Daily Markets

• Most Asian currencies weakened on Friday, pressured by a rebound in the dollar amid increased bets on a deescalation in U.S. President Donald Trump’s trade policies. The Chinese yuan showed little reaction to stronger-than-expected Chinese trade data for April, which showed Beijing’s export growth remained robust despite a bitter tariff exchange with Washington. U.S.-China trade talks are also set to take place over the weekend. The yuan, along with most Asian units, was set to lose ground this week as the dollar rebounded further off recent three-year lows. The Indian rupee was among the worst performers for the day, losing ground amid continued hostilities between New Delhi and Islamabad. Concerns over worsening relations between the two nuclear armed neighbors also kept risk appetite subdued. The dollar index and dollar index futures both steadied in Asian trade after clocking strong gains in the past two sessions. The two were also trading up about 0.7% for the week, their third straight week of gains. The greenback was buoyed chiefly by increased optimism over a deescalation in U.S. trade tariffs, after Trump announced a major trade deal with the UK this week. While the economic benefits of the deal are expected to be limited, investors hoped that the deal would herald more trade agreements with major economies. Some analysts, however, appeared more cautious. ING warned that the trade deal with the UK was negligible, and that the U.S. would need to reach an agreement with China to move the dial towards deescalation. China by far faces the steepest U.S. tariffs. The yuan took little support from data showing a bigger-than-expected increase in Chinese exports, despite headwinds from steep U.S. trade tariffs against Beijing. China’s imports also shrank much less than expected, while its trade balance just missed expectations in April. The trade data came just ahead of trade talks between Chinese and U.S. officials, which are set to take place in Geneva over the weekend. Trump said that he was open to reducing his steep 145% tariffs on China, if the weekend talks went well. A New York Post report said Trump could slash Chinese tariffs to 50% by next week. China’s Vice Minister of Foreign Affairs Chunying Hua said on Friday that the U.S. tariffs were unsustainable and that Beijing was prepared for any outcome from the trade talks. Broader Asian currencies moved in a flat-to-low range. The Indian rupee’s USDINR pair rose 0.2%, recouping some ground from a rise past 86 rupees. The currency remained fragile as India and Pakistan rapidly escalated military action against each other. The Japanese yen’s USDJPY pair fell 0.1%, but remained near a one-month high following softer-than-expected overall wage income data, which went against the Bank of Japan’s narrative of higher wages and sticky inflation.

Gold – XAU

Gold on Thursday its intraday high of US$3414.61/oz and low of $3288.72/oz. Gold is down by 1.77% at US$3305.67/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 3345-3461 keeping stop loss closing above 3461, targeting 3320-3300-3260-3245 and 3228-3210-3200. Buy in between 3320-3208 with risk below 3200 targeting 3345-3358-3370-3390 and 3405-3420-3430-3438.

Silver - XAG

Silver on Thursday its intraday high of US$32.92/oz and low of US$32.20/oz settle down by up by 0.197% at US$32.42/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 32.30-27.10, 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 Thursday high of US$59.90/bbl, an intraday low of US$57.44/bbl, and settled up by 4.02% to close at US$59.89/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 60.25-62.00 with stop loss at 62.00; targeting 59.255.50-54.75-54.00 and 53.50-52.90. Buy above 59.80-52.00 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 Thursday an intraday low of US$1.1211/EUR, a high of US$1.1335/EUR, and settled the day down by 0.633% to close at US$1.1223/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 1.1300-1.1740, targeting 1.1340-1.1300-1.1250-1.1200 with stop-loss at daily closing above 1.1035. Buy above 1.1200-1.1010 with risk below 1.1010 targeting 1.1340-1.1370-1.420 and 1.1450-1.1520-1.1550-1.1590.

GBP/USD

GBP/USD on Thursday low of US$1.3279/GBP, a high of US$1.3355/GBP, and settled the day down 0.318% to close at US$1.3244/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 1.3206-1.3040 with a target of 1.3300-1.3360-1.3400 and 1.3435-1.3470-1.3510 with a stop loss closing below 1.3040. Sell in between 1.3300-1.3600 with targets at 1.3206-1.3150-1.3110 and 1.3090-1.3040-1.3010 with a stop loss of 1.3140.

USD/JPY

USD/JPY on Thursday an intra‐day low of JPY143.44/USD an intraday high of 146.16/USD, and settled the day up by 1.433% at JPY145.85/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.