Daily Markets

• Most Asian currencies drifted lower on Thursday, coming under pressure from a stronger dollar as hawkish comments from the Federal Reserve furthered bets on a slower pace of rate cuts in 2025. The yen was an outlier, benefiting from increased speculation over an interest rate hike by the Bank of Japan after wage data for November read stronger than expected. But the yen, like most Asian currencies, was nursing steep losses in recent sessions amid pressure from a stronger dollar and rising U.S. Treasury yields. Weak inflation data from China also weighed on sentiment, as disinflation remained squarely in play in Asia’s biggest economy, despite recent stimulus efforts from Beijing. The dollar index and dollar index futures steadied in Asian trade after coming back in sight of over two-year highs on Wednesday. The minutes of the Fed’s December meeting showed policymakers growing increasingly geared towards a slower pace of rate cuts in 2025. Fed members also expressed some concerns over expansionary policies under President-elect Donald Trump potentially underpinning inflation. The Japanese yen firmed on Thursday, with the USDJPY pair falling nearly 0.3% and briefly breaking below 158 yen. Average cash earnings data read stronger than expected for November as Japanese wages continued to benefit from bumper hikes won earlier in 2024. The data furthered the notion of a virtuous cycle in Japan’s economy- that increasing wages will underpin inflation and give the Bank of Japan more impetus to hike interest rates sooner, rather than later. BOJ Governor Kazuo Ueda had earlier signaled that the bank would look to wage negotiations in March before deciding on a hike. But ING analysts said the case was building for a January hike, although it would still be a close call. Consumer price index inflation barely grew in December, while producer price index inflation shrank for a 27th consecutive month. The print showed little improvement in China’s long-running disinflationary trend, and signaled that Beijing will likely have to do more to shore up economic growth. Broader Asian currencies mostly weakened on Thursday. The Australian dollar’s AUDUSD pair fell 0.1% as data showed retail sales grew less than expected in November, despite support from the Black Friday shopping event.

Gold – XAU

Gold on Wednesday its intraday high of US$2669.89/oz and low of $2645.15/oz. Gold is up by 0.500% at US$2661.45/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 2660-2725 keeping stop loss closing above 2725, targeting 2649-2635-2624 and 2600-2585-2574-2560. Buy in between 2635-2550 with risk below 2550 targeting 2650-2669 and 2684-2694-2705.

Silver - XAG

Silver on Wednesday made its intraday high of US$30.36/oz and low of US$29.86/oz settle up by 0.372% at US$30.02/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 Wednesday an intra‐day high of US$74.62/bbl, an intraday low of US$72.65/bbl, and settled down by 1.655% to close at US$72.79/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 73.50-76.85 with stop loss at 77.00; targeting 72.45-71.50-70.10 and 69.40-68.50-67.50-66.90. Buy above 72.50-64.05 with risk daily closing below 64.00, targeting 70.90 and 71.65-73.00-73.90.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.0272/EUR, a high of US$1.0356/EUR, and settled the day down by 0.209% to close at US$1.0317/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 1.0350-1.0840, targeting 1.0450-1.0400-1.0340 and 1.0290-1.0210 with stop-loss at daily closing above 1.1400. Buy above 1.0390-1.0210 with risk below 1.0210 targeting 1.0490-1.0540-1.0600 and 1.0660-1.0700-1.0790.

GBP/USD

GBP/USD on Tuesday day low of US$1.2320/GBP, a high of US$1.2493/GBP, and settled the day down by 0.296% to close at US$1.2359/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 1.2300-1.2180 with a target of 1.2340-1.2390-1.2440 and 1.2510-1.2590-1.2650-1.2750 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 Wednesday made an intra‐day low of JPY157.89/USD an intraday high of 158.54/USD, and settled the day up by 0.205% at JPY158.31/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 158.50-159.50 with risk above 160.00 targeting 156.00-155.25-154.30 and 153.80-153.00-152.10. Long positions above 158.00-149.00 with targets of 158.50-159.20-160.00 with stops below 147.00.