Daily Markets

• Gold prices steadied above two-month lows on Wednesday, benefiting from some profit-taking in the dollar as markets awaited more cues on the raising of the U.S. debt ceiling, while copper prices were headed for steep losses in May. A slew of U.S. economic readings was also on tap this week, with nonfarm payrolls data for May, due on Friday, set to large factor into the Federal Reserve’s plans for more rate hikes. The dollar retreated from 10-week highs amid some profit-taking and in anticipation of the data. But an increasingly hawkish outlook on the Fed kept the greenback relatively underpinned while darkening the outlook for non-yielding assets such as gold. Rising interest rates push up the opportunity cost of investing in non-yielding assets- a trend that battered gold through 2022. Still, the yellow metal may see increased safe-haven demand in the event of a U.S. default, which is likely to trigger a recession. U.S. lawmakers are set to vote this week on passing a bipartisan bill to raise the debt ceiling and avert an economic crisis But several Republican and Democrat lawmakers have signaled discontent with the bill, and plan to vote against it in Congress. The yellow metal had tumbled from record highs hit earlier in May, and was now set to clock a monthly loss of over 1%. A bulk of this weakness came from growing expectations that the Federal Reserve will raise interest rates further in June, amid sticky inflation and resilience in the jobs market. The Fed is also set to keep interest rates higher for longer. These factors, coupled with signs of worsening economic conditions across the globe, saw copper prices on course for their worst monthly drop in 11 months. Prices of the red metal also traded just above their weakest levels in nearly seven months. Focus is now squarely on manufacturing activity data from China, for more cues on how an economic recovery in faring in the world’s largest copper importer. Weaker-than-expected readings for April had triggered steep losses in copper, as markets feared a slowdown in Chinese demand.

Gold – XAU

Gold on Tuesday made it’s intraday high of US$1963.44/oz and low of $1931.98/oz. Gold is up by 0.802% at US$1959.18/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 1,961-2080 keeping stop loss closing above 2009, targeting 1950-1939-1926 and 1920-1910-1900. Buy in between 1,941-1,900 with risk below 1,950 targeting 1966-1974-1981 and 1990-2000-2009.

Silver - XAG

Silver on Monday made its intraday high of US$23.36/oz and low of US$22.91/oz settled down by 0.133% at US$23.17/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 23.00-18.30, targeting 23.40-24.10-24.60 and 25.00-25.90-26.30 with stop loss should be placed on the breakage below 18.00. Sell in between 23.90-27.50 with a stop loss above 27.50; targeting 25.00-24.60-23.60-23.00 and 22.05-21.60-21.00.

Oil - WTI

Crude Ol on Tuesday made an intra‐day high of US$73.36/bbl, an intraday low of US$69.05/bbl, and settled down by 4.65% to close at US$69.55/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 68.50 which is a support level and breakage below will call for 68.40. 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 70.10-75.00 with stop loss at 75.00; targeting 69.00-68.40-67.50 and 66.85-65.60. Buy above 69.00-65.40 with risk daily closing below 65.40; targeting 70.10-71.40-72.30 and 73.50-74.10-75.00.

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.0671/EUR, a high of US$1.0745/EUR, and settled the day up by 0.253% to close at US$1.0733/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 1.0750-1.1390, targeting 1.0700-1.0650-1.0600 with stop-loss at daily closing above 1.1032. Buy above 1.0710-1.0525 with risk below 1.0525 targeting 1.0810-1.1090-1.1150 and 1.1200-1.1250.

GBP/USD

GBP/USD on Tuesday made an intra‐day low of US$1.2326/GBP, a high of US$1.2445/GBP, and settled the day up 0.008% to close at US$1.2412/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.2112) 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 oversold 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 1.2350-1.2200 with a target of 1.2410-1.2500-1.2590 and 1.2640-1.2700-1.2745 with a stop loss closing below 1.2200. Sell in between 1.2410-1.2954 with targets at 1.2320-1.2290-1.2250 and 1.2205-1.2175 with stop loss should be 1.2954.

USD/JPY

USD/JPY on Tuesday made an intra‐day low of JPY139.56/USD, an intraday high of JPY140.92/USD, and settled the day down by 0.465% at JPY139.76/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (134.05), which is major 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 overbought territory and signaling to buy as it has given a positive crossover to confirm a bullish stance.

Trading Strategy: Neutral to Sell

Sell below 140.50-142.00 with risk above 142.00 targeting 139.70-138.90-138.50 and 137.90-137.00-136.20. Long positions above 139.70-136.00 with targets of 140.50-141.00-141.60 and 142.00-143.50-144.00 with stops below 133.00.