Daily Markets

• Most Asian currencies moved little on Thursday and the dollar steadied ahead of key U.S. inflation data, while the yen strengthened sharply as a Bank of Japan member called for an end to negative interest rates. Regional currencies were nursing overnight losses after several Federal Reserve members said that more work was needed to achieve the bank’s 2% annual inflation target, while GDP data underscored resilience in the U.S. economy. But the dollar fell slightly in Asian trade amid pressure from a sharp rise in the Japanese yen. The yen firmed 0.6% against the dollar after BOJ member Hajime Takata said on Thursday that the central bank should consider an exit from its ultra-loose policies. Takata called for an end to the BOJ’s yield curve control and negative interest rates, citing progress towards achieving the central bank’s 2% inflation target. Takata’s comment fueled speculation that the central bank will raise interest rates by as soon as April- a notion that was already in play after stronger-than-expected consumer price index inflation data released earlier this week. But other economic readings for January- specifically retail sales and industrial production- still painted a middling picture of the Japanese economy, which had unexpectedly fallen into recession in the fourth quarter. Economic weakness could potentially delay an early pivot by the BOJ. Other Asian currencies moved in a flat-to-low range on Thursday. The Australian dollar rose 0.4%, recovering sharply from steep losses in the prior session after softer-than-expected inflation data. Underwhelming retail sales data on Thursday furthered bets that the Reserve Bank will have little cause to keep raising interest rates. Focus was squarely on PCE price index data- the Fed’s preferred inflation gauge, which is due later on Thursday and expected to reiterate that inflation remained sticky in January. A chorus of Fed officials said the central bank was in no hurry to begin cutting interest rates, citing concerns over sticky inflation. Fed officials John Williams and Raphael Bostic both said on Wednesday that more work was needed to meet the Fed’s 2% annual inflation target.

Gold – XAU

Gold on Wednesday made its intraday high of US$2037.83/oz and low of $2024.46/oz. Gold is up by 0.196% at US$2034.28/oz.

Technicals in Focus:

On the daily charts, gold trades higher than 20DMA (1953). If it drops below this level, it could lead to 1,927. The MACD is currently below the zero line but the histograms are showing an increasing trend, indicating that there may be upward movement in the coming sessions. The RSI is currently at 45.31, which is in the neutral region, suggesting there may be more selling pressure before it rebounds. The Stochastic Oscillator is also in the oversold territory but has given a positive crossover, indicating a bullish stance for intraday trades.

Trading Strategy: Sell on Strength

Sell in between 2038-2061 keeping stop loss closing above 2061, targeting 1985-1974-1965 and 1955-1948. Buy in between 2024-1950 with risk below 1950 targeting 2000-2020-2039 and 2050-2058-2064.

Silver - XAG

Silver on Wednesday made its intraday high of US$22.50/oz and low of US$22.25/oz settle down by 0.022% at US$22.44/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 22.75-19.30, targeting 23.50-24.60 and 25.00-25.90 with stop loss should be placed on the breakage below 19.00. Sell in between 23.30-27.50 with a stop loss above 27.50 targeting 22.40-21.90 and 21.50-20.90-20.50.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$79.25/bbl, an intraday low of US$77.50/bbl, and settled down by 0.282% to close at US77.96/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 75.37, a support level, and breakage above will call for 77.48. 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 overbought region, giving a negative crossover to confirm a bearish 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 78.00-81.00 with stop loss at 81.50; targeting 76.50-75.75-74.40 and 73.70-72.90-72.00. Buy above 76.75-71.00 with risk daily closing below 71.00; targeting 77.30-78.00-79.00 and 79.90-80.80.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.0796/EUR, a high of US$1.0846/EUR, and settled the day down by 0.052% to close at US$1.0837/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 1.0890-1.1100, targeting 1.0805-1.0775 and 1.0770-1.0640 with stop-loss at daily closing above 1.1100. Buy above 1.0805-1.0450 with risk below 1.0400 targeting 1.0890 and 1.1020-1.1105-1.1145.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.2621/GBP, a high of US$1.2687/GBP, and settled the day down by 0.182% to close at US$1.2602/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.2297) is becoming a resistance level. 14-D RSI is currently in a neutral region and direction is difficult to predict on an RSI basis. The Stochastic Oscillator is in oversold territory and gives a positive crossover to confirm a bullish 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 1.2610-1.2050 with a target of 1.2670-1.2730 and 1.2790-1.2850-1.2890 with a stop loss closing below 1.2050. Sell in between 1.2670-1.2950 with targets at 1.2690-1.2630-1.2540 and 1.2490-1.2440-1.2390 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Wednesday made an intra‐day low of JPY150.36/USD an intraday high of 150.83/USD, and settled the day up by % at JPY150.67/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (137.57), 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 150.60-153.50 with risk above 153.90 targeting 149.90-149.30-148.90 and 146.95-146.50-145.80. Long positions above 149.90-140.90 with targets of 150.50-151.30-151.90 and 152.30-153.90 with stops below 140.00.