Daily Markets

• Most Asian currencies kept to a tight range on Wednesday, as did the dollar, as traders fretted over increased expectations of U.S. interest rate cuts and key upcoming inflation data this week The Chinese yuan weakened slightly after inflation data for August showed disinflation remained squarely in play, heralding continued weakness in Asia’s largest economy. Broader Asian currencies were a mixed bag, but saw some strength over the past week as rising bets on lower U.S. interest rates pulled the dollar to seven-week lows. But the dollar found some strength ahead of key U.S. inflation data that is likely to factor into rate expectations. Chinese consumer price index inflation shrank by a bigger-than-expected 0.4% in August, indicating that private spending and local demand was faltering as support from Beijing’s subsidies ran dry. Producer price index inflation shrank 2.8% as expected, and marked a 35th consecutive month of contraction. Wednesday’s data showed a disinflationary trend in China remained squarely in play, as heightened economic uncertainty and pressure from U.S. tariffs weighed on the economy. The reading also underscored the need for more stimulus measures from Beijing to support growth. The yuan was still sitting on stellar gains over the past month on support from Beijing, with analysts viewing the move as being aimed at encouraging more exports to the country. But any more stimulative measures from Beijing, including monetary support, are likely to undermine the yuan. Broader Asian currencies kept to a tight range on Wednesday. The Japanese yen’s USD/JPY pair hovered around 147.45 yen, steadying after whipsawing on the abrupt resignation of Japanese Prime Minister Shigeru Ishiba earlier this week. The dollar index and dollar index futures moved little in Asian trade, steadying from some overnight gains. But the greenback remained close to seven-week lows amid growing conviction that the Fed will cut interest rates next week But key U.S. inflation data for August will test rate cut bets this week. PPI inflation is due later on Wednesday, while CPI inflation data is due on Thursday. August’s inflation data will be closely watched for any signs of an increase in price pressures, given that a bulk of Trump’s trade tariffs took effect last month.

Gold – XAU

Gold on Tuesday made its intraday high of US$3674.57/oz and low of $3625.79/oz. Gold is down by 0.271% at US$3625.93/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 3651-3700 keeping stop loss closing above 3700, targeting 3630-3619-3600 and 3590-3578-3564-3550. Buy in between 3630-3534 with risk below 3534 targeting 3651-3662-3675 and 3684-3690-3700.

Silver - XAG

Silver on Tuesday its intraday high of US$41.46/oz and low of US$40.76/oz settle up by down by 1.113% at US$40.83/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 40.70-33.10, targeting 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 41.30-43.00 with a stop loss above 43.00 targeting 40.70-40.10-39.50 and 38.20-37.80-37.20-36.30.

Oil - WTI

Crude Oil on Tuesday high of US$63.32/bbl, an intraday low of US$62.05/bbl, and settled up by 0.590% to close at US$62.47bbl.

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 63.50-72.00 with stop loss at 72.00; targeting 62.70-62.00 and 61.50-60.60-60.05. Buy above 62.70-58.00 with risk daily closing below 58.00, targeting 63.50-64.10 and 64.70-65.40-66.20-67.10.

EUR/USD

EUR/USD on Tuesday an intraday low of US$1.1702/EUR, a high of US$1.1779/EUR, and settled the day down by 0.465% to close at US$1.1707EUR.

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 1.1755-1.1990, targeting 1.1640-1.1590-1.1545 and 1.1500-1.1470-1.1420 with stop-loss at daily closing above 1.1990. Buy above 1.1690-1.1110 with risk below 1.1100 targeting 1.1755-1.1790 and 1.1850-1.1890.

GBP/USD

GBP/USD on Tuesday low of US$1.3517/GBP, a high of US$1.3589/GBP, and settled the day up by 0.124% to close at US$1.3523/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 1.3470-1.3550 and 1.3600-1.3625-1.3680-1.3720 with a stop loss closing below 1.3040. Sell in between 1.3550-1.3850 with targets at 1.3479-1.3410-1.3370-1.3310 and 1.3260-1.3200-1.3160 with a stop loss of 1.3850.

USD/JPY

USD/JPY on Tuesday an intra‐day low of JPY146,30/USD an intraday high of 147.50/USD, and settled the day down by 0.0515% at JPY147.37/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 148.00-154.00 with risk above 154.00 targeting 147.40 and 146.60-146.10-145.20-144.70. Long positions above 147.60-144.00 with targets of 148.10-148.70-149.35 and 149.90-150.50-151.20-151.60 with stops below 144.00.