Daily Market Lookup

• 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 prices rose Tuesday, building on sharp gains in past sessions on growing bets on a Federal Reserve interest rate cut next week, and a weaker dollar. Bullion prices rose sharply since last week after several data points highlighted a sustained cooling in the U.S. labor market. Most notable of these was last week’s nonfarm payrolls release, which showed the U.S. barely created any new jobs in August. The prints drummed up hopes that the Fed will cut interest rates in September, with markets seen pricing in a 92.4% chance for a 25 basis point reduction during the Fed’s Sept 16-17 meeting. Markets were also pricing in a 7.6% chance for a bigger, 50 bps cut, CME Fedwatch showed. Several Fed officials signaled in recent weeks that the central bank will be open to rate cuts amid more signs of cooling in the labor market. But they also flagged caution over sticky inflation, especially in the face of price increases stemming from U.S. President Donald Trump’s trade tariffs. U.S. inflation data for August is due this week, with markets watching for any more upside in inflation, given that a bulk of Trump’s tariffs took effect last month. "Prices have been rising for three consecutive sessions, supported by increased bets on a wave of Federal Reserve rate cuts this year," said analysts at ING, in a note. "Continued concerns over the Fed’s independence will also remain the focus for the gold market looking ahead. Gold prices have increased nearly 40% this year amid Trump’s aggressive trade policy, conflicts in the Middle East and Ukraine, and central bank buying." Safe-haven flows into gold also increased in the face of a fresh political crisis in France, where Prime Minister Francois Bayrou resigned after losing a vote of confidence in the National Assembly. Political uncertainty in Japan after PM Shigeru Ishiba’s resignation, and prospects of more U.S. sanctions against Russia following a deadly weekend strike by Moscow against Ukraine, also contributed to bullion’s safe-haven demand. Lower rates tend to benefit gold and metals, given that they lower the opportunity cost of investing in non-yielding assets over government bonds.
• Oil prices rose in Asian trade on Wednesday as Israel’s attack on Hamas targets in Qatar pushed up concerns over heightened geopolitical tensions in the Middle East, which could disrupt supplies. The prospect of more U.S. restrictions on Russian oil, following a report that President Donald Trump called for more sanctions on Russian oil buyers, also buoyed prices. Both contracts were headed for a fourth straight session of gains, especially after a smaller-than-expected production hike by the Organization of Petroleum Exporting Countries and allies (OPEC+) over the weekend. Israel said on late-Tuesday that it had attacked Hamas leadership in Doha, drawing rebukes from Qatari and U.S. officials on concerns that such a move stood to derail ongoing peace talks. Oil had risen as much as 2% on Tuesday following the attack, but had trimmed gains after U.S. officials said such an attack would not happen again. Trump told reporters he was “very unhappy” about the strike and said he will issue a full statement on Wednesday. Qatar is a security partner of the U.S. and hosts the al-Udeid Air Base, the biggest U.S. military facility in the Middle East. The country, along with Egypt, has acted as a mediator for talks between Israel and Hamas. Hamas said that Israel had failed in its attempt to assassinate its negotiating team. But the group reported five casualties from the strike. Israel’s attack now leaves future peace talks with Hamas uncertain, opening the door for continued military action by Jerusalem against the Palestinian group. A bulk of this action has been directed at the Gaza Strip, leaving markets on edge over geopolitical tensions in the Middle East. Oil was also buoyed by the prospect of more U.S. sanctions against Russia, after Reuters reported Trump calling on the European Union to also steeply tariff India and China over their buying of Russian energy. Trump has already imposed 50% tariffs on India, and was seen calling for 100% tariffs on New Delhi and Beijing. Such a move could cut off some sources of revenue for Russia and pressure Moscow into ending its long-running war with Ukraine. More restrictions on Russian oil could also limit global supplies, especially if top buyers India and China cave in to Western pressure. But both countries have so far signaled few plans to stop their purchases of Russian oil. Beyond geopolitics, oil markets were also focused on U.S. inventory data. Data from the American Petroleum Institute showed U.S. inventories grew by 1.25 million barrels in the week to September 5.

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.