Daily Market Lookup

• The dollar moved broadly lower on Tuesday, while Australia's and New Zealand's currencies climbed with a rise in risk appetite after China said it would scrap its COVID-19 quarantine rule for inbound travellers - a major step in reopening its borders. China will stop requiring inbound travellers to go into quarantine on arrival starting Jan. 8, the National Health Commission said on Monday, even as COVID cases spike. At the same time, Beijing downgraded regulations for managing COVID cases to the less strict Category B from the top-level Category A. Data released on Friday showed that U.S. consumer spending barely rose in November while inflation cooled further, reinforcing expectations that the Federal Reserve could scale back its aggressive monetary policy tightening. The Japanese yen steadied at 132.89 per dollar, as the recently fragile currency continues to be buoyed by the Bank of Japan's (BOJ) surprise tweak to its yield curve policy last week. BOJ Governor Haruhiko Kuroda on Monday brushed aside the chance of a near-term exit from ultra-loose monetary policy, even as markets and policymakers are signalling an increasing focus on what comes after Kuroda's tenure ends in April next year In cryptocurrencies, crypto lender Vauld has called off its potential acquisition by rival Nexo, according to a CoinDesk report.
• The dollar slid against most currencies in choppy, thin trading on Friday as data signaled that the U.S. economy is cooling a bit, reinforcing expectations of smaller interest rate increases from the Federal Reserve and improving investors' risk appetite. The personal consumption expenditures (PCE) price index rose 0.1% last month after climbing 0.4% in October. In the 12 months through November, the PCE index increased 5.5% after advancing 6.1% in October. Excluding the volatile food and energy components, the PCE index gained 0.2% after increasing 0.3% in October. The so-called core PCE price index rose 4.7% on a year-on-year basis in November after increasing 5.0% in October. The Fed tracks the PCE price indexes for its monetary policy. Wall Street indexes ended higher on the day, while commodity currencies such as the Australian, New Zealand and Canadian dollars, which are highly sensitive to risk sentiment, also gained against the greenback. Investors also sold safe-haven Treasuries, pushing yields higher. The Fed is widely expected to raise interest rates by just 25 basis points at its next policy meeting, in January, after multiple big increases. Euro net longs also rose to 142,272 contracts, the largest since January 2021, according to U.S. Commodity Futures Trading Commission data released on Friday. The Canadian dollar also benefited from data showing that the Canadian economy grew by 0.1% in October versus September, with another 0.1% increase in GDP seen likely in November, Statistics Canada data showed. The dollar though, was on track for a weekly drop of 2.8% after the Bank of Japan (BOJ) tweaked a key bond market policy earlier this week. CFTC data showed net yen shorts declined to 40,881 contracts, the smallest since August. A second report on Friday showed new orders for U.S.-made capital goods rose moderately in November while shipments fell, pointing to a slowdown in business spending on equipment this quarter as higher borrowing costs cool demand for goods. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.2% last month, data showed. These so-called core capital goods orders increased 0.3% in October. However, shipments of core capital goods dipped 0.1% after increasing 1.4% in October. Another piece of data showed U.S. consumers expect price pressures to moderate notably in the next year, with a benchmark survey on Friday showing the one-year inflation outlook dropping in December to the lowest in 18 months. This is a key number that Fed Chair Jerome Powell mentioned in one of his press briefings. In what has been a brutal year for global markets, the dollar has surged almost 9% as the Fed has aggressively hiked rates to tame inflation.
• Oil prices rose to three-week highs on Tuesday as China's latest easing of COVID-19 restrictions raised fuel demand hopes and concerns that winter storms across the United States are affecting energy production continued to buoy prices. China will end its quarantine requirements for inbound travellers starting on Jan. 8, the National Health Commission said on Monday, dropping a rule in place since the start of the pandemic three years ago. That spurred optimism of higher demand from the top crude oil importer. The greenback softened on Tuesday following this announcement. A weaker dollar makes oil cheaper for holders of other currencies and usually reflects greater investor appetite for risk. A lethal blizzard paralysed Buffalo, New York, on Christmas Day, trapping motorists and rescue workers in their vehicles, leaving thousands of homes without power and raising the death toll from storms that have chilled much of the United States for days. Airlines had cancelled nearly 2,700 U.S. flights as of Saturday afternoon after the weather snarled airport operations around the country. Frigid cold and blowing winds on Friday knocked out power and cut energy production across the United States, driving up heating and electricity prices. Concerns over a possible production cut by Russia also contributed to gains. Russia may cut oil output by 5% to 7% in early 2023 as it responds to price caps, the RIA news agency cited Deputy Prime Minister Alexander Novak as saying on Friday.

Gold – XAU

Gold on Monday made its intraday high of US$1803.22/oz and low of $1791.10/oz. Gold is up by 0.312% at US$1798.27/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above the zero line and histograms are a2lso increasing trend and it will bring an upward stance in the upcoming sessions. RSI is in the overbought region and more upside is expected before it gets stretched. The Stochastic Oscillator is in neutral territory and giving a negative crossover to a bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1824-1879 keeping stop loss closing above 1879, targeting 1808-1790-1774 and 1759-1750-1736. Buy in between 1800-1768 with risk below 1750, targeting 1814 and 1826-1834-1847.

Silver - XAG

Silver on Monday made its intraday high of US$23.88/oz and low of US23.50/oz settled up by 0.768% at US$23.73/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (21.00), breakage above will lead to 21.60. MACD is below the zero line and histograms are decreasing trend and it will bring a bearish stance in the upcoming sessions. RSI is approaching the neutral region, indicating a buy signal for now. The Stochastic Oscillator is in the oversold region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 23.60-20.30, targeting 23.30-23.60 and 24.00-24.40-25.00 with stop loss should be placed on the breakage below 20.00. Sell in between 24.00-25.00 with stop loss above 25.00; targeting 22.10-21.70 and 21.30-20.70-20.10.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US$79.83/bbl, an intraday low of US$77.00/bbl, and settled down by 0.310% to close at US$78.14/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. 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 neutral region, giving a positive crossover for confirmation of a bullish stance; while the RSI is in the neutral region and more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 80.00-81.40 with stop loss at 81.60; targeting 78.60-77.00-76.10-75.25 and 74.10-73.30-72.60. Buy above 77.00-71.70 with risk daily closing below 71.00; targeting 78.60 and 79.70-80.50-81.40.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.0614/EUR, a high of US$1.0632/EUR, and settled the day up by 0.0847% to close at US$1.0614/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which becomes immediate support, a break below will target 1.0647. MACD is above the zero line and histograms are increasing mode which will bring a bullish view. Stochastic is in overbought territory and giving positive 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 1.0650-1.0930, targeting 1.0610-1.0580-1.0520 and 1.0490-1.0450-1.0390 with stop-loss at daily closing above 1.0940. Buy above 1.0610-1.0390 with risk below 1.0390 targeting 1.0650-1.0720-1.0790 and 1.0830-1.0900-1.0940.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.2048/GBP, a high of US$1.2076/GBP, and settled the day down 0.0439% to close at US$1.2056/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2113) is becoming a resistance level. 14-D RSI is currently in a neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and gives a positive crossover to confirm bullish a 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 1.2030-1.0800 with a target of 1.2090-1.2120-1.2170 and 1.2280-1.2350-1.2410 with a stop loss closing below 1.1950. Sell in between 1.2120-1.2410 with targets at 1.2030-1.1950-1.1870 and 1.0850-1.0800 with stop loss should be 1.2630.

USD/JPY

USD/JPY on Monday made an intra‐day low of JPY132.442/USD and made an intraday high of JPY133.22/USD and settled the day up by 0.264% at JPY132.81/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.30), which is initial 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 neutral territory and signaling to sell as it has given a negative crossover to confirm a bearish stance.

Trading Strategy: Neutral to Sell

Sell below 132.90-136.00 with risk above 136.00 targeting 131.90-131.10-130.40 and 129.50-129.00. Long positions above 131.90-129.00 with targets of 132.90-134.10-134.90 and 135.40-136.00-137.70 with stops below 129.00.