Daily Markets

• Most Asian currencies drifted higher on Tuesday, while the dollar retreated as the greenback’s rebound was held back by continued expectations of interest rate cuts and uncertainty over the 2024 presidential election. Still, sentiment towards Asia remained constrained by concerns over China, amid signs of a slowing economic recovery and uncertainty over how U.S. policies will treat the country in the coming months. The Japanese yen was the best performer for the day, continuing to strengthen against the dollar after suspected intervention by the government last week. A senior member of the Japanese government called for more clarity on interest rate hikes by the Bank of Japan, the Nikkei reported on Tuesday. The comments come just a week ahead of a BOJ meeting, where some analysts expect the bank to hike interest rates by 10 basis points. A recent increase in countrywide inflation supported this notion, although inflation still remained relatively sluggish. Uncertainty over the BOJ has been a key weight on the yen in recent months, as the central bank provided few cues on when it will tighten policy further. The dollar index and dollar index futures both fell 0.1% each in Asian trade, stalling after a sharp rebound over the past two sessions. The greenback turned volatile amid increased uncertainty over the U.S. presidential race, after President Joe Biden said he will not seek reelection, and endorsed Vice President Kamala Harris as the Democratic nominee. Reports on Monday said Harris had won enough support from Democratic delegates to become the party’s presidential nominee, but will still need to be formally nominated. Still, Republican nominee Donald Trump was seen polling ahead of Biden and Harris as of last week, CBS and HarrisX data showed. Expectations of a Trump presidency had enabled some strength in the dollar, as analysts said he would be likely to enact protectionist trade policies. But the dollar was nursing steep losses in recent weeks amid growing conviction the Federal Reserve will cut interest rates in September. The central bank is set to keep rates unchanged at a meeting next week. Speculation over a Trump presidency also weighed on the yuan, given that Trump’s administration had sparked a trade war with Beijing in the late-2010s.

Gold – XAU

Gold on Monday made its intraday high of US$2474.82/oz and low of $2444.96/oz. Gold is down by 0.553% at S$2444.96/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 2400-2520 keeping stop loss closing above 2520, targeting 2390-2381-2370 and 2362-2350. Buy in between 2390-2300 with risk below 2290 targeting 2,400-2418-2,440 and 2,450-2470-2484.

Silver - XAG

Silver on Monday made its intraday high of US$29.42/oz and low of US$28.73/oz settle down by 1.84% at US$29.10/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 30.50-31.10 and 31.90-32.40 with stop loss should be placed on the breakage below 23.00. Sell in between 29.00-35.00 with a stop loss above 35.50 targeting 28.40-27.90 and 27.10-26.50-26.00.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$78.94/bbl, an intraday low of US$77.38/bbl, and settled down by 0.943% to close at US$78.05/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 79.00-85.29 with stop loss at 85.30; targeting 79.90 and 79.20-78.10-77.00. Buy above 78.00-75.00 with risk daily closing below 75.00, targeting 79.20-80.40-82.00 and 83.00-83.9-84.50.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.0872/EUR, a high of US$1.0901/EUR, and settled the day up by 0.033% to close at US$1.0890/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 1.0900-1.1100, targeting 1.0700-1.0640-with stop-loss at daily closing above 1.1100. Buy above 1.0850-1.0450 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$1.2903/GBP, a high of US$1.2941/GBP, and settled the day up by 0.178% to close at US$1.2931/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 1.2900-1.2500 with a target of 1.2990-1.3040 and 1.3100-1.3150 with a stop loss closing below 1.2050. Sell in between 1.2980-1.3100 with targets at 1.2890-1.2800-1.2720 and 1.2670-1.2610-1.2500 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Monday made an intra‐day low of JPY156.27/USD an intraday high of 157.60/USD, and settled the day down by 0.224% at JPY156.97/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 158.000-162.00 with risk above 162.00 targeting 158.00-157.50-156.00. Long positions above 157.50.10-156.00 with targets of 159.00-159.60-160.30 and 161.10-161.60-162.00 with stops below 156.00.