Daily Markets

• Oil prices edged ahead for a second session on Friday, buoyed by stronger-than-expected U.S. economic growth and hopes of a rapid recovery in Chinese demand as COVID-19 cases and deaths plunged from last month's peak levels. OPEC+ delegates will meet next week to review crude production levels, amid steady support for crude prices from strong demand for jet fuel and diesel. The U.S. Federal Reserve will decide on another rate hike, as inflation cools and gross domestic product improves. Still, oil markets were boosted by broad optimism on the first day of the return of Chinese stock markets as China's reopening still plays a main role in boosting the demand outlook, said Tina Teng, analyst at CMC Markets. Critically ill COVID-19 cases in China are down 72% from a peak early this month while daily deaths among COVID-19 patients in hospitals have dropped 79% from their peak, pointing to a normalisation of the Chinese economy and boosting expectations of a recovery in oil demand. "The short-term bullish factor is that the recent outage in the U.S. refineries helped push up gasoline prices, though the U.S. crude inventories hit a 16-month high," Teng said. Oil prices moved little on Friday and were set to end the week flat amid caution over an upcoming OPEC+ panel meeting, as well as more cues on the U.S. economy from a reading on the Federal Reserve’s preferred inflation gauge. Ministers from Algeria, Kuwait, Venezuela, Russia, and Oman are set to meet virtually next week as part of a panel called the Joint Ministerial Monitoring Committee (JMMC). The panel can call for a full meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+) and can also decide on crude output from the members of the panel. But Reuters recently reported that the panel is unlikely to alter production levels, given that crude prices recovered sharply in early 2023, and that demand is forecast to surge as the Chinese economy recovers. Markets were watching for any potential changes in output by the JMMC, especially as Russia faces U.S. and European price caps on its fuel exports. But Moscow has so far kept output steady, with China and India remaining major buyers of fuel. Focus next week is also on the U.S. Federal Reserve’s first meeting for 2023, with a majority of traders forecasting that the central bank will hike rates by a relatively smaller 25 basis points. A slowdown or potential stopping in the Fed’s rate hike plans is expected to be positive for crude prices, given that it entails a weaker dollar and lesser pressure on the world’s largest economy. U.S. personal consumption inflation data - the Fed’s preferred inflation gauge - is due later on Friday, and is expected to shed more light on the path of inflation and monetary policy. Crude prices rallied in recent weeks on hopes that an economic recovery in China will drive up demand. The country, which is on a week-long Lunar New Year holiday, relaxed most anti-COVID restrictions earlier this year, and is expected to drive oil demand to a record high this year. But given that China is still facing its worst COVID-19 outbreak yet, markets remain uncertain over the timing of such a recovery.

Gold – XAU

Gold on Thursday made it’s intraday high of US$1949.08/oz and low of $1918.56/oz. Gold is down by 0.88% at US$1928.80/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 1930-1914-1900-1894 and 1887-1879-1869. Buy in between 1918-1879 with risk below 1879, targeting 1940-1948 and 1955-1967.

Silver - XAG

Silver on Thursday made its intraday high of US$24.28/oz and low of US23.58/oz settled down by 0.033% at US$23.90/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 23.00-20.30, 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 24.00-26.20 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 Thursday made an intra‐day high of US$82.18/bbl, an intraday low of US$79.99/bbl, and settled up by 0.866% to close at US$81.16/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 82.10-83.40 with stop loss at 83.40; targeting 80.10-79.65-78.95 and 78.10-77.00-76.10. Buy above 81.20-76.10 with risk daily closing below 76.10; targeting 81.70-82.30-82.70 and 83.30-84.00.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.0849/EUR, a high of US$1.0928/EUR, and settled the day down by 0.210% to close at US$1.0891/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 1.0905-1.1100, 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 Thursday made an intra‐day low of US$1.2343/GBP, a high of US$1.2429/GBP, and settled the day up 0.078% to close at US$1.2405/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 1.2350-1.1890 with a target of 1.2390-1.2445-1.2290 with a stop loss closing below 1.1890. Sell in between 1.2445-1.2650 with targets at 1.2350-1.2290-1.2170 and 1.2120-1.2040-1.1990 with stop loss should be 1.2445.

USD/JPY

USD/JPY on Thursday made an intra‐day low of JPY129.01/USD and made an intraday high of JPY130.61/USD and settled the day down by 0.486% at JPY130.20/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 130.50-133.00 with risk above 133.00 targeting 129.50-129.00-127.45 and 126.90-126.20-125.00. Long positions above 129.50-126.20 with targets of 130.40 and 131.10-131.60-132.00 with stops below 130.00.