Daily Markets

• Most Asian currencies moved in a tight range on Monday, while the dollar steadied from recent losses as traders awaited a slew of more cues on the Federal Reserve and U.S. inflation. The Australian dollar was among the better performers, advancing before a Reserve Bank of Australia meeting where the central bank is likely to strike a hawkish chord. Regional trading volumes were muted on account of a Japanese market holiday. But the yen weakened, pulling back further from a nine-month peak hit last week. The yen’s USDJPY pair rose 0.3% to 144.32 yen. But barring the yen, most Asian currencies were sitting on some gains from last week, after a 50 basis point interest rate cut by the Fed. The central bank is widely expected to keep interest rates steady. But sticky inflation and recent strength in the labor market are expected to draw a hawkish stance from the RBA. The central bank is also expected to signal that rates will remain high for longer- a scenario that bodes well for the Australian dollar. The currency was trading close to a 10-month high. The dollar index and dollar index futures both rose slightly in Asian trade, steadying after logging losses last week. The Fed cut interest rates and marked the start of an easing cycle that could see rates fall by as much as 125 bps this year. But overall losses in the dollar were still limited, given that the Fed signaled that neutral rates will also be much higher than seen in the past. More cues from the central bank are due this week, with a slew of Fed officials- most notably Chair Jerome Powell- set to speak in the coming days. PCE price index data- the Fed’s preferred inflation gauge- is also due this Friday, offering up more cues on the Fed’s plans to cut rates. Broader Asian currencies moved in a flat-to-low range. The Chinese yuan’s USDCNY pair fell slightly, after the People’s Bank of China trimmed its 14-day repo rate to further loosen monetary conditions and support economic growth.

Gold – XAU

Gold on Friday made its intraday high of US$2625.60/oz and low of $2560.68/oz. Gold is up by 1.386% at S$2622.25/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 2634-2680 keeping stop loss closing above 2680, targeting 2610-2600-2584 and 2570-2545-2531. Buy in between 2610-2560 with risk below 2560 targeting 2634-2645-2660 and 2669-2690.

Silver - XAG

Silver on Friday made its intraday high of US$31.41/oz and low of US$30.71/oz settle up by 1.41% at US$31.16/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 30.90-25.90, 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 Friday made an intra‐day high of US$71.28/bbl, an intraday low of US$70.30/bbl, and settled up by 1.106% to close at US$71.09/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 Friday made an intraday low of US$1.1135/EUR, a high of US$1.1181/EUR, and settled the day up by 0.0295% to close at US$1.1163/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 Friday made an intra‐day low of US$1.3267/GBP, a high of US$1.3339/GBP, and settled the day up by 0.312% to close at US$1.3324/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 1.3310-1.3010 with a target of 1.3340-1.3390-1.3450 and 1.3500-1.3560 with a stop loss closing below 1.3010. Sell in between 1.3340-1.3560 with targets at 1.3310-1.3260-1.3210 and 1.3140-1.3100-1.3040 with a stop loss of 1.3560.

USD/JPY

USD/JPY on Friday made an intra‐day low of JPY141.73/USD an intraday high of 144.49/USD, and settled the day up by 0.0854% at JPY143.94/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.