Daily Markets

• Most Asian currencies firmed on Wednesday, while the dollar retreated as markets positioned for a widely expected interest rate cut by the Federal Reserve later in the day. Market holidays in Hong Kong and South Korea limited overall volumes, while break. The Japanese yen was the best performer in Asia as it rebounded sharply from some overnight losses against the greenback. The yen remained in sight of 2024 peaks hit earlier this week, with a Bank of Japan meeting on tap later this week. The dollar index and dollar index futures both fell 0.1% each in Asian trade before the conclusion of a two-day Fed meeting later in the day. The greenback found some strength on Tuesday after stronger-than-expected retail sales data, although it still retained most of its recent losses. The dollar was pressured chiefly by expectations that the Fed will enact its first interest rate cut in over four years on Wednesday, likely signaling the start of an easing cycle that could see rates fall by at least 100 basis points by the end of 2024. But markets were somewhat split over just by how much the Fed will cut rates. Traders were seen pricing in a 64% chance for a 50 basis point cut and a 36% chance for a 25 bps cut, CME Fedwatch showed. Recent signs of resilience in the U.S. economy- as seen with strong retail sales and inflation data- could give the Fed less impetus to cut rates sharply. But on the other hand, recent signs of weakness in the labor market could push the Fed into enacting deeper cuts. Still, the prospect of lower rates bodes well for high-yielding, high-risk currencies in Asia, and is likely to spur capital flows into the sector in the coming months. The Japanese yen was the best performer in Asian trade, as it recovered from losses logged on Tuesday. The USDJPY pair fell 0.7% to 141.36 yen, remaining in sight of an over nine-month low hit earlier this week. The yen was buoyed by expectations that the BOJ will strike a hawkish note when it meets on Friday, although analysts are uncertain whether it will hike interest rates again. Still, a slew of BOJ officials signaled plans to raise rates further in tandem with higher inflation.

Gold – XAU

Gold on Tuesday made its intraday high of US$2586.79/oz and low of $2560.68/oz. Gold is down by 0.503% at S$2569.18/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 2590-2634 keeping stop loss closing above 2634, 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 Tuesday made its intraday high of US$30.97/oz and low of US$30.49/oz settle down by 0.0618% at US$30.67/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 30.40-25.90, 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 Tuesday made an intra‐day high of US$70.63/bbl, an intraday low of US$68.49/bbl, and settled up by 0.868% to close at US$69.90/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 69.90-73.90 with stop loss at 74.00; targeting 68.90-68.00-67.30-66.00 and 65.00-64.20-63.50 Buy above 69.00-62.00 with risk daily closing below 62.00, targeting 70.00-71.35-72.00 and 72.70-74.00.

EUR/USD

EUR/USD of Tuesday made an intraday low of US$1.1110/EUR, a high of US$1.1145/EUR, and settled the day down by 0.162% to close at US$1.1112/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 Tuesday made an intra‐day low of US$1.3145/GBP, a high of US$1.3229/GBP, and settled the day down by 0.342% to close at US$1.3159/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 Tuesday made an intra‐day low of JPY140.31/USD an intraday high of 142.45/USD, and settled the day up by 0.618% at JPY142.38/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.