Daily Markets

• The dollar pared some overnight losses on Tuesday after U.S. President Donald Trump suggested the United States could impose tariffs on Canada and Mexico in the near future, challenging suggestions his policies would be more gradual. Trump told reporters his team was thinking of tariffs around 25% that could be announced on Feb. 1, but offered no other specifics. He also floated the idea of universal tariffs, but said the United States was not ready for that yet. The dollar had fallen sharply on Monday after Trump's first day included no specific plans on tariffs and officials signalled any new taxes would be imposed in a "measured" way, a major relief for trade-exposed currencies. A following trade memo merely directed agencies to investigate and remedy persistent trade deficits. The market reaction was a knee-jerk fall in the Canadian dollar and Mexican peso. The dollar climbed 0.6% to 1.4397 Canadian dollar and added 0.9% on the peso. The euro eased back to $1.0389, from an early top of $1.0434. The EU runs a sizeable trade surplus with the United States and has been seen as a major target for Trump's tariffs. Talking to reporters on Monday, Trump said he would remedy the trade imbalance either through tariffs or by Europe buying more U.S. oil and gas. The inauguration speech focused on emergencies in immigration and energy and a more expansionist foreign policy, including a pledge to take back the Panama Canal. In his first term in office, Trump had a history of announcing imminent plans for policy proposals, including on healthcare and infrastructure, only for nothing to eventuate. The dollar could not sustain a bounce on the Japanese yen and slipped 0.5% to a near five-week trough around 154.78. The yen has been supported by growing expectations the Bank of Japan would raise rates at its policy meeting this Friday. The dollar added 0.2% on the Chinese yuan to 7.2847. Trump has in the past threatened China with tariffs of up to 60%, but was vague on his plans on Monday. Beijing later set a stronger fix for the yuan, suggesting it was still inclined to not let the currency fall too quickly.

Gold – XAU

Gold on Monday its intraday high of US$2713.67/oz and low of $2689.21/oz. Gold is up by 0.275% at US$2708.96/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 2725 keeping stop loss closing above 2725, targeting 2694-2680-2649 and 2635-2624-2600. Buy in between 2690-2600 with risk below 2600 targeting 2726-2749-2758 and 2,770-2,780-2789.

Silver - XAG

Silver on Monday its intraday high of US$30.60/oz and low of US$29.97/oz settle up by 0.795% at US$30.55/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 30.40-27.50, targeting 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 30.90-34.30 with a stop loss above 35.00 targeting 29.10-28.60 and 28.10-27.60.

Oil - WTI

Crude Oil on Monday an intra‐day high of US$77.70/bbl, an intraday low of US$75.71/bbl, and settled down by 1.262% to close at US$76.24/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 78.90-83.85 with stop loss at 84.00; targeting 77.80-77.10-76.50 and 75.70-75.05-73.40. 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 Monday made an intraday low of US$1.02655/EUR, a high of US$1.0433/EUR, and settled the day up by 1.361% to close at US$1.0415/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 1.0340 and 1.0290-1.0210 with stop-loss at daily closing above 1.1400. Buy above 1.0345-1.0110 with risk below 1.0110 targeting 1.0400 and 1.0490-1.0540-1.0600.

GBP/USD

GBP/USD on Monday day low of US$1.2159/GBP, a high of US$1.2259/GBP, and settled the day up by 1.307% to close at US$1.2319/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 Monday made an intra‐day low of JPY155.40/USD an intraday high of 156.56/USD, and settled the day down by 0.447% at JPY155.44/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 156.00-159.50 with risk above 160.00 targeting 156.00-155.25-154.30 and 153.80-153.00-152.10. Long positions above 155.00-149.00 with targets of 158.50-159.20-160.00 with stops below 147.00.