Daily Markets

• Most Asian currencies moved little on Thursday after clocking steep losses in the prior session, while the dollar fell slightly from a one-month high as strong U.S. retail sales data spurred more doubts over early rate cuts by the Federal Reserve. Sentiment towards Asian markets remained weak following softer-than-expected Chinese gross domestic product data, which showed the region’s largest economy struggling with a sluggish post-COVID recovery. The Chinese yuan was flat after sinking to its lowest level in nearly two months. But further losses in the currency were limited by a stronger-than-expected midpoint fix by the People’s Bank of China. Still, the outlook for the yuan remained dour, as the PBOC grappled with sluggish growth and limited headroom to keep supporting the currency. Concerns over China weighed on most Asian currencies, given the country’s dominance as a trading hub for the region. Labor data showed Australian employment unexpectedly fell in December, although the broader labor market still remained relatively tight. The Singapore dollar- which also has major trade exposure to China- rose slightly after hitting a two-month low on Wednesday, while the Taiwan dollar steadied near a two-month low. The Japanese yen steadied at a 1-½ month low ahead of key consumer price index (CPI) data due on Friday, which is expected to show a sustained decline in inflation. The reading is expected to provide the Bank of Japan with little impetus to begin tightening its ultra-loose policy, which bodes poorly for the yen. The yen was among the worst-performing Asian currencies in 2023, with a widening gulf between U.S. and Japanese interest rates acting as a key point of pressure. This trend is now likely to continue in the near-term, as traders further trimmed expectations for early interest rate cuts by the Fed. Retail sales data for December read stronger than expected, giving further credence to recent comments from Fed officials that the bank will keep rates higher for longer. The retail sales data came after stronger CPI inflation and nonfarm payrolls readings for December. Strength in the U.S. economy gives the Fed more headroom to keep rates higher for longer.

Gold – XAU

Gold on Wednesday made its intraday high of US$20/oz and low of $2024.19/oz. Gold is down by 1.08% 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 Wednesday made its intraday high of US$23.21/oz and low of US$22.49/oz settled down by 1.602% at US$22.54/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 Wednesday made an intra‐day high of US$72.84/bbl, an intraday low of US$70.60/bbl, and settled up by 0.951% to close at US72.70/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 Wednesday made an intraday low of US$1.0844/EUR, a high of US$1.0883/EUR, and settled the day up by 0.0698% to close at US$1.0881/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 Wednesday made an intra‐day low of US$1.2595/GBP, a high of US$1.2695/GBP, and settled the day up by 0.307% to close at US$1.2675/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 Wednesday made an intra‐day low of JPY147.05/USD, an intraday high of JPY148.52/USD, and settled the day up by 0.659% at JPY148.13/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.