Daily Markets

• Oil prices pulled back from three-month highs on Wednesday as industry data showed a build in U.S. crude inventories and investors remained cautious ahead of an expected Federal Reserve rate hike later in the day. U.S. crude stocks rose by about 1.32 million barrels in the week ended July 21, according to market sources citing American Petroleum Institute figures on Tuesday. Analysts polled by Reuters had expected a 2.3 million barrel drawdown. U.S. government data on inventories is due on Wednesday. The Fed's policy meeting started on Tuesday, with most market participants expecting the central bank to deliver a 25 basis-point rate hike when it concludes. But, with price pressures easing, money market traders are split on the odds of another hike later in the year. The U.S. dollar has been on a gradual uptrend, rebounding from a 15-month low last week and making it more expensive for buyers to procure commodities such as oil. On Tuesday, Brent and WTI hit their highest since April 19 amid concerns about supply due to output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies, and pledges by Chinese authorities to shore up the world's second-largest economy. However, concerns about how China, the world's No.2 oil consumer, will actually step up policy support remained, keeping a further lid on prices. Investors are also waiting to see if major producer Saudi Arabia will roll over voluntary production cuts into September. Saudi oil exports fell almost 40% in May from the same period a year ago, latest government data released on Tuesday showed. The Fed is widely expected to raise interest rates by 25 basis points later in the day. But while the hike appears to be largely priced in by markets, uncertainty over the Fed’s outlook kept sentiment muted on Wednesday. Fed Fund future prices indicate that markets are pricing in the possibility that Wednesday’s hike will be the bank’s last for the year. But the Fed has given no such indication, and has forecast at least one more hike after today, given that inflation is still trending above the central bank’s annual target. Rising interest rates factored into fears that economic growth will slow this year, denting oil demand. This trend weighed heavily on crude markets this year, with prices only recently beginning to trade positive for 2023.

Gold – XAU

Gold on Tuesday made its intraday high of US$1965.58/oz and low of $1951.90/oz. Gold is down by 0.516% at US$1964.74/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, which will bring more downward stances 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, giving a negative crossover to a bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1974-2009 keeping stop loss closing above 2009, targeting 1954-1944-1934 and 1900-1894-1885. Buy in between 1960-1,871 with risk below 1874 targeting 1976-1985 and 2000-2009.

Silver - XAG

Silver on Monday made its intraday high of US$24.71/oz and low of US$24.27/oz settled up by 1.42% at US$24.66/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, bringing 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 24.20-18.30, targeting 25.00-25.90-26.30 and 26.90-27.50 with stop loss should be placed on the breakage below 18.00. Sell in between 24.70-27.50 with a stop loss above 27.50; targeting 24.60-24.10-23.40 and 22.05-21.60-21.00.

Oil - WTI

Crude Ol on Tuesday made an intra‐day high of US$79.76/bbl, an intraday low of US$78.17/bbl, and settled up by 0.625% to close at US79.20/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 68.50, 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, more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 79.60-82.60 with stop loss at 82.60; targeting 78.00-77.10-76.00 and 75.20-74.00-73.30. Buy above 78.90-73.30 with risk daily closing below 73.30; targeting 79.60-80.50 and 81.20-81.90-82.50.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.1020/EUR, a high of US$1.1086/EUR, and settled the day down by 0.099% to close at US$1.1052/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 1.1120-1.1390, targeting 1.1020-1.0900-1.0840 and 1.0790-1.0750-1.0660 with stop-loss at daily closing above 1.1390. Buy above 1.1060-1.0705 with risk below 1.0725 targeting 1 and 1.1090-1.1150-1.1210.

GBP/USD

GBP/USD on Tuesday made an intra‐day low of US$1.2808/GBP, a high of US$1.2904/GBP, and settled the day up by 0.598% to close at US$1.2901/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 1.2850-1.2400 with a target of 1.2990-1.3050-1.3140 and 1.3200-1.3260- 1.3320 with a stop loss closing below 1.2400. Sell in between 1.2940-1.3140 with targets at 1.2855-1.2800 and 1.2750-1.2650-1.2590 with a stop loss should be 1.3140.

USD/JPY

USD/JPY on Tuesday made an intra‐day low of JPY140.82/USD, an intraday high of JPY141.73/USD, and settled the day down by 0.402% at JPY140.88/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 142.00-146.00 with risk above 146.00 targeting 138.30-137.50-136.90 and 136.40-135.50-134.90. Long positions above 141.00-134.90 with targets of 142.20-143.00-144.20 and 145.00-146.00with stops below 134.00