Daily Markets

• The dollar slid against major currencies on Tuesday, a day after it rose to its highest level in almost three months, as strong economic data and a hawkish stance on interest rates by Federal Reserve officials bolster the U.S. currency. Robust U.S. economic data, including a blowout unemployment report on Friday, and recent remarks from Fed Chair Jerome Powell have quashed speculation about early and steep rate cuts that the market had widely expected from the U.S. central bank. Cleveland Fed President Loretta Mester said on Tuesday that if the U.S. economy performs as she expects, it could open the door to rate cuts. But Mester said she was not ready to provide timing for easier policy amid ongoing inflation uncertainty. Other central bankers agreed. The European Central Bank doesn't need to rush cutting rates, policymaker Boris Vujcic told Reuters, arguing it will be better for ECB credibility to be sure that inflation is decisively under control. They are also now pricing in around 117 basis points (bps) of cuts by the end of 2024, compared with around 150 bps anticipated in early January. The dollar index, which measures the U.S. currency against six others, fell 0.24% to 104.19, after touching 104.60 on Monday, its highest since Nov. 14 Key to understanding the dollar's strength are Fed policy decisions versus those of other central banks, and how high rates stay, as higher yields can bolster a currency. German industrial orders unexpectedly jumped in December, while euro zone consumers have trimmed their expectations for inflation over the next 12 months. The pound's fall on Monday came despite some upbeat economic data. Figures showed that UK unemployment was likely much lower late last year than previously thought, which could push out British rate cuts too. Japan's real wages fell for a 21st straight month, though at a slower pace, while household spending dropped for a 10th consecutive month, showing inflation outpaced wage recovery and continued to weigh on consumer spending.

Gold – XAU

Gold on Tuesday made its intraday high of US$2038.81/oz and low of $2022.85/oz. Gold is up by 0.538% at US$2035.79/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 2030-1990 with risk below 1990 targeting 2039-2050-2058 and 2064-2080-2094.

Silver - XAG

Silver on Monday made its intraday high of US$22.47/oz and low of US$22.24/oz settle up by 0.326% at US$22.40/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 22.10-19.30, targeting 22.80-23.50-24.60 and 25.00-25.90 with stop loss should be placed on the breakage below 19.00. Sell in between 22.60-27.50 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$73.84/bbl, an intraday low of US$72.42/bbl, and settled up by 0.949% to close at US73.45/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 72.90-77.30 with stop loss at 77.50; targeting 72.00-71.10-70.50 and 69.90-69.10. Buy above 72.10-69.00 with risk daily closing below 69.00; targeting 72.85-73.70-74.00 and 75.75-76.50-77.30.

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.0722/EUR, a high of US$1.0761/EUR, and settled the day up by 0131% to close at US$1.0753/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 1.0765-1.1100, targeting 1.0805-1.0775 and 1.0770-1.0640 with stop-loss at daily closing above 1.1100. Buy above 1.0710-1.0450 with risk below 1.0400 targeting 1.0765-1.0805-1.0890 and 1.1020-1.1105-1.1145.

GBP/USD

GBP/USD on Tuesday made an intra‐day low of US$1.2526/GBP, a high of US$1.2601/GBP, and settled the day up by 0.512% to close at US$1.2595/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 1.2580-1.2050 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 1.2690-1.2950 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 JPY147.81/USD an intraday high of 148.78/USD, and settled the day down by 0.4923% at JPY147.93/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.