Daily Markets

• Most Asian currencies moved little on Tuesday, tracking a steady dollar as traders remained largely focused on upcoming U.S. inflation readings that are likely to factor into the outlook for interest rates. The Japanese yen was also a point of focus, as sustained weakness in the currency put traders on guard over any more potential intervention by the government. Most regional currencies were nursing recent losses against the dollar, as traders remained largely biased towards the greenback ahead of more cues on U.S. interest rates. The yen’s USDJPY pair, which is inversely representative of strength in the currency, rose 0.1% on Tuesday and was trading well above 156 yen. The pair had recouped a bulk of its losses made earlier in May, when the government was seen intervening in currency markets on two separate occasions. While traders now saw 160 yen as the new line in the sand for government intervention, USDJPY’s rapid ascent, despite the threat of intervention, sparked fears that the government may intervene sooner. Japanese producer price index data showed factory inflation remained largely subdued in April, pointing to little inflationary pressure on the Bank of Japan to keep tightening policy. The dollar index and dollar index futures rose slightly in Asian trade, as traders remained biased to the greenback ahead of inflation readings in the coming days. PPI data is due later on Tuesday, while the more closely-watched consumer price index reading is due later on Wednesday. Both readings are likely to factor into the outlook for U.S. interest rates, with any signs of sticky U.S. inflation presenting more headwinds for Asian currencies. Most regional units were muted on Tuesday. The Australian dollar’s AUDUSD pair fell 0.1%, while the South Korean won’s USDKRW and the Singapore dollar’s USDSGD rose 0.2% and 0.1%, respectively.

Gold – XAU

Gold on Monday made its intraday high of US$2364.37/oz and low of $2332.18/oz. Gold is down by 1.148% at US$2336.10/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 2340-2400 keeping stop loss closing above 2400, targeting 2,340-2329-2300 and 2280-2267. Buy in between 2329-2254 with risk below 2250 targeting 2353-2360-2,370 and 2,382-2,390-2,400.

Silver - XAG

Silver on Monday made its intraday high of US$28.36/oz and low of US$27.94/oz settle up by 0.044% 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 Monday made an intra‐day high of US$79.04/bbl, an intraday low of US$77.79/bbl, and settled up by 1.254% to close at US$78.74/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 78.90-89.65 with stop loss at 90.00; targeting 79.00-78.10-77.80 and 77.00-76.40. Buy above 78.50-75.00 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 Monday made an intraday low of US$1.0765/EUR, a high of US$1.0806/EUR, and settled the day up by 0.160% to close at US$1.0788/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 Monday made an intra‐day low of US$1.2511/GBP, a high of US$1.2568/GBP, and settled the day up by 0.342% to close at US$1.2557/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 Monday made an intra‐day low of JPY15549/USD an intraday high of 156.24/USD, and settled the day up by 0.344% at JPY156.18/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.