Daily Market Lookup

• The dollar was marginally lower on Tuesday and was on track for a four-day losing streak, as risk sentiment continued to improve amid soaring hopes for a final U.S.-Iran peace deal. Meanwhile, foreign exchange market participants received interest rate decisions from Japan and Australia a day ahead of the Federal Reserve’s first monetary policy committee outcome under the leadership of new chair Kevin Warsh. Washington and Tehran are set to meet in Switzerland on Friday for a formal signing of what is being called a memorandum of understanding (MoU) between the warring sides. President Donald Trump said the Strait of Hormuz, which has been effectively shuttered since the start of the conflict at the end of February, would be "completely opened" on Friday. Trump said the text of the MoU will also be released on Friday. Following the signing, the president said a second stage of negotiations will begin that will last 60 days. "Iran wants to get it done. They have to get back to business...so I think it’s going to go pretty quickly," Trump told reports, adding that the MoU was a "very important document" which was a "wall against" Iran getting a nuclear weapon. The MoU also includes the removal of an ongoing American naval blockade of Iran’s ports and coastline. Other details about the agreement remain scarce, and there has been some contradictory claims about what’s in it. While Trump insists that the MoU will state that Tehran will never have a nuclear weapon, Iran’s state media reported that discussions about the country’s nuclear commitments remained "general" at this stage and that Iran had not yet entered into "detailed negotiations" on the nuclear issues. Media reports also said that the agreement includes plans for a $300 billion private fund to trigger investment in Iran, with the fund being separate from negotiations over frozen Iranian assets. But Trump called it "fake news." Against this backdrop, oil prices on Tuesday slid below $80 a barrel for the first time since March. Surging crude prices due to the war have led to an inflationary shock around the world and in the U.S., and had played a major part in traders raising their expectations for central bank interest rate hikes. The slump in oil to over three-month lows comes a day ahead of the Fed’s interest rate decision. The Federal Open Market Committee (FOMC) is widely tipped to leave interest rates unchanged on Wednesday, with officials keeping tabs on accelerating inflationary pressures due largely to an Iran-linked spike in gasoline pump costs. As a result, much of the focus will be on the Fed’s updated economic projections and the post-decision commentary from new chief Kevin Warsh. The recent decline in oil, however, has now given the central bank some breathing room in terms of tightening policy.
• Bank of Japan (BoJ) raised its short-term policy rate by 25 basis points to 1.0%, the highest level in 31 years, in a widely anticipated move aimed at containing inflation and continuing its gradual normalization of monetary policy. The decision also comes at a time when Japan has been struggling with a weak yen. The USD/JPY pair was last up 0.1% to 160.47, above the key 160 level that has spurred intervention from Tokyo before. The sterling was little changed ahead of Thursday’s Bank of England (BoE) decision. While the European Central Bank moved to counter post-war price pressures with a rate hike last week, the BoE is fully expected to stand pat. Hamstrung by anemic growth data and a severely constrained national budget, the BoE lacks the economic air cover to follow its global peers higher. With a parliamentary by-election, a dovish hold by the BoE on Thursday could quickly strip the pound of its interest-rate support, leaving it exposed to a stagflationary drag.
• Oil prices inched lower on Wednesday, extending the previous session’s declines as investors assessed the U.S.-Iran peace deal, though uncertainty over the full resumption of shipping through the Strait of Hormuz limited further falls. Both benchmarks fell about 5% for a second straight session on Tuesday to stand at three-month lows, on hopes that a U.S.-Iran deal would allow oil flows through the Strait The deal would provide for the United States to lift its blockade of Iran’s ports, while Tehran would allow oil tanker traffic through the Strait, effectively blocked since U.S. and Israel strikes on February 28. Before the closure, about a fifth of global crude oil and liquefied natural gas supplies flowed through the Strait.Details of the interim peace deal began to emerge on Tuesday, with President Donald Trump saying it would rule out a nuclear weapon for Tehran and a U.S. official saying it would allow Iran to sell oil upon signing. The memorandum of understanding, not yet public, extends by another 60 days a tenuous ceasefire agreed in April, so as to allow room for talks toward a permanent truce. Still, industry officials say a full return to pre-war production and refining levels is likely to take weeks, months or even years. Israel has distanced itself from both the April ceasefire and the latest U.S.-Iran pact, fuelling uncertainty about whether it will hold. Israeli drone strikes targeted three vehicles in southern Lebanon on Tuesday, killing at least four and wounding others, Lebanon’s National News Agency said, prompting a rare public rebuke from Trump. China’s crude oil throughput fell 9.1% in May on the year to its lowest in almost four years, data showed, also signalling that refiners were starting to draw on stockpiles amid the Iran war. The American Petroleum Institute report showed U.S. crude stocks fell 8.3 million barrels in the week ended June 12, the sources said. It exceeded expectations for a draw of 4.6 million barrels, with official numbers due from the Energy Information Administration at 10:30 a.m. ET (1430 GMT) on Wednesday.

Gold – XAU

Gold on Tuesday interaday high of US$4354.86/oz and low of $4331.12/oz. God is up by 0.447% at US$4331.12/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 Tuesday its intraday high of US71.17/oz and low of US$69.04/oz settle up by 0.0543% at US$69.99/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 70.00-75.45 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 Tuesday high of US$80.12/bbl, an intraday low of US$74.71/bbl, and settled down by 5.07% to close at US$75.77/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 Tuesday made an intraday low of US$1.1574/EUR, a high of US$1.1621/EUR, and settled up by 0.120% to close at US$1.1607/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 1.1630-1.1990, targeting 1.1520-1.1485-1.1450-1.1410 with stop-loss at daily closing above 1.1990. Buy above 1.1570-1.1450 with risk below 1.1450 targeting 1.1590-1.1630-1.1690-1.1750 and 1.1790-1.1840-1.1920-1.1960.

GBP/USD

GBP/USD on Monday made a intraday low of US$1.3389/GBP, a high of US$1.3442/GBP, and settled the day up by 0.12% to close at US$1.3423/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 1.3390-1.3150 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 Monday made an intra‐day low of JPY159.72/USD an intraday high of 160.38/USD, and settled the day up by 0.144% at JPY160.33/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.