Daily Markets

• Gold prices steadied on Thursday after falling in the prior session as the minutes of the Federal Reserve’s June meeting showed that policymakers supported more rate hikes, presenting a dour outlook for metal markets. Wednesday’s losses saw gold wipe out most of a recent recovery, as the yellow metal struggled to rise from a three-month low hit in June. Despite worsening economic conditions, investors have largely pivoted to the dollar as a preferred safe haven, amid growing expectations that the Fed will keep raising interest rates in the coming months. The minutes of the Fed’s June meeting showed that nearly all members of the central bank supported more interest rate hikes this year, citing stubborn inflation and unforeseen strength in the labor market. The Fed had kept rates on hold in June, but had forecast an at least 50 basis point (bps) hike in rates this year. Rising interest rates bode poorly for non-yielding assets such as gold, given that they push up the opportunity cost of holding said assets. Wednesday’s losses saw spot gold pull back from the $1,925 to $1,935 an ounce range, which analysts had said pegged as a support level for bullion. The yellow metal is now back to testing the $1,900 support level. The Fed minutes saw traders ramp up expectations for a rate hike later in July, with markets now pricing in a 90.5% chance that the Fed will raise rates by 25 bps during a late-July meeting. Focus is now on key U.S. nonfarm payrolls data due on Friday, for more cues on the labor market. The reading is likely to factor into the Fed’s July decision on rates. Weak economic data from major importer China, coupled with a potential escalation in a Sino-U.S. trade war, also presented a dour outlook for copper. China imposed curbs on key chipmaking material exports to the U.S. this week, which markets fear could invite retaliatory measures.

Gold – XAU

Gold on Wednesday made its intraday high of US$1934.92/oz and low of $1914.62/oz. Gold is up by 0.543% at US$1915.02/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 Wednesday made its intraday high of US$23.29/oz and low of US$22.84/oz settled up by 0.798% at US$23.11/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 22.90-18.30, 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 23.40-27.50 with a stop loss above 27.50; targeting 22.05-21.60-21.00 and 20.80.

Oil - WTI

Crude Ol on Wednesday made an intra‐day high of US$72.20/bbl, an intraday low of US$70.43/bbl, and settled up by 1.16% to close at US71.86/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 72.55-75.20 with stop loss at 75.00; targeting 70.10-69.00-68.40 and 67.50-66.90-66.00. Buy above 71.60-66.50 with risk daily closing below 66.00; targeting 72.50-73.50-74.10 and 74.60-75.20.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.0850/EUR, a high of US$1.0907/EUR, and settled the day down by 0.233% to close at US$1.0853/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 Wednesday made an intra‐day low of US$1.2687/GBP, a high of US$1.2734/GBP, and settled the day down by 0.0621% to close at US$1.2703/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 Wednesday made an intra‐day low of JPY144.07/USD, an intraday high of JPY144.73/USD, and settled the day up by 0.445% at JPY144.62/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 144.00-148.00 with risk above 148.00 targeting 143.50 and 142.20-141.00-139.70. Long positions above 143.50-140.00 with targets of 144.00-145.40-146.00-146.90 and 147.50-148.00 with stops below 136.00