Daily Markets

• The U.S. dollar traded calmly Wednesday ahead of the release of the minutes from the last Federal Reserve meeting, while sterling gained as inflation fell by less than expected in April. The dollar is struggling to move in any meaningful fashion as traders await the release of the minutes from the last Fed meeting, searching for more cues on the likely path of U.S. interest rates towards the end of the year. Last week’s soft-than-expected consumer inflation data raised hopes of rate cuts in a reasonably short time, but a series of Fed officials have continued to call for policy caution. Fed Governor Christopher Waller on Tuesday said recent economic data indicates the Fed's restrictive policy is working as directed, while Atlanta Fed Chair Raphael Bostic said the central bank needs to exercise caution ahead of its first rate cut to lead to pent-up spending and send inflation "bouncing around." Consumer prices rose by an annual 2.3%, down sharply from a 3.2% increase in March and its lowest since July 2021 when it stood at 2.0%, the Office for National Statistics said. But still above the 2.1% forecast. EUR/USD traded 0.1% lower to 1.0849, as traders position for the European Central Bank to start its rate-cutting cycle next month. “European Central Bank President Christine Lagarde sounded cautiously dovish in line with most comments from her Governing Council members in a speech yesterday,” said ING, adding that markets are pricing in 24bp of easing for next month.

Gold – XAU

Gold on Wednesday made its intraday high of US$2426.23/oz and low of $2374.87/oz. Gold is down by % at US$2378.40/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 2382-2482 keeping stop loss closing above 2482, targeting 2431-2410-2400 and 2382-2370-2351. Buy in between 2370-2305 with risk below 2305 targeting 2382-2394-2405 and 2419-2431-2,450.

Silver - XAG

Silver on Wednesday made its intraday high of US$32.17/oz and low of US$30.73/oz settle down by 3.71% at US$30.72/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 30.40-28.90, targeting 31.10-31.90-32.40 and 33.00-33.70-34.90 with stop loss should be placed on the breakage below 23.00. Sell in between 31.00-35.00 with a stop loss above 35.50 targeting 30.40-29.80-28.90 and 28.40-27.90-27.10.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$78.30/bbl, an intraday low of US$77.15/bbl, and settled down by 1.84% to close at US$77.15/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 77.00-89.65 with stop loss at 90.00; targeting 77.50 and 77.00-76.40. Buy above 76.90-75.00 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 Wednesday made an intraday low of US$1.0862/EUR, a high of US$1.0862/EUR, and settled the day down by 0.290% to close at US$1.0821/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 0.0637% 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 1.2730-1.2900 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 Wednesday made an intra‐day low of JPY155.83/USD an intraday high of 156.83/USD, and settled the day up by % at JPY156.76/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.