Daily Markets

• The U.S. dollar gained on Friday after data showed a key inflation measure came in line with forecasts, while personal spending and income increased, supporting expectations the Federal Reserve will likely cut interest rates by a smaller 25 basis points next month, instead of 50 bps. Some market participants had expected the larger cut next month on the notion that the Fed was behind the curve in terms of easing and should play catchup. U.S. rate futures on Friday implied a 31% chance of a 50 basis-point rate cut next month, down from Thursday's 35% probability, LSEG calculations showed, with the market fully pricing at the September meeting the Fed's first easing in more than four years. Markets have also factored in about 100 bps of cuts by the end of 2024. The dollar rose 0.8% to 146.09 yen after the inflation data, for its largest daily gain in two weeks. It was up 1.2% for the week, on track for its biggest weekly rise since mid-June. But the greenback remained down 2.6% for August, falling for a second straight month versus the Japanese currency. Friday's data showed the personal consumption expenditures (PCE) price index rose 0.2% last month, in line with expectations, after an unrevised 0.1% advance in June. In the 12 months through July, the PCE price index increased 2.5%, matching June's gain. Consumer spending was also 0.5% higher last month after expanding 0.3% in June. The dollar index, a gauge of its value against six major peers, climbed to a 10-day high after the inflation data and was last up 0.3% at 101.7. On the week, it rose 1%, on track for its best weekly performance since early April. The dollar overall continued to benefit from month-end flows, having been sold after Fed Chair Jerome Powell at a Jackson Hole gathering last week gave the clearest signal yet that the U.S. central bank will cut interest rates at the September meeting. Separate economic reports showed that the University of Michigan's monthly consumer sentiment index survey edged up to 67.9 in August from July's eight-month low of 66.4, snapping a four-month slide. U.S. consumers see inflation continuing to moderate in the next year, the survey showed, with a gauge of price growth expectations published on Friday at the lowest level in August since late 2020. The dollar briefly trimmed gains after the report. The euro, however, rose 2.1% in the month of August, for its best monthly showing since November 2023, with the European Central Bank still on track to lower interest rates again next month. The single currency fell to a more than one-week low on Thursday and ended down 0.4% after German inflation cooled more than expected, bolstering investors' expectations of ECB cuts. The Chinese yuan firmed to a 14-month high against the dollar, for its biggest monthly jump since November, amid growing corporate demand for the Chinese currency as expectations heighten for U.S. rate cuts.

Gold – XAU

Gold on made Friday its intraday high of US$2526.71/oz and low of $2494.08/oz. Gold is down by 0.709% at S$2503.00/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$29.56/oz and low of US$28.66/oz settle down by 3.41% at US$28.84/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$75.92/bbl, an intraday low of US$72.88/bbl, and settled down by 2.75% to close at US$73.16/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 73.10-80.00 with stop loss at 80.00; targeting 72.60-72.00-71.30 and 70.60-70.00. Buy above 72.60-70.00 with risk daily closing below 70.00, targeting 73.10-73.90-75.10 and 76.00-76.60-77.15.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.1043/EUR, a high of US$1.1094/EUR, and settled the day down by 0.258% to close at US$1.1047/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 1.1100-1.1400, targeting 1.1100-1.1020-1.0960 and 1.0850- 1.0785with stop-loss at daily closing above 1.1100. Buy above 1.1020-1.0785 with risk below 1.0400 targeting 1.1100-1.1190-1.1250 and 1.1290-1.1340-1.1400.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.3108/GBP, a high of US$1.3199/GBP, and settled the day down by 0.259% to close at US$1.3128/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 1.3120-1.2600 with a target of 1.3200-1.3310 and 1.3390-1.3450 with a stop loss closing below 1.2600. Sell in between 1.3190-1.3410 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 JPY144.64/USD an intraday high of 146.24/USD, and settled the day up by 0.872% at JPY146.19/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 146.90-150.00 with risk above 150.00 targeting 146.00-145.40-144.60 and 144.20-145.00-144.20. Long positions above 146.00-141.00 with targets of 146.90-147.50-148.00 and 148.90-149.50-150.10-151.00 with stops below 146.00.