Daily Markets

• The U.S. dollar strengthened for a third straight session on Thursday as Treasury yields dipped but held at elevated levels on concerns over tariffs under the incoming Trump administration, while sterling's recent weakness persisted. U.S. Treasury yields have been on an uptrend, with the benchmark 10-year note hitting an 8-1/2 month high of 4.73% on Wednesday as a resilient economy and likely tariffs have rekindled inflation concerns and heightened expectations the Federal Reserve will take a slower path of interest rate cuts. Recent economic data has shown a labor market on a solid footing and minutes from the Fed's December meeting showed that policymakers raised new inflation concerns suggesting the new administration's plans may slow economic growth and increase unemployment. Investors will eye Friday's key government payrolls report to gauge how aggressive the central bank will be in cutting interest rates. Federal Reserve Bank of Boston President Susan Collins said on Thursday that significant uncertainty over the outlook calls for the central bank to move forward cautiously with future rate cuts while Philadelphia Federal Reserve President Patrick Harker said he still expects rate cuts, but any sort of imminent move down is not needed amid considerable uncertainty over the economic outlook. In addition, Kansas City Federal Reserve President Jeff Schmid said he believes rates are near the point where the economy needs "neither restriction nor support," while Fed Governor Michelle Bowman said the incoming administration's future policies should not be prejudged. Sterling weakened 0.46% to $1.2306, on track for a third straight session of declines after hitting its lowest level since Nov. 13, 2023 with Britain's finance minister under pressure as concerns over Trump's policies have pushed the British government's borrowing costs higher. Bank of England Deputy Governor Sarah Breeden said a rate cut was supported by recent evidence, although it was difficult to know how quickly. Erik Nelson, macro strategist at Wells Fargo (NYSE:WFC) sees a risk of continued underperformance in the pound while UK gilt yields begin to turn lower. The Japanese yen strengthened 0.17% to 158.06 per dollar. Government data on Thursday showed Japan's inflation-adjusted real wages fell for the fourth straight month in November, weighed down by higher prices even as base pay grew at the fastest pace in more than three decades. Analysts at Goldman Sachs believe the discussions at the January branch managers meeting support their view of a January rate hike from the Bank of Japan.

Gold – XAU

Gold on Thursday its intraday high of US$2655.38/oz and low of $2655.38/oz. Gold is up by 0.322% at US$2669.65/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 2680-2725 keeping stop loss closing above 2725, targeting 2649-2635-2624 and 2600-2585-2574-2560. Buy in between 2670-2550 with risk below 2550 targeting 2684-2694-2705 and 2726-2749.

Silver - XAG

Silver on Thursday made its intraday high of US$30.46/oz and low of US$29.86/oz settle up by 0.0365% at US$30.05/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 Thursday an intra‐day high of US$73.71/bbl, an intraday low of US$72.30/bbl, and settled up by 1.36% to close at US$73.70/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 73.90-76.85 with stop loss at 77.00; targeting 72.45-71.50-70.10 and 69.40-68.50-67.50-66.90. Buy above 73.50-64.05 with risk daily closing below 64.00, targeting 70.90 and 71.65-73.00-73.90.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.0282/EUR, a high of US$1.0320/EUR, and settled the day down by 0.139% to close at US$1.0983/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 Thursday day low of US$1.2237/GBP, a high of US$1.2365/GBP, and settled the day down by 0.448% to close at US$1.2302/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 1.2250-1.2180 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 1.2310-1.2960 with targets at 1.2250 and 1.2210-1.2150-1.2070 with a stop loss of 1.3000.

USD/JPY

USD/JPY on Thursday made an intra‐day low of JPY157.57/USD an intraday high of 158.38/USD, and settled the day down by 0.154% at JPY158.04/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.