Daily Markets

• Oil prices extended gains on Tuesday as markets held out for a swift recovery in Chinese demand this year, although anticipation of an address by Federal Reserve Chair Jerome Powell kept traders from making big bets. Crude prices recovered sharply on Monday after the International Energy Agency reiterated that a recovery in China will drive oil demand to record highs this year, as the country marked a clear pivot away from its strict anti-COVID policies in January. But economic data released last week painted a somewhat mixed picture of the world’s second-largest economy, as it grapples with rising COVID-19 cases. Still, air and road transport data for January showed a clear improvement in travel demand, potentially heralding a bigger bounceback. But crude markets were still reeling from sharp losses last week, as stronger-than-expected U.S. nonfarm payrolls data boosted the dollar and ramped up bets of more interest rate hikes by the Federal Reserve this year. Focus now turns to a discussion with Fed Chair Jerome Powell at the Economic Club of Washington D.C. later in the day. His comments on the U.S. economy will be closely watched, especially in light of recent strength in the jobs market, which gives the Fed sufficient headroom to keep raising interest rates. Hawkish signals from the Fed had also weighed on crude markets last week, after the central bank raised interest rates as expected and signaled there were more hikes in store this year. Oil prices are trading largely flat for the year to date, amid fears of a global recession this year driven by rising interest rates and relatively high inflation. Fourth-quarter economic growth readings for several major countries already indicated a cooling in activity. On the supply front, focus remains on Russian crude shipments as the U.S. and European Union impose more price caps on the country’s oil. Moscow has so far downplayed any speculation that it will cut production and sales, given that it has steady buyers in India and China. U.S. crude inventories will also be in focus this week after the country logged six consecutive weeks of builds.

Gold – XAU

Gold on Monday made it’s intraday high of US$1881.21/oz and low of $1860.04/oz. Gold is up by 0.302% at US$1867.51/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 1887-1918 keeping stop loss closing above 1918, targeting 1874-1865-1853 and 1837-1823-1815. Buy in between 1874-1,815 with risk below 1815, targeting 1887-1900-1910 and 1917-1927-1940.

Silver - XAG

Silver on Monday made its intraday high of US$22.60/oz and low of US22.13/oz settled down by 0.022% at US$22.26/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 22.25-20.30, 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 23.00-26.20 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 Friday made an intra‐day high of US$74.72/bbl, an intraday low of US$72.46/bbl, and settled up by 1.638% to close at US$74.64/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 76.10-83.40 with stop loss at 83.40; targeting 78.10-77.00-76.10 and 75.50-74.90-74.10. Buy above 75.10-72.00 with risk daily closing below 72.00; targeting 76.10-77.00-78.10 and 78.95-79.65-80.10.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.0708/EUR, a high of US$1.0798/EUR, and settled the day down by 0.532% to close at US$1.0724/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 1.0750-1.1100, 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 1.0690-1.0510 with risk below 1.0820 targeting 1.0900-1.0945-1.0990 and 1.1050-1.1100.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.2004/GBP, a high of US$1.2076/GBP, and settled the day down 0.111% to close at US$1.2015/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 1.2010-1.1750 with a target of 1.2120-1.2170-1.2290 and 1.2390-1.2440-1.2490 with a stop loss closing below 1.1750. Sell in between 1.2100-1.2650 with targets at 1.2040-1.1990-1.1900-1.1820 and 1.1750-1.1690 with stop loss should be 1.2445.

USD/JPY

USD/JPY on Monday made an intra‐day low of JPY131.50/USD and made an intraday high of JPY131./USD and settled the day up by 2.01% at JPY132.62/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 132.0-135.10 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.