Daily Markets

• Most Asian currencies moved little on Tuesday, while the dollar crept higher in anticipation of key inflation data that is likely to factor into the outlook for U.S. interest rates. Most regional currencies were nursing some losses over the past week as risk appetite was battered by concerns over worsening global economic conditions. But anticipation of U.S. interest rate cuts helped limit overall losses, while also stemming the dollar’s advance. But the greenback caught some bids this week, amid positioning before Wednesday’s inflation reading. The dollar index and dollar index futures both rose about 0.1% in Asian trade, after clocking strong gains on Monday. Traders favored the greenback as risk sentiment worsened last week, while anticipation of key consumer price index inflation data, due on Wednesday, also spurred flows into the dollar. Wednesday’s reading is expected to show inflation cooled further in August. The reading also comes just a week before a Federal Reserve meeting, where the central bank is widely expected to cut interest rates by 25 basis points Lower rates are expected to dent the dollar and spur some flows into risk-driven Asian markets. But the full extent of such a rotation will depend on just by how much the Fed cuts rates this year. Broader Asian currencies kept to a tight range. The Japanese yen’s USDJPY pair hovered around 143.22 yen, having fallen sharply last week amid increased safe haven demand for the yen. The Australian dollar’s AUDUSD pair fell slightly following some weak economic readings from the country. A private survey showed consumer confidence worsened in early-September and remained close to lows seen during the 2020 COVID-19 pandemic, amid growing concerns over an economic slowdown. The Chinese yuan’s USDCNY pair rose 0.1%, with the currency losing some ground after mixed trade data from the country. China’s trade balance unexpectedly grew in August, as the country’s export industries largely shrugged off headwinds from trade restrictions imposed by the U.S. and its allies. But China’s imports grew much less than expected, raising concerns over sluggish local demand. The yuan was already nursing some losses over the past week, following a string of underwhelming Chinese economic readings.

Gold – XAU

Gold on Monday made its intraday high of US$2507.06/oz and low of $2485.46/oz. Gold is up by 0.364% at S$2505.94/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 2510-2560 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 Monday made its intraday high of US$28.34/oz and low of US$27.68/oz settle up by 1.468% at US$28.32/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 27.90-25.90, targeting 28.50-29.00-29.70 and 30.50-31.10- 31.90 with stop loss should be placed on the breakage below 25.00. Sell in between 28.50-31.00 with a stop loss above 31.50 targeting 28.00-27.60 and 27.10-26.50-26.00.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$68.33/bbl, an intraday low of US$66.78/bbl, and settled up by 0.990% to close at US$68.21/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 68.00-73.90 with stop loss at 74.00; targeting 67.90 and 67.30-66.00. Buy above 67.90.00-66.00 with risk daily closing below 66.00, targeting 68.90-69.60-70.00-70.60 and 71.30-72.00-73.10.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.1032/EUR, a high of US$1.10904/EUR, and settled the day down by 0.390% to close at US$1.1033/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 1.1060-1.1020-1.0960 and 1.0850- 1.0785 with stop-loss at daily closing above 1.1100. Buy above 1.1060-1.0785 with risk below 1.0700 targeting 1.1100-1.1190-1.1250 and 1.1290-1.1340-1.1400.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.3067/GBP, a high of US$1.3142/GBP, and settled the day down by 0.321% to close at US$1.3072/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 1.3060-1.2600 with a target of 1.3200-1.3310 and 1.3390-1.3450 with a stop loss closing below 1.2600. Sell in between 1.3100-1.3410 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 Monday made an intra‐day low of JPY141.94/USD an intraday high of 143.78/USD, and settled the day up by 0.630% at JPY143.11/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 144.0-150.00 with risk above 150.00 targeting 143.60-143.00 and 142.50-141.90-141.00. Long positions above 143.60-141.00 with targets of 144.20-144.60-145.45 and 146.00-146.90-147.50-148.00 with sto42ps below 146.00.