Daily Markets

• The US dollar has been in demand this week, with the recent streak of greenback weakness running out of steam. However, UBS cautions against going long the dollar going forward. The index is up nearly 1.5%, for the week, its strongest such performance since April. “The US dollar has regained a bit of lost territory this week on the back of several factors: Geopolitical risks led to a flight to safety, some of the US labor market data leading up to the all-important nonfarm payrolls and unemployment report have been a touch better, and lower-than-expected European inflation have led markets to anticipate a 25bps European Central Bank cut in October,” analysts at UBS said in a note, dated Oct. 3. “If this undershooting trend extends to the US, the September inflation print could come very close to 2%.” The Swiss bank says this is not its base case, but it cannot rule it out. With mixed labor market data muddying the picture in recent months, we think a stronger drop in inflation could open the door to another 50bp rate cut from the Federal Reserve in November, UBS said.

Gold – XAU

Gold on Friday made its intraday high of US$2670.01/oz and low of $2637.37/oz. Gold is down by 0.087% at S$2653.51/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 2660-2690 keeping stop loss closing above 2700, targeting 2645-2634-2620 and 2610-2600-2584. Buy in between 2645-2560 with risk below 2560 targeting 2660 and 2669-2690-2700.

Silver - XAG

Silver on Friday made its intraday high of US$32.93/oz and low of US$31.48/oz settle up by 0.681% at US$32.20/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 31.70-25.90, targeting 31.90-32.50-32.90 and 33.50-34.00-34.70 with stop loss should be placed on the breakage below 26.00. Sell in between 32.50-34.70 with a stop loss above 35.00 targeting 31.70-31.30-30.50 and 29.80-29.50-28.90.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US$75.10/bbl, an intraday low of US$73.13/bbl, and settled up by 0.615% to close at US$74.02/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 73.90-76.85 with stop loss at 77.00; targeting 68.90 and 68.00-67.30-66.00. Buy above 73.00-65.80 with risk daily closing below 65.00, targeting 70.90-71.65-72.50 and 73.00-74.10-75.00

EUR/USD

EUR/USD of Friday made an intraday low of US$1.0950/EUR, a high of US$1.1038/EUR, and settled the day down by 0.495% to close at US$1.0975/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 1.1020-1.1400, targeting 1.0960 and 1.0850- 1.0785 with stop-loss at daily closing above 1.1100. Buy above 1.0950-1.0785 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$1.3069/GBP, a high of US$1.3174/GBP, and settled the day up by 0.0617% to close at US$1.3122/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 1.3260-1.3010 with a target of 1.3390-1.3450 and 1.3500-1.3560 with a stop loss closing below 1.3010. Sell in between 1.3310-1.3660 with targets at 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 JPY145.91/USD an intraday high of 148.99/USD, and settled the day up by 0.184% at JPY148.67/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 148.50-151.50 with risk above 152.00 targeting 147.80-147.00-146.00 and 145.10-143.90-143.00-142.20. Long positions above 147.50-140.00 with targets of 148.50-149.20-150.00 and 151.10-151.50 with stops below 140.00.