Daily Markets

• The dollar jumped in a volatile session on Tuesday as investors dialed back expectations for a March rate cut from the U.S. Federal Reserve, fueled in part by comments by Board Governor Christopher Waller. Markets are pricing in a 66.9% chance of a rate cut of at least 25 basis points (bps) in March from the Fed, compared with an 81% view in the prior session according to CME's FedWatch Tool. The dollar added to gains on the session after Waller said the U.S. is "within striking distance" of the Federal Reserve's 2% inflation goal, but that the central bank should not rush toward cuts in its benchmark interest rate until it is clear that lower inflation will be sustained. Chandler also noted the dollar had essentially traded sideways for the last two weeks, with oversold and technical conditions at the end of last year now being alleviated. Goldman Sachs said in a note that while they have not changed their view the Fed will deliver a series of three consecutive cuts beginning in March, Waller's comments increased the risk the central bank could cut somewhat later or might prefer to cut once per quarter from the outset. While the dollar was stronger throughout the session, the greenback briefly cut gains after a weak report on the manufacturing sector in the New York region. The euro was down 0.72% at $1.0869 and poised for its steepest one-day percentage drop in two weeks as comments from European Central Bank policymaker Joachim Nagel on Monday attempted to curb expectations of early rate cuts. Several policymakers from the ECB on Tuesday maintained a cloud of uncertainty over the timing of the moves, although interest rates are still likely to come down this year. An ECB survey on Tuesday showed consumer expectations of euro zone inflation three years ahead fell in a November poll to 2.2% from 2.5%. Sterling was last down 0.79% at $1.262 after data showed British wage growth slowed sharply in the three months through November, supporting the idea that the Bank of England will cut rates heavily this year. The dollar was 1.04% higher against the Japanese yen, at 147.26, after hitting 147.31, matching its highest level since Dec. 7. Data showed Japan's wholesale price index stayed flat in December from a year ago, with the rate of change slowing for the 12th straight month, taking pressure off the Bank of Japan to back away from its monetary stimulus measures soon.

Gold – XAU

Gold on Tuesday made its intraday high of US$2028.14/oz and low of $2024.19/oz. Gold is down by 1.274% at US$2028.14/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 2029-2100 keeping stop loss closing above 2107, targeting 2020-2005-1990. Buy in between 2020-1990 with risk below 1990 targeting 2039-2050-2058 and 2064-2080-2094.

Silver - XAG

Silver on Tuesday made its intraday high of US$23.321/oz and low of US$22.75/oz settled up by 1.30% at US$22.90/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 22.40-19.30, 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 23.00-27.50 with a stop loss above 27.50 targeting 22.40-21.90 and 21.50-20.90-20.50.

Oil - WTI

Crude Oil on Tuesday made an intra‐day high of US$73.65/bbl, an intraday low of US$71.84/bbl, and settled down by 1.09% to close at US71.95/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 73.00-76.70 with stop loss at 77.00; targeting 70.30-69.40-68.90 and 68.00-67.30.66.90. Buy above 71.90-67.35 with risk daily closing below 67.00; targeting 72.90-73.85 and 74.90-75.75-76.50.

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.0862/EUR, a high of US$1.0950/EUR, and settled the day down by 0.674% to close at US$1.0874/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 1.0950-1.1100, targeting 1.0890-1.0820 and 1.0775-1.0770-1.0640 with stop-loss at daily closing above 1.1100. Buy above 1.0890-1.0650 with risk below 1.0490 targeting 1.1020-1.1105-1.1145-1.1200 and 1.1245-1.1275.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.2618/GBP, a high of US$1.2728/GBP, and settled the day down by 0.713% to close at US$1.2633/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 1.2600-1.2050 with a target of 1.2730-1.2790-1.2850 and 1.2890-1.2950 1.2990-1.3040 with a stop loss closing below 1.2050. Sell in between 1.2720-1.2950 with targets at 1.2690-1.2630-1.2540 and 1.2490-1.2440-1.2390 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Tuesday made an intra‐day low of JPY145.58/USD, an intraday high of JPY147.30/USD, and settled the day up by 1.0311% at JPY147.16/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 147.90-150.50 with risk above 151.00 targeting 146.95-146.50145.80 and 145.00-144.0-143.00. Long positions above 146.80-140.90 with targets of 148.00-148.55-149.20 and 149.90-150.50 with stops below 140.00.