Daily Markets

• Most Asian currencies firmed slightly on Thursday, recovering a measure of recent losses, while the dollar steadied near a seven-week peak ahead of key consumer inflation data. Regional currencies were nursing losses over the past week amid growing doubts over the pace of the Federal Reserve’s future interest rate cuts. This trend was somewhat offset by the minutes of the Fed’s September meeting showing policymakers in full support of the central bank’s 50 basis point cut then. But they also remained uncommitted over the pace of future easing. Some improving sentiment towards China also drove Asian currencies, as Beijing signaled plans to begin rolling out fiscal stimulus measures. The dollar index and dollar index futures fell slightly in Asian trade, but remained close to seven-week highs hit earlier this week. Focus was squarely on consumer price index inflation data due later in the day, which is likely to factor into the Fed’s plans for interest rates. The data is expected to show headline CPI inflation eased slightly, while core CPI remained sticky. Strong payrolls data released last week saw traders wipe out bets that the central bank will cut rates by 50 bps again in November. Traders were seen pricing in a 79.5% chance for a 25 bps cut in November, and a 20.5% chance for a hold, CME Fedwatch showed. The Chinese yuan’s USDCNY pair fell 0.2%, reversing some recent weakness as traders looked to more stimulus measures from Beijing to support growth. China’s finance ministry said it will hold a briefing on Saturday to outline plans for fiscal stimulus, after a raft of recent monetary stimulus measures largely disappointed markets. Still, any more stimulus measures herald weakness in the yuan, especially if local interest rates fall further. Most Asian units firmed on Thursday but were nursing recent losses. The Japanese yen’s USDJPY pair fell 0.1% after hitting an over two-month high. The currency took little support from stronger-than-expected producer price index inflation data, as markets bet that the Bank of Japan will face difficulty in raising interest rates further. The Indian rupee’s USDINR pair remained close to record highs, with the rupee facing weakness after the Reserve Bank of India signaled a shift away from its hawkish stance.

Gold – XAU

Gold on Wednesday made its intraday high of US$2624.26/oz and low of $2605.11/oz. Gold is down by 0.533% at S$2607.46/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 2620-2690 keeping stop loss closing above 2700, targeting 2610-2600-2584 and 2575-2560-2552. Buy in between 2610-2560 with risk below 2560 targeting 2620-2634-2645 and 2662-2669-2690.

Silver - XAG

Silver on Monday made its intraday high of US$32.31/oz and low of US$31.39/oz settle down by 0.681% at US$31.66/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 30.40-25.90, 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 30.90-34.70 with a stop loss above 35.00 targeting 30.40 and 29.80-29.50-28.90.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$73.96/bbl, an intraday low of US$71.15/bbl, and settled down by 1.529% to close at US$72.83/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 75.90-79.85 with stop loss at 80.00; targeting 74.10-73.00-72.454 and 71.65-70.90-70.00. Buy above 75.00-65.80 with risk daily closing below 65.00, targeting75.75-76.50-77.10 and 78.00-79.00

EUR/USD

EUR/USD of WEDNESDDAY made an intraday low of US$1.0935/EUR, a high of US$1.0980/EUR, and settled the day down by 0.326% to close at US$1.0937/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 1.0960-1.1400, targeting 1.0960 and 1.0850- 1.0785 with stop-loss at daily closing above 1.1100. Buy above 1.0910-1.0785 with risk below 1.0700 targeting 1.1150-1.1190-1.1250 and 1.1290-1.1340-1.1400.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.3063/GBP, a high of US$1.3112/GBP, and settled the day up by 0.202% to close at US$1.3102/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 Monday made an intra‐day low of JPY147.84/USD an intraday high of 149.12/USD, and settled the day down by 0.351% at JPY148.14/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 148.50-140.00 with targets of 148.50-149.20-150.00 and 151.10-151.50 with stops below 140.00.