TOP TRADING

OPPORTUNITIES
FOR Q1, 2024
DAILYFX RESEARCH TEAM AND CONTRIBUTORS
TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

Table of Contents

Disclaimer ......................................................................................................................................3

Top Trading Opportunities for Q1, 2024 .........................................................................................4

Nicholas Cawley, Senior Strategist ........................................................................................................ 5

Diego Colman, Contributing Strategist .................................................................................................. 6

Richard Snow, Strategist......................................................................................................................... 8

Warren Venketas, Strategist ................................................................................................................. 10

Zain Vawda, Analyst .............................................................................................................................. 13

Disclaimer ....................................................................................................................................16

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

Disclaimer
DailyFX Market Opinions

Any opinions, news, research, analyses, prices, or other information contained in this report is provided as
general market commentary and does not constitute investment advice. DailyFX will not accept liability for any
loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use
of or reliance on such information.

Accuracy of Information

The content in this report is subject to change at any time without notice and is provided for the sole purpose
of assisting traders to make independent investment decisions. DailyFX has taken reasonable measures to
ensure the accuracy of the information in the report, however, does not guarantee its accuracy, and will not
accept liability for any loss or damage which may arise directly or indirectly from the content or your inability to
access the website, for any delay in or failure of the transmission or the receipt of any instruction or notifications
sent through this website.

Distribution

This report is not intended for distribution, or use by, any person in any country where such distribution or use
would be contrary to local law or regulation. None of the services or investments referred to in this report are
available to persons residing in any country where the provision of such services or investments would be
contrary to local law or regulation. It is the responsibility of visitors to this website to ascertain the terms of and
comply with any local law or regulation to which they are subject.

High Risk Investment

Trading in financial markets, foreign exchange, indices and commodities on margin carries a high level of risk
and may not be suitable for all investors. The high degree of leverage can work against you as well as for you.
Before deciding to trade in financial markets, foreign exchange, indices and commodities, you should carefully
consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could
sustain losses in excess of your initial investment. You should be aware of all the risks associated with financial
markets, foreign exchange, indices and commodities trading and seek advice from an independent financial
advisor if you have any doubts.

3
TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

Top Trading Opportunities for Q1, 2024

Click on the boxes below to learn more about DailyFX team and contributors’ top trading opportunities.

Nicholas Cawley:
Diego Colman:
Senior Strategist
Contributing Strategist
Coinbase (COIN) – Growing Tailwinds as
Bullish Russell 2000 as Soft-Landing Scenario
Cryptocurrency Interest Swells?
Gets Traction

Richard Snow: Warren Venketas:

Strategist Strategist
Top Trade: Bullish Gold Short GBP/USD: Going Against the Grain

Zain Vawda:
Analyst
Short USD/JPY - Rising Rate Cut Expectations
and FX Intervention by the BoJ

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

Nicholas Cawley, Senior Strategist

Coinbase (COIN) – Growing Tailwinds as Cryptocurrency Interest Swells?

Coinbase, the largest cryptocurrency exchange in the US, has seen its shares perform strongly in the
second half of this year, rallying from around $46 in early June to a current level of $150. This rally
has been driven by a pickup in interest, and volume, in the cryptocurrency space as markets price in
the potential announcement of several spot Bitcoin ETFs and the latest Bitcoin halving event.

There are currently 12 spot Bitcoin ETFs sitting on the US Securities and Exchange Commissions’
desk waiting for approval from a range of blue-chip investment companies including BlackRock,
Franklin Templeton, and Fidelity. These spot ETFs invest directly in Bitcoin - unlike the current futures-
based Bitcoin ETFS – and as an investment vehicle would allow a wide range of investors to gain
exposure to a regulated product that tracks the performance of Bitcoin accurately. Coinbase is the
named custodian in nine of the twelve applications and would hold the underlying Bitcoin on behalf
of the issuing companies. Coinbase would charge for this service.

The latest Bitcoin halving event is predicted to occur in mid-April 2024 and with it will bring increased
volume and volatility before and after the event. This increase in Bitcoin turnover will also waterfall
down the cryptocurrency market into other larger-cap cryptocurrencies and the alt-coin market.

While some of this increased interest has already been priced into the share price, the chart suggests
that the shares can go higher still. The shares traded as high as $428 when they appeared on the
market in April 2021 before falling over the next two years. Coinbase shares have broken above the
20- and 50-day simple moving averages and now look set to test the 38.2% Fibonacci retracement
level at $183 before the 50% Fibonacci retracement level at $230 comes into play. The weekly chart
also shows how Coinbase shares have turned from making lower highs and lower lows to now making
higher highs and higher lows, a bullish setup.

As always with cryptocurrencies, a strong degree of caution and firm risk management need to be
applied before making any investment decision. If ETFs are not approved by the SEC or are delayed
further, Coinbase shares could turn lower quickly and traders need to factor this in before entering
any trade.

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

Coinbase Weekly Chart

Source: TradingView, Prepared by Nicholas Cawley

Diego Colman, Contributing Strategist

Bullish Russell 2000 as Soft-Landing Scenario Gets Traction

The Federal Reserve unexpected pivot at its December monetary policy meeting has significantly
reduced the probability of a downturn in the coming year, making the soft-landing scenario the most
likely outcome for the economy.

For context, policymakers have signaled that they will prioritize growth over inflation and indicated
that they will deliver numerous rate cuts over the next 12 months, sending yields reeling in late 2023
– a situation that has eased financial conditions significantly.

The relaxation of financial conditions, in turn, has boosted stocks, steering major U.S. equity indices
toward fresh records. Elevated asset values are expected to contribute to an enhanced wealth effect
in the near term, helping support household spending- the main driver of U.S. GDP.

With the economic outlook stabilizing and already showing signs of improvement, small-cap stocks,
which have historically thrived in times of lower market uncertainty, should fare well in Q1 2024 after

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

lagging for much of 2023, possibly outperforming larger companies. This leaves the Russell well
positioned to command strength early in the new year.

Focusing on technical analysis, the Russell 2000 experienced a surge towards the end of the fourth
quarter in 2023, but encountered stiff resistance at 2,050, a key ceiling defined by the 50% Fibonacci
retracement of the November 2021/October 2023 selloff.

To have more confidence in the bullish thesis, the small-cap benchmark must decisively climb and
close above the 2,050 level, with a successful breakout opening the door for a rally towards 2,150.
Subsequent gains could signal a possible continuation towards 2,300, followed by 2,355.

In the of event of unexpected and sustained weakness, the bullish bias would be null and void if prices
dip and close below support near the psychological 1,900 level on a weekly candle.

Russell 200 Weekly Chart

Source: TradingView, Prepared by Diego Colman

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

Richard Snow, Strategist

Top Trade: Bullish Gold

Gold has certainly been on the move throughout 2023, rising around 15% from the start of the year
until May, then dropping 13% into October before rising nearly 19% to print an all-time high at the
beginning of December. There are a number of factors influencing gold’s price that appear to be
pulling in the same direction ahead of Q1 of 2024. These help to form the trading thesis and are
outlined in the rest if this article along with technical considerations.

Weaker US Dollar and Declining Treasury Yields Support Gold

Gold inherently has an inverse relationship with US Treasury yields as well as the US dollar. When the
dollar weakens this stimulates gold purchases for foreign buyers and since gold offers no yield, the
metal gains in attractiveness whenever yields drop as the opportunity cost for holding gold declines.

Despite the Fed still not ruling out the possibility of another rate hike, markets have decided that the
pathway for the Fed funds rate is to the downside. This is revealed via the sharp drop in Treasury
yields and the subsequent move lower in the dollar. The chart below reveals how far gold prices have
risen while USD and yields have fallen. Therefore, even if gold prices were to stall, the lower trend in
yields and USD are likely to keep XAU/USD prices supported at the very least.

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

Spot Gold Price (gold line) with DXY (green) and US 10-Year Yield (blue) Overlayed

Source: TradingView, Prepared by Richard Snow

The macro-outlook for the US economy is uncertain but conversations have advanced around two
possible outcomes: a soft landing, or a hard landing. Under a soft landing, inflation makes great
strides towards the 2% target, allowing interest rates to be lowered while the economy shows
moderate growth. The hard landing is more ominous and would see economic growth and
unemployment deteriorate to such a degree that the Fed would need to cut interest rates in an effort
to stimulate the economy again.

In either outcome, interest rates are expected to come down, a scenario that bolsters the value of
gold and that’s before even considering the safe haven appeal of the precious metal. Next year is
likely to see a continuation of two major geopolitical conflicts with the potential for another in Asia.

Gold (XAU/USD) Technical Considerations

From a technical standpoint, the bullish outlook on gold is a little more complicated than the
fundamental thesis suggests. A lot of positive momentum has already been priced in, providing a less
impressive risk-to-reward ratio.

It is with this in mind that an extended pullback would be favourable prior to assessing bullish
continuation setups. The first level of support that could provide a springboard for gold is the zone
around $2010, with a deeper pullback highlighting $1956. The medium-term uptrend has provided

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

notable periods where gold prices cooled before continuing higher and therefore, it would be
reasonable to foresee the potential for another pullback developing in Q1 of 2024.

To the upside, levels of interest appear at $2075 and if price action can muster up enough momentum,
a retest of the new all-time-high of $2146.79 appears as the next level of resistance. This trade idea
requires discipline to wait for a better entry into what remains a bullish trend.

Gold (XAU/USD) Weekly Price Chart

Source: TradingView, Prepared by Richard Snow

Warren Venketas, Strategist

Short GBP/USD: Going Against the Grain – Fundamental Backdrop

The British pound enters 2024 on a relatively strong footing against the USD after markets reacted
‘dovishly’ to the Federal Reserve’s more accommodative messaging in the last FOMC announcement.
That being said, the most recent data from the UK showed a stark shift in the inflation trend whereby
both headline and core inflation metrics fell sharply. Up until then, the UK was touted an outlying
economy with sticker inflation than its developed market counterparts.

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

The Bank of England (BoE) now has a more complex task of timing interest rate cuts as to not shock
the economy or possibly reignite inflationary pressures. Currently, markets expect the first rate cut to
begin in May 2024 (refer to table below) with approximately 134bps of cumulative rate cuts by year
end. An extension of lower inflation could bring forward this first round of cuts as soon as February.

Bank of England Interest Rate Probabilities

Source: Revinitiv, Prepared by Warren Venketas

From a US dollar perspective, the almost automated reaction by markets to a dovish Fed Chair Jerome
Powell could be too much too soon. Considering external risk drivers including the wars in Ukraine
and Gaza, any slight escalation could bring the safe haven appeal of the greenback into play. Implied
Fed funds futures suggest 150bps of rate cuts by December 2024 and this projection has seen some
pushback from certain Fed officials. The risk to current pricing is skewed towards a lesser easing
cycle which could ultimately see GBP/USD fall.

GBP/USD Technical Analysis

Weekly GBP/USD price action below can be seen tentatively testing the 200-week moving average
(blue) after failing a breakout in mid-July 2023. I believe we will see a breach above this level in due
course but may not be as early as Q1. That being said, incoming data is of utmost importance and a
confirmation close above, could spark a continuation of the recent upside rally.

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

GBP/USD Weekly Chart

Source: TradingView, Prepared by Warren Venketas

Cable’s consolidation around the 1.2746 swing high shows bearish/negative divergence as the
Relative Strength Index (RSI) ticks lower coming out of overbought territory. While I do not expect
major moves in Q1, markets should pullback somewhat in early Q1 before settling around current
levels towards the latter part of the quarter.

GBP/USD Daily Chart

Source: TradingView, Prepared by Warren Venketas

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

Key resistance levels:

• 1.2900

• 1.2848

• 1.2746

Key support levels:

• 1.2500/200-day MA (blue)

• 1.2400/50-day MA (yellow)

Zain Vawda, Analyst

Short USD/JPY - Rising Rate Cut Expectations and FX Intervention by the BoJ

I am sticking with my short trade idea from Q4 2023. Although my Q4 idea paid off handsomely in the
end, I still see massive scope for another push lower on USD/JPY in the new year. I would suggest
reading the Q4 top trade idea as well for further insights.

USD/JPY held the high ground for the first half of Q4 2023 before finally declining from near the 2022
highs. The selloff gained traction following growing chatter toward the end of November regarding a
policy shift from the BoJ, something which I personally shot down and was proven right following the
BoJ meeting on December 19. The BoJ stuck to its current monetary policy since as I believed they
would.

In Q1 of 2024 I fully expect these expectations to grow despite what the BoJ said at the December
meeting. The BoJ Governor Kazuo Ueda I believe is working diligently and will eventually deliver the
shift in monetary policy that the market expects. Even if this does not come to fruition in Q1 I still
think market expectations and the BoJ to keep USD/JPY on the back foot. A key metric to monitor in
Q1 will be wage growth as Governor Ueda has emphasized on numerous occasions. Sustainable
wage growth above inflation is likely to be the precursor for a shift in policy and potential market
expectations for a shift in policy.

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

The US Federal Reserve on the other hand have already stated that they expect 75bps of rate cuts in
2024. The timing of these however is what is driving market moves at the moment and is likely to
continue with each high impact data release out of the US. I do think inflation will come down or
remain close to current levels with the main risk being a geopolitical one which could once again dent
supply chains. This could lead to stubborn inflationary pressure and thus delay rate cuts from the Fed
in 2024 and thus provide the US Dollar with some form of support. Overall though I’m leaning toward
continued USD weakness in Q1 which is likely to work in the favour of my short trade idea on USDJPY.

USD/JPY Technical Analysis

Looking at the technical picture, we are currently pushing higher following the recent selloff and
currently trades between a key support and resistance levels resting at 142.00 and 145.00
respectively. Given the stark selloff since the highs just shy of the 152.00 handle, I would ideally prefer
a deeper pullback before looking for potential short opportunities.

USD/JPY Weekly Chart

Source: TradingView, Prepared by Zain Vawda

Zooming in on the daily chart, I will break down a few key areas I will focus on for potential shorts. I
will be watching the 146.50 area as a potential area for shorts but the area that would potentially
provide a better risk to reward opportunity is likely to be a retest of the 50 and 100-day MAs.

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

Another sign that may be used to potentially pull the trigger would be a potential death cross pattern
as the 50-day MA looks to cross below the 100-day MA. If USDJPY pushes beyond these levels, then
the 150.00 level will be of interest and the only thing that would invalidate my bias at this stage would
be a break above the previous highs at the 152.00 handle.

USD/JPY Daily Chart

Source: TradingView, Prepared by Zain Vawda

Support Levels:

• 142.00

• 140.00 (psychological level)

• 138.70

• 135.00

Resistance Levels:

• 146.50

• 147.50

• 150.00 (psychological level)

• 152.00 (2022 high)

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TOP TRADING OPPORTUNITIES FOR Q1, 2024

DailyFX Research Team

Disclaimer
DailyFX Market Opinions

Any opinions, news, research, analyses, prices, or other information contained in this report is provided as
general market commentary and does not constitute investment advice. DailyFX will not accept liability for any
loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use
of or reliance on such information.

Accuracy of Information

The content in this report is subject to change at any time without notice and is provided for the sole purpose
of assisting traders to make independent investment decisions. DailyFX has taken reasonable measures to
ensure the accuracy of the information in the report, however, does not guarantee its accuracy, and will not
accept liability for any loss or damage which may arise directly or indirectly from the content or your inability to
access the website, for any delay in or failure of the transmission or the receipt of any instruction or notifications
sent through this website.

Distribution

This report is not intended for distribution, or use by, any person in any country where such distribution or use
would be contrary to local law or regulation. None of the services or investments referred to in this report are
available to persons residing in any country where the provision of such services or investments would be
contrary to local law or regulation. It is the responsibility of visitors to this website to ascertain the terms of and
comply with any local law or regulation to which they are subject.

High Risk Investment

Trading in financial markets, foreign exchange, indices and commodities on margin carries a high level of risk
and may not be suitable for all investors. The high degree of leverage can work against you as well as for you.
Before deciding to trade in financial markets, foreign exchange, indices and commodities, you should carefully
consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could
sustain losses in excess of your initial investment. You should be aware of all the risks associated with financial
markets, foreign exchange, indices and commodities trading and seek advice from an independent financial
advisor if you have any doubts.

16