DBG Markets: Market Report for Jan 16, 2025

Market Analysis

GOLD - Gold prices are experiencing increased bullish momentum and volume. However, the MACD reveals weakened volume, suggesting a possible retracement before a continuation of the upward trend. The RSI, after hitting overbought levels twice, now reflects normalization in the buying momentum, indicating heightened potential for prices to move higher. Fundamentally, Decembers CPI data rose less than expected, fueling expectations for further Federal Reserve rate cuts this year.

SILVER - Silver prices surged significantly after yesterdays session, breaking above 29.9000 and currently testing 30.6675. A successful break above this level could lead to continued gains, albeit with a slower pace compared to Gold. The MACD shows rising momentum and volume, supported by the RSI, which signals market divergence and strength. Although lighter histograms suggest some waning strength, overall price action respects the bullish structure, and further buying is anticipated.

DXY - The Dollar is struggling to sustain its rally, despite recent expectations. Biden‘s drilling ban has cast doubt on Trump’s ability to fulfill his economic promises, creating additional uncertainty. The MACD reflects reduced volume but retains a bullish cross, while the RSI lacks a clear directional conviction. Price action continues to show resilience, holding above the previous swing low at 107.834 despite aggressive selling following softer CPI data. We expect further buying to persist, though caution is warranted as we await more decisive price action.

GBPUSD - The Pound remains consolidated below 1.23000, reflecting evident market weakness. Despite the Dollar‘s recent retreat, the Pound failed to capitalize, underscoring its bearish bias. The MACD shows a lack of volume, and the RSI also displays limited conviction in either direction. Price action continues to respect the market’s bearish structure, leaving little room for optimism until clearer signals emerge.

AUDUSD - The Australian Dollar leveraged the Dollar‘s weakness to re-enter the consolidation zone, stalling just below the upper boundary. The MACD shows increasing volume, while the RSI highlights improved momentum for buyers. A break above the previous swing high at 0.61705—a significant level since October 2022—could signal continued buying momentum. However, fundamentals suggest the U.S. Dollar could gain strength due to inflationary pressures. Additionally, markets are pricing in a 70% chance of a 25 basis point rate cut by the Reserve Bank of Australia at its February 18 meeting, which could impact the Aussie’s trajectory.

NZDUSD - The New Zealand Dollar managed to climb back into the consolidation zone but lacks decisive strength. The MACD indicates weakened volume, while the RSI shows limited directional conviction. Despite the recovery, price action remains bearish, with markets expecting an 80% probability of a 50 basis point rate cut by the Reserve Bank of New Zealand in February. Selling pressure is likely to persist unless significant shifts occur.

EURUSD - The Euro has stalled after reaching 1.03311, remaining consolidated between the previous swing low and the current swing high. Momentum has yet to shift back toward buying, as the MACD signals increased selling volume and the RSI reflects normalized bearish momentum. Price action continues to respect bearish structures, and we anticipate further declines unless fundamentals provide a catalyst for reversal.

USDJPY - The Yen capitalized on the Dollar‘s weakening, with prices plunging to 155.704 amid speculation of a Bank of Japan rate hike. Remarks from BOJ Governor Kazuo Ueda and Deputy Ryozo Himino suggest a 74% probability of a 25 basis point hike to 0.5% in short-term rates. The MACD shows rising selling volume, while the RSI indicates normalized bearish momentum. Overall, price action has shifted to bearish following yesterday’s sharp decline. Fundamentals point to potential Yen strength, especially with expectations of U.S. rate cuts, but Trumps upcoming inauguration and tariff policies could add further uncertainty.

USDCHF - Franc prices briefly crashed below the previous swing low but quickly rebounded, returning above the critical zone. This recovery suggests the market remains bullish for now. However, if subsequent price action indicates sustained comfort below this level, it could signal a shift in overall market momentum. Currently, the RSI reflects normalization in the rise, while the MACD shows increasing bullish volume and momentum. As such, we maintain a bullish outlook, expecting prices to continue rising in the near term.

USDCAD - The Canadian Dollar remains within a bullish structure, holding above the previous swing low while struggling to break 1.44440. The MACD and RSI are indecisive, reflecting a market awaiting further clarity. Despite this, price action suggests continued buying in the near future, though patience is required to confirm the next move.