Daily Markets

• Most Asian currencies fell slightly on Thursday, but were sitting on strong gains following more stimulus measures from China, while the dollar nursed some losses ahead of key fourth-quarter GDP data due later in the day. Sentiment towards regional currencies was aided by an unexpected cut to China’s RRR rate, which heralds more liquidity in the Chinese economy to spur growth. The People’s Bank of China also flagged more stimulus measures in the coming months to help support an economic recovery. The Chinese yuan fell 0.1%, given that increased liquidity presents more headwinds. But the currency still rebounded from recent lows on hopes of improved Chinese economic prospects. The PBOC also supported the yuan with a series of strong daily midpoints. Near-term optimism over China buoyed sentiment towards broader Asian currencies, particularly those with exposure to China. The Australian dollar rose slightly on Thursday after paring a bulk of its weekly losses. The South Korean won fell 0.3% even as data showed the economy grew more than expected in the fourth quarter. But the pace of growth still remained underwhelming. The Japanese yen fell 0.1% after rising sharply earlier this week. Gains in the yen came as Bank of Japan Governor Kazuo Ueda offered more signals on a potential pivot away from negative interest rates- which were a key pain point for the yen over the past two years. Ueda said that the BOJ’s pivot will be largely dependent on the path of inflation, which turned market focus squarely to upcoming consumer price index readings from Tokyo, due on Friday. The dollar index and dollar index futures rose slightly in Asian trade on Thursday, but were sitting close to a one-week low amid increased uncertainty before a barrage of signals on the U.S. economy and interest rates. Fourth-quarter gross domestic product data due later on Thursday is expected to show some cooling in growth. But U.S. economic growth is still expected to remain well ahead of its developed world peers. PCE price index data- the Federal Reserve’s preferred inflation gauge- is due on Friday, and is expected to show inflation remained sticky in December. Economic resilience and sticky inflation give the Fed more impetus to keep rates higher for longer. The data comes just days before the Fed’s first meeting of 2024, which will be closely watched for any cues on when the central bank will begin trimming interest rates. The dollar recently shot up to six-week highs amid growing conviction that rate cuts will come later, rather than earlier, in 2024. This trend saw most Asian currencies mark a weak start to 2024.

Gold – XAU

Gold on Wednesday made its intraday high of US$2036.64/oz and low of $2011.15/oz. Gold is down by 0.763% at US$2013.48/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$22.94/oz and low of US$22.32 /oz settled up by 1.021% at US$22.65/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$75.78/bbl, an intraday low of US$73.92/bbl, and settled up by 1.14% to close at US75.32/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 75.75-78.00 with stop loss at 78.00; targeting 74.90-74.00-72.90 and 71.50-70.30-69.40. Buy above 74.90-67.35 with risk daily closing below 67.00; targeting 75.75-76.50-77.30 and 78.00-79.35.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.08410/EUR, a high of US$1.0931/EUR, and settled the day up by 0.273% to close at US$1.0883/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$1.2648/GBP, a high of US$1.2773/GBP, and settled the day down by 0.152% to close at US$1.2724/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 Wednesday made an intra‐day low of JPY146.64/USD, an intraday high of JPY148.39/USD, and settled the day down by 0.674% at JPY147.48/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.