Daily Market Lookup

• The U.S. dollar slipped on Friday and was headed for a weekly decline, as surging hopes for a peace deal between Washington and Tehran boosted risk sentiment and dampened safe haven demand. The Middle East peace hopes also helped currency market participants look past key U.S. consumer and producer inflation data this week that showed a big impact of spiking oil prices on headline figures and kept Federal Reserve interest rate hike bets in play. President Donald Trump on Thursday said that a peace agreement with Iran had been approved and could be signed as soon as this weekend, helping fuel a broad risk-on mood across global markets. Trump said the deal would unblock the Strait of Hormuz -- a vital conduit for a fifth of the world’s oil and gas which has been effectively shuttered for months -- and end an American naval blockade of Iran’s ports and coastline. Iran would also "never" have a nuclear weapon under the agreement, the president added. However, Trump this morning berated Iran for rhetoric that he said "bears no relation to the truth." His frustration came after Iran’s Mehr News Agency reported that a memorandum of understanding (MoU) with Washington would include the release of frozen Iranian funds, and final negotiations would focus on nuclear and economic issues without touching upon Iran’s missile program Trump claimed that the terms had "NOTHING to do with the terms that were agreed to, in writing" and said there was "no such thing as dealing in good faith" with Iran. His comments ignited some pessimism about the peace deal, but Iran’s foreign minister Seyed Abbas Araghchi dented that by saying that an MoU had "never been closer." Pakistan, a chief mediator between Washington and Tehran, also lifted spirits by speaking positively about the deal, saying it was "fully aware of incessant misinformation campaign being waged by those who want to sabotage the peace deal." Against this backdrop, crude benchmarks fell on Friday, with Brent crude futures expiring in August, the global oil benchmark, hitting their lowest level in over two months. Brent remains above pre-war levels of around $70 a barrel, and surging oil prices due to the conflict have led to an inflationary shock around the world The inflationary impact of spiking oil showed up in the U.S. consumer price index (CPI) and producer price index (PPI) reports this week. Headline CPI and PPI in May posted their biggest annual jumps since April 2023 and November 2022, respectively. However, core figures were milder. Still, with headline numbers at over three year highs and a strong U.S. labor market, it will be difficult for the Fed to cut rates in such an environment and the central bank may even have to tighten policy. Higher rates generally tend to strengthen the greenback. The Fed will hold its first monetary policy meeting under the leadership of new chair Kevin Warsh next week. It will be joined by a slew of central banks across the world who will also be issuing interest rate decisions, including the Bank of Japan (BoJ) and the Bank of England (BoE). The European Central Bank (ECB) on Thursday became the first major reserve bank to hike rates, citing an Iran-linked oil spike as a central factor behind its decision Turning to other major currencies, the sterling was last down 0.1% to $1.3402. Government data earlier showed the UK economy contracted 0.1% in April, marking its first monthly decline since August. UK investors were also bracing for a potentially pivotal week for Britain. Attention is turning to the Makerfield by-election next Thursday, which could carry significant political implications for Prime Minister Keir Starmer’s government. The Bank of England will also meet next week and is widely expected to leave interest rates unchanged, underscoring the delicate balancing act facing policymakers as they navigate stubborn inflation and a slowing economy.
• Oil prices slipped to their lowest since March on Monday after U.S. President Donald Trump and Iran’s deputy foreign minister said they had reached an initial deal to end the war and to resume traffic through the Strait of Hormuz. The U.S. and Iran will sign a memorandum of understanding in Switzerland on Friday, said the prime minister of Pakistan, whose country has served as a mediator. Trump said on Sunday that the Strait of Hormuz would be open "toll free" and that a U.S. naval blockade of Iranian ports would also end. Iran’s semi-official Mehr news agency said the draft deal called for reopening the Strait of Hormuz within 30 days under Iranian arrangements. The world has lost millions of barrels of oil and gas supply since the war closed the Strait of Hormuz, a chokepoint for a fifth of the world’s oil and liquefied natural gas supplies, for more than three months. Investors are also watching cautiously how quickly Middle Eastern producers can resume oil production and exports following damage from the war and whether more ships will enter the region. Iran’s deputy foreign minister, Kazem Gharibabadi, said a more expansive agreement would be negotiated during a 60-day ceasefire period. E4 nations, which include the UK, France, Germany and Italy, said on Sunday the countries were prepared to lift sanctions on Iran in response to steps on its nuclear programme. "While the conflict may have come to an end and oil flows through the Strait of Hormuz may gradually return to normal, the damage already done cannot be reversed overnight. This includes not only any physical damage to oil infrastructure but also the economic strain endured by oil importing economies that have faced elevated energy costs for months."

Gold – XAU

Gold on Friday interaday high of US$4246.27/oz and low of $4170.09/oz. God is up by 0.008% at US$4219.54/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 4335-4460 keeping stop loss closing above 4500, targeting 4300-4270-4254-4200 and 4180-4150-4135-4100-4085. Buy in between 4300-4071 with risk below 3964 targeting 4335-4360-4390-4400 and 4415-4430-4450-4460-4485.

Silver - XAG

Silver on Friday its intraday high of US68.33/oz and low of US$65.86/oz settle up by 0.865% at US$68.03/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 69.70-63.00 targeting 70.95-71.50-72.00-72.45 and 72.90-73.50-73.90-74.70-75.45 with stop loss should be placed on the breakage below 63.00. Sell in between 70.90-75.45 with a stop loss above 75.45 targeting 69.70-68.90-68.00-67.70 and 67.00-66.15-65.50-64.90.

Oil - WTI

Crude Oil on Friday high of US$85.73/bbl, an intraday low of US$81.78/bbl, and settled down by 2.575% to close at US$82.85/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 upsides can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 80.00-86.90 with stop loss at 87.00 targeting 78.85-78.00-771.0-76.50-75.90 and 75.00-74.10-73.50-72.54 Buy above 78.85-72.54 with risk daily closing below 72.00, targeting 80.00-80.90-81.70-82.40-83.20 and 84.00-85.10-86.00-86.90.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.1556/EUR, a high of US$1.1572/EUR, and settled down by 0.059% to close at US$1.1566/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.1661), which becomes immediate support, a break below will target 1.1695. 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 1.1565-1.1990, targeting 1.1520-1.1485-1.1450-1.1410 with stop-loss at daily closing above 1.1990. Buy above 1.1530-1.1450 with risk below 1.1450 targeting 1.1565-1.1590-1.1630-1.1690-1.1750 and 1.1790-1.1840-1.1920-1.1960.

GBP/USD

GBP/USD on Friday made a intraday low of US$1.3382/GBP, a high of US$1.3425/GBP, and settled the day up by 0.040% to close at US$1.3407/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 between 1.3440-1.3150 with a target of 1.3436-1.3500-1.3570 and 1.3600-1.3640-1.3690-1.3725 with a stop loss closing below 1.3150. Sell in between 1.3490-1.3820 with targets at 1.3440-1.3395-1.3325-1.3275 and 1.3250-1.3190-1.3150 with a stop loss of 1.3900.

USD/JPY

USD/JPY on Friday made an intra‐day low of JPY159.77/USD an intraday high of 160.36/USD, and settled the day up by 0.181% at JPY160.22/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 160.70-163.10 with risk above 163.10 targeting 158.70-158.10-157.00 and 156.60-153.00-152.65-152.10. Long positions above 160.00-152.00 with targets of 159.40-160.00 and 160.90-161.60-162.20-162.60 with stops below 148.00.