Daily Markets

• Asian currencies firmed on Tuesday, with the Japanese yen close to a 2024 peak as the dollar retreated on growing bets the Federal Reserve will cut interest rates by a wide margin this week. Regional trading volumes were held back by market holidays in China and South Korea. Anticipation of Wednesday’s Fed decision also kept traders to the sidelines. The greenback was dented by growing expectations that the Fed will cut interest rates by 50 basis points at the conclusion of a meeting on Wednesday. The central bank is also expected to kick off an easing cycle that could see interest rates fall by a total of 100 bps by the year-end. Traders are pricing in a 68% chance for a 50 bps cut and a 32% chance for a 25 bps cut, CME Fedwatch showed. Lower rates diminish the dollar’s appeal, and push traders to seek higher yields in riskier markets such as Asia. Such a scenario usually bodes well for regional currencies. But the market was still grappling with weak sentiment on concerns over slowing economic growth in China. Still, most Asian currencies clocked some gains on Tuesday. The Australian dollar’s AUDUSD pair rose slightly, while the Singapore dollar’s USDSGD pair was flat. The Chinese yuan’s USDCNH offshore pair fell slightly, with local markets closed for a second straight session. But a swathe of weak economic readings from the country, released over the weekend, primed the yuan for more weakness. The Japanese yen’s USDJPY pair steadied on Tuesday, remaining close to its lowest levels for the year. The yen was boosted by the prospect of lower U.S. interest rates, while traders were also seen building long positions in the yen before a Bank of Japan meeting this Friday. Analysts do not expect the BOJ to hike interest rates. But policymakers are expected to present a hawkish front and forecast higher interest rates in the face of a pick-up in inflation. Japanese consumer inflation data for August is also due on Friday, and is expected to show an increase.

Gold – XAU

Gold on Monday made its intraday high of US$2589.49/oz and low of $2575.31/oz. Gold is up by 0.139% at S$2582.15/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 2594-26 keeping stop loss closing above 2600, targeting 2570-2545-2531-2520-2505 and 2,490-2,484. Buy in between 2570-2490 with risk below 2490 targeting 2594-2600-2610 and 2620-2634.

Silver - XAG

Silver on Monday made its intraday high of US$31.07/oz and low of US$28.51/oz settle up by 0.202% at US$30.70/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 30.50-25.90, targeting 30.10-30.50-31.10 and 31.90-32.50 with stop loss should be placed on the breakage below 26.00. Sell in between 31.00-33.00 with a stop loss above 33.50 targeting 30.50-29.80-29.50 and 28.90-28.00-27.60-27.10.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$69.63/bbl, an intraday low of US$67.72/bbl, and settled up by 1.60% to close at US$69.35/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 69.50-73.90 with stop loss at 74.00; targeting 68.00-67.30-66.00 and 65.00-64.20-63.50 Buy above 69.00-62.00 with risk daily closing below 62.00, targeting 68.90-69.60-69.40 and 70.00-71.35.

EUR/USD

EUR/USD of Monday made an intraday low of US$1.1072/EUR, a high of US$1.1136/EUR, and settled the day up by 0.513% to close at US$1.1131/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 1.1150-1.1400, targeting 1.1060-1.1020-1.0960 and 1.0850- 1.0785 with stop-loss at daily closing above 1.1100. Buy above 1.1100-1.0785 with risk below 1.0700 targeting 1.1150-1.1190-1.1250 and 1.1290-1.1340-1.1400.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.3114/GBP, a high of US$1.3216/GBP, and settled the day up by 0.753% to close at US$1.3214/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 1.3140-1.2600 with a target of 1.3200-1.3310 and 1.3390-1.3450 with a stop loss closing below 1.2600. Sell in between 1.3200-1.3410 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 JPY139.57/USD an intraday high of 140.96/USD, and settled the day down by 0.618% at JPY140.59/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 141.0-144.00 with risk above 144.00 targeting 139.60-139.00-138.40-137.90 and 137.20-136,00. Long positions above 139.60-136.00 with targets of 140.00-140.90-141.70 and 142.50-143.60-144.20 with sto42ps below 136.00.