Daily Markets

• The US dollar slipped back Friday, but remained on track for a strong weekly performance, boosted by expectations of a US economic outperformance and thus fewer Federal Reserve rate cuts this year. The Dollar Index, which tracks the greenback against a basket of six other currencies, was last down 0.3% lower to 108.900, retreating after reaching a more than two-year high on Thursday. The index is on course for weekly gains of around 1%, which would be its best weekly performance in over a month, as traders continue to factor in a more hawkish Fed and a resilient US economy. Manufacturing activity data in the US for December, as determined by S&P Global, came in stronger than expected on Thursday, setting the scene for the more widely-watched Institute for Supply Management's version due later in the session. This is seen cooling slightly to 48.2 last month, down from a five-month high of 48.4 in November. It was the eighth consecutive month that the measure was below the 50-point threshold, although the number remained above a level of 42.5 that the ISM says indicates broader economic expansion. Markets will also be looking ahead to the important monthly jobs report at the end of next week, with the next Fed meeting also due this month. In Europe, EUR/USD edged 0.4% higher to 0.0042, rebounding somewhat after having tumbled almost 1% in the previous session to a more than two-year low. The single currency was helped by the number of people out of work in Germany rising less than expected in December, according to data released Friday. However, the euro was still headed for a weekly decline of around 1.5%, its worst since November after data released earlier Thursday showed that manufacturing activity in the eurozone declined at a faster rate at the end of 2024. Traders expected more interest rate cuts from the European Central Bank in 2025, with markets pricing in at least 100 basis points of easing. The Bank of England held interest rates unchanged last month after consumer prices rose above target, and traders are expecting roughly 60 bps of cuts from the Bank of England in 2025. The Financial Times reported that the PBOC will cut interest rates further in 2025, as the central bank pivots to a more conventional monetary policy structure under a singular benchmark interest rate. The monetary policy reform comes as a slew of liquidity measures have largely failed to stimulate China’s economy over the past two years.

Gold – XAU

Gold on Friday its intraday high of US$2665.07/oz and low of $2636.31/oz. Gold is down by 0.666% at US$2639.63/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 2634-2716 keeping stop loss closing above 2716, targeting 2600-2585 and 2574-2560-2540-2519. Buy in between 2600-2550 with risk below 2550 targeting 2624-2650-2669 and 2684-2694-2705.

Silver - XAG

Silver on Friday made its intraday high of US$29.87/oz and low of US$28.47/oz settle up by 0.257% at US$29.16/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 29.10-27.50, targeting 30.40-30.70-31.30 and 32.10-32.60 and 33.10-33.80-34.20 with stop loss should be placed on the breakage below 27.00. Sell in between 29.90-34.30 with a stop loss above 35.00 targeting 29.10-28.60 and 28.10-27.60.

Oil - WTI

Crude Oil on Friday an intra‐day high of US$73.80/bbl, an intraday low of US$72.32/bbl, and settled up by 1.238% to close at US$73.58/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 73.40-76.85 with stop loss at 77.00; targeting 72.45-71.50-70.10 and 69.40-68.50-67.50-66.90. Buy above 72.90-64.05 with risk daily closing below 64.00, targeting 70.90 and 71.65-73.00-73.90.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.0452/EUR, a high of US$1.0523/EUR, and settled the day up by 0.499% to close at US$1.0502/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 1.0390-1.0840, targeting 1.0450-1.0400-1.0340 and 1.0290-1.0210 with stop-loss at daily closing above 1.1400. Buy above 1.0420-1.0210 with risk below 1.0210 targeting 1.0490-1.0540-1.0600 and 1.0660-1.0700-1.0790.

GBP/USD

GBP/USD on Friday intra‐day low of US$1.2365/GBP, a high of US$1.2433/GBP, and settled the day up by 0.499% to close at US$1.2423/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2674) is becoming a support 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 1.2440-1.2380 with a target of 1.2510-1.2590-1.2650-1.2750 and 1.2800.1.2890-1.2930 with a stop loss closing below 1.2380. Sell in between 1.2510-1.2960 with targets at 1.2440-1.2380-1.2290 and 1.2210-1.2150 with a stop loss of 1.3200.

USD/JPY

USD/JPY on Friday made an intra‐day low of JPY156.87/USD an intraday high of 157.55/USD, and settled the day down by 0.0228% at JPY157.31/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (155.35), 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 157.90-159.50 with risk above 159.00 targeting 156.00-155.25-154.30 and 153.80-153.00-152.10. Long positions above 157.00-149.00 with targets of 157.00-157.90 and 158.50-159.20-160.00 with stops below 147.00.