Daily Markets

• The dollar gained on Thursday as rising geopolitical tensions drove a safe-haven boost, while the British pound fell after the Bank of England cut interest rates from a 16-year high. Concerns about a widening conflict in the Middle East intensified after Hamas leader Ismail Haniyeh was assassinated in the Iranian capital, Tehran, on Wednesday morning, drawing threats of revenge on Israel. The dollar also bounced as a selloff on Wednesday following dovish comments by Federal Reserve Chair Jerome Powell at the conclusion of the U.S. central bank's two-day meeting was seen as possibly overdone. Powell said that interest rates could be cut as soon as September if the U.S. economy follows its expected path. The Fed's policy statement on Wednesday cited "some further progress toward the (Federal Open Market) Committee's 2% objective," while noting that the unemployment rate, at 4.1%, "remains low." Traders are now fully pricing in three 25-basis-point rate cuts by year-end, indicating one cut at each of the Fed's September, November and December meetings. The next major U.S. economic release that is likely to drive Fed policy will be Friday’s jobs report for July. It is expected to show that employers added 175,000 jobs during the month, while the unemployment rate is expected to stay steady at 4.1%. Data on Thursday showed that the number of Americans filing new applications for unemployment benefits increased to an 11-month high last week. Tumbling stocks also likely boosted the safe-haven appeal of the U.S. currency. Sterling slipped 0.96% to $1.2733, the lowest level since July 3, after the Bank of England cut interest rates following a tight vote by policymakers, who were split over whether inflation pressures had eased sufficiently. Governor Andrew Bailey led the 5-4 decision to reduce rates by a quarter-point to 5%, and he said the BoE would move cautiously going forward. The yen has gained since hitting a 38-year low of 161.96 against the dollar on July 3, boosted by interventions by Japanese authorities and by traders unwinding carry trades in which they were short the yen and long U.S. dollar assets.
• Gold prices rose in Asian trade on Friday and were in sight of a record high as a rout in global markets, amid concerns over an economic slowdown, fueled safe haven buying into the yellow metal. Bullion was sitting on strong price gains this week as bets on U.S. interest rate cuts weighed on the dollar and dented Treasury yields. Heightened tensions in the Middle East, after the killing of a Hamas leader, also spurred some safe haven demand for the yellow metal. Spot prices were set to add over 3% this week- their best week since March. The yellow metal benefited from safe haven demand as weak purchasing managers index and employment data from the U.S. ramped up concerns over a slowdown in the world’s largest economy. The data triggered steep declines on Wall Street, which spilled over into Asian trade and sparked a broad risk-off move. This fueled safe haven bids for gold. The weak data also came after the Federal Reserve flagged the potential for an interest rate cut in September, which saw markets almost entirely price in a 25 basis point in the month. Focus was now on upcoming nonfarm payrolls data, for more cues on the U.S. economy. A cooling labor market furthers the prospect of interest rate cuts by the Fed. Lower interest rates bode well for precious metal prices, given that they decrease the opportunity cost of investing in non-yielding assets.
• Oil prices rose on Friday but were set for a fourth successive weekly decline, as signs of disappointing global fuel demand growth outweighed fears of supply disruptions Both benchmarks have declined about 7.3% over the last four weeks in the longest streak of consecutive weekly losses this year. Disappointing economic data from top oil importer China and a survey showing weaker manufacturing activity across Asia, Europe and the United States raised the risk of an underpowered global economic recovery that would weigh on oil consumption. Falling manufacturing activity in China also inhibited prices, adding to concerns about demand growth after June data showed imports and refinery activity were lower than last year. Asia's crude oil imports dropped in July to the lowest in two years, sapped by weak demand in China and India, data from LSEG Oil Research showed. Oil investors are also cautiously watching developments in the Middle East, where the killing of senior leaders of Iran-aligned militant groups Hamas and Hezbollah stoked fears that the region could be on the brink of all-out war, threatening to disrupt supplies. "Heightened geopolitical tensions were reflected in a rising premium for call options as traders are taking a view that prices will rise," ANZ said, adding that Brent call option contract purchases rose to the highest volume since April.

Gold – XAU

Gold on Thursday made its intraday high of US$262.16/oz and low of $2430.10/oz. Gold is up by 0.067% at S$2446.02/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 2450-2520 keeping stop loss closing above 2520, targeting 2431-2418-2400 and 2384-2370-2362. Buy in between 2431-2350 with risk below 2350 targeting 2,450-2470-2484 and 2490-2500.

Silver - XAG

Silver on Thursday made its intraday high of US$29.14/oz and low of US$28.19/oz settle down by 2.19% at US$28.49/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 28.60-25.90, targeting 28.00-28.50-29.70 and 30.50-31.10- 31.90 with stop loss should be placed on the breakage below 25.00. Sell in between 28.90-31.00 with a stop loss above 31.50 targeting 28.50-28.00-27.60 and 27.10-26.50-26.00.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US$78.24/bbl, an intraday low of US$75.73/bbl, and settled down by 2.05% to close at US$76.37/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 76.50-81.29 with stop loss at 81.30; targeting 76.00-75.10-74.50 and 73.90-73.10-72.50. Buy above 76.00-73.50 with risk daily closing below 73.00, targeting 76.50-77.40-78.00 and 79.20-80.40-82.00.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.0776/EUR, a high of US$1.0834/EUR, and settled the day down by 0.313% to close at US$1.0790/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 1.0810-1.0450 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$1.2726/GBP, a high of US$1.2861/GBP, and settled the day down by 0.915% to close at US$1.2736/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 1.2700-1.2500 with a target of 1.2800-1.2890-1.2990-1.3040 and 1.3100-1.3150 with a stop loss closing below 1.2050. Sell in between 1.2790-1.3100 with targets at 1.2720 and 1.2670-1.2610-1.2500 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Thursday made an intra‐day low of JPY148.50/USD an intraday high of 150.88/USD, and settled the day down by % at JPY149.34/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 149.50-154.00 with risk above 154.00 targeting 149.50-149.0-148.40 and 147.50-146.90-146.45. Long positions above 149.500-146.00 with targets of 150.40-151.00-151.60 and 152.50-153.20-154.00 with stops below 146.00.