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For the 24 hours to 23:00 GMT, Gold declined 0.13% against the USD and closed at USD1279.60 per ounce, as strength in the US dollar dented demand for the safe haven asset.

In the Asian session, at GMT0400, the pair is trading at 1277.90, with gold trading 0.13% lower against the USD from yesterday’s close.

The pair is expected to find support at 1275.00, and a fall through could take it to the next support level of 1272.10. The pair is expected to find its first resistance at 1281.80, and a rise through could take it to the next resistance level of 1285.70.

The yellow metal is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Silver declined 0.46% against the USD and closed at USD15.29 per ounce, tracking losses in gold prices.

In the Asian session, at GMT0400, the pair is trading at 15.23, with silver trading 0.43% lower against the USD from yesterday’s close.

The pair is expected to find support at 15.17, and a fall through could take it to the next support level of 15.11. The pair is expected to find its first resistance at 15.32, and a rise through could take it to the next resistance level of 15.42.

The white metal is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Crude Oil rose 0.22% against the USD and closed at USD53.88 per barrel, buoyed by OPEC production cuts.

In the Asian session, at GMT0400, the pair is trading at 53.47, with oil trading 0.76% lower against the USD from yesterday’s close, as concerns about global economic growth sparked fears over future demand.

The pair is expected to find support at 53.16, and a fall through could take it to the next support level of 52.85. The pair is expected to find its first resistance at 54.01, and a rise through could take it to the next resistance level of 54.55.

Crude oil is trading below its 20 Hr moving average and showing convergence with its 50 Hr moving average.

Australian Dollar is under some selling pressure today, as Asian stocks weaken broadly. Canadian Dollar follows as the second weakest as oil price is starting to lose momentum. On the other hand, Yen and Dollar are trading as the strongest ones so far, with prospects of more upside for the day. Sterling slightly softer after UK Prime Minister Theresa May's uninspiring statement on Brexit overnight. The Pound will now look into job data while Euro will look at ZEW economic sentiment.

In Asia:

• Nikkei is down -0.66%.
• Hong Kong HSI is down -1.14%.
• China Shanghai SSE is down -0.98%
• Singapore Strait Times is down -0.42%
• Japan 10 year JGB yield is down -0.0031 at 0.002, still positive.

One development to note is the loss of upside momentum in WTI crude oil. Bearish divergence condition is seen in 4 hour MACD and RSI. WTI is also close to an important resistance at 54.61 and 38.2% retracement of 77.06 to 42.05 at 55.42. First line of defense is at 4 hour 55 EMA (now at 52.01). Sustained break should confirm reversal and send WTI through 50.59 support. USD/CAD's rebound from 1.3180 should accelerate should the fall in oil extends.

China National Development and Reform Commission spokeswoman Meng Wei warned that the job market faces "new changes" ahead and slowdown in the economy will pressure the job markets. She also noted that some factories in the export hub of Guangdong province have shut earlier than usual ahead of Lunar new year holiday.

Meng said "from the viewpoint of 'changes', the external environment is complex and austere." And, "Within the changes, there is something to worry about, and there is downward pressure on the economy. To a certain extent, the pressure will be passed onto jobs."

Her comments came after survey-based data showed unemployment rate rose 0.1% to 4.9% in December, release yesterday.

In response to May's statement on Brexit yesterday, CBI director general Carolyn Fairbairn said " the government's move to consult more widely is welcome, as is the commitment to scrap the settled status charge for EU citizens". But she criticized that "the fundamentals have not changed" as "Parliament remains in deadlock while the slope to a cliff edge steepens." She urged that "government should accept that no-deal in March 2019 must be off the table".

Allie Renison, head of Europe and trade policy at the Institute of Directors also complained "the stasis continues". She also noted that "two-thirds of our members say that leaving without a deal would be negative for their businesses and nearly 80% made clear they don't want to see it happen." And, "we desperately need politicians to get serious about finding a way forward."

UK Prime Minister Theresa May's statement on Brexit plan B yesterday was rather uninspiring. In short, she finally acknowledged the need to have in change in her approach and laid out three areas. Those include, being "more flexible, open and inclusive" in engaging the parliament, embedding the "the strongest possible protections on workers' rights and the environment". And finally, ensuring the "commitment to no hard border in Northern Ireland and Ireland". They're hardly anything new.

Meanwhile, she continued to oppose to a second referendum as that would "damage social cohesion by undermining faith in our democracy." And she doesn't believe there is a majority for a second referendum. On Article 50 extension, she claimed that EU would not approve it unless UK had a plan for approving a deal. And the only way to avoid a no-deal Brexit would be to revoke Article 50.

May will continue cross-party talks and provide further update next Tuesday.

SNB Vice Chairman Fritz Zurbruegg spoke at an economic forum in Landquart, Switzerland, yesterday. He noted that expansive monetary policy is still warranted for the central bank, due to heightened uncertainties, highly valued franc exchange rate, low inflationary pressure and global low interest rates.

In particular, he noted that uncertainties have risen recently, due to protectionism, Brexit, Italy. The Swiss Fran remains highly valued and that remains a risk. But overall, outlook for the Swiss economy remains favorable.

The comments echoed those by Chairman Thomas Jordan, who noted the need to block a surge Franc on safe-haven flow.

STOCKS

IMF cut global GDP growth forecasts yesterday, especially for Europe and Germany and Italy within that. Chinese Q4 2018 GDP growth came in at a multi-year low 6.40% yesterday. Earlier, the Chinese manufacturing PMI (49.7) had dipped below 50 on 2nd Jan. Although most Indices have some more room on the upside in the near-term, maybe growth concerns will trigger profit-taking in the medium term.

The USA was closed yesterday for Marin Luther King day. The DAX (11136.20) was quiet yesterday, after having moved up well on Friday. Good Resistance seen at 11300.

Some initial profit-taking was seen on the Nikkei (20709) yesterday. Still, we look for some more upside towards 21300, which would be a better place to take profit.

The Shanghai (2598) rose yesterday, creeping up towards crucial Resistance in the 2627-2650-60 region, but is seeing a bit of profit-taking today. There can be chances of a pullback towards 2530 from anywhere between current levels and 2660.

The way the Sensex (36578.96, +0.53%) and Nifty (10961.85, +54.90, +0.50%) are trading, both can continue to creep up towards 36800 and 11080 respectively over the next few days. Long-term Supports seen at 36000-35750 and 10700 respectively.

A good Double Bottom on the Kospi (2115.10). There may be room up to 2165-80 in the coming weeks.

COMMODITIES

Commodities have all fallen and are trading lower. Gold and silver could bounce from immediate support while Crude prices could be stable. Copper looks bearish.

Brent (62.21) and WTI (53.68) seem to be holding below immediate horizontal resistances at 64 and 56 respectively. Brent 3-day and weekly line charts indicate a possible fall from levels near 64-65 on Brent. We could expect some ranged movement below 65 (Brent) before a fall is seen. WTI could be pulled lower too while 56 holds.

Brent-WTI spread (8.53) has come down from 8.71 as expected. A further decline towards 7.55-7.15 is on the cards, indicating a possible fall in the Crude prices too.

Gold (1277.50) and Silver (15.24) have fallen sharply. The resistance near 1300 has held well on the Gold 3-day line chart and while the current dip continues, we could possibly see a fall towards 1260 in the medium term before the price bounces back towards 1280 again. But watch a possible bounce from 1270/75 over the next 1-2 sessions.

Silver is just above immediate daily trend support and while that holds, a bounce back towards 15.75 is on the cards.

Copper (2.6740) was unable to bounce above our mentioned resistance near 2.75/77 and a sharp rejection lead t o a fall in the Copper prices. We could see some more fall in the near term towards 2.65.

FOREX

Currency pairs are mixed. While Euro and Pound looks strong, Yen, Yuan, Rupee and Aussie are likely to weaken against the US Dollar over the next 1-3 sessions.

Dollar Index (96.34) and Euro (1.1367) are almost stable with no major movements from levels seen yesterday. While support near 1.1350 holds on Euro, the currency looks bullish in the near term. These indicates a fall in Dollar Index towards 96.00 or lower again.

The Euro-Yen (124.54) is trapped below 125.20 for the last 2-weeks and is unable to move sharply on either side. A break above 125.20 would open up scope of further rise towards 128 but failure to bounce above 125.20 could indicate a fall towards 123.50-123.00 in the coming 1-2 weeks.

Dollar Yen (109.50) is rising as expected and could target 110.55-111.00 levels in the near term.

Pound (1.2893) has immediate support at 1.28 and while that holds a rise to 1.30 is possible just now before coming off in the medium term.

Aussie (0.7149) could fall targeting 0.71-0.70 levels while trades below 0.7250. Immediate view is bearish.

USD-CNY (6.7965) has been in an near term uptrend. View is bullish towards 6.83 from where a small corrective dip is possible within the current upmove.

Dollar Rupee (71.2850) could remain in the 71.60-71.10 region. Note that both levels are crucial and a break on either side would decide further direction for the near term. Break above 71.60 could take it higher to 71.85 and a fall below 71.10 could turn bearish. Need to watch if 71.10 holds for the day.

INTEREST RATES

Although the USA was closed yesterday, US Yields are showing a small dip compared to the upmove seen on Friday. The 2Yr (2.59%, down from 2.61%) remains slighly below the 5Yr (2.60%, down from 2.62%). The 10Yr (2.77%, down from 2.78%) and 30Yr (3.09%, up from 3.10%) have also dipped slightly. Let us see if the cut in growth forecasts by the IMF leads to more dip in the Yields.

The 10Yr GOI (7.5694%) rose to 7.6496% yesterday, just shy of the crucial Resistance at 7.770%, but then closed well below 7.59% again. If the Yield stays low today as well, then we might consider the chances of a top being in place. Let us see how it goes.

Key Highlights

• The British Pound traded as high as 1.3000 and later corrected lower against the US Dollar.
• There are two bullish trend lines formed with support near 1.2780-1.2800 on the 4-hours chart of GBP/USD.
• China’s GDP in Q4 2018 increased 6.4% (YoY), less than the last 6.5%.
• The UK Claimant Count for Jan 2019 will be released today, which could change 20.0K.

GBPUSD Technical Analysis

This past week, there was a solid upward move above the 1.2900 resistance in the British Pound against the US Dollar. The GBP/USD pair traded as high as 1.3000 and later started a downside correction.

West Texas Intermediate edged higher in thin trading yesterday, touching the highest level in almost seven weeks as investors focused on future supply cuts

Prices are approaching the 38.2% Fibonacci retracement of the October to December drop at $55.539

The API weekly crude oil stocks data as at January 18 are due tomorrow. Lat week saw a drawdown of 560,000 barrels, the third consecutive weekly reduction.

Looking at the 4-hours chart, the pair declined below the 1.2940 support and the 23.6% Fib retracement level of the last wave from the 1.2668 low to 1.3000 high. The decline was such that the pair even traded below the 1.2900 support, but it stayed well above the 100 simple moving average (red, 4-hours).

It tested the 1.2830 support and the 50% Fib retracement level of the last wave from the 1.2668 low to 1.3000 high. More importantly, there are two bullish trend lines formed with support near 1.2780-1.2800 on the same chart.

Therefore, there are many supports on the downside near the 1.2800 level. Once the current correction is complete, the pair is likely to bounce back above 1.2900 and 1.2940 in the near term.

Fundamentally, China’s GDP report for Q4 2018 was released recently. The market was looking for a change of 6.4% in Q4 2018, compared with the same quarter a year ago.

The actual result was in line with the forecast, but it was less than the last 6.5%. The quarterly change was 1.5%, less than the last 1.6%.

Overall, the result was slightly bearish, pointing slowdown in China. Therefore, there could be short term downsides in GBP/USD and EUR/USD before a fresh upward move.

Economic Releases to Watch Today

• UK Claimant Count Change Jan 2019 – Forecast 20.0K, versus 21.9K previous.
• UK ILO Unemployment Rate Jan 2019 (3M) – Forecast 4.1%, versus 4.1% previous.
• US Existing Home Sales for Dec 2018 (MoM) – Forecast -1.2%, versus +1.9% previous.