Daily Markets

• Most Asian currencies kept to a tight range on Tuesday, while the dollar steadied after recent gains as traders hunkered down before key U.S. inflation data and a Federal Reserve meeting due in the coming weeks. The dollar index and dollar index futures fell slightly in Asian trade. But the greenback held above 104 against a basket of currencies, as uncertainty over the Fed’s plans to cut interest rates in 2024 drove some flows into the dollar. Consumer price index data is due later in the day, and is expected to show that inflation eased slightly in November. But traders remained wary of a stickier reading, especially after nonfarm payrolls data released last week beat expectations. While the Fed is widely expected to hold rates steady on Wednesday, markets grew more uncertain over when the bank could begin trimming rates in 2024. The strong payrolls data saw Fed Fund traders scaling back bets on a March 2024 rate cut. This spurred some strength in the dollar, and pressured Asian currencies. The Japanese yen rose 0.4% on Tuesday, but was nursing steep losses from the prior session after media reports showed that the Bank of Japan had no intention of moving away from its ultra-loose policies in the near-term. While the bank has still signaled some intent to eventually raise interest rates from negative levels, the reports suggested that such a move was likely to be later, rather than sooner. Data on Tuesday showed a mild pick-up in Japanese producer price inflation in November. Among other Asian currencies, the Chinese yuan was flat as a series of strong midpoint fixes by the People’s Bank helped the currency weather data showing a sustained disinflationary trend in China. Weak inflation data raised more concerns over a persistent economic slowdown in China, and also dented sentiment towards broader Asian markets. The Australian dollar rose 0.4% on Tuesday after retreating in the prior session on concerns over China. Reserve Bank of Australia Governor Michele Bullock said the bank will maintain a cautious approach with monetary policy, after warning on potential inflation risks earlier this month.

Gold – XAU

Gold on Monday made its intraday high of US$2007.70/oz and low of $1975.80/oz. Gold is down by 1.079% at US$1981.65/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 1994-2049 keeping stop loss closing above 2050, targeting 1989-1980 and 1963-1951. Buy in between 1980-1951 with risk below 1951 targeting 2008-2020-2032and 2049-2060-2074.

Silver - XAG

Silver on Monday made its intraday high of US$23.08/oz and low of US$22.70/oz settled down by 0.657% at US$22.80/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 22.90-19.30, 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 23.40-27.50 with a stop loss above 27.50 targeting 22.40-21.90-21.50 and 20.90-20.50.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$71.96/bbl, an intraday low of US$70.56/bbl, and settled up by 0.564% to close at US71.58/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 71.90-73.70 with stop loss at 74.00; targeting 71.00-70.10-69.40 and 68.50-67.90-67.35. Buy above 70.90-67.35 with risk daily closing below 67.00; targeting 71.5074.20-75.10-75.90-76.50 and 73.90-75.00-75.90.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.0741/EUR, a high of US$1.0778/EUR, and settled the day up by 0.270% to close at US$1.0763/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 1.0820-1.1065, targeting 0775-1.0770-1.0640 and 1.0550-1.0490 with stop-loss at daily closing above 1.1065. Buy above 1.0750-1.0250 with risk below 1.0250 targeting 1.0850-1.0890-1.0940 and 1.0990-1.1020-1.1060.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.2526/GBP, a high of US$1.2590/GBP, and settled the day up by 0.0869% to close at US$1.2553/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 1.2550-1.2050 with a target of 1.2650-1.2690-1.2720 and 1.2790-1.2850-1.2890 with a stop loss closing below 1.2100. Sell in between 1.2590-1.2890 with targets at 1.2540-1.2490 and 1.2440-1.2390-1.2300 with a stop loss of 1.2540.

USD/JPY

USD/JPY on Monday made an intra‐day low of JPY144.80/USD, an intraday high of JPY146.58/USD, and settled the day up by 0.864% at JPY146.13/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 146.80-149.50 with risk above 150.00 targeting 146.00-145.20-144.00 and 143.20-142.30-141.60. Long positions above 146.00.00-141.00 with targets of 146.50-147.40 and 148.00-149.50-150.30 with stops below 141.00.