Daily Markets

• The U.S. dollar traded in a tight range early in the European session Tuesday ahead of the start of the latest two-day Federal Reserve policy meeting, while the euro weakened Traders have appeared to be reluctant to push the dollar around ahead of the start of the Federal Reserve's two-day policy meeting, which concludes on Wednesday. That said, the escalating geopolitical tensions in the Middle East, with the U.S. vowing to take "all necessary actions" to defend its troops following a deadly drone attack in Jordan by Iran-backed militants, meant the greenback retained underlying support. The U.S. central bank is widely expected to keep interest rates unchanged, meaning Fed Chair Jerome Powell’s post policy meeting press conference is likely to attract the most attention as traders seek clues as to when the officials will decide to start cutting interest rates. Traders currently see a 50-50 chance that the Fed cuts interest rates in March, with expectations having drifted substantially from levels in December when the U.S. central bank estimated cuts of around 150 basis points in 2024. Tuesday's economic calendar includes data on JOLTS job openings, which kicks off a week of domestic jobs data, culminating in the January U.S. payrolls report on Friday. The data will give further indications of the state of the world's largest economy. In Europe, EUR/USD traded 0.1% lower at 1.0824, after data showed that the German economy contracted in the fourth quarter, raising the potential that woes of the region’s largest economy could drag the whole eurozone into recession. German GDP fell 0.3% on the quarter in the final quarter of 2023, an annual drop of 0.2%. Although numbers out of France, Italy and Spain were more encouraging, eurozone GDP is still expected to contract 0.1% in the fourth quarter, a second consecutive negative quarter. Data released earlier Tuesday by market researcher Kantar showed that British grocery price inflation declined at a slower rate in January, with annual grocery price inflation at 6.8% in the four weeks to Jan. 21, down from a re-stated 6.9% in the previous four-week period.

Gold – XAU

Gold on Tuesday made its intraday high of US$2048.54/oz and low of $2029.01/oz. Gold is up by 0.192% at US$2036.76/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 2038-2100 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$23.28/oz and low of US$22.92/oz settle down by 0.176% at US$23.14/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$78.03/bbl, an intraday low of US$76.36/bbl, and settled down by 2.19% to close at US76.91/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 77.30-81.30 with stop loss at 81.50; targeting 76.50 and 75.75-74.90-74.00. Buy above 76.50-74.00 with risk daily closing below 74.00; targeting 77.30-78.00-78.50 and 79.35-80.00-80.60.

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.0811/EUR, a high of US$1.0884/EUR, and settled the day up by 0.308% to close at US$1.0853/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 Tuesday made an intra‐day low of US$1.2639/GBP, a high of US$1.2720/GBP, and settled the day down by 0.071% to close at US$1.2697/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 Tuesday made an intra‐day low of JPY147.09/USD, an intraday high of JPY147.92/USD, and settled the day up by 0.403% at JPY147.58/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 148.50-151.50 with risk above 151.90 targeting 146.95-146.50145.80 and 145.00-144.0-143.00. Long positions above 147.10-140.90 with targets of 148.00-148.55-149.20 and 149.90-150.50 with stops below 140.00.