Topline Commodities Update

Transcription

1 August 28, 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 from 2-week high as dollar firms against yuan Gold inched down on Tuesday from a two-week high hit in the previous session, as the dollar firmed against yuan, making the precious metal expensive for buyers in the world s biggest consumer China. China s central bank raised its daily guidance rate for the yuan by the most in nearly 15 months on Tuesday, sparking a demand for dollars. The downtrend on the dollar has reversed, with markets probably concerned over the (currency) fixing in China. The market is still a little bit nervous overall when it comes to buying into the weaker U.S. dollar narrative. Gold has lost its appeal as a safe-haven asset, having fallen over 7 percent so far this year, amid international trade disputes and the Turkish currency crisis, with investors increasingly turning to the U.S. dollar instead. A complete flip around momentum in the U.S. dollar for gold to push above $1,230 and move to $1,260. Unless the Fed takes the December rate hike off the table, gold does not have a chance to get near any of those supportive levels. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. Spot gold may rise to $1,224 an ounce, as it has broken a resistance at $1,209 per ounce, according to Reuters technical analyst Wang Tao. Oil Prices Edge Lower Despite Reports of Supply Disruptions Oil prices edged lower on Tuesday despite the International Energy Agency (IEA) warned of further supply disruptions. On Monday, The IEA warned an economic crisis in Venezuela has cut deep into the OPEC-member's oil output. Venezuelan crude oil exports have halved in the previous two years to just 1 million bpd by mid- 2018, according to trade flow data. "We can expect a further fall," the IEA's Executive Director Fatih Birol told Reuters in Norway on Monday. Birol also warned that African OPEC-members Libya and Nigeria "seem both still fragile countries" despite some recent improvements. However, Birol said it was too early to assess any potential impact of the U.S. sanctions that will target Iran from November. Traders also await further developments in the China-U.S. trade relations. The two-day trade talks between China and the U.S. ended last week with no major breakthroughs. Dollar Rises as U.S. Mexico Agree to Replace Trade Deal The dollar rose on Tuesday, paring losses after reaching its lowest level since Aug. 2 in early trade after the Trump administration sealed a bilateral trade deal with Mexico, boosting optimism for an easing of global Topline trade Market tensions. Review The U.S. Dollar Index, which tracks the dollar against a basket of other currencies, was up 0.2% to by 1:35AM ET (05:35 GMT) after U.S. President Donald Trump unveiled details of the agreement that he says will replace the North American Free Trade Agreement (NAFTA). The new deal is expected to last 16 years and will be reviewed every six years pending its approval by Congress, according to U.S. Trade Representative Robert Lighthizer. The dollar has fallen more than 2% since earlier this month as U.S. President Donald Trump said he was not thrilled with the Federal Reserve s decision to raise rates at a time when the U.S. government was trying to stimulate the economy. Meanwhile, the Mexican peso closed about 0.8% higher on Monday after initially rising about 1.2% following the announcement of the trade deal. 2

3 Gold & Silver 27-Aug Aug EMA 1, EMA 100 EMA 1, EMA RSI (14 Days) ADX (14 Days) 1, , RANGE Gold price confirmed breaching level after closing the daily candlestick above it, reinforcing the expectations of achieving more gains in the upcoming sessions, and the price gets positive support by the EMA50, waiting to visit level that represents our next main target. Therefore, the bullish trend will remain suggested on the intraday and short term basis, noting that breaking and holding below it might push the price to test areas before any new attempt to rise. 27-Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Silver price tested the bearish channel s resistance and begins providing slight bearish rebound signals now, while stochastic keeps providing the negative signals, to keep the bearish trend suggested in the upcoming sessions, waiting to head towards our main waited target at Note that breaking will ease the mission of achieving our above mentioned target, while holding below represents key condition to continue the expected decline. 3

4 Crude & Brent Oil 27-Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Crude oil price shows slight bullish bias on its way towards the first waited target at 69.44, and the price gets continuous positive support by the EMA50, waiting to get strong positive motive that assists to breach the mentioned level and opens the way to achieve our next target at In general, we will continue to suggest the bullish trend conditioned by the price stability above 68.06, as breaking it will push the price to achieve negative targets that start at and extend to Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Brent oil price showed new test to level, waiting to breach this level to confirm rallying towards achieving more gains onthe short term basis, reminding you that our next target reaches The main bullish channel still organizes the current bullish wave, to keep the bullish trend scenario active in the upcoming period conditioned by the price stability above

5 Copper & Platinum 27-Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Copper price confirmed keeping the negative attempts by providing new negative close below level, which forms key barrier between resuming the negative attack and starting forming correctional bullish trades, while the price needs to gather additional negative momentum to confirm the preparation to renew the pressure on support. We should note that succeeding to surpass the current barrier and getting positive close will confirm the preparation to provide correctional bullish trades in the near term and medium term period, to target followed by reaching 38.2% Fibonacci correction level at Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Platinum price succeeded to gather new positive momentum yesterday due to stochastic reach to the overbought areas, which confirms the preparation to provide correctional bullish trades by moving towards the first positive station at , followed by attempting to test resistance. The stability of level supports the bullish attempts, which forms solid support base recently against the negative attack, thus, no change to the correctional bullish track unless breaking the current support. 5

6 Natural Gas & Cotton 27-Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Natural gas price gained strong positive momentum recently to form bullish rally to surpass level and settles within the main bullish channel again, which allows us to start suggesting the positive attempts conditioned by the price stability above level, forming the main support line, to target level as a main station. The stability of the moving average 55 below the mentioned support confirms blocking the price within the bullish channel, to agree with stochastic positivity by consolidating within the overbought areas and increase the chances of gathering the positive momentum. 27-Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE Cotton price once again bounced back sharply as it managed to found support at to test and breached that level.. RSI & Stochastic both are neutral. Trend is neutral at the moment till the price is above and is heading now to retest resistance. Whereas breaking and stability above will abort negativity and will send the price to test followed by area. 6

7 EURUSD & GBPUSD 27-Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The EURUSD pair shows some slight bearish bias after reaching our main waited target at , affected by stochastic negativity, and it might be forced for new retest to the previously breached resistance of the bearish channel that appears on the chart before turning back to rise again. In general, we will continue to suggest the bullish trend in the upcoming period conditioned by the price stability above , reminding you that the price is affected by the inverted head and shoulders pattern that was completed previously, which has positive targets that reach Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The GBPUSD pair provided positive trading yesterday but it didn t reach the recently recorded top at , to record lower high and begins forming double top pattern now, as this pattern s confirmation line is located at , which means that breaking this level will activate the negative effect of the negative pattern and motivate the price to head towards our main waited target at Therefore, we will keep our bearish overview in the upcoming sessions, supported by the negative signal provided by stochastic, noting that breaching will stop the expected decline and push the price to recover on the short term basis. 7

8 USDJPY & AUDUSD 27-Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The USDJPY pair tests the key resistance now after it found solid support formed by the EMA50 as appears on the chart, and as long as the price is below the mentioned resistance, our bearish overview will remain active, waiting to visit as a first main target, noting that breaching will push the price to turn to rise and achieve positive targets that start at and extend to Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The AUDUSD pair begins today s trading with slight bearish bias in attempt to resume the bearish trend, to keep the price inside the bearish channel that appears on the chart, noticing that stochastic provides negative signals now, reinforcing the chances of continuing the bearish bias on the intraday and short term basis. Therefore, we are waiting for negative trades today, noting that the waited targets begin by breaking to open the way to head towards , taking into consideration that breaching will stop the expected decline and lead the price to turn to rise. 8

9 USDCHF & USDCAD 27-Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The USDCHF pair traded with clear negativity yesterday to touch the bearish channel s support line that appears on the chart, and it might be forced for some temporary rise and a potential test to before continuing the bearish trend. In general, we will continue to suggest the bearish trend as long as the price is stable below , supported by the negative pressure formed by the EMA50, reminding you that our main target is located at Aug Aug EMA EMA 100 EMA EMA RSI (14 Days) ADX (14 Days) RANGE The USDCAD pair continues to decline to approach our main waited target at , falling under negative pressure provided by the EMA50, while stochastic provides new negative overlapping signal now. Therefore, we believe that the chances are valid to break the above mentioned level and open the way to extend the bearish wave towards more negative targets that reach followed by , noting that breaching will stop the expected decline and push to test initially. 9

10 S&P 500 & DJIA Aug Aug EMA 2, EMA 100 EMA 2, EMA RSI (14 Days) ADX (14 Days) 2, , RANGE S&P 500 bounced sharply to close on all time high last night. We now have to monitor the movement of index in the upcoming sessions to determine the strength of this wave. RSI is at and stochastic is highly overbought therefore we may witness some sideways movement. The trend is bullish till the index is above and may continue to rise to test followed by in the upcoming sessions before any new attempt to fall. Breaking now and stability below will be a bearish sign to immediately target followed by Aug Aug EMA 25, EMA 100 EMA 25, EMA RSI (14 Days) ADX (14 Days) 25, , RANGE DJ30 bounced sharply to close on all time high last night. We now have to monitor the movement of index in the upcoming sessions to determine the strength of this wave. RSI is at and stochastic is highly overbought therefore we may witness some sideways movement. The trend is bullish till the index is above and may continue to rise to test followed by in the upcoming sessions before any new attempt to fall. Breaking now will be a bearish sign to immediately target followed by

11 Nasdaq Aug Aug EMA 7, EMA 100 EMA 7, EMA RSI (14 Days) ADX (14 Days) 7, , RANGE Nasdaq100 bounced sharply to close on all time high last night. We now have to monitor the movement of index in the upcoming sessions to determine the strength of this wave. RSI is at and stochastic is highly overbought therefore we may witness some sideways movement. The trend is bullish till the index is above and may continue to rise to test in the upcoming sessions before any new attempt to fall. Breaking now will be a bearish sign to immediately target before any new attempt to rise. 11

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 (Dec) BULLISH TRADE BUY: TARGET: STOPLOSS SILVER BEARISH TRADE 1 SELL-STOP: TARGET: STOPLOSS CRUDE OIL (Sep) BULLISH TRADE 1 BUY: TARGET: STOPLOSS BRENT (Oct) BULLISH TRADE 1 BUY: TARGET: STOPLOSS COPPER BEARISH TRADE 1 SELL-STOP: TARGET: STOPLOSS ICOTTON (Dec) NEUTRAL TRADE 1 BUY: TARGET: STOPLOSS (GOLD) EUR-USD BULLISH TRADE 1 BUY: TARGET: STOPLOSS (GOLD) GBP-USD BEARISH TRADE 1 SELL-STOP: TARGET: STOPLOSS (GOLD) USD-JPY BEARISH TRADE 1 SELL: TARGET: STOPLOSS (GOLD) AUD-USD BEARISH TRADE 1 SELL-STOP: TARGET: STOPLOSS (GOLD) USD-CHF BEARISH TRADE 1 SELL: TARGET: STOPLOSS (GOLD) USD-CAD BEARISH TRADE 1 SELL: TARGET: STOPLOSS PLATINUM BULLISH TRADE 1 BUY: TARGET: STOPLOSS NATURAL GAS BULLISH TRADE 1 BUY: TARGET: STOPLOSS S&P 500 BULLISH TRADE 1 BUY: TARGET: STOPLOSS 2, DJIA 30 BULLISH TRADE 1 BUY: TARGET: STOPLOSS 25, NASDAQ 100 BULLISH TRADE 1 BUY: TARGET: STOPLOSS 7,

14 Economic Calendar Date Time Currency Impact Actual Forecast Previous TueAug 28 7:00pm USD M CB Consumer Confidence WedAug 29 5:30pm CAD M Current Account -19.5B USD H Prelim GDP q/q 4.00% 4.10% 7:30pm USD H Crude Oil Inventories -5.8M ThuAug 30 6:30am AUD H Private Capital Expenditure q/q 0.60% 0.40% AUD M Building Approvals m/m -1.90% 6.40% All Day EUR M German Prelim CPI m/m 0.20% 0.30% 12:00pm CHF M KOF Economic Barometer EUR M Spanish Flash CPI y/y 2.20% 2.20% 5:30pm CAD H GDP m/m 0.50% USD M Core PCE Price Index m/m 0.20% 0.10% USD M Personal Spending m/m 0.40% 0.40% 10:30pm EUR M German Buba President Weidmann Speaks Source: Forexfactory; Topline Commodities MAJOR CURRENCIES/INDICIES Symbol Ra te Trend EUR/USD BULLISH GBP/USD BEARISH USD/JPY BEARISH AUD/USD BEARISH USD/CHF BEARISH USD/CAD BEARISH Dollar Index NEUTRAL S&P500 2,900.8 BULLISH DJ30 26,103.0 BULLISH NASDAQ100 7,581.0 BULLISH FTSE100 7,566.5 NEUTRAL 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 <2.00% 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