Daily Markets

• Most Asian currencies firmed on Thursday as increased expectations of interest rate cuts by the Federal Reserve dented the dollar, while a fragile yen kept traders on guard over potential government intervention. But gains in Asian currencies were tempered by hawkish signals from the minutes of the Fed’s June meeting, while anticipation of key payrolls data on Friday also kept sentiment cautious. Japanese yen gains some ground, but intervention concerns remain The Japanese yen took some relief from weakness in the dollar, with the USDJPY pair falling 0.2% after nearly crossing the 162 level on Wednesday. The pair was trading well above 160- the level that had last attracted government intervention in May. With Japanese officials reiterating their commitment to defend the yen, traders remained on guard over any potential intervention in the coming days. Traders speculated that the government would take advantage of low trading volumes during the July 4 U.S. market holiday to intervene. The government's intervention in May had taken place during a Japanese market holiday. Softer-than-expected ADP employment data and a weak purchasing managers index reading on non-manufacturing activity ramped up bets on a cooling U.S. economy, which traders bet will push the Fed into cutting interest rates sooner. Soft labor data also spurred bets on a weak nonfarm payrolls reading on Friday. Traders ramped up bets that the Fed will enact a 25 basis point cut in September. The CME Fedwatch tool showed traders pricing in a nearly 66% chance of a September rate cut, up from 59% seen a day ago. Still, the minutes of the Fed’s June meeting showed policymakers remained unconvinced that inflation was coming down to an extent where rate cuts will be viable. Some officials still saw the need for higher interest rates to bring down inflation. Several Fed officials, most notable Chair Jerome Powell, also warned this week that while the bank had made some progress towards combating inflation, it still lacked the confidence to begin trimming rates. Still, most Asian currencies advanced against a softer dollar. The Australian dollar’s AUDUSD pair rose 0.2% even as data showed the country’s trade balance shrank more than expected in May, due to weak exports.

Gold – XAU

Gold on Wednesday made its intraday high of US$2364.80/oz and low of $2326.74/oz. Gold is up by 1.14% at US$2355.83/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 2360-2400 keeping stop loss closing above 240, targeting 2350-2334-2300 and 2290-2281-2270. 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$30.65/oz and low of US$29.45/oz settle up by 3.29% at US$30.47/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 29.90-26.90, 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 30.50-35.00 with a stop loss above 35.50 targeting 29.40-28.40-27.90 and 27.10-26.50-26.00.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$83.41/bbl, an intraday low of US$81.94/bbl, and settled up by 0.767% to close at US$83.10/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 Wednesday made an intraday low of US$1.0735/EUR, a high of US$1.0816/EUR, and settled the day up by 0.372 % to close at US$1.0784/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 Wednesday made an intra‐day low of US$1.2671/GBP, a high of US$1.2776/GBP, and settled the day up by 0.024% to close at US$1.2740/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 Wednesday made an intra‐day low of JPY160.73/USD an intraday high of 161.94/USD, and settled the day up by 0.153% at JPY161.62/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.