AAFX TRADING

Daily Market Lookup

  • The dollar started the new year by slipping broadly on Monday as investors sold it for just about everything else in the Asia session, wagering the world's pandemic recovery will drive other currencies higher. The safe-haven yen rose 0.3% to 102.94 per dollar, and looked to test resistance at 102.55, after Japan's Prime Minister, Yoshihide Suga, said his government is mulling a state of emergency in Tokyo as infections rise. Low U.S. interest rates, massive U.S. budget and trade deficits and a belief that rebounding world trade will drive non-dollar currencies higher have set the dollar on a downward course that has gathered pace as more investors piled in. The dollar index posted its first annual loss since 2017 last year and has fallen roughly 13% from a three-year peak hit at the height of the pandemic panic in March. The softening dollar boosted commodity prices and pushed bitcoin as well as several Asian currencies to milestone highs. The Singapore dollar hit its highest since April 2018 on Monday after data the city-state's growth shrinking by less than expected last year. The rising yuan pulled the Malaysian ringgit and South Korean won to multi-year highs as well, while the Indonesian rupiah leapt more than 1% and cryptocurrencies found new peaks. Bitcoin on Monday was a little off Sunday's all-time top of $34,800 at $33,491. An enormous rally has carried it up 800% since March as institutional investors seem to have turned buyers. Gold was up 1% at a two-month high of $1,922. Ahead on the radar, investors are focused on a runoff election in the U.S. state of Georgia on Tuesday which will determine control of the Senate. Minutes of the Federal Reserve's December meeting due on Wednesday should offer more detail on discussions about making their forward policy guidance more explicit and the chance of a further increase in asset buying this year. The data calendar includes a raft of manufacturing surveys across the globe, which will show how industry is coping with the spread of the coronavirus, and the closely watched ISM surveys of U.S. factories and services. Chinese factory activity continued to accelerate in December, though the PMI missed forecasts at 53.0. In this climate, they wrote, cyclical currencies such as the Aussie, kiwi and those of Asian exporters can benefit - with low global rates increasing the appeal of higher-yielders such as the rupiah, ringgit, rupee and yuan.
  • The dollar was down on Monday morning in Asia, with investors continuing to put pressure on the safe-haven asset on the first trading day of 2021. Expectations that U.S. interest rates will remain low and hopes for an eventual global economic recovery from COVID-19 will likely continue to slow the dollar down against other major currencies. Trade is still thin as investors return from the holiday season, but some short sellers were already betting against the greenback and reversing the small bounce it enjoyed on the last trading day of 2020 when profit-taking lent support. The Federal Reserve is due to release the minutes from its December meeting on Wednesday. Investors will be looking for more detail on the discussions about making their forward policy guidance more explicit and the chance of a further increase in asset buying in 2021. Japanese media reported that a state of emergency is being considered for Tokyo and could be declared within the week. With the city dealing with record levels of infections, investors will pay close attention to Prime Minister Yoshihide Suga’s news conference to mark the start of 2021, due to take place later in the day. The news from Japan saw the risk-sensitive Antipodean currencies steady after unwinding what would have been small earlier gains. In China, the Caixin Manufacturing Purchasing Managers Index (PMI) was released earlier in the day, with a reading of 53 for December. The figure was lower than the 54.8 in forecasts prepared by Investing.com and November’s 54.9 reading. The pound also saw its gains capped as the number of COVID-19 cases continues to increase and U.K Prime Minister Boris Johnson warned on Sunday that tougher restrictions were likely on the way to curb the surge. Across the Atlantic, all eyes are on the Jan. 5 runoff vote in the U.S. state of Georgia, which will determine which party controls the Senate and how successfully President-elect Joe Biden can implement his agenda. Georgia has not elected a Democrat senator in two decades, with a victory of either or both Republican incumbents sealing a narrow majority in the Senate for the Republicans. However, if the Democrat candidates win, the dollar could be further weakened by the expected higher stimulus spending pushed by their party and the improved market sentiment. Bitcoin is also continuing an extraordinary rally, and was just below the record high of $34,800 seen on Sunday. It has gained more than 65% after crossing the $20,000-mark around two weeks ago and rose 300% in 2020.
  • Oil prices rose on Monday on expectations that OPEC and allied producers may cap output at current levels in February at a meeting later in the day as the coronavirus pandemic keeps worries about first-half demand elevated. Broader macro momentum trends including a weaker dollar and investors positioning for a recovery in the oil sector this year could be supporting oil prices, Energy Aspects analyst Virendra Chauhan said. Mohammad Barkindo, Secretary General of the OPEC, said on Sunday that while crude demand is expected to rise by 5.9 mn bpd to 95.9 mn bpd this year, the group sees plenty of downside demand risks in the first half of 2021. Prices ended 2020 about 20% below 2019's average, still recovering from the impact of global economic lockdown measures imposed to battle COVID-19 that slashed fuel demand, even though the world's major producers agreed record output cuts through the year. OPEC and allied producers including Russia, a grouping known as OPEC+, decided at a meeting last month to raise output by 500,000 barrels per day in January, anticipating a boost in demand, and agreed to meet every month to review production. Analysts from Energy Aspects and RBC Capital said OPEC+ was likely to maintain January production levels in February. In the United States, crude oil production stayed under pressure from weak prices and tepid demand, down more than 2 million bpd in October from earlier in 2020, a government report showed on Jan. The Organization of the Petroleum Exporting Countries and allies, or OPEC+, will continue a series of meetings to discuss easing current production cuts. The cartel’s Joint Technical Committee met on Jan. 3 and its Joint Ministerial Monitoring Committee and 13th OPEC and non-OPEC Ministerial Meeting is scheduled to take place later in the day. OPEC Secretary General Mohammad Barkindo said on Sunday that while crude demand is expected to rise by 5.9 mn bpd to 95.9 mn bpd this year, OPEC sees plenty of downside demand risks in the first half of 2021. The production cuts put in place by the group as the spread of COVID-19 saw fuel demand tank eased by 500,000 barrels per day in January, with the level to be reviewed monthly.

 

 
Intraday RESISTANCE LEVELS
4th January 2021 R1 R2 R3
GOLD-XAU 1,931-1940 1,948 1,955-1965
Silver-XAG 27.30-27.65 28.00 28.50-28.90
Crude Oil 50.00 50.40-51.00 51.90
EURO/USD 1.2300-1.2350 1.2400 1.2475-1.2545
GBP/USD 1.3670-1.3710 1.3800 1.3860-1.3900
USD/JPY 103.80-104.50 105.00 105.40-105.90

Intraday SUPPORTS LEVELS
4th January 2021 S1 S2 S3
GOLD-XAU 1,918-1,900 1,887 1,878-1,860
Silver-XAG 27.00-26.50 26.05 25.60-25.05
Crude Oil 49.30-48.50 47.80 47.00-46.45
EURO/USD 1.2210-1.2170 1.2140 1.2090-1.2050
GBP/USD 1.3590-1.3540 1.3470 1.3400-1.3340
USD/JPY 103.15-102.50 102.05 101.60-101.20

Intra-Day Strategy (4th January 2021)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Buy
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Friday made its intraday high of US$1900.31/oz and low of US$1885.30/oz. Gold down 0.013% at US$1893.67/oz.

Technicals in Focus:

In daily charts, prices are below 50DMA (1899) and breakage above will call for 1916. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1884-1836 with risk below 1836, targeting 1894-1905 and 1918-1931-1940. Sell below 1900-1956 keeping stop loss closing above 1956, targeting 1885-1878-1860 and 1849-1836.

 
Intraday Support Levels
S1     1,918-1,900
S2     1,887
S3     1,878-1,860
Intraday Resistance Levels
R1     1,931-1940
R2     1,948
R3     1,955-1965

Technical Indicators

Name   Value Action
14DRSI  

59.041

Buy
20-DMA   1862.92 Buy
50-DMA  

1866.31

Buy
100-DMA   1895.31 Sell
200-DMA   1828.37 Buy
STOCH(5,3)   70.503 Buy
MACD(12,26,9)   -6.276 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$26.69/oz and low of US$26.19/oz settled up by 1.316% at US$26.30/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 50DMA (24.30), breakage above will lead to 25.00. MACD is below zero line and histograms are decreasing trend and it will bring bearish stance in the upcoming sessions. RSI is approaching neutral region, indicating buy signal for now. The Stochastic Oscillator is in overbought region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, sell in between 27.30-28.90 with stop loss above 28.90; targeting 27.00-26.50-26.05 and 25.60-25.05-24.50. Buy silver in between 27.00-25.05, targeting 27.30-27.65-28.00 and 28.50-29.00 with stop loss should be place on the breakage below 24.60.

 
Intraday  Support Levels
S1     27.00-26.50
S2     26.05
S3     25.60-25.05

Intraday  Resistance Levels
R1     27.30-27.65
R2     28.00
R3     28.50-28.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.473 Buy
20-DMA   25.11 Sell
50-DMA   24.46 Sell
100-DMA   25.05 Sell
200-DMA   21.55 Buy
STOCH(5,3)   75.268 Buy
MACD(12,26,9)   0.594 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US48.44/bbl, intraday low of US$47.80/bbl and settled down by 0.262% to close at US$48.21/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 45.74 which is a support level and breakage below will call for 45.74. MACD is above zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving positive crossover for confirmation of bullish stance; while the RSI is in neutral region and more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 49.30-46.50 with risk daily closing below 46.50 and targeting 50.00-50.40-51.00 and 51.90. Sell in between 50.00-51.90 with stop loss at 51.90; targeting 49.30-48.50-47.80 and 48.00-47.50-46.45.

 
Intraday Support Levels
S1     49.30-48.50
S2     47.80
S3     47.00-46.45

Intraday Resistance Levels
R1     50.00
R2     50.40-51.00
R3     51.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.216 Sell
20-DMA   47.44 Buy
50-DMA   43.67 Buy
100-DMA   42.07 Buy
200-DMA   37.51 Buy
STOCH(5,3)   63.130 Buy
MACD(12,26,9)   1.287 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.2308/EUR, high of US$1.2308/EUR and settled the day up by 0.382% to close at US$1.2216/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2177), which become immediate resistance level, break above will target 1.1970. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently in overbought region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.2200-1.1840 with risk below 1.1800, targeting 1.2300-1.2350 and 1.2400-1.2475-1.2545. Sell below 1.2300-1.2545 targeting 1.2245-1.2190-1.2150 and 1.2090-1.2050-1.1990 with stop-loss at daily closing above 1.2545.

 
Intraday Support Levels
S1     1.2210-1.2170
S2     1.2140
S3     1.2090-1.2050

Intraday  Resistance Levels
R1     1.2300-1.2350
R2     1.2400
R3     1.2475-1.2545

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.812 Buy
20-DMA   1.2177 Buy
50-DMA   1.1972 Buy
100-DMA   1.1884 Buy
200-DMA   1.1533 Buy
STOCH(5,3)   66.758 Sell
MACD(12,26,9)   0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3599/GBP, high of US$1.3685/GBP and settled the day up by 0.198% to close at US$1.3658/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.3134) is become immediate support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in oversold territory and giving negative crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell in between 1.3670-1.3900 with targets at 1.3590-1.3540-1.3470 and 1.3400-1.3340-1.3240 stop-loss should be 1.3900. Buy above 1.3600-1.3240 with targets 1.3670-1.3710-1.3800 and 1.3860-1.3900 with stop loss closing below 1.3200.

 
Intraday Support Levels
S1     1.3590-1.3540
S2     1.3470
S3     1.3400-1.3340

Intraday Resistance Levels
R1     1.3670-1.3710
R2     1.3800
R3     1.3860-1.3900

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

63.783

Buy
20-DMA   1.3484 Sell
50-DMA   1.3285 Buy
100-DMA   1.3148 Buy
200-DMA   1.2837 Buy
STOCH(5,3)   82.940 Buy
MACD(12,26,9)   0.009 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY102.99/USD and made an intraday high of JPY103.31/USD and settled the day up by 0.095% at JPY103.24/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.30), which is initial support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is in neutral territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 103.80-108.00 with risk above 108.00 targeting 103.15-102.50-102.05 and 101.60-101.20. Long positions above 103.10-101.00 with targets of 103.80-104.50-105.00 and 105.40-105.90- with stop below 105.00.

 
Intraday Support Levels
S1     103.15-102.50
S2     102.05
S3     101.60-101.20

INTRADAY RESISTANCE LEVELS
R1     103.80-104.50
R2     105.00
R3     105.40-105.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.307 Buy
20-DMA   104.40 Sell
50-DMA   105.36 Sell
100-DMA   105.36 Sell
200-DMA   106.45 Sell
STOCH(9,6)   57.253 Sell
MACD(12,26,9)   -0.199 Sell

AAFX TRADING
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