Daily Markets

• The U.S. dollar slipped against the euro on Monday, extending last week's fall, as the U.S. currency remains under pressure from the Federal Reserve's signaling last week the possibility of interest rate cuts next year. The dollar was higher against the yen as the Bank of Japan (BOJ) kicked off a two-day meeting that could be crucial in determining the timing of the end of the central bank’s ultra-loose stance on interest rates. Bets that the Fed will lower its benchmark overnight interest rate at its March meeting by a quarter of a percentage point soared last week after the U.S. central bank left its policy rate unchanged in the 5.25%-5.50% range and officials forecast three-quarters of a percentage point in cuts next year. Meanwhile, European Central Bank policymakers do not expect to change their message on the need for high interest rates before their March meeting, making any rate cut before June difficult, seven people familiar with the matter told Reuters. The Federal Reserve is not pre-committing to cutting interest rates soon and swiftly, and the jump in market expectations that it will do so is at odds with how the U.S. central bank functions, Chicago Fed President Austan Goolsbee said on Monday. Goolsbee was the latest in a slew of Fed speakers who have pushed back against financial market expectations of how abruptly the central bank will pivot to rate cuts, including Cleveland Fed President Loretta Mester, the New York Fed's John Williams and Atlanta Fed's Raphael Bostic. The yen retreated on Monday, but held near its recent highs, as the Bank of Japan (BOJ) kicked off a two-day meeting that could be crucial in determining the timing of the end of the central bank’s ultra-loose stance on interest rates. The dollar was last up 0.51% against the Japanese currency at 142.935 yen. The Japanese currency has had a volatile few weeks, as markets struggle to get a grip on how soon the BOJ could phase out its negative interest rate policy, with comments from Governor Kazuo Ueda this month initially sparking a huge rally in the yen. That was later reversed on news that a policy shift was unlikely to come as early as December, and investors now await Tuesday's BOJ decision for further clarity on the bank's rate outlook. In any case, since hitting a multi-decade low against the dollar near 152 in November, the yen has gained around 6% in value as traders have grown increasingly convinced the BOJ's low-rates drag on the currency will not last much longer. Elsewhere, the Australian and New Zealand dollars, which can often act as barometers for investor risk appetite in the currency market, traded about flat on the day but remained near their respective 5-month highs against the U.S. currency.

Gold – XAU

Gold on Monday made its intraday high of US$2033.61/oz and low of $2015.84/oz. Gold is up by 0.365% at US$2027.07/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 2020-1951 with risk below 1951 targeting 2049-2060-2074 and 2080-2094.

Silver - XAG

Silver on Monday made its intraday high of US$24.03/oz and low of US$23.73/oz settled down by 1.257% at US$23.78/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 23.40-19.30, 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 24.00-27.50 with a stop loss above 27.50 targeting 23.40-22.40-21.90 and 21.50-20.90-20.50.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$74.62/bbl, an intraday low of US$70.99/bbl, and settled up by 1.13% to close at US72.88/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 72.90-74.70 with stop loss at 75.00; targeting 72.00-71.00-70.10 and 69.40-68.50-67.90. 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 Monday made an intraday low of US$1.0891/EUR, a high of US$1.0930/EUR, and settled the day up by 0.235% to close at US$1.0922/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 Monday made an intra‐day low of US$1.2628/GBP, a high of US$1.2703/GBP, and settled the day down by 0.450% to close at US$1.2646/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 1.2630-1.2050 with a target of 1.2730-1.2790-1.2850 and 1.2890-1.2950 with a stop loss closing below 1.2100. Sell in between 1.2700-1.2950 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 Monday made an intra‐day low of JPY142.01/USD, an intraday high of JPY143.15/USD, and settled the day up by 0.445% at JPY142.72/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.