Daily Markets

• The U.S. dollar was little changed to modestly higher against a basket of currencies on Monday ahead of central bank policy decisions in Japan and the euro zone that may determine the currency's direction this year. Japan's yen moved away from Friday's 148.80 per U.S. dollar, its weakest in a month, and rose to as high as 147.61, as the BOJ started its two-day policy meeting. The dollar was last down 0.1% against the Japanese currency at 148.06 yen. Wagers for an exit from negative rates at this meeting have been wound down following the New Year's Day earthquake on Japan's west coast, alongside dovish BOJ commentary. The yen, which is sensitive to the difference in interest rates between the U.S and Japan, has been the worst hit against the dollar this year, tumbling about 5% in a swift reversal of December's bounce to five-month peaks near 140. Traders said one factor also driving the yen moves was the expiry of a large amount of currency options this week and the hedging around those contracts. The European Central Bank is also holding a policy meeting this week and is expected to leave rates unchanged at 4%, with ECB officials saying it is too early for rate cuts. With the ECB likely to remain data-dependent, investors will focus on the tone of the policy statement and President Christine Lagarde's press conference. Speculators pared back net long positions on the euro to their lowest since early November, data from the Commodity Futures Trading Commission showed last Friday. The dollar index was flat to slightly higher at 103.34. It has gained the most among developed market currencies in January, rising about 1.8% from the start of this year. Its rally, however, has been up and down as investors try to make up their minds about when the Federal Reserve will start cutting rates. Data late last week showing U.S. economic activity remains resilient despite interest rates at their highest level in decades caused markets to scale back expectations of rate cuts beginning as soon as March. In cryptocurrencies, bitcoin fell below $40,000 for the first time since early December, as investors continued to book profits following the U.S. approval of spot bitcoin exchange-traded funds a few weeks ago. The world's largest cryptocurrency in terms of market capitalization dropped to $39,335.37, the lowest level since December 4. Bitcoin was last down 3.5% at $40,284. So far this year, bitcoin has fallen 5.3%.

Gold – XAU

Gold on Monday made its intraday high of US$2032.02/oz and low of $2016.68/oz. Gold is down by 0.386% at US$2021.61/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 Monday made its intraday high of US$22.64/oz and low of US$21.90/oz settled down by 2.25% at US$22.07/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 Monday made an intra‐day high of US$75.40/bbl, an intraday low of US$72.53/bbl, and settled up by 1.546% to close at US74.59/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 74.90-76.70 with stop loss at 77.00; targeting 72.90-71.50-70.30 and 69.40-68.90-68.00. Buy above 73.50-67.35 with risk daily closing below 67.00; targeting 74.00 and 74.90-75.75-76.50.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.0879/EUR, a high of US$1.0908/EUR, and settled the day down by 0.0716% 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 Monday made an intra‐day low of US$1.2676/GBP, a high of US$1.2732/GBP, and settled the day up by 0.193% to close at US$1.2707/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 1.2650-1.2050 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 Friday made an intra‐day low of JPY1447.61/USD, an intraday high of JPY148.29/USD, and settled the day down by 0.078% at JPY148.08/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.