Daily Markets

• The dollar was off a one-week high against other major currencies on Friday, capping off a turbulent few days as traders digested a drop in U.S. jobless claims and the prospect of a looming economic downturn. The U.S. currency was down against the Japanese yen following a three-day rebound, as Thursday's firmer-than-expected employment data spurred a paring back in bets for Federal Reserve interest rate cuts later this year. The yen and the Swiss franc - another safe haven currency - hung near one-week lows as major stock markets rose and Treasury yields dipped. Markets have endured a chaotic week, triggered in large part by surprisingly soft U.S. payrolls figures a week ago that sent global stocks tumbling, while demand for the safety of assets such as the yen and the franc sent those currencies surging to their highest since the start of the year on Monday. Data on Thursday showed the number of Americans filing new applications for unemployment benefits fell more than expected last week, calming fears the labour market was unravelling and reinforcing that a gradual softening remains intact. The odds of the Fed cutting interest rates by 50 basis points at its next policy meeting on Sept. 17-18 fell to 52%, from 69% a day earlier, with a 25 basis point cut now seen as having a 49% probability, according to the CME Group's (NASDAQ:CME) FedWatch Tool. The yen had shot higher this month, reaching the strongest since Jan. 2 at 141.675 per dollar on Monday, as an unwinding of short positions snowballed, following a surprise rate hike by the Bank of Japan amid weakness in U.S. economic indicators. U.S. Commodity Futures Trading Commission figures will give a clearer indication later on Friday of the extent of yen buying that has taken place. The euro was flat at $1.0919, but little changed compared with a week ago. On Monday, it rose as high as $1.1009 for the first time since Jan. 2.
• Gold prices steadied in Asian trade on Thursday, recouping some recent losses as increased volatility in risk-driven markets, particularly stocks, kept safe havens relatively well-bid. Among industrial metals, copper prices rose on Thursday but recouped only a fraction of recent losses, with weak import from data further undermining the red metal. Broader metal markets advanced, but still remained mostly rangebound amid uncertainty over the global economy and interest rates. The yellow metal remained close to the closely watched $2,400 an ounce level, and was still less than $100 away from record highs. Risk-driven markets logged wild swings in recent sessions, with Wall Street settling lower despite a strong start on Wednesday, while Japanese markets flitted between gains and losses on Thursday. This kept safe havens such as gold and the Japanese yen relatively well-bid, although they did see some weakness this week as broader markets saw a brief rebound. Gold’s outlook also appeared brighter in the face of deeper interest rate cuts by the Federal Reserve, as markets bet that worsening economic conditions will elicit such a scenario.
• Oil prices steadied in Asian trade on Monday, retaining last week’s rebound as media reports suggested that an Iranian strike on Israel was likely to happen in the coming days. Some encouraging economic data also aided sentiment, especially as traders bet that fears of a U.S. recession were overblown. More key economic data is on tap this week. A market holiday in Japan made for relatively lower trading volumes. Israeli intelligence believes Iran will attack Israel directly and within days, Axio reported on Sunday. The strike is likely to be in retaliation for the killing of Hamas leader Ismail Haniyeh in Tehran last month. Israel was also seen keeping up its offensive in Gaza with a round of strikes over the weekend, pointing to little chances of deescalation in the long-running conflict. The sustained conflict saw traders attach a greater risk premium to oil prices, amid growing fears that a bigger war in the Middle East will disrupt oil supplies from the crude-rich region. Focus this week is also on inflation readings from a string of major economies this week, most notably the U.S. Consumer price index inflation is due on Wednesday, and is expected to show some cooling in inflation through July- which bodes well for expectations of interest rate cuts in September. CPI data from major oil importer India is due on Monday and is also expected to show substantial cooling in inflation, while CPI data from the UK is due on Wednesday. Before last week, oil prices were nursing four straight weeks of losses amid fears of slowing economic growth, especially in top oil consumers the U.S. and China.
• But some encouraging economic data from the U.S. suggested that a recession in the world’s biggest fuel consumer may not be imminent, helping spur some flows into crude Beyond economic readings, monthly reports from the Organization of Petroleum Exporting Countries and the International Energy Agency are also due this week.

Gold – XAU

Gold on Friday made its intraday high of US$2436.96/oz and low of $2416.80/oz. Gold is up by 0.175% at S$2431.17/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 2431-2520 keeping stop loss closing above 2520, targeting 2418-2400 and 2384-2370-2362. Buy in between 2418-2334 with risk below 2330 targeting 2400-2418-24322,4502470-2484 and 2490-2500.

Silver - XAG

Silver on Friday made its intraday high of US$27.74/oz and low of US$27.23/oz settle down by 0.243% at US$27.45/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 27.00-25.90, 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 27.90-31.00 with a stop loss above 31.50 targeting 27.60 and 27.10-26.50-26.00.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$76.01/bbl, an intraday low of US$74.88/bbl, and settled up by 1.419% to close at US$75.97/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 76.00-80.00 with stop loss at 80.00; targeting 75.10-74.50-73.90 and 73.10-72.50-71.90-71.00. Buy above 75.10-71.00 with risk daily closing below 71.00, targeting 75.10 and 76.50-77.40-78.00.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.0908/EUR, a high of US$1.10930/EUR, and settled the day down by 0.018% to close at US$1.0915/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 1.0960-1.1100, targeting 1.0700-1.0640-with stop-loss at daily closing above 1.1100. Buy above 1.0900-1.0450 with risk below 1.0400 targeting 1.0845-1.0890 and 1.1020-1.1105-1.1145.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2725/GBP, a high of US$1.2773/GBP, and settled the day up by 0.137% to close at US$1.2759/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 1.2830-1.2890-1.2990-1.3040 and 1.3100-1.3150 with a stop loss closing below 1.2050. Sell in between 1.2800-1.3100 with targets at 1.2720 and 1.2670-1.2610-1.2500 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Friday made an intra‐day low of JPY155.25/USD an intraday high of 147.90/USD, and settled the day up by 1.689% at JPY155.78/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 147.20-150.00 with risk above 150.00 targeting 145.00-144.20-143.60 and 142.90-141.70-141.00. Long positions above 146.00-141.00 with targets of 146.00-146.45-146.90 and 147.50-148.40-149.00 with stops below 146.00.