DBG Markets: Market Report for Feb 04, 2025

Market Overview

GOLD - GOLD prices maintain their high as concerns over tariffs linger among traders. Prices also reached new historic highs, and we expect further buying to continue. However, the strength in the dollar is also anticipated to persist. "In the current highly dynamic environment, where market volatility and policy flip-flops are likely to dominate, gold prices may continue to stay supported," IG market strategist Yeap Jun Rong said.

SILVER - SILVER prices have halted their advancement, as expected, correlating with GOLDs slowdown. This is because they will likely hold off on increasing SILVER prices until GOLD becomes overpriced, making SILVER the next best asset. Therefore, we remain bullish on this price as overall price action suggests the same bias.

DXY - Dollar prices have now filled the gap and are expected to continue higher in the coming days. The EMA200 still supports the price, alongside the previous swing low. However, the gap makes it challenging to interpret what the RSI and the MACD are indicating.

GBPUSD - Pound prices have filled the gap as expected. However, they are still a few pips away from signaling a shift back to buying. For now, our outlook remains bearish. The MACD is showing buying momentum, and the RSI is also reflecting an increase in this bullish movement. Still, we anticipate prices will continue to sell off in the coming days, with a potential consolidation for the rest of today.

AUDUSD - Aussie dollar prices bounced off the EMA200 and are expected to continue falling from current levels. Overall price action remains very bearish, and this bias is generally expected to continue after the gap is filled. However, there is potential for the markets to consolidate here, as the price has returned above the lower boundary of the previous consolidation zone. Thus, we are still looking for a potential opportunity to sell. The MACD and the RSI, however, show growing momentum and volume for the buying.

NZDUSD - Kiwi prices are expected to continue dropping, as prices clearly respect the previous consolidation lower boundary and the EMA200. It‘s still a long way before the previous swing high is reached and overall price action shifts momentum. We remain bearish for this market overall. The MACD reflects increased buying, but the RSI aligns more closely with the bearish bias, showing normalization of the market’s selling pressure.

Fundamentally, weakness remains as markets await details, with the Trump administration yet to engage with China on a possible reprieve from the additional 10% tariffs set to take effect later today. Meanwhile, the prospect of further rate cuts by the Reserve Bank of New Zealand pressures the currency, with markets anticipating a 50 bps reduction to 3.75% this month and a policy rate bottom of 3% over the next 12 months.

EURUSD - The Euro has filled the gap and is now generally expected to go lower. However, the RSI shows an increase in buying momentum alongside the MACD. Despite this, we remain bearish as overall prices suggest a continuation of the sell-off. There are slight chances for prices to remain consolidated until the Euro finds a clearer direction in the coming days.

USDJPY - The Yen remains under pressure but is more stable compared to other currencies. This stability is due to market expectations for the BOJ to hike rates. Currently, the markets are just consolidating, with both the MACD and the RSI failing to show a significant conviction in any direction. In Japan, investors are focusing on Wednesday's release of wage figures, which could impact the outlook for the Bank of Japan's monetary policy. The BOJ raised interest rates in January and has signaled its readiness to hike rates further if economic and price trends align with forecasts.

USDCHF - The Franc has filled the gap and might consolidate before continuing its upward run. Prices are likely to continue rising as overall price momentum remains bullish. The MACD shows a sell signal, while the RSI indicates increasing buying momentum. We remain bullish since even the EMA200 continues to support prices.

USDCAD - The CAD breathed a sigh of relief, enough to fill the gap after the delay in tariffs. However, it is generally expected that the CAD will weaken against the dollar, and this market will continue to trend upward. There are expectations for sideways movement from here, but a recovery for the inflationary dollar is now in progress.

Other analysts share this sentiment. TD expects "USDCAD dips will be brief and shallow," and the currency pair will rise to C$1.50 by end-March, based on Canada's "relatively weak macro story," as well as trade uncertainty. The RSI shows an increase in buying momentum. The MACD still shows rising volume for selling, albeit suddenly and abruptly. The overall price is still very bullish from here. Uncertainty in the markets plays a huge part in this as Trump calls for more sudden decisions, causing a ruckus in the markets.