DBG Markets: Market Report for Jan 21, 2025

Market Analysis

GOLD - Gold prices have risen significantly, holding above 2722.268. However, yesterday‘s trading session saw prices remain steady as markets focused on Trump’s first-day policies. It may take time for the market to determine a clear direction as analysts digest Trumps inauguration speech and await further policy announcements. While some questions remain about the impact of his decisions on gold demand, the overall expectation is for gold prices to rise. Investors and bankers are shifting away from the strong dollar to reduce risk.

SILVER - Silver prices remain steady as the market assesses its next move. While there may be some hesitation, clearer direction is expected soon. The RSI reflects positive momentum and strength for the bullish trend, which is further supported by a growing bullish MACD.

DXY - The dollar gapped lower as U.S. banks resumed trading after the holiday. This drop is not considered a crash or a shift in overall momentum but rather an opportunity for the dollar to fill the gap and resume its rally. A strong dollar is expected as Trumps tariff policies are announced.

The uncertainty surrounding the timing and magnitude of Trumps tariffs has added a layer of complexity to the markets. This has led other countries to increase gold purchases as a hedge against potential unfavorable outcomes. For now, the dollar remains consolidated, with both the MACD and RSI signaling potential for a buying continuation.

GBPUSD - The pound remains under pressure, failing to capitalize on the dollar‘s weakness. Resistance at 1.23000 holds firm, maintaining the bearish structure. Although the MACD reflects increased buying momentum and the RSI shows strength, these signals are likely driven by the dollar’s temporary weakness rather than fundamental improvements. Relations between the U.S. and the UK are expected to worsen under Trump, with potential tariffs further straining the British economy. We remain bearish overall, though short-term buying may occur over the next few hours or days.

AUDUSD - The Australian dollar saw a sudden rise, with the MACD showing increased bullish momentum and the RSI signaling positive movement. However, prices remain consolidated between two boundaries, and expectations for rate cuts by the RBA in the near term weigh on the Aussies outlook. Markets anticipate the RBA may begin cutting rates as early as next month, adding pressure to the currency. While short-term buying potential exists, we remain cautious and anticipate further weakness in the coming days.

NZDUSD - The New Zealand dollar is experiencing increased buying momentum, with the MACD and RSI supporting the bullish trend. This could slow the Kiwis economy significantly. Price action remains bearish, with prices confined within the consolidation boundaries. We expect the selling trend to persist and await further clues before confirming a specific direction.

EURUSD - The Euro has risen above 1.03311, supported by increased buying volume on the MACD and a bullish RSI divergence. However, concerns over strained relations between the U.S. and Europe under Trump‘s administration may weigh on the Euro’s outlook. While short-term bullish momentum may continue, the broader trend remains bearish, with potential for selling to resume in the coming days.

USDJPY - The Yen continues to gain strength as traders assess the BOJ‘s likelihood of a rate hike. Optimism surrounding wage growth and rising inflation expectations suggests the BOJ could revise its inflation target higher, fueling bullish sentiment for the Yen. Japan’s Finance Minister Katsunobu Kato has also reiterated the governments commitment to supporting the currency.

Despite these fundamentals, the MACD signals increased selling momentum, and the RSI reflects normalization in bearish movements. Price action remains bearish, with further declines expected as the market balances short-term optimism against overall structure.

USDCHF - The Franc is seeing increased chances for bearish continuation, with both the MACD and RSI indicating growing selling momentum and volume. Price action has shifted bearish, driven by the sustained strength of the Franc and the dollars lower open.

USDCAD - The Canadian dollar is exhibiting whipsaw behavior, reflecting uncertainty in the market. This volatility stems from mixed expectations about Trumps tariff policies, which he recently suggested could include a 25% tariff on imports from Canada and Mexico starting February 1.

Given the current price action, relying on indicators is not advisable. While the market remains unpredictable, further buying pressure is expected as sentiment toward a weaker CAD grows. Caution is essential while trading this market, as sudden announcements could significantly shift momentum.