Daily Markets

• Oil prices crept lower in Asian trade on Tuesday as initial optimism over more supply cuts by Saudi Arabia and the OPEC was largely offset by persistent concerns over slowing economic growth and weakening demand. While crude markets initially marked a strong rally in response to more production cuts by Saudi Arabia on Monday, they pared a bulk of their gains by the end of the session as weak U.S. economic data ramped up concerns over a recession this year. Saudi Arabia pledged to cut production by an additional 1 million barrels per day (bpd) in July, adding to a total of 3.66 million in supply cuts by the OPEC since October. But markets questioned whether lower production targets for other OPEC+ members- particularly Russia, Angola and Nigeria, would have a tangible impact, given that they bring the targets in line with actual output levels. Markets also bet that any slowdown in demand will largely outweigh tighter supplies this year. Data on Monday showed that U.S. service sector activity barely grew in May, as strong growth seen over the past few months now appeared to be running out of steam. The data put more headwinds to the U.S. economy- chiefly rising interest rates and high inflation- in stark focus, ahead of a Federal Reserve meeting next week. Markets are split over whether the central bank will hike or hold interest rates, given somewhat mixed signals on the move in recent weeks. While inflation and labor market data surprised to the upside, several Fed officials have called on the bank to hold rates and watch for more effects of its year-long rate hike spree, given that several facets of the U.S. economy have cooled in recent months. Focus this week is also on economic readings from major crude importer China, amid growing concerns that a post-COVID rebound in the country is running out of steam. Inflation and trade data from China is on tap this week, with the latter expected to provide more cues on the country’s appetite for commodities amid weak manufacturing acivity. Still, data this week showed that China’s services sector grew more than expected in May, indicating some resilience in the economy after the lifting of anti-COVID measures earlier this year.

Gold – XAU

Gold on Monday made it’s intraday high of US$1963.94/oz and low of $1938.01/oz. Gold is up by 0.757% at US$1961.59/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above the zero line and histograms are a2lso increasing trend and it will bring an upward stance in the upcoming sessions. RSI is in the overbought region and more upside is expected before it gets stretched. The Stochastic Oscillator is in neutral territory and giving a negative crossover to a bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1,966-2080 keeping stop loss closing above 2009, targeting 1955-1944-1936 and 1926-1920-1910. Buy in between 1,954-1,900 with risk below 1,900 targeting 1966-1970 and 1981-1990-2000.

Silver - XAG

Silver on Monday made its intraday high of US$23.67/oz and low of US$23.23/oz settled down by 0.0975% at US$23.55/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (21.00), breakage above will lead to 21.60. MACD is below the zero line and histograms are decreasing trend and it will bring a bearish stance in the upcoming sessions. RSI is approaching the neutral region, indicating a buy signal for now. The Stochastic Oscillator is in the oversold region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 23.40-18.30, targeting 24.10-24.60 and 25.00-25.90-26.30 with stop loss should be placed on the breakage below 18.00. Sell in between 24.00-27.50 with a stop loss above 27.50; targeting 25.00-24.60-23.60-23.00 and 22.05-21.60-21.00.

Oil - WTI

Crude Ol on Monday made an intra‐day high of US$74.30/bbl, an intraday low of US$71.78/bbl, and settled down by 2.215% to close at US71.98/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 68.50 which is a support level and breakage below will call for 68.40. 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 neutral region, giving a positive crossover for confirmation of a bullish stance; while the RSI is in the neutral region and more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 72.30-77.00 with stop loss at 77.00; targeting 72.30-71.40*-70.10 and 69.00-68.40-67.50. Buy above 71.40-67.40 with risk daily closing below 67.40; targeting 72.30-73.50-74.10 and 75.00-76.20-77.00.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.0673/EUR, a high of US$1.0721/EUR, and settled the day up by 0.0177% to close at US$1.0712/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which becomes immediate support, a break below will target 1.0647. MACD is above the zero line and histograms are increasing mode which will bring a bullish view. Stochastic is in overbought territory and giving positive 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 1.0660-1.1390, targeting 1.0600-1.0550 and 1.0510-1.0470 with stop-loss at daily closing above 1.1032. Buy above 1.0700-1.0525 with risk below 1.0525 targeting 1.0740-1.0790-1.0840 and 1.1090-1.1150-1.1200

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.2367/GBP, a high of US$1.2448/GBP, and settled the day down by 0.0329% to close at US$1.2437/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.2112) is becoming a resistance level. 14-D RSI is currently in a neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in oversold territory and gives a positive crossover to confirm bullish a 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 1.2350-1.2200 with a target of 1.2410-1.2500-1.2590 and 1.2640-1.2700-1.2745 with a stop loss closing below 1.2200. Sell in between 1.2410-1.2954 with targets at 1.2320-1.2290-1.2250 and 1.2205-1.2175 with stop loss should be 1.2954.

USD/JPY

USD/JPY on Monday made an intra‐day low of JPY139.24/USD, an intraday high of JPY140.44/USD, and settled the day down by 0.0795% at JPY139.56/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (134.05), which is 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 buy as it has given a positive crossover to confirm a bullish stance.

Trading Strategy: Neutral to Sell

Sell below 140.50-142.00 with risk above 142.00 targeting 139.70-138.90-138.50 and 137.90-137.00-136.20. Long positions above 139.70-136.00 with targets of 140.50-141.00-141.60 and 142.00-143.50-144.00 with stops below 133.00.