DBG Markets: Market Report for Dec 03, 2024

Market Overview

GOLD

Gold encountered resistance at 2653.515 after climbing upward as expected, supported by a sufficient pullback. The RSI indicates sustained selling momentum, while the MACD suggests a growing likelihood of a bearish crossover, as reflected in the lighter histogram bars.

The failure to reach the previous swing high reinforces the potential for continued selling pressure. However, the possibility of USD weakness increases, driven by rising expectations of monetary easing in December, which could lend support to metals.

Looking ahead, we anticipate the dollar to strengthen further after the expected rate cut is factored in. This shift would signal a new economic phase, characterized by a slower easing trajectory throughout 2025.

SILVER

Silver prices are facing resistance at 30.6675, with price action signaling a stronger likelihood of continued selling. While the MACD remains in buying territory, the RSI shows divergence and highlights increased selling momentum, as evidenced by a recent drop below the zero line.

We anticipate further price declines, albeit with a possibility of a short-term reversal upward. Additional price movements will help confirm the market's next direction.

DXY

The dollar strengthened following data revealing greater-than-expected growth in the manufacturing sector. Federal Reserve Governor Christopher Waller signaled support for a 25 basis point rate cut during the Fed's mid-December policy meeting, though he left room for a pause depending on incoming economic data.

Waller emphasized that monetary policy remains restrictive and projected gradual rate cuts through next year to achieve a neutral policy stance, balancing inflation control with labor market stability.

The probability of a December rate cut has surged to 75.1%, up from just over 60% days earlier. However, markets await employment data later this week, which could influence expectations further.

GBPUSD

The pound struggled to sustain levels above its previous swing high of 1.27256, encountering strong resistance. While price briefly traded above this zone, it was quickly rejected. Both the MACD and RSI confirm increased selling momentum, suggesting the likelihood of continued bearish activity throughout the week.

AUDUSD

The Australian dollar shows potential for further declines, with resistance near its previous swing high at 0.65250. Although the MACD histogram prints have lightened, the overall momentum remains heavily bearish, supported by the RSI.

NZDUSD

The New Zealand dollar faces rejection at its previous swing high near 0.59288, with both MACD and RSI signaling extended selling momentum. The price action suggests a continued bearish trend, although consolidation remains a possibility.

EURUSD

The euro is trading between two key price levels, with selling momentum intensifying after breaching a prior swing low. However, the subsequent price rebound suggests potential for upward continuation.

The MACD shows a clear increase in selling momentum, as indicated by red histogram prints and a dip below zero. Conversely, the RSI suggests buying momentum, supported by divergence observed before the recent price rise.

USDJPY

The yen shows heightened potential for a sell continuation, respecting the previous swing high near 151.700. Despite this, the MACD lacks clear bearish momentum, while the RSI indicates a shift toward bullishness. A short-term pullback is possible before further selling resumes.

Over the weekend, BOJ Governor Kazuo Ueda suggested that rate hikes are

“Nearing,” aligning with Japan's economic data. Markets now assign a 60% probability of a 25 basis point hike this month, up from 50% recently.

USDCHF

Franc weakness aligned with expectations, driving prices to 0.88886. The RSI suggests strong bullish momentum, while the MACD points to potential consolidation before further gains, as reflected in the lighter histogram bars. Overall, price action favors continued buying momentum.

USDCAD

The Canadian dollar presents buying opportunities following a decisive move that broke previous swing levels, forming a new higher low. Both the MACD and RSI reflect increasing momentum and volume for buying, supporting expectations for continued bullish price action.