Daily Markets

• Most Asian currencies weakened on Tuesday, while the dollar steadied as focus remained on just when the Federal Reserve will begin cutting interest rates. Underperformance in the Japanese yen persisted as the currency continued to reverse a bulk of its gains made on the back of government intervention last week. Focus was also on a Reserve Bank of Australia meeting where the central bank is widely expected to keep rates steady and offer up a more hawkish outlook amid sticky inflation. Weakness in the Japanese yen persisted on Tuesday, with the USDJPY pair, which is inversely representative of yen strength, rising 0.4% and past the 154 level. The currency pair had risen as far as 160 in late April, before apparent instances of government dollar selling saw the pair fall sharply to as low as 152. But the yen struggled to retain any strength, given that the main factor behind its decline- a wide gap between U.S. and Japanese interest rates- remained largely in play. Markets are now looking to more readings on Japanese inflation and wage growth to gauge whether the Bank of Japan will hike interest rates further this year, which is expected to offer some relief to the Japanese currency. Retail sales declined during the first quarter amid sticky inflation and high interest rates, indicating sustained weakness in consumer spending. This trend presents a muted outlook for inflation. Broader Asian currencies fell slightly on Tuesday, as the dollar index and dollar index futures recovered a measure of last week’s losses. Focus this week is on comments from several Fed officials on the path of interest rates, especially after softer-than-expected nonfarm payrolls data saw traders once again begin pricing in interest rate cuts by the central bank. But this notion offered little support to Asian currencies, given that the Fed is still expected to begin cutting rates only by September.

Gold – XAU

Gold on Monday made its intraday high of US$2331.80/oz and low of $2291.70/oz. Gold is up by 0.851% at US$2323.71/oz.

Technicals in Focus:

On the daily charts, gold trades higher than 20DMA (2197). If it drops below this level, it could lead to 2,100. The MACD is currently above the zero line and the histograms are showing an increasing trend, indicating that there may be upward movement in the coming sessions. The RSI is currently at 83.04, which is in the overbought region, suggesting there may be selling pressure in the next 2 to 3 sessions. The Stochastic Oscillator is also in the overbought territory but has given a positive crossover, indicating a bullish stance for intraday trades, but rebound in expected in all the overbought indicators.

Trading Strategy: Sell on Strength

Sell below 2329-2380 keeping stop loss closing above 2400, targeting 2300-2280-2267. Buy in between 2300-2254 with risk below 2250 targeting 2325 and 2340-2351-2360.

Silver - XAG

Silver on Monday made its intraday high of US$227.46/oz and low of US$26.41/oz settle up by 3.27% at US$27.41/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 20MA (25.05), breakage above will lead to 23.73. MACD is below the zero line and histograms are increasing trend, bringing a bullish stance in the upcoming sessions. RSI is in the oversold region, indicating a sell signal for now. The Stochastic Oscillator is in the overbought region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 26.20-23.90, targeting 27.50-27.90-28.90 and 29.40-30.00-30.40-31.00 with stop loss should be placed on the breakage below 23.00. Sell in between 27.00-30.50 with a stop loss above 30.50 targeting 26.40-25.90 and 25.45-24.90 and 24.60-23.90-23.20.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$78.80/bbl, an intraday low of US$77.66/bbl, and settled up by 0.743% to close at US78.44/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 78.50.00-89.65 with stop loss at 90.00; targeting 79.00-78.10-77.80 and 77.00-76.40. Buy above 77.80-75.00 with risk daily closing below 75.00, targeting 79.00-79.90-80.50 and 81.10-82.00-82.90.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.0754/EUR, a high of US$1.0790/EUR, and settled the day up by 0.0529% to close at US$1.0767/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 1.0790-1.1100, targeting 1.0700-1.0640-with stop-loss at daily closing above 1.1100. Buy above 1.0690-1.0450 with risk below 1.0400 targeting 1.0845-1.0890 and 1.1020-1.1105-1.1145.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.2531/GBP, a high of US$1.2593/GBP, and settled the day up by 0.112% to close at US$1.2560/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.2674) 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 1.2430-1.2050 with a target of 1.2500-1.2540 and 1.2600-1.2690-1.2730 with a stop loss closing below 1.2050. Sell in between 1.2540-1.2700 with targets at 1.2360-1.2300-1.2240 and 1.2190-1.2100 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Monday made an intra‐day low of JPY152.76/USD an intraday high of 154.00/USD, and settled the day up by 0.662% at JPY153.86/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 154.90-159.00 with risk above 159.00 targeting 153.10-152.60-151.00 and 150.60-149.90-149.30. Long positions above 153.90-149.50 with targets of 154.90 and 156.10-156.90-157.50 with stops below 149.50.