Daily Markets

• Most Asian currencies steadied after a recent rally on Friday, while the dollar languished at four-month lows as traders positioned for deeper-than-expected interest rate cuts by the Federal Reserve in 2024. More stimulus measures in China also aided sentiment, as the People’s Bank of China injected 1.45 trillion yuan ($200 billion) into the economy through its medium-term lending facility. But the move offered little support to the yuan, given that it signals that the PBOC will keep its loan prime rate at record lows next week. The currency traded sideways on Friday. Economic data also offered some positive cues on China. Industrial production grew more than expected in November, although retail sales and fixed asset investment missed expectations. Still, weakness in the dollar kept the yuan trading near a six-month high. Broader Asian currencies advanced slightly, tracking a weaker dollar and as the prospect of lower U.S. interest rates drove investors into risk-driven, high-yield assets. The Japanese yen steadied near a four-month high to the dollar, having appreciated sharply against the greenback in recent sessions. But further gains in the yen were uncertain, with the Bank of Japan expected to maintain its ultra-dovish stance in its final meeting for the year on the coming Tuesday. Purchasing managers index data pointed to more weakness in the Japanese economy, with a preliminary reading for December showing a deeper-than-expected contraction in manufacturing activity. Among the few outliers for the day, South Korea’s won fell 0.2% after a strong run this week, while the Indian rupee hovered near record lows, having moved little against a weaker dollar. While optimism over India’s economy drove local stocks to record highs, traders remained wary of the rupee on caution over India’s massive trade deficit. The Reserve Bank has also signaled no more interest rate hikes, despite a recent uptick in inflation. The dollar index and dollar index futures fell slightly in Asian trade and were at their weakest levels since mid-August. The greenback was set to lose about 2% this week after the Fed said it was done raising interest rates, and projected deeper rate cuts in 2024. The Fed’s comments also spurred deep losses in U.S. Treasury yields, and diminished the dollar’s appeal as traders began speculating over just when the Fed will begin trimming interest rates.

Gold – XAU

Gold on Thursday made its intraday high of US$2047.80/oz and low of $2024.00/oz. Gold is up by 0.424% at US$2036.23/oz.

Technicals in Focus:

On the daily charts, gold trades higher than 20DMA (1953). If it drops below this level, it could lead to 1,927. The MACD is currently below the zero line but the histograms are showing an increasing trend, indicating that there may be upward movement in the coming sessions. The RSI is currently at 45.31, which is in the neutral region, suggesting there may be more selling pressure before it rebounds. The Stochastic Oscillator is also in the oversold territory but has given a positive crossover, indicating a bullish stance for intraday trades.

Trading Strategy: Sell on Strength

Sell in between 2040-2094 keeping stop loss closing above 2094, targeting 2032-2020-2005 and 1989-1980-1963. Buy in between 2032-1951 with risk below 1951 targeting 2049-2060-2074 and 2080-2094.

Silver - XAG

Silver on Thursday made its intraday high of US$24.20/oz and low of US$23.73/oz settled up by 4.52% at US$24.16/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (22.91), breakage above will lead to 23.51. MACD is below the zero line and histograms are decreasing trend, bringing a bearish stance in the upcoming sessions. RSI is approaching the oversold region, indicating a sell signal for now. The Stochastic Oscillator is in the oversold region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 22.90-19.30, targeting 23.50-24.60 and 25.00-25.90 with stop loss should be placed on the breakage below 19.00. Sell in between 23.40-27.50 with a stop loss above 27.50 targeting 22.40-21.90-21.50 and 20.90-20.50.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US$72.15/bbl, an intraday low of US$69.81/bbl, and settled up by 2.649% to close at US68.95/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 upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 72.50-73.70 with stop loss at 74.00; targeting 71.00-70.10-69.40 and 68.50-67.90-67.35. Buy above 72.00-67.35 with risk daily closing below 67.00; targeting 72.90-73.85-74.20 and 75.10-75.90-76.50.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.0726/EUR, a high of US$1.0800/EUR, and settled the day up by 1.090% to close at US$1.0762/EUR.

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 1.1020-1.1100, targeting 1.0940-1.0890-1.0820 and 1.0775-1.0770-1.0640 with stop-loss at daily closing above 1.1100. Buy above 1.0940-1.0490 with risk below 1.0490 targeting 1.0940 and 1.0990-1.1020-1.1060.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.2611/GBP, a high of US$1.2793/GBP, and settled the day up by 1.17% to close at US$1.2764/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.2297) is becoming a resistance 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 1.2730-1.2050 with a target of 1.2790-1.2850-1.2890 with a stop loss closing below 1.2100. Sell in between 1.2790-1.2950 with targets at 1.2630-1.2540-1.2490 and 1.2440-1.2390-1.2300 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Thursday made an intra‐day low of JPY140.94/USD, an intraday high of JPY142.91/USD, and settled the day down by 0.721% at JPY141.83/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (137.57), 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 in 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 142.00-145.90 with risk above 146.00 targeting 141.60-140.90-140.00 and 138.70-137.90-137.10. Long positions above 141.50-137.90 with targets of 142.30-143.20-144.00 and 145.00-146.00-146.80 with stops below 137.90.