Daily Markets

• Most Asian currencies retreated on Monday as the dollar rebounded after a blowout nonfarm payrolls report saw fears of high for longer interest rates creep back into markets. The dollar also benefited from a drop in the euro, which hit a one-month low amid political uncertainty after the results of the European Union elections showed a broad swing towards right-wing parties. French President Emmanuel Macron called for snap legislative elections later in June after his party was beaten by Marine Le Pen’s far-right party in the EU vote. Regional trading volumes were limited on account of market holidays in China, Hong Kong and Australia. The dollar index and dollar index futures advanced in Asian trade on Monday, extending strong gains from Friday after a strong nonfarm payrolls report. The reading saw traders sharply scale back expectations for a rate cut in September. The payrolls data just came days before a Federal Reserve meeting this week, where the central bank is widely expected to keep rates on hold. But any signals on future rate decisions will be closely watched. Also on tap this week is key consumer price index inflation data, due on Wednesday. The reading is expected to show inflation remaining well above the Fed’s 2% annual target. Uncertainty over the Fed meeting and interest rates battered most Asian currencies. Weakness in the yen came even as gross domestic product data showed Japan’s economy shrank slightly less than expected in the first quarter. But the economy still remained squarely in contraction. The GDP data came just before a Bank of Japan meeting later this week, where the central bank is expected to begin tightening policy by reducing its asset purchases. But just how much the BOJ can tighten policy remains uncertain, given that the economy remains weak.

Gold – XAU

Gold on Friday made its intraday high of US$2387.57/oz and low of $2286.70/oz. Gold is down by 3.44% at US$2294.08/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 2300-2360 keeping stop loss closing above 2360, targeting 2290-2281-2270 and 2258-2250. Buy in between 2290-2250 with risk below 2250 targeting 2300-2309-2320 and 2331-2350-2374.

Silver - XAG

Silver on Friday made its intraday high of US$31.52/oz and low of US$29.09/oz settle down by 6.81% at US$29.17/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 30.10-26.90, targeting 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 Friday made an intra‐day high of US$75.95/bbl, an intraday low of US$74.97/bbl, and settled down by 0.360% to close at US$75.17/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 75.50-79.20 with stop loss at 80.00; targeting 74.90-74.00-73.20 and 72.00-71.40-70.60. Buy above 74.90-70.00 with risk daily closing below 70.00, targeting 75.50 and 76.40-77.00-78.10.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.0798/EUR, a high of US$1.0901/EUR, and settled the day down by 0.787% to close at US$1.0801/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 1.0805-1.0450 with risk below 1.0400 targeting 1.0845-1.0890 and 1.1020-1.1105-1.1145.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2715/GBP, a high of US$1.2818/GBP, and settled the day down by 0.542% to close at US$1.2719/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 1.2700-1.2050 with a target of 1.2760-1.2830-1.2890 and 1.2950-1.2990 with a stop loss closing below 1.2050. Sell in between 1.2800-1.3100 with targets at 1.2760-1.2700-1.2670 and 1.2610-1.2500-1.2450 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Tuesday made an intra‐day low of JPY155.11/USD an intraday high of 157.06/USD, and settled the day up by 0.768% 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 157.00-159.00 with risk above 159.00 targeting 156.00-155.50-154.30 and 153.60-153.10-152.60. Long positions above 156.20-149.50 with targets of 156.90-157.50 and 158.00-158.60 with stops below 149.50.