Daily Markets

• Most Asian currencies weakened on Wednesday as a military escalation between India and Pakistan rattled risk, while the dollar firmed before a Federal Reserve interest rate decision later in the day The negative signals largely offset cheer over the U.S. and China signaling that trade talks between the two will begin later in the week. Rate cuts in China also weighed on the yuan. The dollar firmed in Asian trade, retaining some recent gains after it recovered from a three-year low. Safe haven flows also aided the greenback, albeit slightly. The People’s Bank of China said it will cut its benchmark repurchase rate by 10 basis points to 1.40%, while its reserve requirement ratio will fall by 50 bps to 6.2%. The move is aimed at further bolstering the Chinese economy with monetary support, as it grapples with increased headwinds from a trade conflict with the United States. But there appeared to be some progress towards Sino-U.S. deescalation, after U.S. and Chinese officials confirmed they will meet for trade talks in Switzerland this week. U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet their Chinese counterparts in the coming days. China’s Vice Premier He Lifeng, Beijing’s lead official in U.S.-China trade matters, will meet the two in Switzerland. While the move points to some thawing in U.S.-China relations, which are at their worst in years, traders were doubtful whether any immediate deescalation would come from the meeting. U.S. President Donald Trump also said on Tuesday that he was in no hurry to sign any trade deals, as his administration undertakes trade negotiations over his proposed reciprocal tariffs. The Indian rupee’s USDINR pair rose 0.3% to around 84.5 rupees on Wednesday, after India said it had carried out strikes against several alleged terrorist targets in Pakistan. Pakistan decried the attack, and claimed it had retaliated with artillery strikes and by shooting down at least three Indian planes. New Delhi said the strikes were in retaliation for a deadly terrorist attack in Indian Kashmir in April. The military action represents the worst fighting between the two nuclear armed countries in decades, and pushed up concerns over a greater escalation. The dollar index and dollar index futures both rose 0.3% in Asian trade, taking some support from news of U.S.-China trade talks. The greenback was also well-bid before the conclusion of a Fed meeting later in the day, where the central bank is widely expected to keep rates steady. Fed Chair Jerome Powell is expected to signal few near-term changes to rates, especially in the face of heightened trade tariff uncertainty and sticky inflation. Powell is also expected to brush off repeated calls from Trump to cut interest rates. Steady U.S. interest rates are expected to offer some support to the dollar in the near-term, especially as it wallows near three-year lows. Positioning in the dollar, before the Fed, spurred some weakness in Asian currencies. The Japanese yen’s USDJPY pair rose 0.5%, seeing few near-term safe haven bids, while the Australian dollar’s AUDUSD pair fell 0.2%.

Gold – XAU

Gold on Tuesday its intraday high of US$3434.78/oz and low of $3323.15/oz. Gold is down by 2.83% at US$3430.19/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 3285-3461 keeping stop loss closing above 3461, targeting 3245-3232-3210 and 3200-3180-3167. Buy in between 3265-3208 with risk below 3200 targeting 3265-3280-3300 and 3310-3320-3345.

Silver - XAG

Silver on Monday its intraday high of US$33.22/oz and low of US$32.41/oz settle down by up by 2.83% at US$33.19/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 32.50-27.10, targeting 33.50-33.90-34.30 and 34.60-35.00 with stop loss should be placed on the breakage below 27.00. Sell in between 33.10-34.00 with a stop loss above 34.00 targeting 32.50-31.90-30.90 and 30.50-29.90-29.20.

Oil - WTI

Crude Oil on Monday high of US$59.49/bbl, an intraday low of US$56.77/bbl, and settled up by % to close at US$58.68/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 59.60-62.00 with stop loss at 62.00; targeting 59.255.50-54.75-54.00 and 53.50-52.90. Buy above 59.20-52.00 with risk daily closing below 52.00, targeting 59.80-60.25-61.00 and 61.50-62.20-63.00.

EUR/USD

EUR/USD on Tuesday an intraday low of US$1.1279/EUR, a high of US$1.1380/EUR, and settled the day up by 0.479% to close at US$1.13672/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 1.1370-1.1740, targeting 1.1340-1.1300-1.1250-1.1200 with stop-loss at daily closing above 1.1035. Buy above 1.1340-1.1010 with risk below 1.1010 targeting 1.1450-1.1520-1.1550-1.1590 and 1.1630-1.1690-1.1740.

GBP/USD

GBP/USD on Tuesday low of US$1.3259/GBP, a high of US$1.3401/GBP, and settled the day up 0.562% to close at US$1.3362/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 1.3360-1.3040 with a target of 1.3400-1.3435-1.3470 and 1.3510-1.3550-1.3600 with a stop loss closing below 1.3040. Sell in between 1.3390-1.3600 with targets at 1.3300-1.3266 and 1.3206-1.3150-1.3110 with a stop loss of 1.3140.

USD/JPY

USD/JPY on Tuesday an intra‐day low of JPY142.33/USD an intraday high of 144.26/USD, and settled the day down by 0.913% at JPY142.34/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 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 143.90-149.00 with risk above 149.00 targeting 144.00-143.40-142.50-141.90 and 140.60-140.00-139.60. Long positions above 143.00-138.00 with targets of 143.90-144.50-145.20 and 146.00-146.60-147.40 with stops below 138.00.