Daily Markets

• The U.S. dollar edged higher Tuesday, but remained near its six-week low as uncertainty of trade policies raised doubts about the outlook for the U.S. economy, while the euro slipped slightly ahead of key inflation data. The Trump administration is urging countries to present their most favorable trade proposals by Wednesday, according to a report from Reuters, citing a draft letter to negotiating partners. However, U.S. duties on imported steel and aluminum are also set to double to 50% on Wednesday, an indication that tough times likely lie ahead for the U.S. economy. April’s JOLTS report is due for release later in the session, where job openings and layoffs will be scrutinised closely, while durable goods orders for April are also expected to have taken a hit. In Europe, EUR/USD traded 0.2% lower to 1.1415, after briefly touching a six-week high, ahead of the release of the flash eurozone inflation figures for May. Expectations are for consumer prices to have slowed to an annual 2.0% last month after April’s larger-than-expected 2.2% rise, which is seen providing the ECB with room to cut interest rates by a quarter point once more on Thursday. GBP/USD traded 0.2% lower at 1.3518, with sterling staying supported as the Bank of England remains cautious with its interest rate cuts as inflation remains elevated. Data released Monday showed that U.K. house prices rose more than expected in May, climbing 3.5% year-on-year, according to data from mortgage lender Nationwide. On a monthly basis, prices increased by 0.5%, reversing most of April’s decline and marking the largest monthly gain since December. A host of weak economic readings for the first quarter – including a bigger-than-expected current account deficit – also dampened sentiment towards Australia before Q1 gross domestic product data due on Wednesday. The RBA had cut rates by 25 basis points in May, and presented a largely dovish outlook on the Australian economy, citing increased headwinds from trade tariffs. Recent purchasing managers index readings signaled persistent weakness in the Chinese economy, as Caixin manufacturing PMI data showed an unexpected contraction in May, in line with government PMI data released over the weekend. The reading showed export orders for Chinese goods were stalling amid high U.S. tariffs.

Gold – XAU

Gold on Tuesday its intraday high of US$3392.04/oz and low of $3353.12/oz. Gold is down by 0.873% at US$3353.12/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 3358-3420 keeping stop loss closing above 3420, targeting 3300-3287 and 3274-3244-3227. Buy in between 3345-3201 with risk below 3200 targeting 3358 and 3370-3386-3404.

Silver - XAG

Silver on Friday its intraday high of US$34.74/oz and low of US$33.94/oz settle down by down by 0.659% at US$34.49/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 33.95-29.10, targeting 34.30 and 34.60-35.00-35.30 with stop loss should be placed on the breakage below 29.00. Sell in between 33.50-35.60 with a stop loss above 36.00 targeting 33.95-33.50 and 32.50-31.90-30.90.

Oil - WTI

Crude Oil on Tuesday high of US$63.24/bbl, an intraday low of US$61.83/bbl, and settled up by 0.631% to close at US$62.76/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 63.52-64.00 with stop loss at 64.00; targeting 60.25-59.80-59.25 and 55.50-54.75-54.00. Buy above 62.20-56.00 with risk daily closing below 56.00, targeting 63.15 and 63.52-64.00-64.98.

EUR/USD

EUR/USD on Tuesday an intraday low of US$1.1363/EUR, a high of US$1.1454/EUR, and settled the day down by 0.572% to close at US$1.1367/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 1.1390-1.1740, targeting 1.1300 and 1.1250-1.1200 with stop-loss at daily closing above 1.1035. Buy above 1.1350-1.1010 with risk below 1.1010 targeting 1.1390-1.1420 and 1.1450-1.1470-1.1510.

GBP/USD

GBP/USD on Friday low of US$1.3491/GBP, a high of US$1.3558/GBP, and settled the day down 0.235% to close at US$1.3510/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 1.3470-1.3040 with a target of 1.3510-1.3570-1.3600 and 1.3645-1.3700- 1.3750-1.3790 with a stop loss closing below 1.3040. Sell in between 1.3510-1.1385 with targets at 1.3470-1.3400-1.3360-1.3300 with a stop loss of 1.3185.

USD/JPY

USD/JPY on Tuesday an intra‐day low of JPY142.36/USD an intraday high of 144.43/USD, and settled the day up by 0.859% at JPY143.84/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (152.35), 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 144.50-148.00 with risk above 149.00 targeting 145.20-144.50-143.90 and 143.00-142.50-141.90. Long positions above 143.90-138.00 with targets of 145.20-146.10-146.60-147.40 and 148.10-148.90-149.35 with stops below 138.00.