Daily Markets

• Most Asian currencies advanced on Monday after data showed some improvement in Chinese business activity, while the dollar retreated amid increased speculation over interest rate cuts by the Federal Reserve. The greenback remained at an over three-year low, also pressured by concerns over higher government debt levels, especially as a sweeping tax and spending cut bill progressed in the U.S. Senate. Lawmakers are expected to vote on the bill’s passage by as soon as Monday. Broader regional currencies extended gains from last week, and were also sitting on strong gains for June as markets amid persistent weakness in the dollar. Purchasing managers index data showed China’s manufacturing sector shrank at a slightly smaller rate in June than expected, while non-manufacturing activity picked up from the prior month. The reading reflected some improvement in Chinese business activity, with the manufacturing sector seeing a recovery in overseas orders after the U.S. and China agreed to slash their respective trade tariffs in May. But China’s manufacturing sector still shrank for a third consecutive month, indicating that local manufacturers still remained under pressure from relatively high U.S. tariffs. Local demand also remained languid. Still, persistent weakness in the Chinese economy is expected to elicit more stimulus measures from Beijing. The dollar index and dollar index futures fell 0.2% each in Asian trade, remaining close to their weakest levels since early-2022. The greenback was pressured by increased speculation over the Fed’s plans for interest rate cuts. CME Fedwatch showed markets ratcheting up bets that the central bank will cut rates by 25 basis points by at least September. These bets came even as recent inflation data read showed an increase in May, while Fed Chair Jerome Powell dismissed speculation that a rate cut was imminent. Still, Powell is under persistent pressure from Trump to cut rates, with the president expected to even announce Powell’s successor early to undermine the Fed chair. Concerns over high U.S. government debt also weighed on the dollar, as Trump’s sweeping tax-cut bill progressed through the Senate. The Congressional Budget Office (CBO)– a non-partisan, federal agency that analyzes the economic effects of proposed legislation in Congress– estimates U.S. government debt will increase by nearly $3.3 trillion over the next decade due to the bill. Higher U.S. debt levels increase the cost of government debt, and also raise the risk of a default. Congress has until mid-summer to raise the U.S. debt limit and avert a potential default. Broader Asian currencies mostly benefited from weakness in the dollar, although bigger gains were limited by some middling data, as well as increased uncertainty over Trump’s trade tariffs before a July 9 deadline to sign trade deals with the United States.

Gold – XAU

Gold on its Friday intraday high of US$3327.84/oz and low of $3255.65/oz. Gold is down by 1.607% at US$3274.00/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 3300-3500 keeping stop loss closing above 3500, targeting 3300 and 3287-3274-3244. Buy in between 3284-3220 with risk below 3200 targeting 3311-3331-3354 and 3372-3386-3404

Silver - XAG

Silver on Friday its intraday high of US$36.70/oz and low of US$35.76/oz settle down by down by 1.828% at US$35.96/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 36.20-33.10, 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 36.60-39.60 with a stop loss above 40.00 targeting 36.10-35.60-35.30 and 35.00-34.85-34.30.

Oil - WTI

Crude Oil on Friday high of US$65.47/bbl, an intraday low of US$64.21/bbl, and settled down by 0.343% to close at US$64.49/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 65.10-72.00 with stop loss at 72.00; targeting 64.90-64.10 and 63.40-62.80-62.00. Buy above 64.50-62.00 with risk daily closing below 62.00, targeting 67.12-67.90-68.60 and 69.50-70.05-71.00.

EUR/USD

EUR/USD on Friday an intraday low of US$1.1711/EUR, a high of US$1.1737/EUR, and settled the day up by 0.179% to close at US$1.1735/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 1.1690-1.1740, targeting 1.1470-1.1450-1.1420 and 1.1390-1.1300-1.1250 with stop-loss at daily closing above 1.1035. Buy above 1.1620-1.1010 with risk below 1.1010 targeting 1.1545-1.1570 and 1.16501.1690-1.1745.

GBP/USD

GBP/USD on Friday low of US$1.3682/GBP, a high of US$1.3751/GBP, and settled the day down 0.0349% to close at US$1.3720/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 1.3645-1.3040 with a target of 1.3710-1.3750-1.3790 and 1.3850-1.3890 with a stop loss closing below 1.3040. Sell in between 1.3670-1.3850 with targets at 1.3645-1.3600-1.3510 and 1.3470-1.3400-1.3360 with a stop loss of 1.3850.

USD/JPY

USD/JPY on Friday an intra‐day low of JPY144.16/USD an intraday high of 145.94/USD, and settled the day up by 0.219% at JPY144.65/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 144.20-149.00 with risk above 149.00 targeting 145.20 and 144.50-143.90-143.00. Long positions above 143.50-140.00 with targets of 146.10-146.60-147.40 and 148.10-148.90-149.35 with stops below 138.00.