Daily Markets

• The U.S. dollar fell Thursday, as traders weighed up the competing factors of benign U.S. inflation yet a more hawkish Federal Reserve. The dollar saw some volatile trading on Wednesday, falling in the immediate aftermath of the U.S. inflation report, which showed consumer prices flat month-to-month in May against market expectations of a 0.1% rise. This brings Thursday’s PPI release firmly into focus, with the headline figure expected to show monthly growth of 0.1% in May, a drop from 0.5% growth the prior month. The core PPI release, which excludes volatile food and energy prices, is expected to show monthly growth of 0.3%, a drop from 0.5% growth the previous month. EUR/USD rose 0.1% to 1.0812, continuing to gain after rising 0.6% overnight, as traders digested more regional inflation data. German wholesale prices fell by 0.7% in May compared with the same month last year, while Spanish consumer prices rose 3.6% on an annual basis in May. In Asia, USD/JPY traded 0.3% higher to 157.23, with traders now awaiting more cues on policy from the BOJ on Friday. The central bank is likely to keep rates steady, but is expected to scale back some of its bond purchases in a bid to tighten policy.

Gold – XAU

Gold on Thursday made its intraday high of US$2326.50/oz and low of $2295.47/oz. Gold is down by 0.911% at US$2303.59/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 2320-2382 keeping stop loss closing above 2382, targeting 2309-2300-2290 and 2281-2270-2258. Buy in between 2300-2250 with risk below 2250 targeting 2320-2331-2350 and 2360-2374.

Silver - XAG

Silver on Thursday made its intraday high of US$29.69/oz and low of US$28.63/oz settle down by 2.565% at US$28.93/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 29.00-26.90, 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 30.00-32.00 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 Thursday made an intra‐day high of US$78.52/bbl, an intraday low of US$77.34/bbl, and settled down by 0.54% to close at US$77.57/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 78.00-81.29 with stop loss at 81.30; targeting 77.00-76.40-74.90 and 74.00-73.20-72.00. Buy above 77.00-72.00 with risk daily closing below 72.00, targeting 78.10-79.20-80.00 and 80.60-81.30.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.0732/EUR, a high of US$1.0815/EUR, and settled the day down by 0.665% to close at US$1.0736/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 1.0785-1.1100, targeting 1.0700-1.0640-with stop-loss at daily closing above 1.1100. Buy above 1.0690-1.0450 with risk below 1.0400 targeting 1.0845-1.0890 and 1.1020-1.1105-1.1145.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.2760/GBP, a high of US$1.2859/GBP, and settled the day down by 0.278% to close at US$1.2760/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 Thursday made an intra‐day low of JPY156.54/USD an intraday high of 157.30/USD, and settled the day up by 0.181% at JPY156.96/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 157.50-159.00 with risk above 159.00 targeting 156.00-155.50-154.30 and 153.60-153.10-152.60. Long positions above 157.00-149.50 with targets of 156.90-157.50 and 158.00-158.60 with stops below 149.50.