Daily Markets

• The dollar climbed on Monday, buoyed by a rise in U.S. bond yields, as a run of solid U.S. economic data suggested the Federal Reserve can afford to be patient in cutting rates while investors positioned for the Nov. 5 presidential election. The greenback has risen for three straight weeks and 14 of the past 16 sessions as a run of positive economic data led investors to scale back expectations about the size and speed of rate cuts from the Fed. Markets are pricing in an 87% chance for a cut of 25 basis points (bps) at the Fed's November meeting, with a 13% chance of the central bank holding rates steady, according to CME's FedWatch Tool. The market was completely pricing in a cut of at least 25 bps a month ago, with a 50.4% chance of a 50 bps cut. Last week, the Atlanta Fed raised its estimate for third quarter GDP growth to 3.4%. Federal Reserve Bank of Dallas President Lorie Logan said on Monday she sees more gradual rate cuts ahead for the central bank and suggested she sees no reason why the Fed can’t also press forward with shrinking its balance sheet. In addition, Minneapolis Federal Reserve Bank President Neel Kashkari again said he expects "modest" interest rate cuts over the next several quarters, though a sharp deterioration of labor markets could move him to call for faster cuts. The European Central Bank (ECB) last week cut rates for the third time this year. On Monday, Slovak central bank chief Peter Kazimir said eurozone inflation is increasingly likely to return to target next year but a bit more evidence is needed before the European Central Bank can declare victory. Data on Monday showed German producer prices fell more than expected in September, declining 1.4% year-on-year, mainly due to a drop in energy costs. Investors were also positioning as the U.S. election on Nov. 5 grew closer. Chandler said a Trump victory is likely to bring about tariffs that would affect those that are closest and most exposed to the U.S. in trade partner terms, such as Canada, Mexico, China and Japan. Against the Japanese yen, the dollar strengthened 0.84% to 150.77 after hitting a more than 9-week high of 150.83. Japan will hold a general election on Sunday, Oct. 27. While opinion polls vary on how many seats the ruling Liberal Democratic Party (LDP) will win, markets have been optimistic that the LDP along with junior coalition partner Komeito will prevail.

Gold – XAU

Gold on Monday made its intraday high of US$2740.41/oz and low of $2714.12/oz. Gold is down by 0.0418% at S$2719.34/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 2734-2770 keeping stop loss closing above 2770, targeting 2720-2700-2692 and 2680-2670-2650. Buy in between 2700-2640 with risk below 2640 targeting 2732-2,740 and 2750-2762-2,770.

Silver - XAG

Silver on Monday made its intraday high of US$34.25/oz and low of US$33.44/oz settle up by 0.231% at US$33.75/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 34.00-31.70, targeting 34.00-34.70 with stop loss should be placed on the breakage below 26.00. Sell in between 34.20-36.70 with a stop

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$70.31/bbl, an intraday low of US$68.140/bbl, and settled up by 0.231% to close at US$69.70/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 70.50.00-76.85 with stop loss at 77.00; targeting 70.00-69.20-68.50 and 67.90-67.00. Buy above 68.50-65.80 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$1.0814/EUR, a high of US$1.0870/EUR, and settled the day down by 0.407% to close at US$1.0814/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 1.0840-1.1400, targeting 1.0960 and 1.0850- 1.0785 with stop-loss at daily closing above 1.1100. Buy above 1.0800-1.0685 with risk below 1.0600 targeting 1..0870-1.0910-1.0960 and 1.1020-1.1120-1.1190.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.2976/GBP, a high of US$1.3056/GBP, and settled the day up by 0.325% to close at US$1.2983/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 1.3010-1.2690 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 1.3050-1.3660 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 JPY149.08/USD an intraday high of 150.87/USD, and settled the day up by 0.936% at JPY150.82/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 150.90-151.50 with risk above 152.00 targeting 147.80-147.00-146.00 and 145.10-143.90-143.00-142.20. Long positions above 150.20-140.00 with targets of 148.50-149.20-150.00 and 151.10-151.50 with stops below 140.00.