January 24, 2024
Forex Daily Analysis: 25 Jan 2024
CURRENCIES:
Overview: Gold and Silver Struggle
- Heavyweight US data releases anticipated later this week.
- Latest Fed rate expectations indicate six quarter-point cuts this year.
- Gold and Silver prices experience challenges, but the sell-off is contained.
US Rate Expectations: A Shift in Outlook
- New assessment suggests six quarter-point cuts, with the first expected in May.
- Contrast to the previous week, where seven cuts were forecasted, starting in March.
- The UST 2-year daily yield rises from 4.14% to 4.40%, signaling a moderation in rate cut expectations.
Upcoming US Economic Data Releases
- Three key releases scheduled for the week: US Q4 GDP on Thursday, Durable Goods report, and Core PCE report on Friday.
- These releases closely monitored by the Fed in anticipation of next week’s FOMC meeting.
Gold Price Action and Trading Range
- Gold currently trades within a $2,000/oz. – $2,040/oz. range.
- Series of higher lows provide support, while price action around the 20- and 50-day moving averages remains uncertain.
- Potential break lower could target prior support at $1,987/oz.
Retail Trader Sentiment for Gold
- Retail trader data indicates 59.13% are net-long.
- Changes show a 7.39% decrease in net long positions compared to yesterday.
- Weekly changes indicate a 4% reduction in net long positions.
Silver’s Recovery and Chart Analysis
- Silver rebounds today after a multi-week sell-off from late December.
- Brief dip below $22/oz. on Monday, followed by a recovery, currently trading approximately 1.1% higher.
- The cluster of lows around $20.71 from early October may face renewed pressure.
STOCK MARKET:
S&P 500 Soars to New Highs:
- The S&P 500 (^GSPC) continues its record-setting rally, surging nearly 0.3% to achieve a new closing high of 4,864.61.
- Nasdaq Composite (^IXIC) also gains momentum, rising 0.4%, while Dow Jones Industrial Average (^DJI) experiences a slight dip of about 0.2% following its breakthrough above 38,000 on Monday.
Sector Performances:
Winners:
- Consumer Staples (XLP) and Communications Services (XLC) lead gains in the S&P 500.
- Staples surge over 1%, with notable quarterly results from Procter & Gamble (PG) and Verizon (VZ).
Earnings Impact on Dow:
- Dow faces a setback as 3M (MMM) drops over 10% due to a 2024 profit outlook below Wall Street’s expectations.
Earnings-Driven Moves:
Positive Outlook Lifts Airlines:
- United Airlines (UAL) provides an optimistic 2024 profit forecast, boosting its shares by 5%.
- Positive momentum extends to other airlines, including Delta (DAL) and American Airlines (AAL).
Tech Focus – Netflix (NFLX):
- Netflix (NFLX) takes the spotlight with earnings reported after the bell.
- The company announces a deal with TKO Group’s WWE (TKO), impacting TKO shares positively.
Ongoing Developments:
3M (MMM) Earnings Disappointment:
- Dow affected by a more than 10% drop in 3M (MMM) shares due to a below-expectation 2024 profit outlook.
United Airlines (UAL) Resilience:
- Despite warnings about the Boeing 737 Max 9 planes’ grounding impact, United Airlines (UAL) shares rise with an upbeat 2024 profit forecast.
Netflix (NFLX) Partnership:
- Netflix (NFLX) strikes a deal with TKO Group’s WWE (TKO), leading to a nearly 15% rise in TKO shares.
Outlook and Market Dynamics:
- Earnings in various sectors contribute significantly to market movements.
- Ongoing focus on corporate America’s health and economic indicators.
- Continued attention to tech-driven rallies and sector-specific earnings for market insights.
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