Daily Markets

• Most Asian currencies firmed on Monday with the Japanese yen rising sharply amid increasing bets that the Federal Reserve will cut interest rates in September, which put the dollar at 13-month lows. Most regional currencies extended gains from the prior week, especially after comments from Fed Chair Jerome Powell on Friday cemented expectations for a rate cut. But anticipation of more U.S. economic data this week, particularly key inflation data, still spurred some caution, as markets remained uncertain over the size of a September cut. The dollar index and dollar index futures both fell slightly in Asian trade, and were trading at their weakest levels since July 2023. The greenback was pressured by Powell’s comments, as the Fed Chair said that further cooling in the labor market was unhealthy, and said it was time to begin adjusting policy accordingly. Speaking at the Jackson Hole Symposium, Powell noted that inflation was close to the Fed’s 2% annual target, but said that the timing and scale of any rate cuts will still depend on economic data. Powell’s comments cemented expectations for a September cut. But CME Fedwatch showed traders split over a 25 and 50 basis point reduction. His comments also saw focus turn squarely towards upcoming economic data this week, with PCE price index data due Friday set to offer more definitive cues on rates. The reading is the Fed’s preferred inflation gauge, and is likely to factor into the central bank’s outlook on rates. The Japanese yen was among the better performers in Asia, with the USDJPY pair falling 0.4% on Monday. The pair was also close to lows last seen in early-August, where a hawkish Bank of Japan, increased safe haven demand and an unwinding carry trade put the currency at its strongest levels since early-January. But strength in the yen somewhat undermined a risk-on move across Asian markets, given that it also presented a further unwinding in the carry trade that had fueled strong capital flows into Asian markets. The yen is likely primed for more strength this year, especially with the prospect of lower interest rates in the U.S. and potential rate hikes by the Bank of Japan. Inflation data from Tokyo, due this Friday, is set to offer more cues. Broader Asian currencies were a mixed bag. The Chinese yuan’s USDCNY pair fell slightly after the People’s Bank kept its medium-term lending rate unchanged and withdrew about 101 billion yuan of liquidity through the facility.

Gold – XAU

Gold on Friday made its intraday high of US$2518.23/oz and low of $2484.27/oz. Gold is up by 1.123% at S$2512.46/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 2520-2560 keeping stop loss closing above 2560, targeting 2,490-2,484-2,470 and 2459-2431-2418. Buy in between 2490-2430 with risk below 2430 targeting 2512-2,520-2531 and 2545-2560.

Silver - XAG

Silver on Friday made its intraday high of US$29.86/oz and low of US$28.92/oz settle up by 3.110% at US$29.83/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 29.40-25.90, targeting 29.70 and 30.50-31.10- 31.90 with stop loss should be placed on the breakage below 25.00. Sell in between 29.70-31.00 with a stop loss above 31.50 targeting 28.90-28.00-27.60 and 27.10-26.50-26.00.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US$74.80/bbl, an intraday low of US$72.61/bbl, and settled up by 2.735% to close at US$74.69/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 751.0-80.00 with stop loss at 80.00; targeting 74.50-73.90-73.00 and 72.50-71.90-71.00. Buy above 74.00-71.00 with risk daily closing below 71.00, targeting 75.10 and 76.00-78.10-78.75-79.80.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.1100/EUR, a high of US$1.1200/EUR, and settled the day up by 0.741% to close at US$1.1192/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 1.1190-1.1400, targeting 1.1100-1.1020-1.0960 and 1.0850- 1.0785with stop-loss at daily closing above 1.1100. Buy above 1.1150-1.0785 with risk below 1.0400 targeting 1.1190-1.1250 and 1.1290-1.1340-1.1400.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.3085/GBP, a high of US$1.3229/GBP, and settled the day up by 0.99% to close at US$1.3217/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 1.3150-1.2600 with a target of 1.3200-1.3310 and 1.3390-1.3450 with a stop loss closing below 1.2600. Sell in between 1.3210-1.3410 with targets at 1.3150-1.3100-1.3040 and 1.2950-1.2890-1.2790 with a stop loss of 1.3100.

USD/JPY

USD/JPY on Friday made an intra‐day low of JPY144.04/USD an intraday high of 146.47/USD, and settled the day down by 1.26% at JPY144.37/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 144.50-150.00 with risk above 150.00 targeting 144.20-145.00 and 144.20-143.60-142.90. Long positions above 145.00-141.00 with targets of 146.00-146.90-148.90-149.50 and 150.10-151.00 with stops below 146.00.