Daily Technical Analysis January 4th 2024

1. USD/JPY Analysis:

News Summary:

The yen remained on the defensive against US dollar for two consecutive days. The 7.6-magnitude earthquake hit Japan on New Year's Day, which is seen as a key factor in weakening the Japanese currency. Expectations of a reversal in policy differences between the Bank of Japan and the Federal Reserve in 2024, as well as geopolitical risks, helped limit losses in the safe-haven yen.

Trend Analysis:

We can see USD/JPY encountered resistance after rebounding, and then moved above 48 hours moving average on H4 chart. If the Bank of Japan abandons its dovish policy, the downward trend in USD/JPY is expected to continue until mid-2024. Owing to rising momentum fading in the short term, sell limit could be employed, stop loss is necessary.

Today's Key Price Levels:

Key Support Levels: [141.50]

Key Resistance Levels: [145.00]

Pivot Points [144.20]

2. Gold Analysis:

News Summary:

The recent Palestinian-Israeli conflict and the dovish turn of the Federal Reserve have contributed to large increase in gold. The market may have relatively fully priced in short-term factors. The recent Red Sea shipping issues have pushed up global freight rates and may increase US inflation fluctuations. Under a neutral economic scenario, after the FED stops raising interest rate and before it starts to cut interest rate, gold may be more volatile than other assets.

Trend Analysis:

We can see gold fell further and ran below 48 hours moving average. However, the MACD double line and energy column converged under zero axis. Once interest rate cut begins, gold's winning rate and return rate will be significantly better than stocks, commodities, and other assets within 6 months. The buy limit can be placed, stop loss is mandatory.

Today's Key Price Levels:

Key Support Levels: [2018]

Key Resistance Levels: [2067]

Pivot Points [2029]

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