Daily Markets

• Most Asian currencies kept to a tight range on Thursday, taking little advantage of a drop in the dollar as the Federal Reserve said interest rates were unlikely to fall in the near-term, although they were also unlikely to rise. This kept a rebound in the Japanese yen short-lived, with the currency weakening sharply after seeing strong gains on Wednesday. Traders said the yen’s rebound this week appeared to be driven by government intervention in currency markets. The dollar sank from near six-month highs after the Fed’s comments, but steadied in Asian trade. The prospect of U.S. rates remaining high for longer bodes well for the greenback. The USDJPY pair, which is inversely related to yen strength, surged 1% to over 156 on Thursday, after falling as low as 153 in overnight trade. Strength in the yen was pegged largely to two instances of currency market intervention by government officials this week, although they declined to directly comment on any potential corrective moves. The USDJPY pair had tumbled from 160 on Monday, which traders said was the new line in the sand for Japan when it came to yen weakness. But the factors weighing on the yen- chiefly a dovish Bank of Japan and a wide gap between local and U.S. rates- are expected to remain in play, limiting the effect of government intervention. Broader Asian currencies moved in a flat-to-low range, and were nursing steep losses this week as concerns over U.S. rates persisted. But an overnight drop in the dollar offered some, albeit fleeting relief. The dollar index and dollar index futures both steadied in Asian trade after falling 0.6% in overnight trade. Pressure on the dollar came from a sharp rise in the yen, while Fed Chair Jerome Powell reiterated that the bank will not raise interest rates any further. Focus now turns to nonfarm payrolls data for April, due Friday, for more cues on the economy and interest rates.

Gold – XAU

Gold on Wednesday made its intraday high of US$2328.18/oz and low of $2281.57/oz. Gold is up by 1.44% at US$2319.12/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 2329-2380 keeping stop loss closing above 2400, targeting 2300-2280-2267. Buy in between 2300-2254 with risk below 2250 targeting 2325 and 2340-2351-2360.

Silver - XAG

Silver on Wednesday made its intraday high of US$26.95/oz and low of US$26.21/oz settle up by 1.35% at US$26.62/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 26.20-23.90, targeting 27.50-27.90-28.90 and 29.40-30.00-30.40-31.00 with stop loss should be placed on the breakage below 23.00. Sell in between 27.00-30.50 with a stop loss above 30.50 targeting 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$83.00/bbl, an intraday low of US$80.67/bbl, and settled down by 2.22% to close at US81.18/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 80.00-89.65 with stop loss at 90.00; targeting 79.00-78.10-77.80 and 77.00-76.40. Buy above 79.00-75.00 with risk daily closing below 75.00, targeting 79.90-80.50-81.10 and 82.00-82.90-83.45.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.0648/EUR, a high of US$1.0732/EUR, and settled the day up by 0.49% to close at US$1.0708/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 1.0750-1.1100, targeting 1.0700-1.0640-with stop-loss at daily closing above 1.1100. Buy above 1.0650-1.0450 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$1.2465/GBP, a high of US$1.2562/GBP, and settled the day down by 0.561% to close at US$1.2529/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 1.2430-1.2050 with a target of 1.2500-1.2540 and 1.2600-1.2690-1.2730 with a stop loss closing below 1.2050. Sell in between 1.2540-1.2700 with targets at 1.2360-1.2300-1.2240 and 1.2190-1.2100 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Wednesday made an intra‐day low of JPY152.98/USD an intraday high of 157.98/USD, and settled the day down by 1.98% at JPY154.52/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 155.80-159.00 with risk above 159.00 targeting 153.10-152.60-151.00 and 150.60-149.90-149.30. Long positions above 154.90-149.90 with targets of 156.10-156.90-157.50 and 158.00-159.00 with stops below 149.90.