Daily Markets

• Most Asian currencies weakened slightly on Tuesday as the dollar recovered from recent losses before a barrage of cues on interest rates, while the Japanese yen weakened further into territory last seen 38 years ago. Regional currencies saw little support even as traders priced in an increased chance of a September interest rate cut by the Federal Reserve. Anticipation of more cues from the Fed and on the U.S. labor market kept appetite for risk-driven assets limited. Sustained weakness in the yen sparked continued speculation over potential government intervention in currency markets. Japanese ministers said they remained vigilant over currency market moves, although the USDJPY pair was trading comfortably above the 160 yen level that had last spurred intervention in May. Traders speculated that the government could be waiting for low market volumes during the July 4 independence day holiday to intervene. The dollar index and US Dollar Index Futures steadied in Asian trade after rebounding from recent losses on Monday, with more cues on the Fed and U.S. interest rates due this week. Fed Chair Jerome Powell is set to speak at a European Central Bank conference on Tuesday, while the minutes of the Fed’s June meeting are due on Wednesday. Key nonfarm payrolls data for June is due on Friday, and is set to offer more insight into the labor market, which is also a key consideration for the Fed in cutting interest rates. The dollar saw some weakness last week as traders upped their bets on a 25 basis point rate cut in September. But a slew of Fed officials maintained that the central bank will need more confidence in cooling inflation before trimming rates. While the minutes showed policymakers had considered a rate hike in the face of sticky inflation, they had eventually settled on keeping rates steady. But UBS analysts argued that any more signs of sticky inflation was likely to invite an August hike, boosting inflation.

Gold – XAU

Gold on Monday made its intraday high of US$2338.20/oz and low of $2318.41/oz. Gold is up by 0.220% at US$2331.45/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 2334-2382 keeping stop loss closing above 2382, targeting 2300-2290 and 2281-2270-2258. Buy in between 2322-2250 with risk below 2250 targeting 2334-2350-2362 and 2374-2382 -2390.

Silver - XAG

Silver on Monday made its intraday high of US$29.46/oz and low of US$28.93/oz settle up by 1.02% at US$29.42/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 28.50-26.90, targeting 28.90-29.40-30.10 and 31.00-31.90-32.40 with stop loss should be placed on the breakage below 23.00. Sell in between 29.50-32.00 with a stop loss above 35.50 targeting 28.40-27.90-27.10 and 26.50-26.00-25.20.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$83.10/bbl, an intraday low of US$80.94/bbl, and settled up by 1.235% to close at US$82.86/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 82.90-85.29 with stop loss at 85.30; targeting 82.00-81.20-80.00 and 79.20-78.10-77.00. Buy above 82.00-75.00 with risk daily closing below 75.00, targeting 83.00-83.90-84.50 and 85.80-86.50-87.00.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.0718/EUR, a high of US$1.0775/EUR, and settled the day down by 0.0083% to close at US$1.0739/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 1.0740-1.0450 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$1.2632/GBP, a high of US$1.2711/GBP, and settled the day down by 0.020% to close at US$1.2648/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 1.2760-1.2830-1.2890 and 1.2950-1.2990 with a stop loss closing below 1.2050. Sell in between 1.2700-1.3100 with targets at 1.2670 and 1.2610-1.2500-1.2450 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Monday made an intra‐day low of JPY160.67/USD an intraday high of 161.72/USD, and settled the day up by 0.450% at JPY161.40/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 161.90-163.00 with risk above 162.00 targeting 159.60-159.00-158.60 and 158.00-157.50-156.00. Long positions above 161.30-156.50 with targets of 162.00-162.50-163.20 and 164.00-165.00 with stops below 156.00.