Daily Market Lookup

• The U.S. dollar edged higher in early European trade Thursday, stabilizing after earlier losses as growing recession worries resulted in Treasury yields retreating. The dollar has slipped from that peak as markets have become increasingly concerned that the Fed's attempt to curb historically high inflation with aggressive monetary tightening will result in a recession. Fed Chair Jerome Powell added to these concerns on the first day of his two-day testimony to Congress, stating that while it wasn’t what the central bank policy makers were aiming for, a recession was "certainly a possibility" as they attempted to bring prices under control. Those worries sent the 10-year Treasury yields sliding to an almost two-week low, before rebounding marginally in early European hours. Powell continues his testimony later Thursday, while on the data front, the weekly U.S. initial jobless claims are due. U.K. government borrowed more than forecast in May after a 70% surge in interest payments to service the national debt, while the risk sensitive AUD/USD dropped 0.6% to 0.6887. Also weighing on the pair were comments from Takehiko Nakao, former head of foreign exchange policy at the finance ministry, who stated that the possibility of Japan intervening directly in currency markets to stem the yen’s slide can’t be ruled out. Investors are worried that the Fed’s commitment to tame red hot inflation could trigger a recession, sending the 10-year Treasury yields to an almost two-week low. U.S. Federal Reserve Chair Jerome Powell said that an aggressive interest rate hike could lead to an economic contraction and called a soft landing “very challenging” in his testimony to the Senate Wednesday. Powell also said that he would not rule out a 100-basis point increase in interest rates, adding that the central bank would take whatever moves necessary to restore price stability. On the data front, U.S. initial jobless claims is due on Thursday while U.S. University of Michigan consumer sentiment will be released on Friday.
• Gold was down on Thursday morning in Asia as investors expected aggressive interest rate hikes after U.S. Federal Reserve Chair Jerome Powell said the central bank is fully committed to bringing prices down. Investors are expecting aggressive interest rate hikes after the Fed Chair’s testimony to the Senate. Powell said on Wednesday that he would not rule out a 100-basis point increase in interest rates, adding that the central bank would take whatever moves necessary to restore price stability. Powell is due to testify to the House later in the day.
• Oil was down on Thursday morning in Asia as investors are worried that tightening monetary policy could trigger a recession and dampen fuel demand. Investors are concerned about a recession caused by tightening monetary policy. U.S. Federal Reserve is not trying to trigger a recession to tame inflation but is fully committed to bringing down prices, Fed Chair Jerome Powell said on Wednesday. U.S. President Joe Biden called on Congress to temporarily suspend a federal tax on gasoline to bring down soaring fuel prices and offer some relief to American families before summer peak. Wednesday’s U.S. crude supply data from the American Petroleum Institute showed a build of 5.607 million barrels for the week ended June 17. The U.S. Energy Information Administration’s weekly oil data will be delayed until at least next week due to systems issues. Oil was down on Thursday morning in Asia as investors are worried that tightening monetary policy could trigger a recession and dampen fuel demand. Investors are concerned about a recession caused by tightening monetary policy. U.S. Federal Reserve is not trying to trigger a recession to tame inflation but is fully committed to bringing down prices, Fed Chair Jerome Powell said on Wednesday. U.S. President Joe Biden called on Congress to temporarily suspend a federal tax on gasoline to bring down soaring fuel prices and offer some relief to American families before summer peak. Wednesday’s U.S. crude supply data from the American Petroleum Institute showed a build of 5.607 million barrels for the week ended June 17. The U.S. Energy Information Administration’s weekly oil data will be delayed until at least next week due to systems issues.

Gold – XAU

Gold on Wednesday made its intraday high of US$1847.71/oz and low of US$1823.20/oz. Gold up 0.284% at US$1837.65/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in neutral territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1840-1900 keeping stop loss closing above 1900, targeting 1831-1820 and 1801-1787. Buy in between 1820-1786 with risk below 1786, targeting 1840-1851-1859-1870 and 1879-1890.

Silver - XAG

Silver on Tuesday made its intraday high of US$21.67/oz and low of US$21.22/oz settled up by 1.12% at US$21.41/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. MACD is below zero line and histograms are decreasing trend and it will bring bearish stance in the upcoming sessions. RSI is approaching neutral region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 21.20-19.60, targeting 21.80-22.05-22.50 and 23.05-23.95-24.55 with stop loss should be place on the breakage below 19.50. Sell in between 22.05-23.75 with stop loss above 23.75; targeting 21.30-21.05-20.60 and 20.00-19.60.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US109.24/bbl, intraday low of US$101.11/bbl and settled down by 4.73% to close at US$103.88/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. MACD is above zero line and histograms are in increasing mode 0will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in neutral region and giving positive crossover for confirmation of bullish stance; while the RSI is in neutral region and more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 105.50-109.75 with stop loss at 109.75; targeting 103.30-101.00-100.20 and 99.00-97.10. Buy above 103.30-97.00 with risk daily closing below 97.00 and targeting 105.50-107.00-108.00 and 109.75-110.50-113.00.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.0468/EUR, high of US$1.0605/EUR and settled the day up by 0.480% to close at US$1.0565/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which become immediate support, break below will target 1.0647. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Sell

Sell below 1.0550-1.0795, targeting 1.0390-1.0330 and 1.0290-1.0250 with stop-loss at daily closing above 1.0795. Buy above 1.0460-1.0250 with risk below 1.0210, targeting 1.0550-1.0630-1.0690 and 1.0770-1.0840.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.2160/GBP, high of US$1.2314/GBP and settled the day up by 0.0326% to close at US$1.2260/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2834) is become immediate resistance level. 14-D RSI is currently in oversold region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.2200-1.2010 with target 1.2310-1.2420 and 1.2490-1.2575-1.2650 with stop loss closing below 1.2010. Sell in between 1.2310-1.2630 with targets at 1.2190-1.2150-1.2100 and 1.2075-1.2050 with stop loss should be 1.2630.

USD/JPY

USD/JPY on Wednesday made intra‐day low of JPY135.67/USD and made an intraday high of JPY136.70/USD and settled the day down 0.315% at JPY136.17/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.30), which is initial support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is in neutral territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 137.00-139.70 with risk above 139.70 targeting 136.00-135.20-134.00 and 133.50-132.90-132.00. Long positions above 136.00-130.60 with targets of 137.00 with stop below 124.30.