Daily Markets

• Most Asian currencies weakened on Wednesday, while the dollar firmed as comments from Federal Reserve officials saw markets rethink expectations for U.S. interest rate cuts. The Japanese yen remained an underperformer among its peers, weakening against the dollar even as government officials kept up their warnings of more potential intervention in currency markets. Underperformance in the Australian dollar also persisted after the Reserve Bank of Australia struck a less hawkish chord than expected on Tuesday. The Japanese yen’s USDJPY pair- which is inversely representative of strength in the yen- rose 0.3% and past the 155 level, moving back towards 34-year highs of over 160 hit last week. The pair had tumbled from those levels after the Japanese government seemingly intervened in currency markets on two separate occasions, while some weakness in the dollar also aided the yen. But with markets now questioning the outlook for interest rate cuts in the U.S., traders resumed their speculation against the yen, even as Japanese officials warned against sustained weakness in the currency. While the RBA did also imply that rates will remain high for longer, markets priced out expectations of rate hikes from the Australian dollar, which had hit a near two-month high before Tuesday’s meeting. Still, losses in the Aussie are expected to be limited as interest rates remain near 12-year highs, potentially for the rest of 2024. The dollar index and dollar index futures rose 0.1% in Asian trade, extending overnight gains after a slew of Fed officials warned that U.S. rates were more likely to remain unchanged for the rest of the year. While softer-than-expected nonfarm payrolls data from last week spurred some bets on a September rate cut, a slew of Fed officials warned this week that sticky inflation was likely to give the bank more reason to keep rates static. This rhetoric boosted the dollar and weighed on most risk-driven assets, with Asian currencies seeing sustained weakness.

Gold – XAU

Gold on Tuesday made its intraday high of US$2329.81/oz and low of $2309.95/oz. Gold is down by 0.421% at US$2313.80/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 Tuesday made an intra‐day high of US$78.89/bbl, an intraday low of US$77.36/bbl, and settled down by 0.503% to close at US77.36/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 Tuesday made an intraday low of US$1.0747/EUR, a high of US$1.0790/EUR, and settled the day down by 0.119% to close at US$1.0753/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 1.0750-1.1100, 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 Tuesday made an intra‐day low of US$1.2499/GBP, a high of US$1.2569/GBP, and settled the day down by 0.426% to close at US$1.2507/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 1.2450-1.2050 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 Tuesday made an intra‐day low of JPY153.83/USD an intraday high of 154.74/USD, and settled the day up by 0.526% at JPY154.67/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 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.