Markets seem to be placing bets on 6-rate cuts by FED in 2024 as the sentiment for the first rate cut in March intensifies, dragging down the Dollar Index to levels below 101. Euro has risen to 1.11+ which if sustains can rise to 1.12 before falling from there. EURJPY fell from 158.56 and could be headed towards 157/156 now while USDJPY is falling towards 141 as expected. Aussie is bullish towards 0.69 from where a rejection is possible. Pound continues to slowly inch higher breaking above 1.28 and could test weekly resistance near 1.29 before coming off. USDCNY fell towards 7.10/09. An immediate range of 7.09-7.15 may hold. USDRUB is fluctuating within the 94-89 region as expected. USDINR may appreciate within the 83.00-83.40 region. EURINR trades above 92 on higher Euro. It may rise higher for some more time before falling back to 92 or lower. The US Treasury yields continue to fall. Bearish view is intact and more fall is on the cards. German yields have declined sharply and are coming down in line with our expectation. View remains bearish. The 10Yr GoI is on a corrective rise. Resistance can cap the upside and keep the downtrend intact. The 5Yr GoI is stuck inside its narrow range. Bias is negative for the yield to break the range on the downside and fall more. Dow Jones continues to rise and remain bullish to target new highs. DAX is bullish as long as it holds above 16600-16500. Nifty has some resistance ahead which, if breaks, can extend the uptrend further. Shanghai has bounced back sharply towards the upper end of range and a break on the upside, if seen, can be bullish further in the coming sessions. Nikkei can be range bound for a while. Crude prices have fallen back but could get support at $78 and $72 respectively. Gold has entered into the key resistance zone. Silver has risen within its sideways range and needs a decisive break on the upside to strengthen the bullish momentum. Copper has broken above its upper end of the range to target its key resistance as expected. Natural Gas could be range bound while below 2.60. Visit KSHITIJ official site to download the full analysis

Gold price extends a five-day uptrend to hit a new three-week high above $2,085 early Thursday. The US Dollar keeps the red amid risk appetite, shrugs off a rebound in the US Treasury bond yields. Gold price looks to take out $2,100 as the daily technical setup remains in favor of buyers. Gold price is sitting at its highest level in three weeks above $2,085 early Thursday, extending its winning momentum into the fifth day in a row. Attention turns toward the mid-tier US Jobless Claims data and the bond auction for further upside in Gold price. Gold price keeps pushing higher, as dovish Fed bets support Gold price is finding additional support, as the US Dollar meets fresh supply from a risk-on rally in the Asian stock markets. Investors cheer expectations of aggressive interest rate cuts by the US Federal Reserve (Fed) next year and pile up on global stocks. Further, China's pledge to promote stable growth by expanding domestic demand combined with the People's Bank of China's (PBOC) liquidity injections boost risk appetite at the expense of the US Dollar. Therefore. Gold price continues its upward trajectory toward the $2,100 barrier in Asian trading on Thursday, ignoring the modest rebound in the US Treasury bond yields. At the time of writing, the US Dollar Index is flirting with five-month lows near 100.75 while the benchmark 10-year US Treasury bond yields bounce off multi-month troughs to trade at 3.81%, up 0.50% on the day. On Wednesday, full markets returned following an extended Christmas break and cheered Tuesday's strong US two-year sale and the latest positive auction of $58 billion in five-year notes, which triggered a fresh leg lower in the US Treasury bond yields and the US Dollar. The renewed US Dollar sell-off propelled Gold price to post a record close above the $2,070 level on Wednesday. Markets continued to ramp up demand for stocks and bonds, in anticipation of the potential Fed rate cuts next year, weighing heavily on the US Treasury bond yields. All eyes now turn toward the mid-tier US Jobless Claims data and the seven-year bond auction due later this Wednesday for a fresh upside boost in Gold price. Meanwhile, Gold traders will also remain cautious of any exaggerated moves, courtesy of the pre-New Year thin liquidity conditions. Gold price technical analysis: Daily chart From a short-term technical perspective, Gold price remains exposed to the upside amid bullish indicators. Gold price broke above the rising trendline resistance at $2,080 but needs a daily closing above the latter to extend the uptrend toward the all-time high of $2,144. Gold buyers will face stiff resistance at the $2,100 and $2,120 levels beforehand. The 14-day Relative Strength Index (RSI) indicator is pointing north above the midline, adding credence to the latest uptick. Any pullback in Gold price could meet initial demand at the previous day's low of $2,061, below which the correction could extend toward the $2,050 round figure. The last line of defense for Gold buyers is envisioned at the 21-day Simple Moving Average (SMA) at $2,035.

Markets In a session marked by signs of year-end investor fatigue, U.S. stocks managed to eke out slight gains on Wednesday, with subdued trading and a lack of significant market-moving news. The S&P 500 ended 0.3% below its record closing high of 4,796.56 on Jan. 3, 2022. The Dow notched a new record closing high. The three primary U.S. stock indexes experienced fluctuations, alternating between modest gains and losses before closing in positive territory. Despite the day's mixed performance, all three U.S. indices are poised for monthly, quarterly, and annual gains. The proximate market driver was a steep fall in the pivotal benchmark 10-year U.S. yield. Following a positive reception for Tuesday's two-year sale, the auction of $58 billion in five-year notes on Wednesday received favourable attention, considering the prevailing market holiday condition and setting the week up for a clean sweep if all goes well with Thursday's 7-year note auction. The period between Christmas and New Year's is not typically known for a significant influx of market-moving news; however, the Treasury rally on Wednesday, supported by the success of the five-year stop-through, carried notable weight and saw 10s richer by almost 10 bps, with yields slipping below 3.80%, the lowest since July. The recent surge in buying activity in stocks and bonds is primarily linked to the widespread anticipation of lower yields in 2024, propelled by the expected rate cuts from the Federal Reserve. However, a significant unresolved aspect is the market's pricing of these rate cuts, which appears notably more aggressive than indicated in the December dot plot. While flashes of uncertainty and indecision dotted the New York session, the fall in U.S. yields may give investors more confidence to hold the bullish course through year-end. Still, it will most certainly hold the short sellers at bay, who remain frustrated to the nth degree. If nothing else, after the tumultuous year we have gone through, especially in the rates markets, it's astonishing that 10-year yields are trading nearly on top of the 2022 closing levels. Forex market Not that I disagree with the direction of travel, but the overnight sell-off of the U.S. dollar driven by the auction pass-throughs was likely exacerbated by holiday-thin liquidity. Still, some significant and noteworthy levels were breached. USDJPY is again trading south of 142 while the EURUSD broke fresh higher ground above 1.1100, suggesting a March Fed rate cut is becoming more engrained in the Forex market purview.  The JPY holds some real yield appeal here. With 150 bps+ of Fed cuts getting priced in and the end of negative rates in Japan still pinging loudly on the radar, 140 could be tested early in 2024. Oil market Oil prices fell as global shipping giants prepared to resume navigation through the Red Sea despite ongoing missile attacks from Houthi rebels. The decision to resume operations reflects a calculated risk, betting on the success of a new multinational maritime task force, Prosperity Guardian, commissioned to safeguard the region. On Wednesday, Danish shipping company Maersk revealed its intention to resume scheduling vessels for the Suez Canal via the Red Sea in the coming weeks following a temporary pause.

AUD/USD Current Price: 0.8649 The US Dollar slides across the board, boosting AUD/USD. The pair trades near the upper limit of an ascending channel. AUD/USD approaches 2023 highs and holds near the level it closed last year.  The AUD/USD broke firmly above 0.6800 and rose further to the 0.6850 area, reaching the highest level since July. The key driver behind this is a broad-based weakness in the US Dollar heading into the year-end. Regarding economic data, no reports are due from Australia until 2024. In the US, data released on Wednesday showed the Richmond Fed Manufacturing Index falling from -5 to -11, below the expected -7. On Thursday, more important data is due with the weekly Jobless Claims report. The focus regarding data is on next week's employment figures (JOLTS, ADP, and NFP). The US Dollar Index (DXY) dropped to its lowest level since July, under 101.00. It remains under pressure, amid falling US Treasury Yields. Markets continue to bet on rate cuts from the Federal Reserve (Fed) next year. The AUD/USD is headed towards the second monthly gain in a row, accumulating more than 500 pips of gains. The rally has eliminated 2023 losses and it is trading near the level it closed in 2022. The pair had a bearish bias for most of the year until November when it rebounded sharply, and then accelerated in December after the latest FOMC meeting, which included the now-famous rate cut forecasts from policymakers. AUD/USD short-term technical outlook The AUD/USD continues to trade within an ascending channel, near the upper limit of the range that stands at 0.6855. That level is an important resistance that should cap the upside. However, if the Aussie breaks above it, it could accelerate. The bullish bias will remain intact as long as it stays above 0.6660. On the 4-hour chart, technical indicators offer mixed signals. The Relative Strength Index (RSI) is at overbought levels but flat, suggesting potential exhaustion but not necessarily anticipating an immediate correction. The MACD is also flat, lacking clear direction. The upside remains solid, with price well above the 20-period Simple Moving Average and above upward trendlines. The chart indicates a clear bullish bias, with overbought conditions. A break below 0.6815 would weaken the Aussie. Support levels: 0.6820 0.6795 0.6750 Resistance levels: 0.6850 0.6875 0.6905   

The Effective Fed Funds rate from monthly averages 1 to 32 years reveals the same story as last December / January. Although Averages improved. The shape of Averages is contained as a Bell Curve by humped in the middle while left and right tails trade low yet acceptable.  Humped in the middle, best described as Leptokurtic was the result to Bernanke and Yellen's 0 interest rate policy. Without Bernanke and Yellen policies, averages would actually trade as a flat line across all averages. Averages from 1 to 7 years trade overbought yet the degree of overbought lacks any concept to extremes. The extremes to low and overbought averages are located from 8 to 25 years. Averages from 25 to 32 years are actually in good shape. Based on averages 1 to 7 years and 25 to 32, Powell and the Fed actually accommodates the possibility to raise if necessary. The distribution of averages would then form a Leptokurtic curve as the middle hump rises but thins and the right and left tails flatten further. The problem to Fed Funds at 5.33 and 32 year monthly averages is 5.33 is not captured by the data. Fed Funds by speculation trades around the 50 year average and the same location as DXY at 99.00 and GBP/JPY at the 37 ad 38 year monthly averages at 181.07 and 184.14. The proximity to 5.33 is 4.70 and the vital line to break to possible  rate cuts. At 4.70 is followed by many averages at 2.00's and located from 25 to 32 averages. Targets are located at 4.00's across the board from averages 25 to 32. This means about 100 points to possible drops or 25 points X 4. Powell and the Fed lack an immediate urgency to slash rates. Longer term, an interest and exchange rate lack any possibility to trade at 50 year averages. The proper location for Fed Funds and DXY and to declare healthy markets is trade at averages 1 to 10 years. DXY and Fed Funds would then not only match perfectly to SPX 500 but far better movements would be seen. SPX at 82 points per month for 2023 is the result of misplaced DXY and Fed Funds.  

EUR/USD climbed to a fresh multi-month high near 1.1050. The pair's technical outlook suggests that the bullish bias remains intact. This week's economic calendar will not offer any high-impact data releases. EUR/USD gained traction and registered small gains on Tuesday following the Christmas holiday. The pair continued to edge higher early Wednesday and reached its highest level since August near 1.1050.