Daily Markets

• Oil prices were flat in Asian trade on Wednesday as traders sought more cues on monetary policy from the minutes of the Federal Reserve’s June meeting, while fears of a renewed U.S.-China trade war also dented sentiment. The start of a two-day meeting of the Organization of Petroleum Exporting Countries with major oil industry executives also saw markets holding their breath, especially after Saudi Arabia and Russia vowed deeper supply cuts in the coming months. The prospect of tighter supplies boosted oil prices this week, as a 1 million barrels per day production cut by Saudi Arabia came into effect from July. The world’s largest oil exporter vowed to extend said cut until end-August, and potentially later. But fears of worsening economic growth, amid rising interest rates and a potential U.S.-China trade standoff, kept oil gains in check. Oil markets were now squarely focused on the minutes of the Fed’s June meeting, due later on Wednesday. The central bank had held rates steady in June, but vowed at least two more hikes this year, given that inflation remains well above the Fed’s annual target. Fed Chair Jerome Powell had also reiterated the plan for more hikes, which in turn pressured oil markets with the prospect of tighter monetary conditions and worsening economic growth. Markets are now pricing in an 88% chance the Fed will hike rates by 25 basis points in late-July. The prospect of higher rates has weighed heavily on oil prices this year, as markets feared that an economic slowdown caused by higher rates would dent oil demand later in the year. China had this week imposed curbs on the export of certain key chipmaking materials to the U.S., potentially marking an escalation in an ongoing trade war between the world’s largest economies. The move ramped up concerns over more disruptions in global supply chains, which could in turn impact an already fragile global economy. It also pointed to more economic pressure on major crude importer China, which is struggling to shore up growth after three years of strict COVID lockdowns. Recent economic data from China pointed to worsening conditions in the world’s largest crude importer, largely undermining bets that China will drive oil demand to record highs this year. A potential escalation in a Sino-U.S. trade war adds to the uncertainty surrounding the Chinese economy.

Gold – XAU

Gold on Tuesday made its intraday high of US$1930.62/oz and low of $1919.81/oz. Gold is up by 0.215% at US$1925.37/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1894) and breakage below will call for 1871. MACD is below the zero line and histograms are also decreasing trend and which will bring more downward stance in the upcoming sessions. RSI is in the oversold region and more downside is expected before it gets stretched. The Stochastic Oscillator is in oversold territory and giving a negative crossover to a bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1930-1966 keeping stop loss closing above 1966, targeting 1900-1894-1885 and 1871-1858. Buy in between 1909-1,871 with risk below 1874 targeting 1909-1920-1934 and 1944-1954-1966.

Silver - XAG

Silver on Tuesday made its intraday high of US$23.04/oz and low of US$22.84/oz settled up by 0.411% at US$22.94/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (22.91), breakage above will lead to 23.51. 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 oversold region, indicating a sell 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 22.90-27.50 with a stop loss above 27.50; targeting 22.05-21.60-21.00 and 20.80.

Oil - WTI

Crude Ol on Tuesday made an intra‐day high of US$71.40/bbl, an intraday low of US$69.95/bbl, and settled up by 1.595% to close at US71.30/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 70.90-74.70 with stop loss at 75.00; targeting 70.10-69.00-68.40 and 67.50-66.90-66.00. Buy above 70.10-66.50 with risk daily closing below 66.00; targeting 70.90-71.60 and 72.50-73.50-74.10.

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.0875/EUR, a high of US$1.0915/EUR, and settled the day down by 0.287% to close at US$1.0878/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.0800), which becomes immediate support, a break below will target 1.0717. MACD is above the zero line and histograms are increasing mode, bringing a bullish view. Stochastic is in oversold territory, giving negative 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 1.0900-1.1390, targeting 1.0840-1.0790-1.0750 and 1.0660-1.0600-1.0550 with stop-loss at daily closing above 1.1390. Buy above 1.0840-1.0525 with risk below 1.0525 targeting 1.0900-1.0970-1.1020 and 1.1090-1.1150-1.1210.

GBP/USD

GBP/USD on Tuesday made an intra‐day low of US$1.2681/GBP, a high of US$1.2738/GBP, and settled the day up by 0.155% to close at US$1.2711/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 1.2650-1.2400 with a target of 1.2690-1.2750-1.2855 and 1.2910-1.2970-1.3050 with a stop loss closing below 1.2400. Sell in between 1.2690-1.2950 with targets at 1.2650-1.2590 and 1.2520-1.2450 with a stop loss should be 1.2970.

USD/JPY

USD/JPY on Tuesday made an intra‐day low of JPY144.68/USD, an intraday high of JPY144.68/USD, and settled the day down by 0.138% at JPY144.44/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (137.57), 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 sell as it has given a negative crossover to confirm a bearish stance.

Trading Strategy: Neutral to Sell

Sell below 145.40-148.00 with risk above 148.00 targeting 144.60-144.00-143.50 and 142.20-141.00-139.70. Long positions above 144.60-140.00 with targets of 145.40-146.00-146.90 and 147.50-148.00 with stops below 136.00