Daily Markets

• The U.S. dollar edged higher in early European trade Tuesday, bouncing off its lowest level in a month ahead of Fed Chair Jerome Powell’s testimony to the Senate, while the euro has held its ground amid a volatile French political climate. The dollar has bounced a little Tuesday, but remains on the back foot following Friday’s weak jobs report and ahead of Chair Powell’s two days of testimony before Congress, beginning later on Tuesday with the Senate and followed by the House on Wednesday. Confidence is growing that the Fed will sanction the first rate cut of this cycle in September, with traders currently seeing about a 76% chance of a rate cut then, up from 66% a week ago, according to the CME Group's (NASDAQ:CME) FedWatch Tool. There will be more clues over the likely path of U.S. interest rates this week, with the release of key consumer inflation data on Thursday. Traders are still trying to digest the implications of Sunday’s second round of parliamentary elections in France, with the country now facing a hung parliament and difficult negotiations to form a government. A hung parliament in France is likely to complicate policymaking, S&P Global said on Monday, warning that more debt or a sustained slump in economic growth could trigger another rating cut. The credit rating agency downgraded France at the end of May. Bank of England policymaker Jonathan Haskel said that day he wanted to keep interest rates on hold as inflation pressures remained in the jobs market. The Bank of England next meets at the start of August.

Gold – XAU

Gold on Monday made its intraday high of US$2371.43/oz and low of $2347.48/oz. Gold is up by 0.198% at S$2363.50/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 2382-2450 keeping stop loss closing above 2450, targeting 2390-2382-2362 and 2350-2334-2300. Buy in between 2360-2290 with risk below 2290 targeting 2400-2418-2431 and 2440-2450.

Silver - XAG

Silver on Monday made its intraday high of US$31.13/oz and low of US$30.49/oz settle up by 0.130% at US$30.77/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 30.90-35.00 with a stop loss above 35.50 targeting 30.10-29.40-28.40-27.90 and 27.10-26.50-26.00.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$81.86/bbl, an intraday low of US$80.64/bbl, and settled down by 0.611% to close at US$81.15/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 81.00-85.29 with stop loss at 85.30; targeting 82.00-81.20-80.00 and 79.20-78.10-77.00. Buy above 80.00-75.00 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 Monday made an intraday low of US$1.0804/EUR, a high of US$1.0832/EUR, and settled the day down by 0.096% to close at US$1.0812/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 1.0850-1.1100, targeting 1.0700-1.0640-with stop-loss at daily closing above 1.1100. Buy above 1.0785-1.0450 with risk below 1.0400 targeting 1.0845-1.0890 and 1.1020-1.1105-1.1145.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.2770/GBP, a high of US$1.2824/GBP, and settled the day down by 0.156% to close at US$1.2784/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2674) is becoming a support 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 1.2790-1.2050 with a target of 1.2830-1.2890 and 1.2950-1.2990 with a stop loss closing below 1.2050. Sell in between 1.2830-1.3100 with targets at 1.2790-1.2720-1.2670 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 JPY160.71/USD an intraday high of 161.52/USD, and settled the day up by 0.317% at JPY161.27/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 160.30-159.60-159.00-158.60 and 158.00-157.50-156.00. Long positions above 161.10-156.50 with targets of 161.10-161.60-162.00 and 162.50-163.20-164.00 with stops below 156.00.