Daily Markets

• Gold prices edged lower on Friday and were set for their worst week since January, while copper prices retreated as a bumper rate hike from the Bank of England and hawkish Federal Reserve signals pushed up fears of tighter monetary conditions. Prices of the yellow metal traded at a three-month low, having finally broken out of a tight trading range seen over the past month, albeit to the downside. The latest catalyst for gold’s losses came from a bigger-than-expected, 50 basis point rate hike from the Bank of England, as the lender grapples with overheated inflation in the UK. Thursday’s hike followed data showing an unexpected rise in UK inflation, with the BoE potentially hinting at more hikes later this year. The outlook for the yellow metal also dimmed after Federal Reserve Chair Jerome Powell reiterated in testimony before Congress that the bank could hike rates at least two more times this year, as U.S. inflation continues to trend at twice the Fed’s target range. The prospect of rising interest rates bodes poorly for gold, given that they push up the opportunity cost of holding bullion. Markets are positioning for an over 70% chance the Fed will raise rates in July, and have wound down most bets for a rate cut this year. A string of Fed speakers are set to speak later on Friday, potentially offering up more cues on the Fed’s plans for more rate hikes. Other precious metals tracked losses in gold, with platinum and silver down 6.5% and 8.1% for the week, respectively. Hawkish signals from major central banks drove up concerns over slowing economic growth this year, which bodes poorly for copper, given that demand for the red metal is tied to industrial activity.

Gold – XAU

Gold on Thursday made its intraday high of US$1934.81/oz and low of $1912.38/oz. Gold is down by 0.976% at US$1913.67/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 1,934-2000 keeping stop loss closing above 2000, targeting 1955-1944-1936 and 1926-1920-1910. Buy in between 1,920-1,885 with risk below 1,880 targeting 1934-1944-1954 and 1966-1974-1981.

Silver - XAG

Silver on Thursday made its intraday high of US$23.16/oz and low of US$22.16/oz settled down by 1.818% at US$22.24/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 22.05-18.30, targeting 22.90-23.40-24.10 and 24.60-25.00-25.90-26.30 with stop loss should be placed on the breakage below 18.00. Sell in between 22.50-27.50 with a stop loss above 27.50; targeting 22.05-21.60-21.00 and 20.80.

Oil - WTI

Crude Ol on Thursday made an intra‐day high of US$72.62/bbl, an intraday low of US$68.95/bbl, and settled down by 3.838% to close at US69.57/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 72.55-74.70 with stop loss at 75.00; targeting 71.60-70.90-70.10 and 69.00-68.40-67.50. Buy above 71.60-67.50 with risk daily closing below 67.50; targeting 72.50-73.50-74.10 and 75.00-75.90-76.50.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.0947/EUR, a high of US$1.1011/EUR, and settled the day down by 0.275% to close at US$1.0954/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 1.0990-1.1390, targeting 1.0600-1.0550 and 1.0510-1.0470 with stop-loss at daily closing above 1.1390. Buy above 1.0900-1.0525 with risk below 1.0525 targeting 1.0970-1.1020-1.1090 and 1.1150-1.1210-1.1390.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.2724/GBP, a high of US$1.2843/GBP, and settled the day down by 0.181% to close at US$1.2746/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 1.2690-1.2200 with a target of 1.2750-1.2855-1.2910 and 1.2970-1.3050 with a stop loss closing below 1.2200. Sell in between 1.2800-1.3050 with targets at 1.2690-1.2650-1.2590 and 1.2520-1.2450 with stop loss should be 1.2954.

USD/JPY

USD/JPY on Thursday made an intra‐day low of JPY143.22/USD, an intraday high of JPY143.22/USD, and settled the day up by 0.914% at JPY143.08/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 143.50-145.00 with risk above 145.00 targeting 141.00-139.70-138.90 and 137.90-137.00-136.20. Long positions above 141.00-136.00 with targets of 141.60-142.00-143.50 and 144.00-144.60-145.40 with stops below 136.00