AAFX TRADING

Daily Market Lookup

  • The dollar remained trading near its weakest level in nearly three years Thursday as the projected Democrat victories in the U.S. Senate runoffs in Georgia pointed to two years of loose fiscal and monetary policy. USD/JPY was up 0.2% at 103.29, with the yen underperforming with a fresh state of emergency for Tokyo and the neighboring Saitama, Kanagawa and Chiba prefectures is due to be declared later in the day as Covid-19 cases rise. The euro was supported by stronger-than-expected German factory orders for November, which were the latest sign of the global manufacturing sector performing relatively strongly toward the end of last year. The Democrat pair of Jon Ossoff and Raphael Warnock are projected to have won the two Senate seats in Georgia, meaning their party is now set to have control of the White House, the Senate and the House of Representatives. This is raising expectations that President-elect Joe Biden will find it easier to push his agenda, including more stimulus measures, when his administration takes over in a couple of weeks. The currency markets remained relatively calm overnight despite the violent disorder in Washington D.C., with supporters of President Donald Trump storming Capitol Hill to stop the certification of Biden’s win in the November presidential election. The main economic release on Thursday will be the weekly initial claims number, especially ahead of Friday’s nonfarm payrolls release and after Wednesday’s ADP figure indicated that U.S. companies slashed jobs for the first time since April last month.
  • The dollar was up on Friday morning in Asia, holding onto the biggest gains in over two months as a rise in U.S. Treasury yields led to some unwinding of bearish bets on the U.S. currency. The market avoided big moves as investors finish the week. The dollar rose above the almost thee-year low of 89.206 seen on Wednesday, as investors took profits against the euro particularly. The index slid almost 7% in 2020, and as much as 0.9% in 2021 to date, over expectations of U.S. stimulus measures. Prime Minister Yoshihide Suga said earlier in the day that the government would liaise with other prefectures to see whether the state of emergency should be extended, with the Osaka and Aichi governors expected to request that the two areas be added to the emergency declaration. However, Jon Ossoff and Raphael Warnock’s victory in the U.S. Senate runoff elections in Georgia earlier in the week are expected to be negative for both bonds and the dollar. The pair’s sweep of the two available seats gives the Democrats a Senate majority, in turn giving President-elect Joe Biden scope to push through more fiscal stimulus when his administration takes office on Jan. 20. On the data front, the U.S. will release employment data, including non-farm payrolls, later in the day. The data is expected to give investors clues to the need for more stimulus measures to keep the economic recovery going.
  • Gold was down on Friday morning in Asia but hopes for further U.S. stimulus buoyed the yellow metal as the week closes. Investors will also be looking at the U.S. jobs report, including non-farm payrolls, which will be released later in the day and forecast to show a sharp slowdown in hiring. U.S. President-elect Joe Biden now has full control of Congress, thanks to Jon Ossoff and Raphael Warnock’s victory in the U.S. Senate runoff elections in Georgia earlier in the week. A Democrat-controlled Senate could see Biden push through his agenda, including more stimulus measures, with more ease. Congress’ certification of his win in the Nov. 3 presidential election against incumbent Donald Trump also gave Biden a boost. Protests by Trump supports as the certification process was underway earlier in the week saw House of Representatives Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer demand that Trump’s cabinet immediately remove him from office. Trump condemned the riot on Thursday through a video message. “A new administration will be inaugurated on Jan. 20th … my focus now turns to ensuring a smooth, orderly and seamless transition of power,” he added. Meanwhile, Federal Reserve Bank of Cleveland President Loretta Mester said she didn’t believe that the increased fiscal stimulus under Biden would mean a pull-back on monetary policy in 2021. Other Fed officials, including Chicago President Charles Evans and Atlanta’s Raphael Bostic, have said they could support reducing the pace of the central bank’s ongoing asset purchases before the end of 2021 should the economy bounce back strongly enough. The yellow metal has had a mixed start to 2021 after posting its biggest annual advance in ten years. Although tailwinds, including the rising number of COVID-19, the uncertainty over the global economic recovery and expectations of rising inflation, remain, the gains in benchmark Treasury yields during the past week weighed on non-interest-bearing gold.
  • Oil prices held near 11-month highs on Friday and were on track for a strong weekly gain as Saudi Arabia's pledge to cut output continued to buoy market sentiment. Both benchmarks are on track for gains of about 5% for this week. Earlier this week Saudi Arabia, the world's biggest oil exporter, said it would cut output by an additional 1 million barrels per day (bpd) in February and March. On Thursday, seven North Sea crude cargoes were bought and sold in the trading window operated by Platts, a record amount that trade sources said may reflect tighter supply after the surprise cut. UBS raised its forecast for Brent to $60 per barrel by mid-year, following Saudi Arabia's unilateral cut and expectations of a sharp recovery in demand in the second quarter as coronavirus vaccine rollouts revived travel. Meanwhile, Asian shares rose to record highs on Frid , with Japan's Nikkei hitting a three-decade peak as investors looked beyond rising coronavirus cases and political unrest in the United States to focus on hopes for an economic recovery later in the year. The raging pandemic claimed its highest U.S. death toll yet, killing more than 4,000 people in a single day, while China reported the biggest rise in daily cases in more than five months and Japan may extend a state of emergency beyond the greater Tokyo region. U.S. fuel inventories rose last week, with gasoline stocks increasing by 4.5 million barrels, the biggest increase since April, the Energy Information Administration said on Wednesday.

 

 
Intraday RESISTANCE LEVELS
8th January 2021 R1 R2 R3
GOLD-XAU 1,918-1,931 1,940 1,948-1,955
Silver-XAG 27.35-27.65 28.00 28.50-28.90
Crude Oil 51.20 51.90-52.50 53.00
EURO/USD 1.2300-1.2350 1.2400 1.2475-1.2545
GBP/USD 1.3590-1.3670 1.3710 1.3800-1.3860
USD/JPY 104.00-104.50 105.00 105.40-106.00

Intraday SUPPORTS LEVELS
8th January 2021 S1 S2 S3
GOLD-XAU 1,900 1,887 1,878-1,870
Silver-XAG 27.00-26.50 26.05 25.60-25.05
Crude Oil 50.25-49.30 48.50 47.80-47.00
EURO/USD 1.2250-1.2170 1.2140 1.2090-1.2050
GBP/USD 1.3540 1.3470 1.3400-1.3340
USD/JPY 103.80-103.15 102.50 102.05-101.60

Intra-Day Strategy (8th 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 Thursday made its intraday high of US$1927.56/oz and low of US$1906.72/oz. Gold down 0.241% at US$1913.29/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 1900-1878 with risk below 1878, targeting 1918-1931-1948 and 1955-1965-1973. Sell below 1918-1973 keeping stop loss closing above 1973, targeting 1900-1885 and 1878-1860.

 
Intraday Support Levels
S1     1,900
S2     1,887
S3     1,878-1,870
Intraday Resistance Levels
R1     1,918-1,931
R2     1,940
R3     1,948-1,955

Technical Indicators

Name   Value Action
14DRSI  

67.447

Buy
20-DMA   1873.04 Buy
50-DMA  

1867.81

Buy
100-DMA   1895.14 Sell
200-DMA   1831.55 Buy
STOCH(5,3)   90.503 Buy
MACD(12,26,9)   16.276 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$27.35/oz and low of US$26.90/oz settled down by 0.656% at US$27.10/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     27.35-27.65
R2     28.00
R3     28.50-28.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.957 Buy
20-DMA   25.42 Sell
50-DMA   24.56 Sell
100-DMA   25.06 Sell
200-DMA   21.68 Buy
STOCH(5,3)   77.268 Buy
MACD(12,26,9)   0.7277 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US51.26/bbl, intraday low of US$50.39/bbl and settled up by 0.860% to close at US$50.39/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 48.34 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 50.50-46.50 with risk daily closing below 46.50 and targeting 51.20-51.90 and 52.50-53.00. Sell in between 51.25-53.50 with stop loss at 53.50; targeting 50.25-49.30-48.50-47.00 and 46.45-45.60.

 
Intraday Support Levels
S1     50.25-49.30
S2     48.50
S3     47.80-47.00

Intraday Resistance Levels
R1     51.20
R2     51.90-52.50
R3     53.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.216 Sell
20-DMA   48.34 Buy
50-DMA   44.26 Buy
100-DMA   42.43 Buy
200-DMA   38.29 Buy
STOCH(5,3)   90.130 Buy
MACD(12,26,9)   1.480 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.2244/EUR, high of US$1.2343/EUR and settled the day down by 0.434% to close at US$1.2269/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 1.2250-1.1840 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     1.2250-1.2170
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 Wednesday made an intra‐day low of US$1.3536/GBP, high of US$1.3669/GBP and settled the day up by 0.110% to close at US$1.3606/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 1.3590-1.3900 with targets at 1.3540-1.3470 and 1.3400-1.3340-1.3240 stop-loss should be 1.3900. Buy above 1.3540-1.3240 with targets 1.3670-1.3710-1.3800 and 1.3860-1.3900 with stop loss closing below 1.3200.

 
Intraday Support Levels
S1     1.3540
S2     1.3470
S3     1.3400-1.3340

Intraday Resistance Levels
R1     1.3590-1.3670
R2     1.3710
R3     1.3800-1.3860

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

58.783

Buy
20-DMA   1.3461 Sell
50-DMA   1.3305 Buy
100-DMA   1.3158 Buy
200-DMA   1.2849 Buy
STOCH(5,3)   82.940 Buy
MACD(12,26,9)   0.009 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY102.92/USD and made an intraday high of JPY103.95/USD and settled the day up by 0.738% at JPY103.75/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 103.10-102.50-102.05 and 101.60-101.20. Long positions above 103.10-101.00 with targets of 103.80-104.50 and 105.00-105.40 with stop below 105.00.

 
Intraday Support Levels
S1     103.80-103.15
S2     102.50
S3     102.05-101.60

INTRADAY RESISTANCE LEVELS
R1     104.00-104.50
R2     105.00
R3     105.40-106.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.604 Buy
20-DMA   103.60 Sell
50-DMA   104.07 Sell
100-DMA   104.83 Sell
200-DMA   106.02 Sell
STOCH(9,6)   27.253 Sell
MACD(12,26,9)   -0.290 Sell

AAFX TRADING
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