DBG Markets: Market Report for Jan 27, 2025

Market Overview

Markets are on watch for the FED‘s rate decision later this week. Trump has called for an immediate rate cut, although markets widely expect the FOMC to hold rates this month. Will Trump’s demand influence the FED to reconsider its stance？

In addition to the FED decision on Thursday, other significant events are lined up for this week.

> On Tuesday, SNB Chairman Jordan is expected to outline the central banks direction for the Franc, alongside the U.S. CB Consumer Confidence report.

> Wednesday will see Australia‘s CPI release, the BOE Governor’s speech, and the Bank of Canadas rate decision.

> Thursday includes the Eurozone monetary policy statement with the ECB press conference, as well as the U.S. Advance GDP and unemployment data

> Finally, on Friday, the European CPI, Canadian GDP, U.S. Core PCE Price Index, and Employment Cost Index will be released

GOLD - Gold prices are currently experiencing increased selling momentum, as indicated by the MACD. However, the RSI suggests a potential turnaround before momentum normalizes. Overall, price action remains very bullish, with the previous swing low still holding as key support.

SILVER - Silver prices remain consolidated and are likely to stay in this range until a catalyst prompts a directional move. Silver prices are being kept low for now, potentially serving as a hedge against gold once it reaches overpriced levels. As silver approaches historic highs, another bullish run is anticipated.

DXY - The Dollar is seeing increased bullish movement ahead of the FED rate decision. While the RSI signals overbought conditions, the MACD reflects growing bullish volume, suggesting a continuation. However, overall price action remains bearish, with 107.834 serving as strong resistance.

Fundamentally, the Dollar is expected to strengthen further as tariff concerns resurface.

GBPUSD - The Pound has gained significantly, breaking above its previous swing high and shifting overall momentum, as previously anticipated. Prices have reached 1.24754, exceeding initial expectations. The MACD indicates a potential turnaround, while the RSI shows overbought conditions, suggesting a normalization of prices soon.

While more short-term buying is expected, the Pound is fundamentally poised for weakness in the long term.

AUDUSD - The Australian Dollar opened with a price gap, suggesting a possible return to fill it. However, if prices fail to reach 0.63407, a decline is likely. The RSI is recovering from oversold conditions, signaling a momentum shift, while the MACD reflects growing buying volume.

Overall, price action remains bullish. However, a move below the upper boundary of the previous consolidation zone would signal a return to bearish momentum.

NZDUSD - The Kiwi Dollar is declining, with the RSI recovering from oversold conditions and signaling a shift in momentum similar to the Aussie Dollar. The MACD shows rising bearish volume. If prices fall below 0.56859, a continuation under the consolidation zones upper boundary is expected, signaling a broader return to bearish momentum.

EURUSD - Euro prices have returned below 1.04672, with the MACD crossing to suggest growing bearish volume. However, the RSI indicates oversold conditions without a clear directional bias. While short-term buying may occur due to bullish momentum, a break below the previous swing low would confirm a bearish shift. Fundamentally, the Euro is expected to weaken in the long term.

USDJPY - On Friday, the BOJ raised interest rates by 25 basis points to 0.5%, marking the highest short-term borrowing costs in 16 years. The central bank projected inflation reaching its 2% target in the latter half of its forecast period, suggesting potential further rate hikes.

However, BOJ Governor Kazuo Ueda provided little guidance on the timing or pace of future increases. The Yen remains consolidated, partly due to Trumps unpredictability. The Yen is expected to strengthen due to bullish market structure, but a break above the swing high could lead to increased Dollar buying.

Both the MACD and RSI lack clear direction, reflecting the current consolidation.

USDCHF - The Franc remains below 0.90743, despite the Dollars recent gains. The MACD hints at a bullish move but lacks volume, while the RSI has yet to show a clear directional bias. Price action remains stable, potentially serving as a hedge against other assets. Overall momentum remains bearish, with 0.90743 acting as strong resistance.

USDCAD - The Canadian Dollar is expected to weaken further after Trump threatened tariffs on Colombia. If Trump follows through, the likelihood of imposing tariffs on Canada, Mexico, and China by February 1 increases significantly. This would weaken the CAD further while strengthening the Dollar.

The MACD reflects increasing volume, while the RSI is quickly normalizing, indicating a potential momentum shift. Although the market opened with a gap—suggesting an order fill—overall, the market remains bullish in the long term.