Asian shares rose to their highest in two-and-a-half-weeks on Monday as strong U.S. jobs data offset worries that tariff wars between the United States and the rest of the world could retard global economic growth. Finance leaders of the closest U.S. allies vented anger over the Trump administration's metal import tariffs on Saturday, setting the tone for a heated G7 summit next week in Quebec. In a rare show of division among the normally harmonious club of wealthy nations, six G7 member countries issued a statement asking U.S. Treasury Secretary Steven Mnuchin to convey their "unanimous concern and disappointment" to President Donald Trump. There appears to have been no major break-through on trade disputes after U.S. Commerce Secretary Wilbur Ross met Chinese Vice Premier Liu He, either. China warned the United States on Sunday that any agreements reached on trade and business between the two countries will be void if Washington implements tariffs and other trade measures, as the two ended their latest round of talks in Beijing. Still, the U.S. economy's current strength kept bears at bay for the moment. Data released on Friday showed U.S. job growth accelerated in May and the unemployment rate dropped to an 18-year low of 3.8 percent, indicating a rapidly tightening labour market, which could eventually fuel inflation. Average hourly earnings rose eight cents, or 0.3 percent last month after edging up 0.1 percent in April. That pushed the annual increase in average hourly earnings to 2.7 percent from 2.6 percent in April. The strong employment report added to a string of upbeat economic data, including consumer spending, industrial production and construction spending. They have suggested economic growth was regaining speed early in the second quarter after expanding at a moderate 2.2 percent annualised rate in the January-March period. Given the strength, the Federal Reserve is all but certain to raise interest rates at its policy meeting next week.
The dollar opened the week sliding in morning trade in Asia Monday but holding on to most of its strength even as confidence in the U.S. economy was boosted by a strong jobs report and the likelihood of another interest rate increase by the U.S. Federal Reserve increased. Investors continue to watch closely the looming trade war the U.S. and China. Talks between the U.S. and China ended on Sunday without any deal announcement and China threatening to void any previous commitments. A trade war could prompt China to slowly devalue its currency. In a widely distributed statement, China said that "if the U.S. introduces trade sanctions including raising tariffs, all the economic and trade achievements negotiated by the two parties will be void." Last Friday evening, U.S. released job data. Nonfarm payroll employment increased by 223,000 in May , while average hourly earnings also rose 0.3% compared to May last year. The unemployment rate fell from 3.9% to 3.8%. The strong data supported the idea that the Fed may raise rates later this month. Closely watched data out on Friday showed U.S. jobs growth gathering pace and wages rising in May, making a rate hike by the Federal Reserve in June a near certainty and increasing expectations of a fourth hike this year. The robust U.S. jobs report helped offset factors that had weighed on the dollar earlier last week, such as a flare up in trade tensions between the United States and its allies. The prospect of a snap election in Italy shook investor risk sentiment at the start of last week as some feared the vote could be a referendum on the country's euro membership. But the euro has drifted up since as markets gained some composure after anti-establishment parties reached a deal to resurrect their proposed coalition government, averting potentially destabilizing elections.
Crude oil futures lost more ground on Monday as the market was weighed down by U.S. output climbing to a record-high and expectations that OPEC members will raise supplies. Saudi Arabia, effective leader of the Organization of the Petroleum Exporting Countries (OPEC), and Russia have discussed boosting output to compensate for supply losses from Venezuela and to address concerns about the impact of U.S. sanctions on Iranian output. Russia's largest oil producer Rosneft (MM:ROSN) will be able to restore 70,000 barrels per day (bpd) of oil output in just two days if global production limits are lifted, Renaissance Capital wrote in a client note. U.S. crude production climbed in March to 10.47 million barrels per day (bpd), a monthly record, the Energy Information Administration said on Thursday. U.S. drillers added two oil rigs in the week to June 1, bringing the total to 861, the most since March 2015, General Electric Co's (N:GE) Baker Hughes energy services firm said on Friday. That was the eighth time drillers have added rigs in the past nine weeks. Hedge funds and other money managers cut their bullish wagers on U.S. crude futures and options, according to data released on Friday, as oil prices slumped on oversupply fears. The speculator group cut its combined futures and options position in New York and London by 50,937 contracts to 370,980 during the week to May 29, the U.S. Commodity Futures Trading Commission said.
4th June 2018 R1 R2 R3
GOLD-XAU 1300-1,305 1,311 1,321-1,330
Silver-XAG 17.00 17.40 17.70-18.20
EURO/USD 1.1725 1.1800 1.1850-1.1915
GBP/USD 1.3400 1.35501.3450-1.3500 1.3550
4th June 2018 S1 S2 S3
GOLD-XAU 1,290 1,280-1,274 1,265
Silver-XAG 16.31 16.00-15.60 15.30
Crude Oil 65.70-65.20 64.50 63.00
Intra-Day Strategy (4th June 2018)
EUR/USD Neutral to Buy
GBP/USD Neutral to Buy
Gold on Friday made its intraday high of US$1300.44/oz and low of US$1289.17/oz. Gold was down by 0.400% at US$1293.14/oz.
In daily charts, prices are above 50DMA (1326) and breakage below will call for 1316-1300. MACD is below zero line and histograms are decreasing trend and it will bring upward stance in the upcoming sessions. RSI is in oversold region and more downside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance for intraday trade.
Based on the charts and explanations above; sell below 1300-1331 keeping stop loss closing above 1331 and targeting 1290-1280-1274 and 1265-1259. Buy above 1289-1265 with risk below 1280, targeting 1295-1305-1311 and 11321-1331.
R1 1300-1,305
Silver on Friday made its intraday high of US$16.32/oz and low of US$16.49/oz. Silver settled down by 0.0304% at US$16.39/oz.
Crude Oil on Friday made an intra‐day high of US$67,24/bbl, intraday low of US$65.47/bbl and settled down by 1.881% to close at US$65.71/bbl.
On daily charts, oil is sustaining below its 50DMA i.e. 61.15 which is a major resistance and breakage above will call for 62.20-62.80. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in oversold region and giving positive crossover for confirmation of bullish stance; while the RSI is in oversold region and more downside can be expected.
Based on the charts and explanations above; sell below 66.30-69.00 with stop loss at 690.00; targeting 65.70-65.20 and 64.50-63.00. Buy above 65.70-65.20 with risk daily closing below 63.00 and targeting 66.30-67.00-68.10 and 69.30-70.00.
MACD(12,26,9) -0.512 Sell
EUR/USD on Friday made an intraday low of US$1.1616/EUR, high of US$1.1717/EUR and settled the day down by 0.256% to close at US$1.1659/EUR.
Trading Strategy: Neutral to Buy
Buy above 1.1600-1.1300 with risk below 1.1300 targeting 1.1725-1.1800 and 1.1850-1.1915. Sell below 1.1700-1.1915 targeting 1.1600-1.1550-and 1.1450-1.1390 with stop-loss at daily closing above 1.1915.
STOCH(5,3) 7.431 Sell
GBP/USD on Monday made an intra‐day low of US$1.3252/GBP, high of US$1.3361/GBP and settled the day up by 0.406% to close at US$1.3346/GBP.
R2 1.35501.3450-1.3500
USD/JPY on Friday made intra‐day low of JPY108.17/USD and made an intraday high of JPY109.72/USD and settled the day up by 0.671% at JPY109.52/USD.