On January 4, 2024, the forex market displayed a range of activities across various commodities and currencies. This analysis provides an overview of the market's behaviour, focusing on specific instruments including the US Dollar, gold, crude oil, Euro, and British Pound.
In yesterday's forex market review, the US Dollar Index presented a notable exception to the expected pattern of correction after a rise, instead showing a direct increase until meeting a resistance level that led to its decline.
In contrast, gold markets experienced a unilateral downturn, leading to a decision against trading due to the limited prospects.
Crude oil, however, showed a more positive outcome, reaching its target position and allowing for a successful though modestly profitable long-position trade.
Meanwhile, the EUR/GBP displayed less significant movements, not reaching specific positions that would have merited detailed analysis, thus shifting the focus to the broader market trends anticipated for the year.
The US Dollar Index witnessed an upward trajectory without undergoing a correction, subsequently encountering resistance and starting to decline. The current market analysis suggests a possible consolidation and oscillation pattern for the US Dollar, with its depreciation potentially limited to a range of 3% to 5%.
Recent developments indicate a shift in the interest rate policy of the U.S. Federal Reserve, with hikes considered towards the year's end. This policy shift has already been reflected in the market, suggesting a potentially suitable strategy for considering long positions at dips.
Gold, traditionally viewed as a haven during economic uncertainty, did not exhibit significant rises in the past during such periods (e.g., 2008-2009). However, in more recent years, despite interest rate hikes by the Federal Reserve, gold reached new highs. The current market consensus anticipates a rise in gold prices due to expected rate cuts.
Yet, the relationship between interest rates and gold prices is complex and influenced by various factors.
At present, gold is consolidating around a support level, with the market awaiting the impact of upcoming non-farm payroll data. The analysis of the recent gold performance indicates a bearish trend, suggesting that short positions during rebounds, especially around the 2055 level, could be a point of interest.
Crude oil has demonstrated a V-shaped pattern, influenced by geopolitical events such as tensions in the Middle East. The market's behaviour suggests a potential upward movement for oil prices. A comparison with last year's gold market, which exhibited a similar pattern, suggests considering long positions on oil during pullbacks, especially around the 71.9 level.
The EUR has shown significant declines, indicating a bearish market sentiment. The analysis suggests that short positions on the EUR, targeting around 1.0975, could be relevant. Similarly, for the GBP, the market trend also leans bearish, with recommendations to consider short positions targeting around 1.270.
The forex market on January 4, 2024, presents a diverse set of trends and potential strategies across various commodities and currencies. This technical analysis provides an overview of these trends, aiding in understanding the market's current dynamics.
It is important to note that market conditions are subject to change and should be monitored continuously for any updates or shifts in trends.
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