Daily Markets

• The U.S. dollar edged up against the euro on Tuesday, as Federal Reserve policymakers said it is prudent for the U.S. central bank to wait several more months to ensure that inflation really is back on a path to the 2% target before commencing interest rate cuts. Against other currencies, the greenback was mostly flat ahead of the U.S. Memorial Day holiday next week. Fed Governor Christopher Waller told the Peterson Institute for International Economics in Washington, on Tuesday, he would need to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. Waller, however, did put a pin in any speculation that interest rates may need to rise again for demand to soften enough to ease price pressures further, saying the latest inflation data is "reassuring" and the probability of a rate hike is "very low. Atlanta Fed Chair Raphael Bostic also spoke on Tuesday and warned against cutting rates too quickly. The Fed, he said, needs to be cautious about approving its first rate cut to be sure it does not touch off pent-up spending among businesses and households, and put the central bank in a position where inflation starts "bouncing around." Fed Chair Jerome Powell, in his press briefing after the Fed held rates steady earlier this month, also ruled out rate hikes. Investors will be watching Thursday's data from the European Central Bank negotiated wage tracker and the euro zone Purchasing Managers' Index which could provide further clues about the monetary cycle in the euro area. On Tuesday, the U.S. currency slipped 0.04% against the Japanese yen to 156.20. This dollar-yen pair has moved in tight ranges in the past couple of trading days after a tumultuous start to May in the wake of suspected rounds of currency interventions by Tokyo to prop up the yen. Fears of intervention from Japanese authorities have deterred traders from pushing the yen to new lows. The yen dropped to more than 160 per dollar on April 29, its weakest in 34 years. In cryptocurrencies, ether was set for its largest two-day gain in nearly two years and bitcoin approached a record high on speculation about the outcome of applications for U.S. spot exchange-traded funds that would track the world's second-biggest cryptocurrency.

Gold – XAU

Gold on Tuesday made its intraday high of US$2433.79/oz and low of $2406.20/oz. Gold is down by 0.180% at US$2420.53/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 2420-2482 keeping stop loss closing above 2482, targeting 2431-2410-2400 and 2382-2370-2351. Buy in between 2410-2351 with risk below 2350 targeting 244-2,450-2,462 and 2,470-2,482.

Silver - XAG

Silver on Tuesday made its intraday high of US$32.48/oz and low of US$31.05/oz settle up by 0.471% at US$31.95/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 31.40-28.90, targeting 31.90-32.40-33.00 and 33.70-34.50-34.90 with stop loss should be placed on the breakage below 23.00. Sell in between 31.90-35.00 with a stop loss above 35.50 targeting 32.10-31.60-31.00 and 30.40-29.80-28.90.

Oil - WTI

Crude Oil on Tuesday made an intra‐day high of US$79.21/bbl, an intraday low of US$77.59/bbl, and settled down by 1.23% to close at US$78.14/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 78.00-89.65 with stop loss at 90.00; targeting 77.50 and 77.00-76.40. Buy above 77.50-75.00 with risk daily closing below 75.00, targeting 78.10-79.00-79.90 and 80.50-81.10-82.00.

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.0842/EUR, a high of US$1.0874/EUR, and settled the day down by 0.0257% to close at US$1.0852/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 1.0700-1.0640-with stop-loss at daily closing above 1.1100. Buy above 1.0850-1.0450 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$1.2685/GBP, a high of US$1.2726/GBP, and settled the day up by 0.0244% to close at US$1.2707/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 1.2650-1.2050 with a target of 1.2690-1.2730-1.2760 and 1.2830-1.2890 with a stop loss closing below 1.2050. Sell in between 1.2700-1.2900 with targets at 1.2670-1.2610-1.2500 and 1.2450-1.2360-1.2300 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Tuesday made an intra‐day low of JPY155.83/USD an intraday high of 156.54/USD, and settled the day down by 0.056% at JPY156.13/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 156.50-159.00 with risk above 159.00 targeting 153.10-152.60-151.00 and 150.60-149.90-149.30. Long positions above 155.90-149.50 with targets of 156.50-156.90-157.50 and 158.00-158.60 with stops below 149.50.