Daily Markets

• The U.S. dollar edged higher against most major currencies on Tuesday, resuming the latest uptrend that took it to more than two-month highs fueled by expectations the Federal Reserve will proceed with modest interest rate cuts over the next year and a half. The greenback traded lower for most of the European and U.S. sessions due in part to a decline in risk aversion after media reports said Israel was not willing to strike Iranian oil targets, easing fears of a supply disruption in the Middle East. That pushed oil prices lower and reduced inflation expectations, modestly pressuring the dollar. Analysts, however, said the dollar's recent uptrend still has some ways to go given persistent geopolitical and election uncertainty. U.S. data has shown a resilient economy, while inflation in September rose slightly more than expected, leading traders to trim bets on further large rate cuts from the Fed. The U.S. central bank kicked off its easing cycle with an aggressive 50-bp move at its last policy meeting in September but market expectations have shifted to a slower pace of cuts, boosting the dollar. Traders have assigned a nearly 100% chance of a 25 bps cut in November, with just a 0.2% probability of a pause by the Fed, keeping the fed funds rate at the 4.75%-5.0% target range, according to LSEG calculations. The market has also factored 47 bps of rates easing this year, and another 100 bps of cuts in 2025, much lower than the 200 bps reductions priced in before the September Fed meeting. In afternoon trading, the dollar index, which measures the U.S. currency against six rivals, was up 0.1% at 103.26, not far from 103.36, the highest level since Aug. 8 touched on Monday. The dollar was boosted in part by comments from Fed Governor Chris Waller, who called for "more caution" on interest rate cuts ahead. The euro hit its lowest level since Aug. 8 at $1.0882 ahead of the European Central Bank policy meeting on Thursday, where the central bank looks set to deliver back-to-back rate cuts, a move that seemed unlikely at its last meeting in September. It was last down 0.2% at $1.0887. The pound was marginally higher at $1.3068 in the wake of British labor market data showing pay grew at its slowest in more than two years in the three months to August. That pace that should allow the Bank of England to lower interest rates next month. Expectations that sticky inflation would keep the BoE on a gradual rate cut path relative to its peers - the Fed and the ECB - had underpinned the pound's outperformance this year. But shifting bets have pushed it lower in recent weeks, with the pound down over 2% against the dollar for the month. The U.S. currency's rise has pushed the yen back toward 150 per dollar, especially after a dovish shift in rhetoric from Bank of Japan Governor Kazuo Ueda and surprising opposition to further rate hikes from new Prime Minister Shigeru Ishiba. That has cast doubts as to when Japan's central bank will next tighten policy, with a very slim majority of economists in a Reuters poll expecting BOJ to forgo raising rates again this year. Oil-exporting currencies were weaker after crude oil prices plummeted on reports of Israel unwilling to strike Iranian targets. China's yuan, both onshore and offshore, weakened to a one-month low against the dollar on Tuesday.

Gold – XAU

Gold on Tuesday made its intraday high of US$2668.78/oz and low of $2638.01/oz. Gold is up by 0.546% at S$2662.39/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 2662-2720 keeping stop loss closing above 2720, targeting 2650-2634-2620 and 2610-2600-2584-2575. Buy in between 2650-2560 with risk below 2560 targeting 2662-2669-2690 and 2700-2720.

Silver - XAG

Silver on Tuesday made its intraday high of US$31.67/oz and low of US$30.74/oz settle up by 1.014% at US$31.47/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 31.30-31.90-32.50 and 32.90-33.50-34.00-34.70 with stop loss should be placed on the breakage below 26.00. Sell in between 31.40-34.70 with a stop loss above 35.00 targeting 30.40 and 29.80-29.50-28.90.

Oil - WTI

Crude Oil on Tuesday made an intra‐day high of US$71.59/bbl, an intraday low of US$69.23/bbl, and settled down by 0.910% to close at US$70.44/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 70.90.00-76.85 with stop loss at 77.00; targeting 70.00-69.20-68.50 and 67.90-67.00. Buy above 70.00.00-65.80 with risk daily closing below 65.00, targeting70.90-71.65-72.45 and 73.00-74.10-75.76-76.50.

EUR/USD

EUR/USD of Monday made an intraday low of US$1.0887/EUR, a high of US$1.0936/EUR, and settled the day down by 0.1848% to close at US$1.0907/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 1.0910-1.1400, targeting 1.0960 and 1.0850- 1.0785 with stop-loss at daily closing above 1.1100. Buy above 1.0850-1.0785 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$1.3034/GBP, a high of US$1.3102/GBP, and settled the day up by 0.115% to close at US$1.3072/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 1.3040-1.2690 with a target of 1.3120-1.3210-1.3300 and 1.3390-1.3450-1.3500 with a stop loss closing below 1.3010. Sell in between 1.3120-1.3660 with targets at 1.3040 -1.2940-1.2890 and 1.2800-1.2740-1.2690 with a stop loss of 1.3560.

USD/JPY

USD/JPY on Tuesday made an intra‐day low of JPY148.50/USD an intraday high of 150.88/USD, and settled the day up by 0.362% at JPY149.34/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 149.50-151.50 with risk above 152.00 targeting 147.80-147.00-146.00 and 145.10-143.90-143.00-142.20. Long positions above 149.20-140.00 with targets of 148.50-149.20-150.00 and 151.10-151.50 with stops below 140.00.