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Short Term Elliott Wave view in Silver (XAGUSD) suggests cycle from 10.22.2024 high is in progress as a double three Elliott Wave structure. Down from 10.22.2024 high, wave (W) ended at 29.68 and wave (X) rally ended at 32.32 Wave (Y) lower is in progress and unfolding as another double three Elliott Wave structure in lower degree. Down from wave (Y), wave W ended at 28.73 as the 1 hour chart below shows.

Up from wave W, wave ((w)) ended at 29.88 and wave ((x)) ended at 28.75. Wave ((y)) higher ended at 30.67 which completed wave X in higher degree. The metal has turned lower in wave Y. Down from wave X, wave (i) ended at 30.08 and wave (ii) rally ended at 30.37. Wave (iii) lower ended at 29.49 and wave (iv) rally ended at 29.75. The metal should extend lower in wave (v) to complete wave ((a)). Then it should rally in wave ((b)) to correct cycle from 1.10.2025 high for further downside. Near term, as far as pivot at 30.67 high stays intact, expect rally to fail in 3, 7, 11 swing for further downside.

XAGUSD (Silver) 60 Minutes Elliott Wave Chart

XAGUSD Elliott Wave Video

https://www.youtube.com/watch?v=cwDxHOOoRtU

USDCHF broke resistance level 0.9130
• Likely to rise to resistance level 0.9225

USDCHF currency pair recently broke the resistance level 0.9130, which stopped the previous impulse wave i at the start of January, as can be seen below.

The breakout of the resistance level 0.9130 accelerated the active impulse wave iii, which belongs to the higher impulse waves 3 and (3).

Given the sharp daily uptrend, strongly bullish US dollar sentiment, USDCHF currency pair can be expected to rise to the next resistance level 0.9225 (former multi-month high from April of 2024 and the target for the completion of the active wave 3).

The USDCHF pair trades around 0.9170, marking its fifth day of gains during Monday's early European session. A stronger US Dollar is supported by better-than-expected US job data for December, which has eased worries about further interest rate cuts from the Federal Reserve. Markets are now waiting for the US Producer Price Index (PPI) report, due Tuesday, for more economic clues.

Meanwhile, geopolitical tensions, including ongoing conflicts in the Middle East, are driving demand for the safe-haven Swiss Franc. Concerns about President-elect Donald Trump's policies are also adding uncertainty, but for now, the stronger US Dollar is supporting the USDCHF pair. Based on this, let's see how the price lines up on the EURCHF charts.

EURCHF – D1 Timeframe

There has been a recent bullish break of structure on the daily timeframe chart of EURCHF as the price broke above the previous high, leaving behind a supply zone and a Fair Value Gap region. From the daily timeframe chart perspective, the price is expected to attempt a retest of the FVG region before continuing bullish. Now, let's see how this looks on the entry timeframe.

EURCHF – H4 Timeframe

As seen on the daily timeframe, my sentiment as touching EURCHF is bullish. The confluence of the trendline support and the drop-base-rally demand zone is my expected area of entry, with targets highlighted below.

Analyst's Expectations:

• Direction: Bullish
• Target: 0.94397
• Invalidation: 0.92589

Oil closed the previous three weeks higher and is rising at the start of the new week, driven by various bullish factors. Most of them are temporary, but they are altering the long-term technical picture, changing speculators’ attitudes towards oil and attracting bulls.

Brent oil is moving steadily above $80, entering the peak area of October last year. Last week, Brent closed near its 50-week moving average. Further gains at the start of the week indicate the strength of buyers, who are not deterred by the general risk apprehension that is causing a sell-off in equities and bonds.

The main reason for this dynamic is the return of interest in oil. The US has tightened sanctions against Russia’s oil and gas sector, lifting demand for affordable alternatives. While these were sanctions of the outgoing Biden administration, Trump may continue this policy as he often promotes the interests of US producers in an attempt to turn around trade balance dynamics.

Extreme weather in parts of Europe and the US is pushing energy prices higher. Weather is a highly speculative factor; reports often have a greater impact on prices than actual changes in supply and demand. Nevertheless, market sensitivity to this factor should not be underestimated: it may continue to pull quotes upwards despite the headwinds in the form of risk sell-off.

The dynamics of commercial inventories in the USA also temporarily support stock bulls. In the last seven weeks, a decline in inventories has been recorded, bringing their total level closer to 400 million barrels. This is not a magic line, but the impact of inventory levels on the oil price is growing as it approaches this mark, which has been the lower boundary of inventories for almost 10 years.

Brent is moving above the 50-week moving average, but the most important test will be the 200-week moving average, now at $83.60, which could be reached as early as this week. A rise above this level may not be an easy task. However, if the price confidently overcomes this level, it may become a prologue to the return of prices to the territory above $100.

• Oil prices rose due to new US sanctions on Russian oil and tankers.
• The Kremlin warned these sanctions could destabilize global energy markets.
• Indian ‘sources’ stated it would avoid purchasing Russian oil from sanctioned entities and vessels.
• Markets are assessing the potential for a supply shock and whether OPEC+ will increase output.

Oil prices continued their rise this morning following a harsh batch of sanctions by the US on Russian Oil and tankers. The sanctions are the harshest yet and include producers Gazprom Neft SIBN.MM and Surgutneftegaz SNGS.MM, as well as 183 vessels that have shipped Russian oil, targeting revenue Moscow has used to fund its war with Ukraine.

The Kremlin responded this morning, warning that such decisions are bound to destabilize global energy and oil markets. The Kremlin also reiterated its stance to minimize the impact of US sanctions.

Source: LSEG (click to enlarge)

India and China to Buy Oil Elsewhere?

There have been rumors since Friday’s announcement of the sanctions that countries who were still purchasing Russia will cease to do so under the new sanctions. This morning an Indian Government source stated that India won’t take Russian oil from sanctioned entities and in sanctioned vessels.

However, this has not been confirmed by official channels. Several tankers listed in the new sanctions have been transporting oil to India and China. This shift happened after Western sanctions and a price cap set by the Group of Seven in 2022 redirected Russian oil trade from Europe to Asia. Some of these ships have also been carrying oil from Iran, which is also under sanctions.

The move comes just as proceeds from oil and gas sales for Russia’s federal budget in 2024 jumped by more than 26% to 11.13 trillion roubles ($108.22 billion). Many see the oil industry as the main source of funding for the war in Ukraine with oil and gas proceeds accounting for about a third to half of the total Federal Budget.

Markets are now weighing up a potential supply side shock following sanctions. However, given that OPEC+ have been waiting to increase output, will they now do so if Russian output is taken off the market?

For now, it appears markets are adopting a more cautious approach and hence the increase in Oil prices. Markets do not appear to be sold yet on the idea that OPEC + will bridge any supply deficits.

Intriguing to see how this develops in the coming weeks as President Trump assumes office.

The Week Ahead – Inventories Data and US inflation

Higher Oil prices may not be ideal for Financial Markets after last weeks US jobs data smashed estimates. The result has seen market participants expecting inflationary pressure in 2025 especially in the US which could halt interest rate cuts.

An increase in Oil prices could have a similar impact and see market participants price in more inflationary pressure globally in 2025. Such a move would no doubt stoke demand concerns as well.

US inflation data is due this week and any significant uptick in the inflation print will also add to the market’s growing concern. On the inventory front markets will be paying attention to stockpile levels from both the EIA and API, due on Tuesday and Wednesday respectively.

Technical Analysis

As discussed last week, Oil prices have rallied tremendously at the start of 2025 much to the surprise of many analysts.

However, given the length of time Oil prices remained in consolidation, i for one was not surprised by the aggressiveness of the breakout.

As things stand, Oil has run into a spot of bother on the weekly chart below. The Oil price is currently rejecting of the 100-day MA which could leave Oil prices with some downside in the coming days.

Brent Crude Oil Weekly Chart, January 13, 2025

Source: TradingView (click to enlarge)

Dropping down to a daily timeframe and immediate support rests at $80 a barrel mark with the 200-day MA resting below at 79.28.

A break of this level could open up a retest of the 76.35 before the 75.00 psychological level.

If bulls were to seize control of the narrative then Oil could eye resistance at 81.58 and 83.00 respectively.

Brent Crude Oil Daily Chart, January 13, 2025

Source: TradingView (click to enlarge)

Support

• 80.00
• 79.28
• 76.35

Resistance

• 81.58
• 83.00
• 84.72

The Australian dollar has started the week quietly. In the North American session, AUD/USD is trading at 0.6151, up 0.07% at the time of writing. Earlier, the Australian dollar fell as low as 0.6130, its lowest level since April 2020.

It was another rough week for the Australian dollar, which declined 1.7% last week. The Aussie can’t find its footing and has plunged 10.4% in the past three months.

Strong US nonfarm payrolls sends Aussie tumbling

The week ended with a surprisingly strong US jobs report. In December, the economy added 256 thousand jobs, the most since March 2024. This followed a downwardly revised 212 thousand in November and easily beat the market estimate of 160 thousand. The unemployment rate eased to 4.1%, down from 4.2% in November. Wage growth also ticked lower, from 4% y/y to 3.9% and from 0.4% to 0.3% monthly.

The upshot of the jobs report is that the US labor market remains solid and is cooling slowly. For the Federal Reserve, this means there isn’t much pressure to lower interest rates in the next few months. That will suit Fed policy makers just fine as it awaits Donald Trump, who has pledged tariffs against US trading partners and mass deportations of illegal immigrants. Either of those policies could increase inflation and the Fed will try to get a read of the Trump administration before cutting rates again. The latest Fed forecast calls for only two rate cuts in 2025 but that could change, depending on inflation and the strength of the labor market.

The strong employment numbers boosted the US dollar against most of the majors on Friday and the Australian dollar took it on the chin, falling 0.8%, its worst one-day showing in three weeks. With interest rates likely on hold in the near-term and high tensions in the Middle East, the safe-haven US dollar should remain attractive to investors in the coming months.

AUD/USD Technical

• AUD/USD tested resistance at 0.6163 earlier. Above, there is resistance at 0.6188
• 0.6121 and 0.6096 are providing support

Markets

Strong US payrolls published on Friday continued to dominate sentiment for global trading. The report confirmed Fed’s ‘guidance’ since the December meeting that it has plenty of room to assess the timing for additional easing. In this respect, the December US CPI inflation data to be published on Wednesday will be key in setting up the next big market move. A new upward surprise might cause markets to fully price out all remaining 2025 rate cuts and even cause market talk on the need for some tightening to resume. We’re not there yet, but underlying sentiment remains bearish. Core yields this morning again added a few basis points, but with hardly any important eco data scheduled for release today, investors are ‘happy’ just to digest the recent sharp repricing for now. US yields rise 1-2 bps across the curve. The German yields curve steepens slightly with yields little changed at the short end of the curve and as the 30-y adds 1.5 bps. Brent oil extending gains beyond $ 80 p/b after the US announced additional sanctions against Russian oil exports didn’t help to mitigate lingering inflation worries. Tightening of financial conditions this time also outweighs recent market optimism on ongoing strong US growth. After declining, 1.5% already on Friday, US equities again open in red (S&P 500 -0.9%, Nasdaq -1.6%).

Higher US real yields and a risk-off sentiment are supporting the dollar, but gains are not unequivocal across all USD cross rates. The DXY index near 110 is trading at the strongest level since November 2022. EUR/USD intraday briefly dropped below the 1.0201 level (62% retr. 2022/2023 rebound). The pair tries to avoid a sustained break but momentum suggests a revisit of parity (or below) is ever more likely. The jury is still out, but US equities also being captured in the broader risk-off move apparently causes investors to reassess the yen’s safe haven virtues. USD/JPY is easing from the 158 area to trade near 157.2. At the other side of the FX spectrum, sterling (and Gilts) continue to fight an uphill battle. UK Prime Minster Starmer explicitly supporting Fin Min Reeves’ policy and committing to rules of financial orthodoxy doesn’t help to address investor concerns on fiscal sustainability and on inflation staying too high for too long. ST UK yields are rising up to 4.5 bps (2-y), but this higher risk premium understandably still doesn’t help sterling. Cable tested the 1.21 area. EUR/GBP regained the 0.84 barrier (0.841). UK CPI will also be published on Wednesday. An new upside surprise almost certainly will cause more damage too overall UK markets.

News & Views

Czech inflation fell 0.3% M/M in December whereas consensus expected a 0.1% monthly gain. Lower prices in “food and non-alcoholic beverages” and in “alcoholic beverages and tobacco” were the main culprit. Prices of goods in total decreased by 0.5% (to be up 1.7% Y/Y) while prices of services remained at the level of November (5% Y/Y). In Y/Y-terms, headline CPI rose from 2.8% to 3%, the fastest pace since end 2023 but less than the feared uptick to 3.3%. Average 2024 inflation as a whole was 2.4%. The Czech National Bank commented on the inflation figures which were below the central bank’s autumn forecast (+3.3% Y/Y). Food price inflation was weaker in particular (3.3% Y/Y vs 4.8% Y/Y), but core inflation was also somewhat lower than forecasted. (2.3% instead of 2.4%). Services inflation nevertheless remains a worry because of elevated wage growth. The Czech krone weakened in the wake of the inflation report (EUR/CZK 25.20 from 25.05) as it gently reopens the door to a February policy rate cut after the CNB paused its cutting cycle in December. That feeling was strengthened by comments from influential CNB vicegovernor Zamrazilova who welcomed the pleasant inflation surprise and added that there is a rising chance that the CNB may resume its policy easing early in 2025. Czech swap rates lose up to 6 bps at the front end of the curve. Key things to watch apart from CNB comments are Q4 GDP (Jan 31st) and the January inflation report (Feb 6).

Indian inflation declined 0.56% M/M in December with the Y/Y-figure slowing down from 5.48% to 5.22%. The decline was largely driven by lower price gains for vegetables, pulses and cereals. Core inflation eased slightly from 4% Y/Y to 3.9%. Today’s data strengthen the view that new RBI governor Sanjay Malhotra at its first meeting in charge will implement a policy rate cut to start supporting slowing growth. In public comments, he has revealed himself as being more dovish than outgoing chair Das. The Indian rupee trades at an all-time low against the dollar today (USD/INR 86.50) but today’s significant sell-off is more because of the global rising interest rate environment and because of the two-day surge in oil prices (Indian being energy-dependent) than due to the inflation data.

Daily Pivots: (S1) 156.98; (P) 157.94; (R1) 158.64; More...

No change in USD/JPY's outlook and intraday bias stays neutral at this point. Further rally is in favor as long as 156.0 support holds. ON the upside, decisive break of 61.8% projection of 139.57 to 156.74 from 148.64 at 159.25 will extend the rally from 139.57 to retest 161.94 high. However, considering bearish divergence condition in 4H MACD, firm break of 156.01 support will indicate short term topping. Intraday bias will then be back on the downside for 55 D EMA (now at 154.13) instead.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low). The range of medium term consolidation should be set between 38.2% retracement of 102.58 to 161.94 at 139.26 and 161.94. Nevertheless, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 0.9120; (P) 0.9154; (R1) 0.9200; More…

USD/CHF's rally from 0.8374 is still in progress for 0.9223 key resistance. Decisive break there will carry larger bullish implications. For now, near term outlook will stay bullish as long as 0.9007 support holds, in case of retreat.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern, with rise from 0.8374 as the third leg. Overall outlook will continue to stay bearish as long as 0.9223 resistance holds. Break of 0.8332 low is in favor at a later stage when the consolidation completes. However, decisive break of 0.9223 will be an important sign of bullish trend reversal.