Daily Markets

• The U.S. dollar slipped slightly lower Monday as traders monitored the ongoing Israel-Iran conflict, at the start of a week that includes a number of central bank policy-setting meetings, including the Federal Reserve. The dollar gained at the end of last week as traders sought out safe havens after the Israeli strike on Iran, while oil prices soared. However, while the two sides have continued to exchange missile strikes, concerns about other countries being dragged into a broader regional conflict have receded, while Iran has kept the vital Strait of Hormuz open to global shipping. This has seen the dollar’s bounce begin to unwind. These geopolitical tensions, and associated oil price gains, were the latest twist for central bank policymakers to work though, with the Federal Reserve widely expected to stand pat at the conclusion of its latest two-day meeting on Wednesday. The U.S. central bank has maintained its fed funds rate at 4.25%-4.50% since it last eased in December. Investors will also be looking for progress towards trade deals on the sidelines of a Group of Seven leaders meeting in Canada this week, with the U.S. dollar having lost more than 9% this year as investors remain nervous over Trump’s deadline on trade deals due in about three weeks. This strength has sparked speculation that it could challenge the U.S. dollar’s dominant status, but European Central Bank Vice President Luis de Guindos dismissed the possibility in the short term. The U.K. central bank is widely expected to keep rates on hold, following its 25 basis point cut in May, as the policymakers have to cope with a contraction of economic growth last month and deteriorating employment figures, but still elevated inflation. Elsewhere, the Norges Bank is also expected to keep rates unchanged later in the week, while Sweden’s Riksbank is likely to cut rates, and the Swiss National Bank could return to negative rates given the strength of the franc. In Asia, USD/JPY traded 0.1% higher to 144.26, with the Japanese yen reversing course after logging some gains last week on increased safe haven demand. The Bank of Japan is widely expected to leave rates unchanged on Tuesday, and the focus will be squarely on its plans to further taper its bond purchases. China’s industrial production grew slightly less than expected in May, as overseas orders were pressured by high U.S. trade tariffs. But Chinese retail sales blew past expectations on support from a public holiday and ecommerce shopping events during the month. The print helped spur some confidence in China’s economy, given that soft consumer spending has been a major source of deflationary pressure in recent months. The People’s Bank of China is set to decide on its loan prime rate later this week, and is expected to leave the rate unchanged after a cut earlier this year..

Gold – XAU

Gold on its Monday intraday high of US$3451.12/oz and low of $3382.76/oz. Gold is down by 1.237% at US$3385.02/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 3390-3500 keeping stop loss closing above 3500, targeting 3420-3300-3287 and 3274-3244-3227. Buy in between 3370-3287 with risk below 3200 targeting 3390-3404-3430 and 3438-3444-3460-3470.

Silver - XAG

Silver on Monday its intraday high of US$36.51/oz and low of US$36.29/oz settle down by up by 0.0072% at US$36.29/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 36.10-33.10, targeting 36.50-37.00 and 37.80-38.25-38.90 with stop loss should be placed on the breakage below 29.00. Sell in between 36.50-38.60 with a stop loss above 39.00 targeting 35.60-35.30-35.00 and 34.85-34.30-33.95-33.50.

Oil - WTI

Crude Oil on Friday high of US$67.77/bbl, an intraday low of US$65.59/bbl, and settled down by 0.141% to close at US$67.51/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 64.70-66.00 with stop loss at 66.00; targeting 63.52-62.20-61.00-60.25 and 59.80-59.25-55.50. Buy above 64.00-56.00 with risk daily closing below 56.00, targeting 64.98-65.60-66.00 and 66.60-67.20-68.00.

EUR/USD

EUR/USD on Monday an intraday low of US$1.1523/EUR, a high of US$1.1614/EUR, and settled the day up by 0.255% to close at US$1.1554/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 1.1570-1.1740, targeting 1.1300 and 1.1250-1.1200 with stop-loss at daily closing above 1.1035. Buy above 1.1520-1.1010 with risk below 1.1010 targeting 1.1510-1.1545-1.1570 and 1.16501.1690-1.1745.

GBP/USD

GBP/USD on Friday low of US$1.3621/GBP, a high of US$1.3621/GBP, and settled the day up 0.160% to close at US$1.3571/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 1.3510-1.3040 with a target of 1.3570-1.3600 and 1.3645-1.3700- 1.3750-1.3790 with a stop loss closing below 1.3040. Sell in between 1.3570-1.3850 with targets at 1.3470-1.3400-1.3360-1.3300 with a stop loss of 1.3185.

USD/JPY

USD/JPY on Monday an intra‐day low of JPY143.64/USD an intraday high of 144.86/USD, and settled the day up by 0.461% at JPY144.64/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 145.20-148.00 with risk above 149.00 targeting 144.50-143.90 and 143.00-142.50-141.90. Long positions above 144.90-138.00 with targets of 145.20-146.10-146.60-147.40 and 148.10-148.90-149.35 with stops below 138.00.