Daily Markets

• The yen rose for a second straight session against the dollar on Tuesday, boosted by comments from a senior Japanese politician about normalizing monetary policy, adding pressure on the Bank of Japan to continue hiking interest rates to boost the currency. The U.S. dollar overall was higher as traders waited for inflation data later in the week, while the Australian and New Zealand dollars continued to struggle after China's surprise interest rate cuts. The Aussie dollar is viewed as a proxy for China risks. Senior ruling party official Toshimitsu Motegi said overnight that the Bank of Japan should more clearly indicate its resolve to normalize monetary policy, including through steady interest rate hikes. The BOJ next sets rates on July 31. Most economists polled by Reuters expect the BOJ to keep rates on hold at the meeting. It last raised rates in March to a range of 0%-0.1% from -0.1%. The yen has found some support on the back of Tokyo's recent bouts of intervention to prop up the currency and as traders looked to the BOJ's decision. The dollar reacted little to data showing U.S. existing home sales fell more than expected in June as the median house price set another record high. Home sales dropped 5.4% last month to a seasonally adjusted annual rate of 3.89 million units, the lowest since December, data showed. Meanwhile, the median existing home price soared 4.1% from a year earlier to an all-time high of $426,900, the second straight month it touched a record peak. China surprised markets on Monday by cutting major short and long-term interest rates in its first such broad move since last August, signalling intent to boost growth in the world's second-largest economy. Trading was relatively subdued in a week with little in the way of economic data until the release of U.S. personal consumption expenditure (PCE) inflation figures for June on Friday. In addition, the market's reaction to U.S. President Joe Biden's decision to bow out of the election race was muted, though there was some unwinding of the so-called Trump trade, which saw the dollar and U.S. Treasury yields ease a touch.

Gold – XAU

Gold on Tuesday made its intraday high of US$2418.27/oz and low of $2444.96/oz. Gold is up by 0.224% at S$2409.33/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 2420-2520 keeping stop loss closing above 2520, targeting 2390-2381-2370 and 2362-2350. Buy in between 2400-2300 with risk below 2290 targeting 2418-2,440 and 2,450-2470-2484.

Silver - XAG

Silver on Tuesday made its intraday high of US$29.28/oz and low of US$28.64/oz settle up by 0.402% at US$29.21/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 28.90-26.90, targeting 29.70-30.50-31.10 and 31.90-32.40 with stop loss should be placed on the breakage below 23.00. Sell in between 29.50-35.00 with a stop loss above 35.50 targeting 28.40-27.90 and 27.10-26.50-26.00.

Oil - WTI

Crude Oil on Tuesday made an intra‐day high of US$78.49/bbl, an intraday low of US$76.19/bbl, and settled down by 1.025% to close at US$77.21/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 77.00-85.29 with stop loss at 85.30; targeting 79.90 and 79.20-78.10-77.00. Buy above 76.00-73.50 with risk daily closing below 73.00, targeting 77.40-78.00-79.20 and 80.40-82.00-83.00.

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.0843/EUR, a high of US$1.0843/EUR, and settled the day down by 0.340% to close at US$1.0852/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 Tuesday made an intra‐day low of US$1.2887/GBP, a high of US$1.2934/GBP, and settled the day down by 0.194% to close at US$1.2906/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 1.2850-1.2500 with a target of 1.2990-1.3040 and 1.3100-1.3150 with a stop loss closing below 1.2050. Sell in between 1.2920-1.3100 with targets at 1.2870-1.2800-1.2720 and 1.2670-1.2610-1.2500 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Tuesday made an intra‐day low of JPY155.53/USD an intraday high of 157.08/USD, and settled the day down by 0.913% at JPY155.54/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (155.35), 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 155.000-162.00 with risk above 162.00 targeting 154.50-154.00-153.20 and 152.50-151.60. Long positions above 154.50-151.00 with targets of 155.30-156.00-156.50 and 157.00-158.50-159.00 with stops below 151.00.