Topline Commodities Update

Transcription

1 May 08, 2018 Topline Commodities Update Topline Commodities Research Tel: Topline Securities, Pakistan Best Local Brokerage House Brokers Poll , Best Local Brokerage House 2015 & 2016

2 Headlines Gold slips as dollar index climbs to 2018 peak Gold slipped on Monday, snapping three days of gains as the U.S. dollar index strengthened after last week's soft U.S. jobs data did little to dampen optimism about the world's largest economy. That left traders betting the U.S. Federal Reserve would proceed with lifting interest rates this year. Higher rates typically weigh on gold, as they increase the opportunity cost of holding non-yielding assets such as bullion. The dollar in the immediate term is overbought and gold is oversold today. (Gold) needs to recapture $1,322 to increase. The market was thinned by a national holiday in Britain, which closed trading desks in London. The dollar's strength, driven by a less hawkish European Central Bank and a disparity in bond yields (between the United States and Europe), has kept gold lower today. Investors were therefore tempering bets on higher gold prices, said Commerzbank analyst Carsten Fritsch, with speculators cutting their net long positions on Comex gold contracts to the lowest since July 2017 with a "massive reduction" in the last few trading weeks. Most speculative investors have thrown in the towel already," he said. Government bond yields in the euro area rose in late Monday trading after the European Central Bank's chief economist, Peter Praet, said an earlier unexpected drop in euro zone core inflation may be a one-off. Initially dropping, bond yields in the single currency bloc rose after his remarks. The U.S. dollar index hit a 2018 peak against a commodity basket after U.S. jobs and wages data did little to alter perceptions of strength in the U.S. economy and consequently expectations for more Fed rate hikes. Oil trims gains ahead of Trump Iran announcement, Asia shares up Oil prices eased slightly on Tuesday, a day after hitting 3-1/2 year highs, as investors braced for President Donald Trump's decision on whether to withdraw the United States from the Iran nuclear deal, a move that could disrupt global oil supply. Asian shares picked up, helped by technology stocks as generally upbeat earnings overcame weakness in the global smartphone market and concerns about more regulation. U.S. West Texas Intermediate (WTI) crude futures on Monday rose above $70 for the first time since November 2014, putting it more than 18 percent above this year's low touched in February. Adding to market pressures, falls in Venezuelan oil production due to problems at the country's oil company PDVSA also added to the rally. While caution on Trump's statement kept investors edgy in early trade, technology firms helped to generate gains for Asian equities. The combination of higher oil prices, a strong dollar and higher U.S. rates is risky for some emerging market assets as it could significantly worsen their trade balance and also encourage investors to shift funds to higher-yielding U.S. assets. Dollar Steady near 4-Month Highs, Euro Struggles The dollar was hovering just below four month highs against a currency basket on Tuesday amid indications that Topline the Market U.S. economy Review remains on track, while the euro remained below the $1.19 level as concerns over economic headwinds weighed. Demand for the dollar continued to be underpinned as rising U.S. Treasury yields and broadly solid economic data has underlined expectations for a steady pace of interest rate increases by the Federal Reserve this year. The euro remained on the back foot a day after falling below the $1.19 level for the first time this year.the euro showed little reaction after data showing that German industrial output rose more than expected in March. The report helped ease concerns that the euro area s largest economy is facing headwinds from rising protectionism. Investors were keeping an eye on geopolitical developments, ahead of an announcement by U.S. President Donald Trump later in the day about the future of an international nuclear agreement with Iran, which he has repeatedly threatened to withdraw from. 2

3 Gold & Silver 7-May May EMA 1, EMA 100 EMA 1, EMA RSI (14 Days) ADX (14 Days) 1, , RANGE Gold price ended yesterday s trading below level, to stop the suggested positive scenario and moves confined between the mentioned resistance and support, and it might witness sideways trading on the intraday basis until managing to surpass one of these levels. The contradiction between stochastic positivity and the EMA50 negativity supports the chances of moving within sideways range, noting that breaching will push the price to start attempts to regain the main bullish trend that its positive targets at , while breaking will push the price to visit the next correctional level at May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Silver price did not show any strong move in the previous sessions, to continue fluctuating around level, thus, the sideways trading scenario will remain valid until the price manages to breach one of its lines, represented by support and resistance, noting that the details of the expected targets after the breach are explained in our previous report. 3

4 Crude & Brent Oil 7-May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Crude oil price ended yesterday s trading with strong negativity to retest the key support and keeps its stability above it, as it begins today with bullish bias to move above barrier, noticing that stochastic gets rid of its negative momentum gradually to approach the oversold areas. Therefore, we believe that the chances are valid to resume the main bullish trend in the upcoming sessions, which targets followed by levels as next main stations, noting that breaking will push the price to start bearish correction on the intraday basis. 7-May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Brent oil price provided negative trading yesterday but it settles above barrier, noticing that the EMA50 keeps supporting the price from below, while stochastic gains the positive momentum on the four hours time frame. Therefore, the bullish trend scenario will remain active on the intraday and short term basis, depending on the price stability above 73.58, waiting to head towards followed by levels that represent our next main targets. 4

5 Copper & Platinum 7-May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Copper price did not show any action until this morning by consolidating above the bullish channel s support line, to notice forming new sideways trading by fluctuating below the moving average 55, while we will keep waiting to gather the required positive momentum to resume the bullish attack to extend trading towards achieving the positive targets at followed by May May EMA EMA EMA EMA RSI (14 Days) ADX (14 Days) RANGE Platinum price was forced to provide intraday sideways trading due to the lack of the bullish momentum, to fluctuate near support, while the continuous stability of this support line confirms the preparation to provide strong bullish trades in the upcoming period, to keep waiting to gather the bullish momentum and manage to surpass level to reach the first main positive target at We should note that attempting to crawl below the current support will confirm the preparation to provide new negative trading, to suffer additional losses by reaching that represents the previously recorded low. 5

6 Natural Gas & Cotton 7-May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE No change to Natural gas price trading, as it continues to consolidate below resistance, expecting the preparation to form strong negative trading in the near term period to push on level first, followed by extending losses towards and threat the stability of the targeted key support. Stochastic attempt to fluctuate below 50 level reinforces the continuation of the negativity by providing additional negative momentum and eases the attempt to resume the bearish attack to reach the suggested targets. 7-May May EMA EMA EMA EMA RSI (14 Days) ADX (14 Days) RANGE Cotton price fell yesterday at registering new high of as the price was highly overbought. Now and are the crucial supports at the moment to keep the bullish trend intact. The price is heading to test level but for that stability above is mandatory. Trend is bullish till the price is above and note that breaking this level followed by and stability below that level will be a bearish sign to target 81,70 area. 6

7 EURUSD & GBPUSD 7-May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The EURUSD pair found solid support base at that represents 61.8% Fibonacci for the rise measured from to , and the price did not manage to break it, which hints the price attempt to stop the bearish correction that dominated the recent trades and return to rise again. Therefore, we suggest witnessing positive trading in the upcoming sessions, and the targets begin by breaching to confirm extending the bullish wave towards followed by levels, taking into consideration that breaking will stop the expected rise and push the price to head towards direct. 7-May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The GBPUSD pair shows slight positivity in attempt to move away from level, and stochastic begins to provide positive overlapping signals that we are waiting to assist to push the price for more rise. In general, we will continue to suggest the bullish trend in the upcoming period unless breaking level and holding below it, as breaking it will push the price to head towards direct, while the positive targets begin at and extend to

8 USDJPY & AUDUSD 7-May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The USDJPY pair fluctuates around level and keeps its stability below it, and the price finds difficulty to break the bullish channel s support line until now, noticing that stochastic provides negative signals that we expect to motivate the price to break the mentioned support. Until now, the bearish trend scenario still active as long as the price remains stable below , noting that our next main target is located at May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The AUDUSD pair completed forming bearish flag pattern after breaking the minor bullish channel s support line, to fall under negative pressure, supported by the EMA50, but it finds solid support at , which attempts to protect the price from suffering more losses. Therefore, we prefer staying aside temporarily until we get clearer signal for the next trend, noting that breaking will push the price to suffer more losses that reach as a next station, while breaching will lead the price to start recovery attempts that target areas initially. 8

9 USDCHF & USDCAD 7-May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The USDCHF pair showed clear positive trading yesterday to surpass level without managing to hold above it, noticing that the price completed forming bullish flag that appears on the chart, to support the chances of resuming the bullish trend on the short term basis, paving the way to head towards as a next station. Therefore, the bullish trend will be suggested for today unless breaking level and holding below it. 7-May May EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The USDCAD pair keeps fluctuating within sideways track as appears on the chart, while stochastic approaches the oversold areas, to provide positive motive that we are waiting to assist to push the price to rise. In general, we will continue to suggest the bullish trend for today conditioned by the price stability above , reminding you that our next main target is located at

10 S&P 500 & DJIA 30 7-May May EMA 2, EMA 100 EMA 2, EMA RSI (14 Days) ADX (14 Days) 2, , RANGE S&P 500 tested EMA50 & EMA100 yesterday but failed to close above it which resulted in a decline. We now have to monitor the movement of index near these moving averages in the upcoming sessions to determine the next trend. RSI is at and stochastic is in neutral territory therefore we may witness some sideways movement. The trend is neutral now till the index is struggling between EMA200 at and more importantly EMA100 at Breaking and stability below this level will be the resumption of bearish trend to target previous lows around region, whereas breaching and stability above this level will abort any negativity and will reactivate the bullish trend to target again. 7-May May EMA 24, EMA 100 EMA 24, EMA RSI (14 Days) ADX (14 Days) 24, , RANGE DJ30 tested EMA50 & EMA100 yesterday but failed to close above it which resulted in a decline. We now have to monitor the movement of index near these moving averages in the upcoming sessions to determine the next trend. RSI is at and stochastic is in neutral territory therefore we may witness some sideways movement. The trend is neutral now till the index is struggling between EMA200 at and more importantly EMA100 at Breaking and stability below this level will be the resumption of bearish trend to target previous lows around region, whereas breaching and stability above this level will abort any negativity and will reactivate the bullish trend to target again. 10

11 Nasdaq May May EMA 6, EMA 100 EMA 6, EMA RSI (14 Days) ADX (14 Days) 6, , RANGE Nasdaq100 remained stable above EMA50 & EMA100 at We noticed that the index is getting strong positive pressure near EMA50 and EMA100 which indicates high probability of further upside in the upcoming sessions to test RSI is at and stochastic is in neutral territory therefore we may witness some sideways movement. The trend is bullish now till the index is above EMA100 at Breaking and stability below this level will abort any positivity and will target EMA200 at

12 INTRA-DAY SUPPORT & RESISTANCE Gold Silver Platinum Crude Oil (WTI) Brent Oil Natural Gas Copper Cotton Euro Usd Gbp Usd Usd Jpy Aud Usd Usd Chf Usd Cad S&P DJIA NASDAQ

13 DAILY TRADING STRATEGY GOLD (June) NEUTRAL TRADE BUY: TARGET: STOPLOSS SILVER NEUTRAL TRADE 1 BUY: TARGET: STOPLOSS CRUDE OIL (June) BULLISH TRADE 1 BUY-STOP: TARGET: STOPLOSS BRENT (July) BULLISH TRADE 1 BUY-STOP: TARGET: STOPLOSS COPPER BULLISH TRADE 1 BUY-STOP: TARGET: STOPLOSS ICOTTON BULLISH TRADE 1 BUY: TARGET: STOPLOSS (GOLD) EUR-USD BULLISH TRADE 1 BUY-STOP: TARGET: STOPLOSS (GOLD) GBP-USD BULLISH TRADE 1 BUY-STOP: TARGET: STOPLOSS (GOLD) USD-JPY BULLISH TRADE 1 BUY-STOP: TARGET: STOPLOSS (GOLD) AUD-USD NEUTRAL TRADE 1 BUY-STOP: TARGET: STOPLOSS (GOLD) USD-CHF BULLISH TRADE 1 BUY-STOP: TARGET: STOPLOSS (GOLD) USD-CAD BULLISH TRADE 1 BUY: TARGET: STOPLOSS PLATINUM BULLISH TRADE 1 BUY: TARGET: STOPLOSS NATURAL GAS BEARISH TRADE 1 SELL: TARGET: STOPLOSS S&P 500 NEUTRAL TRADE 1 SELL: TARGET: STOPLOSS 2, DJIA 30 NEUTRAL TRADE 1 SELL: TARGET: STOPLOSS 24, NASDAQ 100 BULLISH TRADE 1 BUY: TARGET: STOPLOSS 6,

14 Economic Calendar Date Time Currency Impact Actual Forecast Previous TueMay 8 6:30am AUD H Retail Sales m/m 0.00% 0.20% 0.60% Tentative CNY M Trade Balance 183B 187B -30B All Day EUR French Bank Holiday 12:15pm USD H Fed Chair Powell Speaks 12:30pm GBP M Halifax HPI m/m -3.10% -0.30% 1.50% 2:30pm AUD H Annual Budget Release 11:00pm USD H President Trump Speaks Source: Forexfactory; Topline Commodities MAJOR CURRENCIES/INDICIES Symbol Ra te Trend EUR/USD BULLISH GBP/USD BULLISH USD/JPY BULLISH AUD/USD NEUTRAL USD/CHF BULLISH USD/CAD BULLISH Dollar Index NEUTRAL S&P500 2,667.0 NEUTRAL DJ30 24,278.0 NEUTRAL NASDAQ100 6,817.8 BULLISH FTSE100 7,537.0 BULLISH Source: Topline Commodities CENTRAL BANKS RATES Symbol Interest Rate AUD 1.50% CNY 4.35% CAD 1.25% EUR 0.00% GBP 0.50% CHF -0.75% USD <1.75% JPY <0.10% Source: Global-Rates, Topline Commodities WORLD GOLD COUNCIL SPDR TRUST TOTAL GOLD IN TRUST Current Previous % change Tonnes: Ounces (mn): Value US$ (bn): Source: World Gold Council; Topline Commodities ISHARES SILVER TRUST TOTAL SILVER IN TRUST Current Previous % change Tonnes: 10, , Ounces (mn): Value US$ (bn): Source: Ishares by BlackRock; Topline Commodities Disclaimer This report has been prepared by Topline Securities and is provided for information purposes only. Under no circumstances this is to be used or considered as an offer to sell or solicitation of any offer to buy. While reasonable care has been taken to ensure that the information contained therein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Topline Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report. This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report. Investments in capital markets are subject to market risk and Topline Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents. In particular, the report takes no account of the investment objectives, financial situation and particular needs of investors, who should seek further professional advice or rely upon their own judgment and acumen before making any investment. The views expressed in this report are those of Topline Research Department and do not necessarily reflect those of Topline or its directors. Topline as a firm may have business relationships, including investment banking relationships, with the companies referred to in this report. All rights reserved by Topline Securities. This report or any portion hereof may not be reproduced, distributed or published by any person for any purpose whatsoever. Nor can it be sent to a third party without prior consent of Topline Securities. Action could be taken for unauthorized reproduction, distribution or publication. 14