Daily Market Lookup

• The U.S. dollar edged lower in early European trade Friday, with the safe-haven Japanese yen seeing strong demand in the wake of the shooting of former Japanese Prime Minister Shinzo Abe. USD/JPY fell 0.3% to 135.63 as foreign exchange traders sought out the Japanese currency, a well-known risk-averse trade, following the news that Abe, Japan's longest-serving prime minister, was shot on Friday while campaigning for a parliamentary election. Abe was reported to be in a grave condition. Japan holds upper house elections on Sunday, and traders have been mulling the implications of a possible shift in policy support for the central bank although any market impact is likely to be temporary. The yen has the second-biggest weighting in calculating the|dollar index, only behind the euro, and its strength has weighed on the index Friday. That said, the index’s losses are minor with the Federal Reserve aggressively tightening monetary policy, with the minutes from the central bank’s latest meeting pointing to further hikes ahead. Fed governors Christopher Waller and St. Louis Fed President James Bullard backed on Thursday the need for restrictive policy to bring down soaring prices but suggested that the U.S. can still avert a recession. Attention will turn later in the session to the release of the latest monthly U.S. jobs report, which is expected to show the number of Americans in paid employment increasing modestly in June though not by as much as the number of jobs added in May. European Central Bank head Christine Lagarde is scheduled to speak later in the session on the risks facing the global economy. This speech will be parsed carefully for clues of the thinking at the central bank given it is expected to lift interest rates later this month but growth appears to be slowing in the region GBP/USD fell 0.2% to 1.2002, handing back some of Thursday’s gains after Prime Minister Boris Johnson resigned, ending uncertainty about his future. While this move could end the recent political paralysis, the country still faces the difficulties associated with rampant inflation, rising interest rates, and slowing growth.
• The dollar was up on Friday morning in Asia, but moves were small as some recession fears eased on optimistic speeches from U.S. Federal Reserve governors. The Fed governors Christopher Waller and St. Louis Fed President James Bullard backed on Thursday the need for restrictive policy to bring down soaring prices but suggested that the U.S. can still avert a recession. Waller suggested the Fed would likely attempt to tackle inflation with a 75-basis-point interest rate hike in July and a 50-basis-point hike in September. Boosting market sentiment, U.S. President Joe Biden will discuss possible U.S. tariffs on Chinese goods in a meeting with advisers later in the day. U.S. initial jobless claims rose to 235,000 last week, suggesting a cooling demand for labor, as the U.S. Federal Reserve delivers tightening monetary policies.
• Gold was down on Friday morning in Asia although growth fears seem to ease. Gold prices have lost about 3.7% this week. It is likely to be their fourth straight weekly fall and worst since mid-May. Benchmark U.S. 10-year Treasury yields dipped on Friday, lending non-yielding bullion a hand. U.S. initial jobless claims rose to 235,000 last week, signaling that demand for labor is cooling, as the U.S. Federal Reserve delivers tightening monetary policies. U.S. Federal Reserve governors Christopher Waller and St. Louis Fed President James Bullard backed on Thursday the need for restrictive policy to bring down soaring prices but suggested that the U.S. can still avert a recession. Boosting market sentiment, U.S. President Joe Biden will discuss possible U.S. tariffs on Chinese goods in a meeting with advisers later in the day.
• Oil was up on Friday morning in Asia on worries over tight global supplies. Bans on Russian oil and gas output have driven global energy prices, while other producers are not able to boost significantly to supplies. Global central banks are raising interest rates to tackle inflation, spurring fears that rising borrowing costs could reduce oil demand. Data from U.S. Energy Information Administration (EIA) showed on Thursday that U.S. Crude Oil Inventories rose by 8.2 million barrels in the week ended July 1. Oil prices edged slightly higher in volatile Asian trade on Friday, reversing earlier losses as the market weighed up the tight global supply concerns against recession fears. However, both contracts are still set for their second straight weekly loss. Trade this week was marked by a sharp sell-off on Tuesday, when WTI slid 8% and Brent tumbled 9%. Western bans on Russian oil and gas output have kept global energy prices buoyed, while other major producers have yet to significantly boost to supplies. Central banks across the world are raising interest rates to tame inflation, spurring fears that rising borrowing costs could stifle economic activity and reduce oil demand. Data from U.S. Energy Information Administration (EIA) showed on Thursday that product supplied, the best proxy for U.S. consumer demand, rose to 20.5 million barrels per day in the most recent week. Overall gasoline and distillate demand over the past four weeks, however, was down a little more than 5% from the year-ago period. U.S. crude inventories rose by 8.2 million barrels in the week to July 1, EIA data showed, driven by an increase in inventories and as refiners cut output.

Gold – XAU

Gold on Thursday made its intraday high of US$1749.02/oz and low of US$1736.29/oz. Gold up 0.0603% at US$1740.09/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 a2lso 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 1750-1787 keeping stop loss closing above 1787, targeting 1741-1732-1720 and 1707-1700. Buy in between 1741-1700 with risk below 1700, targeting 1750-1759-1779 and 1787-1798.

Silver - XAG

Silver on Thursday made its intraday high of US$19.47/oz and low of US$19.09/oz settled up by 0.104% at US$19.21/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 19.05-16.90, targeting 19.50-19.80-20.45 and 20.70-21.20- 21.80 with stop loss should be place on the breakage below 19.50. Sell in between 20.45-23.75 with stop loss above 23.75; targeting 19.80-19.50-19.05 and 18.40-17.90.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US101.85/bbl, intraday low of US$94.01/bbl and settled up by 4.17% to close at US$99.66/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 99.90-105.00 with stop loss at 105.00; targeting 98.90-98.00-96.90 and 96.00-94.65-93.20. Buy above 98.90-94.65 with risk daily closing below 94.65 and targeting 99.90-101.05-102.40 and 103.55-105.00.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.0143/EUR, high of US$1.0220/EUR and settled the day down by 0.220% to close at US$1.0158/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 1.0200-1.0430, targeting 1.0150-1.0100-1.0010 and 0.9950-0.9860 with stop-loss at daily closing above 1.0795. Buy above 1.0100-1.0986 with risk below 1.0986, targeting 1.0200-1.0250-1.0290 and 1.0335-1.0390-1.0550.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.908/GBP, high of US$1.2029/GBP and settled the day up by 0.828% to close at US$1.2021/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 1.2100-1.2010 with target 1.2200-1.2310-1.2420 and 1.2490-1.2575-1.2650 with stop loss closing below 1.2010. Sell in between 1.2200-1.2630 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 Thursday made intra‐day low of JPY135.54/USD and made an intraday high of JPY136.21/USD and settled the day up 0.0529% at JPY135.98/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 136.00-139.70 with risk above 139.70 targeting 135.20-134.60-134.00 and 133.50-132.90-132.00. Long positions above 135.20-130.60 with targets of 136.50-137.40 and 137.90-138.50 with stop below 124.30.