Daily Markets

• Bank of America reported a bullish sentiment toward the US dollar among investors following a series of meetings. The bank noted that the combination of Federal Reserve repricing after recent CPI data and current geopolitical events had investors unanimously in favor of the USD. Discussions during marketing events in the US and Europe revealed that concerns about the dollar rally lagging behind fundamentals were dismissed by the bank, which believes the rally is in line with the current situation. The perception of the US elections' impact on the currency market has shifted slightly, with the previously dominant expectation of a stronger dollar in the event of a Republican sweep becoming less widespread. Meanwhile, bearish views on the Japanese yen (JPY) and the Chinese yuan (CNH) were prevalent among investors. There was particular caution regarding the USDJPY pair due to the risk of intervention, which is expected if the rate reaches 155. The conversations also touched on the possibility of coordinated foreign exchange intervention following a joint statement by South Korea, Japan, and the United States. However, such coordinated efforts were deemed unlikely by the participants. Despite the People's Bank of China's commitment to maintaining a "basically stable" exchange rate, there is a belief that short positions in the CNH may have staying power. Lastly, investors are not yet convinced that the Australian dollar's (AUD) correlation to risk will decrease. The sentiment suggests that investors are closely monitoring currency dynamics and are positioning themselves accordingly in light of global economic and political developments. While the US dollar remains a focal point for investors, it's worth noting that individual stock performance can also reflect broader market sentiments. Dixie Group Inc (NASDAQ:DXYN), a small-cap player in the home furnishings industry, presents a unique case with its recent financial metrics and market behavior. Despite a challenging environment reflected in an 8.97% decline in revenue over the last twelve months as of Q4 2023, the company has demonstrated a strong free cash flow yield, as indicated by another InvestingPro Tip. This could imply that Dixie Group Inc has been efficient in generating cash from its operations. Moreover, the company's stock price movements have been quite volatile, which is a point of consideration for investors who are weighing the risk-reward profile of their portfolios. With a market cap of just 7.96M USD, Dixie Group Inc's stock price could be influenced by both microeconomic factors specific to the company and the broader macroeconomic trends influencing market sentiment.

Gold – XAU

Gold on Tuesday made its intraday high of US$2334.31/oz and low of $2291.32/oz. Gold is down by 0.217% at US$2321.87/oz.

Technicals in Focus:

On the daily charts, gold trades higher than 20DMA (2197). If it drops below this level, it could lead to 2,100. The MACD is currently above the zero line and the histograms are showing an increasing trend, indicating that there may be upward movement in the coming sessions. The RSI is currently at 83.04, which is in the overbought region, suggesting there may be selling pressure in the next 2 to 3 sessions. The Stochastic Oscillator is also in the overbought territory but has given a positive crossover, indicating a bullish stance for intraday trades, but rebound in expected in all the overbought indicators.

Trading Strategy: Sell on Strength

Sell below 2330-2380 keeping stop loss closing above 2400, targeting 2300-2280-2267. Buy in between 2310-2254 with risk below 2250 targeting 2325-2340-2351 and 2360-2369-2380.

Silver - XAG

Silver on Tuesday made its intraday high of US$27.36/oz and low of US$26.64/oz settle up by 0.449% at US$27.28/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 20MA (25.05), breakage above will lead to 23.73. MACD is below the zero line and histograms are increasing trend, bringing a bullish stance in the upcoming sessions. RSI is in the oversold region, indicating a sell signal for now. The Stochastic Oscillator is in the overbought region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 26.80-23.90, targeting 27.50-27.90-28.90 and 29.40-30.00-30.40-31.00 with stop loss should be placed on the breakage below 23.00. Sell in between 27.90-30.50 with a stop loss above 30.50 targeting 27.00-26.40-25.90 and 25.45-24.90 and 24.60-23.90-23.20.

Oil - WTI

Crude Oil on Tuesday made an intra‐day high of US$83.26/bbl, an intraday low of US$80.74/bbl, and settled up by 1.518% to close at US83.20/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 83.50-89.65 with stop loss at 90.00; targeting 82.00-81.10-79.90. Buy above 82.50-75.00 with risk daily closing below 75.00, targeting 82.70-83.50-84.70 and 86.70-87.50-88.40.

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.0638/EUR, a high of US$1.0710/EUR, and settled the day up by 0.435% to close at US$1.0700/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 1.0740-1.1100, targeting 1.0775 and 1.0770-1.0640 with stop-loss at daily closing above 1.1100. Buy above 1.0690-1.0450 with risk below 1.0400 targeting 1.0845-1.0890 and 1.1020-1.1105-1.1145.

GBP/USD

GBP/USD on Tuesday made an intra‐day low of US$1.2331/GBP, a high of US$1.2457/GBP, and settled the day up by 0.809% to close at US$1.2447/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.2674) 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 1.2400-1.2050 with a target of 1.2500-1.2540 and 1.2600-1.2690-1.2730 with a stop loss closing below 1.2050. Sell in between 1.2500-1.2700 with targets at 1.2360-1.2300-1.2240 and 1.2190-1.2100 with a stop loss of 1.2950.

USD/JPY

USD/JPY on Tuesday made an intra‐day low of JPY154.54/USD an intraday high of 154.86/USD, and settled the day down by 0.007% at JPY154.81/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 154.90-156.00 with risk above 156.00 targeting 153.10-152.60-151.00 and 150.60-149.90-149.30. Long positions above 154.00-149.90 with targets of 154.00-154.90 and 155.59-156.10 with stops below 149.90.