Daily Markets

• Most Asian currencies kept to a tight range as the dollar headed for a strong weekly performance, while the Japanese yen stemmed some recent losses following strong producer inflation data. The yen was also aided by speculation over whether Tokyo will intervene in currency markets, after ministers expressed some discomfort over sustained selling of the currency. Weakness in the yen– which is a component of the DXY dollar index, was one of the key drivers of the greenback’s resilience this week, even as sentiment towards the U.S. economy remained weak amid an ongoing government shutdown. Other Asian currencies kept to a tight range, and were sitting on a muted weekly performance amid pressure from a stronger dollar. The Japanese yen firmed slightly on Friday, with the USD/JPY pair falling nearly 0.3% from an eight-month high. Producer price index data for September, released earlier in the day, read stronger than expected, pointing to a potential increase in broader inflation last month. The print sparked some uncertainty over the BOJ’s plans to hike rates, given that the central bank has maintained its stance that interest rates will increase in tandem with inflation. But the BOJ is widely expected to face increased resistance from the government over its hiking plans, especially with fiscal dove Sanae Takaichi set to take the prime ministership. Takaichi’s election as the leader of the ruling Liberal Democratic Party triggered steep declines in the yen this week, as markets bet on more fiscal spending and accommodative policy under her government. But outsized weakness in the yen spurred speculation over whether the government will intervene in currency markets. Japanese Finance Minister Katsunobu Kato added to this speculation by stating on Friday that the government was concerned over “one-sided, rapid moves” in currency markets. Kato’s comments also offered the yen some relief. The dollar index and dollar index futures fell about 0.1% and 0.2% , respectively, in Asian trade, but were trading up over 1.5% for the week. The dollar index also hit a two-month high. Buying in the dollar came chiefly from a pivot out of the yen, while weakness in the euro– another dollar index component– also favored the greenback. The euro tumbled this week as traders fretted over a deepening political crisis in France. While traders remained convinced that the Fed will cut interest rates further in the coming months, some uncertainty emerged this week over just how low rates will fall. An ongoing government shutdown delayed the release of several key U.S. economic prints, adding to uncertainty over the world’s biggest economy. Resilience in the dollar left most Asian currencies trading in a tight range against the greenback on Friday.

Gold – XAU

Gold on Thursday made its intraday high of US$4057.85/oz and low of $39944.64/oz. God is down by 1.507% at US$3975.90/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 3970-4110 keeping stop loss closing above 4110, targeting 3964-3950-3925 and 3915-3894-3885. Buy in between 3964-3900 with risk below 3900 targeting 3984-3995-4010 and 4040-4050-4064-4080.

Silver - XAG

Silver on Thursday its intraday high of US$51.41/oz and low of US$48.45/oz settle up by 0.843% at US$49.23/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 49.30-40.00, targeting 49.80-50.10-50.60 and 51.00-51.60-52.00 with stop loss should be placed on the breakage below 40.00. Sell in between 49.80-52.10 with a stop loss above 52.50 targeting 49.30-48.75-48.15-47.60 and 46.50-45.90-45.40-45.00.

Oil - WTI

Crude Oil on Thursday high of US$62.42/bbl, an intraday low of US$60.85/bbl, and settled up by 0.0711% to close at US$61.11/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 62.00-70.00 with stop loss at 70.00; targeting 60.60-60.05-59.40 and 58.70-58.00-57.65. Buy above 61.60-59.00 with risk daily closing below 59.00, targeting 62.05-62.70-63.50-64.10 and 65.40-66.20-67.20.

EUR/USD

EUR/USD on Thursday an intraday low of US$1.1541/EUR, a high of US$1.16475/EUR, and settled the day down by 0.529% to close at US$1.1563/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 1.1640-1.1590 and 1.1545-1.1500-1.1470 with stop-loss at daily closing above 1.1990. Buy above 1.1610-1.1110 with risk below 1.1100 targeting 1.1790-1.1850-1.1890-1.1920 and 1.1950-1.1990-1.2040.

GBP/USD

GBP/USD on Thursday low of US$1.3278/GBP, a high of US$1.3418/GBP, and settled the day down by 0.765% to close at US$1.3295/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 1.3300-1.3040 with a target of 1.3410-1.3470-1.3550 and 1.3600-1.3625-1.3680-1.3720 with a stop loss closing below 1.3040. Sell in between 1.3370-1.3850 with targets at 1.3370-1.3310 and 1.3260-1.3200-1.3160 with a stop loss of 1.3850.

USD/JPY

USD/JPY on Thursday an intra‐day low of JPY152.11/USD an intraday high of 153.22/USD, and settled the day up by 0.248% at JPY153.03/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 153.10-155.50 with risk above 155.00 targeting 152.65-152.00-151.60-151.20 and 150.50-149.90-149.00. Long positions above 152.60-148.00 with targets of 152.65-153.10-153.60 and 154.00-154.60-155.50with stops below 144.00.