Daily Markets

• Most Asian currencies moved in a flat-to-low range on Thursday as the dollar firmed sharply after an outsized interest rate cut by the Federal Reserve was offset by less dovish signals on future rates. The Japanese yen was among the worst performers for the day, retreating amid pressure from the dollar and as traders priced in no changes to interest rates by the Bank of Japan later this week. Broader Asian currencies were muted tracking mixed signals from the Fed. The dollar index and dollar index futures both rose about 0.4% in Asian trade, extending overnight gains. Strength in the greenback came even as the Fed cut its benchmark rate by 50 basis points- the higher end of market expectations- to a range of 4.75% to 5%. Fed Chair Jerome Powell said that risks between higher inflation and more labor market weakness were now evenly balanced, and that the central bank was likely to cut rates further amid growing confidence that inflation will fall. But Powell also said that the bank had no intention of returning to an ultra-low rate regime as seen during the pandemic, and that the Fed’s neutral rate will now be much higher than seen in the past. While traders were still pricing in at least 125 bps worth of cuts by end-2024, Powell’s comments spurred expectations that rates will be higher than initially expected in the medium and long term. This notion pressured most Asian currencies. The currency was pressured by strength in the dollar, while traders also positioned for no changes to local interest rates after a BOJ meeting on Friday. The central bank is widely expected to keep rates unchanged, but could still signal future rate hikes on an elevated outlook for inflation. Japanese consumer inflation is also due on Friday. Broader Asian currencies were mostly mixed. The Australian dollar’s AUDUSD pair rose 0.4%, buoyed by a stronger-than-expected reading on the labor market in August. Strength in the labor market gives the Reserve Bank of Australia more headroom to keep rates high for longer, which it is more inclined to do amid signs of sticky inflation in the country. The Chinese yuan’s USDCNY pair reversed early gains to trade sideways, with focus squarely on a loan prime rate decision by the People’s Bank on Friday. The central bank is expected to leave the LPR unchanged.

Gold – XAU

Gold on Wednesday made its intraday high of US$2599.79/oz and low of $2560.68/oz. Gold is down by 0.397% at S$2558.98/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 2570-2634 keeping stop loss closing above 2634, targeting 2570-2545-2531-2520-2505 and 2,490-2,484. Buy in between 2560-2490 with risk below 2490 targeting 2575-2594-2600-2610 and 2620-2634.

Silver - XAG

Silver on Wednesday made its intraday high of US$31.21/oz and low of US$29.68/oz settle down by 2.04% at US$30.05/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 Wednesday made an intra‐day high of US$70.25/bbl, an intraday low of US$68.51/bbl, and settled down by 1.172% to close at US$69.05/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 Wednesday made an intraday low of US$1.1096/EUR, a high of US$1.1188/EUR, and settled the day up by 0.048% to close at US$1.1118/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 Wednesday made an intra‐day low of US$1.3148/GBP, a high of US$1.3296/GBP, and settled the day up by 0.4096% to close at US$1.3212/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 Wednesday made an intra‐day low of JPY140.43/USD an intraday high of 142.70/USD, and settled the day down by 0.0854% at JPY142.25/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 143.0-148.00 with risk above 148.00 targeting 142.20-141.00-139.60 and 139.00-138.40-137.90. Long positions above 142.20-136.00 with targets of 140.00-140.90-141.70 and 142.50-143.60-144.20 with sto42ps below 136.00.