Daily Markets

• Oil prices edged lower from a recent rally on Monday, as traders awaited more cues on an economic recovery in China and a potential U.S. recession, although Asian trading volumes were slim amid a slew of market holidays in the region. China and other major Asian markets were closed for the Lunar New Year holiday, which is expected to keep volumes slim for the remainder of the week. Still, markets are positioning for a strong boost to the Chinese economy from the week-long holiday, especially after the country withdrew most anti-COVID measures and reopened its international borders this year. The prospect of a recovery in Chinese demand boosted oil prices in recent weeks, with major industry bodies also forecasting a big rebound in demand this year as China reopens. But given that the country is also grappling with its worst yet COVID-19 outbreak, markets remain uncertain over the timing of such a recovery. Focus this week now turns to U.S. fourth quarter GDP data due on Thursday to gauge whether the world’s largest economy drew closer to a recession in late-2022. Growth is expected to have slowed in the fourth quarter from the third, as the effects of a sharp rise in interest rates were felt by the economy. While a recovery in China is expected to benefit crude demand this year, markets fear that a potential recession in the U.S. and other Western majors could hamper crude consumption. U.S. and Eurozone economies are struggling with elevated inflation and tight monetary policy, both of which are expected to persist for the bulk of the year. Economic indicators for December already indicate a cooling in activity, likely heralding a bigger downturn in the coming months. On the supply side, focus is squarely on Russia, as the country copes with strict price caps on its oil exports. Moscow is widely expected to scale down crude production as its margins are hit by weaker selling prices. This in turn could tighten global crude supply, providing some upside to prices.

Gold – XAU

Gold on Friday made it’s intraday high of US$1935.10/oz and low of $1900.90/oz. Gold is up by 1.457% at US$1931.98/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above the zero line and histograms are a2lso increasing trend and it will bring an upward stance in the upcoming sessions. RSI is in the overbought region and more upside is expected before it gets stretched. The Stochastic Oscillator is in neutral territory and giving a negative crossover to a bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1930-1967 keeping stop loss closing above 1967, targeting 1914-1900-1894 and 1887-1879-1869. Buy in between 1914-1879 with risk below 1879, targeting 1931-1940-1948 and 1955-1967.

Silver - XAG

Silver on Friday made its intraday high of US$24.06/oz and low of US23.69/oz settled up by 0.369% at US$23.92/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (21.00), breakage above will lead to 21.60. MACD is below the zero line and histograms are decreasing trend and it will bring a bearish stance in the upcoming sessions. RSI is approaching the neutral region, indicating a buy signal for now. The Stochastic Oscillator is in the oversold region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 23.60-20.30, targeting 24.40-25.00-25.90 and 26.20-26.90 with stop loss should be placed on the breakage below 20.30. Sell in between 24.40-26.20 with stop loss above 26.20; targeting 23.60-23.00-22.10 and 21.70-21.30-20.70.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US$81.90/bbl, an intraday low of US$79.91/bbl, and settled up by 1.062% to close at US$81.73/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. MACD is above the zero line and histograms are in increasing mode will bring a bullish stance in the upcoming sessions. The Stochastic Oscillator is in the neutral region, giving a positive crossover for confirmation of a bullish stance; while the RSI is in the neutral region and more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 81.20-83.40 with stop loss at 83.40; targeting 80.50-79.65-78.95 and 78.10-77.00-76.10. Buy above 80.50-76.10 with risk daily closing below 76.10; targeting 81.20-82.30-82.70 and 83.30-84.00.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.0781/EUR, a high of US$1.0839/EUR, and settled the day up by 0.35% to close at US$1.0830/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which becomes immediate support, a break below will target 1.0647. MACD is above the zero line and histograms are increasing mode which will bring a bullish view. Stochastic is in overbought territory and giving positive crossovers to the bullish outlook for intraday. 14D RSI is currently in a neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Sell

Sell below 1.0900-1.1100, targeting 1.0830-1.0790-1.0690 and 1.0650-1.0590-1.0520 with stop-loss at daily closing above 1.1100. Buy above 1.0830-1.0520 with risk below 1.0820 targeting 1.0900-1.0945-1.0990 and 1.1050-1.1100.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2334/GBP, a high of US$1.2403/GBP, and settled the day up 0.128% to close at US$1.2398/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2113) is becoming a resistance level. 14-D RSI is currently in a neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and gives a positive crossover to confirm bullish a stance. MACD is above the zero line but histograms are increasing leading to movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.2290-1.1890 with a target of 1.2290-1.2350 and 1.2390-1.2445-1.2290 with a stop loss closing below 1.1890. Sell in between 1.2350-1.2445 with targets at 1.2290-1.2170-1.2120 and 1.2040-1.1990-1.1890 with stop loss should be 1.2445.

USD/JPY

USD/JPY on Friday made an intra‐day low of JPY128.34/USD and made an intraday high of JPY130.60/USD and settled the day up by 0.860% at JPY129.51/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.30), which is initial support on the daily chart. 14-D RSI is currently in the overbought region and chances of downward are expected based on RSI. MACD is above the zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is in neutral territory and signaling to sell as it has given a negative crossover to confirm a bearish stance.

Trading Strategy: Neutral to Sell

Sell below 129.00-133.00 with risk above 133.00 targeting 127.45 and 126.90-126.20-125.00. Long positions above 127.50-126.20 with targets of 129.00-129.70-130.40 and 131.10-131.60-132.00 with stops below 130.00.