Daily Market Lookup

• The U.S. dollar steadied Wednesday after rebounding sharply from recent four-year lows, while the euro showed some weakness after the release of key regional inflation data. At 11:54 ET (16:54 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.3% higher to 97.69. The index is up over 1% since the nomination of Kevin Warsh to be the head of the Federal Reserve. The greenback received a boost late last week with the nomination of Warsh to take over from Fed Chair Jerome Powell. The market expects him to be more hawkish and seek a reduction in the Fed’s balance sheet. The focus is now on whether Warsh will be confirmed by the Senate, and just what his appointment could mean for U.S. interest rates when he takes over from Powell in May. A brief government shutdown appeared to have had little bearing on the dollar, as policymakers approved more government funding this week, but it does mean that the release of crucial employment data, due on Friday, will be delayed. A soft ADP payrolls report for January released on Wednesday was also taken in stride by traders. In Europe, the EUR/USD traded 0.1% lower to 1.1802, even after the release of softer-than-anticipated eurozone preliminary inflation data. The positive print had little impact on expectations that the European Central Bank would keep rates steady at 2% for a fifth straight meeting. Policymakers last month had flagged growing worries over the euro’s quick appreciation against the dollar and its effect on inflation. The euro hit a 4-1/2-year high versus the dollar at 1.2084 last week. GBP/USD traded 0.3% lower to 1.3657, with the Bank of England also expected to keep its benchmark interest rate unchanged at its policy meeting on Thursday The yen came under renewed pressure this week after comments from Prime Minister Sanae Takaichi raised questions over whether Tokyo will intervene in currency markets to support the yen. Focus is now squarely on a snap lower house election scheduled for February 8, with Takaichi’s party poised to score a strong victory and give her a greater grip on Japan’s parliament.
• Gold prices reversed early gains and fell in Asian trade on Thursday, coming under pressure from a stronger dollar as anticipation of major central bank meetings and key U.S. labor data saw traders prefer the greenback Cooling haven demand, after the U.S. and Iran confirmed that talks will take place on Friday, also pressured gold. Losses in gold came as Iran and the U.S. confirmed that they will hold talks this week, helping quell fears over an immediate military escalation in the Middle East. Metal prices were also pressured by a stronger dollar, with traders pivoting to the greenback in anticipation of interest rate decisions by the Bank of England and the European Central Bank, both due on Thursday. The dollar also caught some bids ahead of key U.S. nonfarm payrolls data due this Friday. The print is likely to factor into the outlook for interest rates. The greenback extended gains from last week after U.S. President Donald Trump nominated Kevin Warsh as the next chairman of the Federal Reserve. Warsh is viewed as the less dovish pick, and could keep broader monetary policy tight, even as interest rates fall. The white metal is expected to benefit further from its dual role as an industrial and precious metal, and has also vastly outperformed in recent months. But silver, like gold, saw steep losses over the past week, amid a mix of profit-taking and dollar strength.
• Oil prices fell about 2% on Thursday after the U.S. and Iran agreed to hold talks in Oman on Friday, easing concerns that a potential military conflict between them could disrupt supply from the key Middle East-producing region. Oil prices surged about 3% on Wednesday after a media report suggested the planned talks between the United States and Iran on Friday could collapse. However, later in the day officials from both sides said talks would go ahead on Friday though the topics up for discussion have not been settled. However, the two sides remain wide apart on what the talks should include. Iran is open to discussing its nuclear programme, including uranium enrichment, with Western countries, while the U.S. also wants to include Iran’s ballistic missiles, its support for armed proxy groups around the Middle East and its treatment of its own people Despite the upcoming talks, there are concerns U.S. President Donald Trump will still carry out his threats to strike Iran, the fourth-largest producer among the Organization of the Petroleum Exporting Countries, potentially risking a wider confrontation in the oil-rich region.In addition to the possible disruption of Iranian production in the event of a conflict, there are concerns exports from other Gulf producers could be affected. About a fifth of the world’s total oil consumption passes through the Strait of Hormuz which lies between Oman and Iran. Other OPEC members, Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, export most of their crude via the strait, as well as Iran itself. Strength in the U.S. dollar and volatility in precious metals also weighed on commodities and risk sentiment more broadly on Thursday, analysts said. Meanwhile, data from the Energy Information Administration on Wednesday showed oil inventories declined last week in the U.S., the world’s biggest crude producer and consumer, after a winter storm gripped large swathes of the country.

Gold – XAU

Gold on Thursday interaday high of US$091.90/oz and low of $4855.04/oz. God is up by 0.394% at US$4965.41/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 4872-5100 keeping stop loss closing above 5100, targeting 4800-4772-4750 and 4710-4668-4630. Buy in between 4806-4630 with risk below 4600 targeting 4874-4900-4960 and 4990-5040-5100-5160.

Silver - XAG

Silver on Thursday its intraday high of US$92.18/oz and low of US83.25/oz settle up by 3.59% at US$88.14/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 76.00-70.00, targeting 78.0079.40-80.50-81.50 and 82.10-83.00-84.70-85.50 with stop loss should be placed on the breakage below 90.00. Sell in between 78.00-85.50 with a stop loss above 85.50 targeting 77.10-76.00-75.30-74.50 and 73.55-73.00-71.50-70.90.

Oil - WTI

Crude Oil on Friday high of US$65.21/bbl, an intraday low of US$62.59/bbl, and settled up by % to close at US$64.23/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 63.90-65.70 with stop loss at 66.00; targeting 63.00-62.50-61.90 and 61.20-60.60-60.10-59.40 Buy above 63.20-57.90 with risk daily closing below 57.40, targeting 63.80 and 64.50-65.15-65.70-66.40.

EUR/USD

EUR/USD on Thursday an intraday low of US$1.1789/EUR, a high of US$1.1837/EUR, and settled the day up by 0.543% to close at US$1.1806/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.1661), which becomes immediate support, a break below will target 1.1695. 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 1.1850-1.1990, targeting 1.1850-1.1790-1.1755-1.1690 and 1.1640-1.1590-1.1545-1.1500 with stop-loss at daily closing above 1.1990. Buy above 1.1790-1.1110 with risk below 1.1100 targeting 1.1890-1.1920-1.1950 and 1.1990-1.2010-1.2035.

GBP/USD

GBP/USD on Thursday made a intraday low of US$1.3641/GBP, a high of US$1.3732/GBP, and settled the day down by 0.306% to close at US$1.3645/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 between 1.3600-1.3200 with a target of 1.3640-1.3690-1.3725 and 1.3760-1.3800 with a stop loss closing below 1.3200. Sell in between 1.3660-1.3820 with targets at 1.3700-1.3670-1.3640-1.3600 and 1.3550-1.3490-1.3410 with a stop loss of 1.3700.

USD/JPY

USD/JPY on Thursday made an intra‐day low of JPY156.93/USD an intraday high of 156.93/USD, and settled the day up by 0.700% at JPY156.80/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (152.35), 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 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 154.60-160.10 with risk above 160.10 targeting 157.10-156.00-155.40-154.60 and 154.00-153.60-153.20-152.65. Long positions above 154.00-148.00 with targets of 155.00-155.40-155.90-156.50 and 157.10-157.60-158.20-158.60 with stops below 148.00.