Daily Markets

• The dollar softened on Thursday as traders assessed the U.S. interest rates outlook in the wake of comments from Federal Reserve officials that cemented expectation of monetary settings remaining restrictive for a while longer. The yen, meanwhile, briefly strengthened as Japan's top currency diplomat Masato Kanda said finance leaders of the G7 reaffirmed their stance that excessive currency volatility was undesirable. The greenback has been rising in recent weeks as strong U.S. economic data and persistent inflation dashed expectation of near-term rate cuts. Tensions in the Middle East have also added to the dollar's safe-asset appeal. Dollar strength has cast a shadow across currency markets, keeping the yen rooted near 34-year lows and leading to several warnings from Japanese authorities as traders fret about possible intervention. Emerging-market currencies have also been under pressure. The U.S., Japan and South Korea agreed to "consult closely" on foreign exchange markets in their first trilateral finance dialogue on Wednesday, in a nod to concerns from Tokyo and Seoul over their currencies' recent sharp declines. The Japanese currency strengthened to 153.96 on Thursday, after Kanda told reporters of the G7 finance leaders' agreement to reaffirm their commitment on currency moves. Market participants have raised the bar on possible intervention by Japanese authorities to prop up the yen, now pinpointing the 155 level from 152 previously, even if they believed Japan could step in at any time. Still, given the dollar's broad strength, DBS's Chang said their models suggest the risk of intervention may have shifted even higher to the 156 range, as Japanese authorities weigh the yen's level against a handful of other currencies that have depreciated. Japan last intervened in the currency market in 2022, spending an estimated $60 billion to defend the yen. The euro was largely unchanged at $1.0676, after notching a 0.5% gain on Wednesday and lifting away from a five-month low touched on Tuesday. Sterling was last $1.2465, up 0.15% on the day. Markets are pricing in 44 basis points of cuts from the Fed this year, drastically lower than the 160 bps expected at the start of the year, with September becoming the latest starting point of the easing cycle, showed the CME FedWatch Tool. Traders had earlier expected the Fed to start cutting rates in June but a string of data including the consumer price index (CPI) and push-back from central bankers have altered that expectation. U.S. economic activity expanded slightly from late February through early April and firms signalled they expect inflation pressure to hold steady, a Federal Reserve survey showed on Wednesday. Fed Governor Michelle Bowman on Wednesday said progress on slowing U.S. inflation may have stalled, and it remains an open question whether rates are high enough to ensure inflation returns to the Fed's 2% target.

Gold – XAU

Gold on Wednesday made its intraday high of US$2395.47/oz and low of $2354.25/oz. Gold is down by 0.897% at US$2360.90/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 2389-2430 keeping stop loss closing above 2430, targeting 2350 and 2325-2310-2280. Buy in between 2360-2300 with risk below 2300 targeting 2360 and 2369-2380-2400.

Silver - XAG

Silver on Wednesday made its intraday high of US$28.78/oz and low of US$28.04/oz settle up by 0.430% at US$28.20/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 28.00-23.90, targeting 28.90-29.40-30.00 and 30.40-31.00 with stop loss should be placed on the breakage below 23.00. Sell in between 28.90-30.50 with a stop loss above 30.50 targeting 27.00-26.40-25.90 and 25.45-24.90 and 24.60-23.90-23.20.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$84.95/bbl, an intraday low of US$81.99/bbl, and settled down by 2.97% to close at US82.30/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 82.70.00-89.65 with stop loss at 90.00; targeting 82.00-81.10-79.90. Buy above 82.00-75.00 with risk daily closing below 75.00, targeting 82.70-83.50-84.70 and 86.70-87.50-88.40.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.0600/EUR, a high of US$1.0653/EUR, and settled the day down by 0.0517% to close at US$1.0617/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 1.0650-1.1100, targeting 1.0775 and 1.0770-1.0640 with stop-loss at daily closing above 1.1100. Buy above 1.0590-1.0450 with risk below 1.0400 targeting 1.0845-1.0890 and 1.1020-1.1105-1.1145.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.2416/GBP, a high of US$1.2481/GBP, and settled the day up by 0.281% to close at US$1.2452/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.2674) is becoming a resistance 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 1.2410-1.2050 with a target of 1.2540-1.2600-1.2690 and 1.2730-1.2790-1.2850 with a stop loss closing below 1.2050. Sell in between 1.2510-1.3120 with targets at 1.2400-1.2360-1.2300 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Wednesday made an intra‐day low of JPY154.14/USD an intraday high of 154.72/USD, and settled the day down by 0.204% at JPY154.36/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (137.57), 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 154.90-156.00 with risk above 156.00 targeting 153.10-152.60-151.00 and 150.60-149.90-149.30. Long positions above 154.00-149.90 with targets of 154.00-154.90 and 155.59-156.10 with stops below 149.90.