DBG Markets: Market Report for Jan 13, 2025

Market Overview

Major economic data releases are lined up this week, starting with the U.S. Producer Price Index (PPI) on Tuesday, Consumer Price Index (CPI) on Wednesday, and Retail Sales on Thursday. The United Kingdom will release its CPI data on Wednesday, GDP figures on Thursday, and Retail Sales on Friday. Meanwhile, Australia's jobs report is scheduled for Thursday.

GOLD - GOLD prices experienced a sudden spike low after Fridays better-than-expected economic data but quickly rebounded as larger investors turned to gold for security against market uncertainties.

"Despite the headwinds from dollar and Treasury yield strength, investors are turning to tangible assets to hedge against persistent inflation risks, mounting fiscal debt concerns, and the risk of tariffs disrupting normal trading dynamics. This trend is further supported by increased hoarding of physical metals by Chinese traders, wary of potential further depreciation of the yuan," noted Saxo Bank.

The MACD indicates increased bullish potential, while the RSI reflects exaggerated selling levels despite minimal bearish movement, signaling reduced bearish volume and rising bullish sentiment. Overall, price action remains within the channel, but a break above 2689.197 could lead to further gains toward 2710.194, as bullish structures continue to hold.

SILVER - SILVER prices managed to break above the upper boundary of the consolidation zone but were resisted at 30.6675. A few more days may be needed for sufficient buying momentum to push through this level and continue the upward trend. The MACD shows lighter prints in recent price action, suggesting the possibility of a deeper retracement. However, the RSI indicates exaggerated selling levels despite minor price declines, hinting at greater upward potential.

DXY - The Dollar remains bullish after breaking the previous swing high following last weeks strong economic data. The MACD points upward with increasing volume, while the RSI holds steady despite the stronger price rally, signaling continued bullish momentum. We maintain a bullish outlook for this market as the structure supports further gains.

GBPUSD - The Pound continues its decline, with increased bearish momentum evident as prices failed to break above 1.23000. The MACD reflects rising selling volume, while the RSI holds steady, supporting the ongoing bearish trend. We expect the selling pressure to persist in this market.

AUDUSD - The Aussie Dollar is positioned for further downside as prices hover near the lower boundary of the consolidation zone. The MACD signals increased potential for continued selling, while the RSI remains stable despite significant price drops, reflecting strong selling pressure. Overall, the bearish outlook remains intact.

NZDUSD - The Kiwi Dollar shows stronger bearish indications than the Aussie, as prices stay below the lower boundary. The MACD reveals heightened selling pressure, while the RSI maintains normal levels, reinforcing the expectation of continued declines.

EURUSD - The Euro briefly attempted a recovery after wicking the previous swing low but is likely to resume its downward trajectory. The MACD reflects growing selling pressure, and the RSIs stability signals increased volume and momentum for the bearish trend. Price action supports further declines as the structure remains bearish.

USDJPY - The Yen is gaining strength against the Dollar ahead of the Bank of Japans upcoming monetary policy announcement. Markets are anticipating a hawkish stance for the year, but we remain neutral given other influencing factors, including evolving U.S. dynamics under Trump.

Prices failed to breach the previous swing high despite the Dollars recent strength, retreating to 157.720, with potential for further declines below this structure. The MACD reflects increased selling momentum, and the RSI remains stable despite the sharp drop, signaling strong seller dominance. Overall, the bullish bias persists unless the swing low is breached.

USDCHF - The Franc shows increased weakness against the Dollar, mirroring broader market trends. The MACD indicates growing buying momentum, while the RSI reflects exaggerated selling levels, reinforcing bullish sentiment. Price action supports further gains, and we remain bullish for this market.

USDCAD - The CAD fell short of breaking above 1.44440, with the RSI signaling normal movement during the recent rise and the MACD showing no significant developments. We expect the market to remain within the consolidation zone until a decisive break occurs.

The CAD's strength stems from Friday‘s better-than-expected jobs data. However, the Dollar’s outperformance and current market dynamics overshadowed these gains. Investors now estimate a roughly 60% chance of a Bank of Canada rate cut on January 29, down from 71% before the data. The expected rate cut for the year has also been revised to 46 basis points, down from 61.