Daily Markets

• Most Asian currencies kept to a tight range on Monday with focus squarely on a looming deadline for a U.S.-China trade deal, while the dollar steadied ahead of key inflation data due this week. Regional markets took negative cues from weak Chinese inflation data released over the weekend, which highlighted sustained pressure on Asia’s biggest economy. Trading volumes in the region were also quashed by a holiday in Japan. U.S. trade tariffs remained the biggest point of focus, after they took effect against a slew of major economies from last week. Focus was also on upcoming talks between Russia and the U.S. this week, which could help determine tariff levels for India and China. The Chinese yuan’s USDCNY pair moved little on Monday, after data released over the weekend showed deflation remained largely in play in July. Chinese consumer price index inflation was flat, while producer price index inflation shrank more than expected. The print highlighted fading support from Beijing’s recent stimulus measures, while a trade truce with Washington also offered limited relief. U.S.-China trade relations came into renewed focus this week before an August 12 deadline for a permanent trade truce between the two countries. Washington and Beijing had agreed to temporarily lower their respective trade tariffs earlier this year, and were seen working towards a more permanent trade deal, with President Donald Trump setting an August 12 deadline for an agreement. Trump signaled last week that he was likely to extend this deadline, with dialogue between the world’s biggest economies set to continue. Uncertainty over U.S. trade and China provided middling cues to regional currencies. The Japanese yen’s USDJPY pair fell 0.1% in thin trade, while the Singapore dollar’s USDSGD pair fell 0.1%. The South Korean won’s USDKRW pair fell 0.2%, while the Taiwan dollar’s USDTWD pair fell 0.1%. The Indian rupee’s USDINR pair rose slightly and remained in sight of record highs hit last week, as sentiment towards India was battered by Trump imposing up to 50% tariffs on New Delhi over its buying of Russian oil. Trump had also threatened similar duties on China. The U.S. president is set to meet his Russian counterpart Vladimir Putin on Friday to discuss an end to the Ukraine war. The dollar index and dollar index futures moved little on Monday after logging steep losses in the past week. Focus was squarely on upcoming CPI inflation data for July, due on Tuesday, for more cues on the economy and interest rates. The CPI data comes amid increasing bets that the Federal Reserve will cut interest rates in September, following a series of weak labor market prints in recent months. Markets will be looking for a similar cooling in inflation, although analysts and central bankers have warned that Trump’s tariffs are expected to boost inflation.

Gold – XAU

Gold on Friday made its intraday high of US$3409.03/oz and low of $3377.25/oz. Gold is down by 0.188% at US$3397.63/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 3380-3500 keeping stop loss closing above 3500, targeting 3367-3354-3330-3312 and 3300-3288-3278-3267. Buy in between 3367-3211 with risk below 3200 targeting 3380-3390-3400 and 3424-3437-3451.

Silver - XAG

Silver on Friday its intraday high of US$38.45/oz and low of US$37.97/oz settle up by up by 0.107% at US$38.30/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 37.80-33.10, targeting 38.10-38.90-39.50 and 39.90-40.50-41.10 with stop loss should be placed on the breakage below 33.00. Sell in between 38.50-43.00 with a stop loss above 43.00 targeting 37.80-37.20-36.30 and 35.60-35.30-34.70-34.05.

Oil - WTI

Crude Oil on Friday high of US$63.86/bbl, an intraday low of US$62.17/bbl, and settled down by 0.712% to close at US$62.69/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 64.00-72.00 with stop loss at 72.00; targeting 63.00-62.80-62.00 and 61.50-60.60-60.05. Buy above 63.00-60.00 with risk daily closing below 60.00, targeting 64.10-65.40-66.20 and 67.10-67.90-68.70.

EUR/USD

EUR/USD on Friday an intraday low of US$1.1628/EUR, a high of US$1.1678/EUR, and settled the day down by 0.193% to close at US$1.1640/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 1.1690-1.1990, targeting 1.1545-1.1500-1.1470 and 1.1420-1.1390-1.1320-1.1260 with stop-loss at daily closing above 1.1990. Buy above 1.1645-1.1110 with risk below 1.1100 targeting 1.1690-1.1755-1.1790 and 1.1850-1.1890.

GBP/USD

GBP/USD on Thursday low of US$1.3341/GBP, a high of US$1.3457/GBP, and settled the day up 0.106% to close at US$1.3450/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 1.3430-1.3040 with a target of 1.3370 and 1.3400-1.3470-1.3510-1.3600 with a stop loss closing below 1.3040. Sell in between 1.3470-1.3850 with targets at 1.3400-1.3370-1.3310-1.3200 and 1.3139-1.3090-1.3050 with a stop loss of 1.3850.

USD/JPY

USD/JPY on Friday an intra‐day low of JPY146.71 /USD an intraday high of 147.89/USD, and settled the day up by 0.448% at JPY147.74/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: 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.