Daily Markets

• The dollar inched higher on Friday following a reading on U.S. consumer sentiment as investors sorted through a batch of comments from Federal Reserve officials, with the focus beginning to turn toward key inflation readings next week. The greenback pared declines and turned modestly higher after the University of Michigan's preliminary reading on consumer sentiment came in at 67.4 for May, a six-month low and below the 76.0 estimate of economists polled by Reuters. In addition, the one-year inflation expectation climbed to 3.5% from 3.2%. The dollar had weakened on Thursday after a higher than expected reading on initial jobless claims fueled expectations the labor market was loosening, adding to other recent data that indicated the overall economy was slowing. Next week, investors will eye readings on inflation in the form of the consumer price index (CPI) and producer price index (PPI), as well as retail sales data. Also supporting the dollar were comments from Dallas Federal Reserve President Lorie Logan, who said it was not clear whether monetary policy was tight enough to bring inflation down to the U.S. central bank's 2% goal, and it was too soon to be cutting interest rates. That ran counter to earlier comments from Atlanta Federal Reserve President Raphael Bostic, who said the Fed likely remained on track to cut rates this year even if the timing and extent of the policy easing was uncertain. In addition, Chicago Federal Reserve President Austan Goolsbee said he believes U.S. monetary policy is "relatively restrictive." The comments capped off a week of varying opinions among Fed officials as to whether rates are high enough. Following last week's softer than expected U.S. payrolls report and a Fed policy announcement, markets have been pricing in about 50 basis points (bps) of cuts this year, with a 62.2% chance for a cut of at least 25 basis points in September, according to CME's FedWatch Tool. Against the Japanese yen, the dollar strengthened 0.26% to 155.86 and was up about 1.9% on the week against the Japanese currency after it tumbled 3.4% last week, its biggest weekly percentage drop since early December 2022 after two suspected interventions by the Bank of Japan. Japan's Finance Minister Shunichi Suzuki said on Friday the government would take appropriate action on foreign exchange if needed, echoing recent comments from other officials. Sterling edged up 0.02% to $1.2525 after earlier reaching $1.2541 in the wake of data showing Britain's economy grew by the most in nearly three years in the first quarter of 2024, ending the shallow recession it entered in the second half of last year.

Gold – XAU

Gold on Friday made its intraday high of US$2378.26/oz and low of $2345.24/oz. Gold is up by 0.634% at US$2360.59/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 2360-2400 keeping stop loss closing above 2400, targeting 2,340-2329-2300 and 2280-2267. Buy in between 2351-2254 with risk below 2250 targeting 2353-2360-2,370 and 2,382-2,390-2,400.

Silver - XAG

Silver on Friday made its intraday high of US$28.74/oz and low of US$28.02/oz settle down by 0.45% at US$28.17/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 27.90-23.90, targeting 28.90-29.40 and 30.00-30.40-31.00 with stop loss should be placed on the breakage below 23.00. Sell in between 28.50-30.50 with a stop loss above 30.50 targeting 28.10-27.50-26.40 and 25.90-25.45-24.60.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$79.54/bbl, an intraday low of US$77.79/bbl, and settled down by 1.68% to close at US77.83/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 78.50-89.65 with stop loss at 90.00; targeting 79.00-78.10-77.80 and 77.00-76.40. Buy above 77.50-75.00 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 Friday made an intraday low of US$1.0759/EUR, a high of US$1.0789/EUR, and settled the day down by 0.318% to close at US$1.0771/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 1.0805-1.1100, targeting 1.0700-1.0640-with stop-loss at daily closing above 1.1100. Buy above 1.0750-1.0450 with risk below 1.0400 targeting 1.0805-1.0845-1.0890 and 1.1020-1.1105-1.1145.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2444/GBP, a high of US$1.2540/GBP, and settled the day up by 0.023% to close at US$1.2525/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 Friday made an intra‐day low of JPY155.25/USD an intraday high of 155.89/USD, and settled the day up by 0.028% at JPY155.78/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 155.90-159.00 with risk above 159.00 targeting 153.10-152.60-151.00 and 150.60-149.90-149.30. Long positions above 154.90-149.50 with targets of 154.90 and 156.10-156.90-157.50 with stops below 149.50.