AAFX TRADING

Daily Market Lookup

  • The dollar pushed higher Monday, rebounding from recent lows on the back of rising Treasury yields. After a prolonged period of dollar weakness, investors are now betting on economic recovery spurring an uptick in inflation and an end to extreme accommodation by the Federal Reserve toward the end of the year. President-elect Joe Biden has promised “trillions” in extra coronavirus-relief spending, much of which will be financed by additional borrowing. The fact that the Democrats will be able to control both houses of Congress makes these promises more likely to be delivered, and this has resulted in the yield on benchmark 10-year U.S. debt rising more than 20 basis points to 1.12% this year, topping 1% for the first time since March. Also helping the dollar push higher is growing uncertainty over the length of time the Federal Reserve will keep its ultra-low interest rates policy in place. Although the U.S. central bank has indicated that interest rates will remain on hold near zero through at least 2023, Federal Reserve Vice Chair Richard Clarida said on Friday the U.S. economy was headed for an "impressive" year as the impact of coronavirus vaccines takes hold and with the potential for larger government spending. He stated this view even after it was announced that the U.S. economy lost 140,000 jobs in December, the first negative print in the closely watched monthly employment report since April.
  • Gold was down on Monday morning in Asia, following a slump of more than 4% during the previous session, over a strengthening dollar and U.S. Treasury yields that continue to remain elevated. Treasury yields remained firm, after data released on Thursday showed that the number of initial jobless claims fell to 787,000 during the previous week, down from the 790,000 claims from the week before. This boosted expectations of more federal spending to aid the COVID-19-battered economy and, in turn, the greenback. Further U.S. employment data released on Friday showed that December’s non-farm payrolls shrank by 140,000, against the 71,000 increase in forecasts prepared by Investing.com and the 336,000-increase seen in November. The unemployment rate also remained steady at 6.7% as the U.S. continues to see a surge of COVID-19 cases. President-elect Joe Biden said Friday’s data showed that Americans need more immediate relief now and that acting now will help the economy even with deficit financing. He has pledged to lay out proposals for trillions of dollars in fiscal support in the coming week to fight COVID-19's economic toll. in Washington D.C., House of Representatives Speaker Nancy Pelosi is leading calls for Vice President Mike Pence and the cabinet to remove incumbent President Donald Trump from office before moving to impeachment. Calls for Trump’s impeachment are growing after he incited his supporters’ riots on Capitol Hill during the previous week. Meanwhile, European Central Bank President Christine Lagarde will speak s at an online conference on Wednesday and Federal Reserve Chairman Jerome Powell will take part in a webinar on Thursday.
  • The dollar was up on Monday morning in Asia, continuing a rebound over big gains in U.S. yields and hopes for more U.S. stimulus measures that saw some investors tempering bearish bets and seeing the dollar move further away from the multi-year lows seen recently. The dollar’s gain was the risk-sensitive Antipodean currencies’ loss, with even a second month of better-than-expected data in Australia failing to lift the AUD up. November’s retail sales were up 7.1% month-on-month, higher than October’s 7% reading. The USD/CNY pair was up 0.22% to 6.4890. Data released earlier in the day showed that the producer price index (PPI) contracted 0.4% year-on-year in December, higher than the -0.8% in forecasts prepared by Investing.com and November’s -1.5% reading. The data also showed that December’s consumer price index (CPI) also beat expectations, rising 0.7% month-on-month and 0.2% year-on-year. Further Chinese data, including exports, imports and trade balance data, is due later in the week. Data from the U.S., including the PPI and retail sales, is also due later in the week. U.S. President-elect Joe Biden has promised “trillions” in extra COVID-19 relief spending as he and a Democrat-controlled Congress prepare to take office on Jan. 20. Biden’s promise pushed the yield on the benchmark 10-year U.S. debt up more than 20 basis points to 1.1187% in 2021 to date, in turn helping the dollar to a one-month high of 104.095 yen earlier in the day, with better rates giving pause to some dollar shorts. But Attrill is not buying a rebound yet, warning that shifts in relative yields tend to take time to play out in currency markets. The fact that extra stimulus is not yet guaranteed, as well as other factors weighing on the dollar, remain in place, he added. However, a crowded trade in bets against the dollar, alongside the selloff in the bond market since the Democrats won control of the Senate during the previous week’s runoff elections in Georgia, has slowed the greenback’s steep and steady decline since March 2020.
  • Brent crude oil prices fell by $1 per barrel on Monday, hit by renewed concerns about global fuel demand amid tough coronavirus lockdowns in Europe and new curbs on movement in China, the world's second-largest oil user, where infections jumped. Mainland China saw its biggest daily increase in virus infections in more than five months, authorities said on Monday, as new infections rose in Hebei, which surrounds the capital, Beijing. Shijiazhuang, the provincial capital and epicentre of the new outbreak, is in lockdown, with people and vehicles barred from leaving, as authorities seek to rein in the spread. Most of Europe is now under the strictest restrictions, according to the Oxford stringency index, which tracks measures such as travel bans and school and workplace closures. The Saudi crown prince unveiled plans on Sunday to build a zero-carbon city at NEOM, the first major construction project for the $500 billion flagship business zone aimed at diversifying the economy of the world's largest oil exporter. Still, oil price losses were curbed by plans for U.S. President-elect Joe Biden to announce trillions of dollars in new virus relief bills this week, much to be funded through increased borrowing. Crude prices were supported by Saudi Arabia's pledge last week for a voluntary oil output cut of 1 million barrels per day (bpd) in February and March as part of a deal for most OPEC+ producers to hold production steady during new lockdowns.

 

 
Intraday RESISTANCE LEVELS
11th January 2021 R1 R2 R3
GOLD-XAU 1,300-1,309 1,315 1,322
Silver-XAG 15.80-16.00 16.40 17.00
Crude Oil 53.00-53.50 54.00 54.60-55,.50
EURO/USD 1.1560 1.1590-1.1620 1.1660
GBP/USD 1.2800 1.2850 1.2895-1.2940
USD/JPY 108.50-109.10 109.60 110.20-111.00

Intraday SUPPORTS LEVELS
11th January 2021 S1 S2 S3
GOLD-XAU 1.289-1,282 1,274 1,266-1,260
Silver-XAG 15.60-15.40 15.10 14.90-14.75
Crude Oil 52.70-51.70 51.00 50.20-49.50
EURO/USD 1.1490 1.1460 1.1420-1.1390
GBP/USD 1.2750-1.2700 1.2660 1.2600-1.2550
USD/JPY 108.10 107.50 107.05-106.60

Intra-Day Strategy (11th 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$1917.41/oz and low of US$1828.11/oz. Gold down 3.347% at US$1849.31/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 1837-1800 with risk below 1800, targeting 1854-1867-1918-1931-1948 and 1955-1965-1973. Sell below 1918-1973 keeping stop loss closing above 1973, targeting 1900-1885 and 1878-1860.

 
Intraday Support Levels
S1     1.289-1,282
S2     1,274
S3     1,266-1,260
Intraday Resistance Levels
R1     1,300-1,309
R2     1,315
R3     1,322

Technical Indicators

Name   Value Action
14DRSI  

67.186

Buy
20-DMA   1270.72 Buy
50-DMA  

1243.84

Buy
100-DMA   1225.05 Buy
200-DMA   1225.05 Sell
STOCH(5,3)   64.971 Sell
MACD(12,26,9)   14.383 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$27.19/oz and low of US$24.45/oz settled down by 6.025% at US$25.44/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 25.60-28.00 with stop loss above 28.00; targeting 25.05-24.45-24.00 and 23.60-23.20. Buy silver in between 25.05-23.20, targeting 25.60-26.05-26.50 and 27.00-27.65-28.00 with stop loss should be place on the breakage below 24.60.

 
Intraday  Support Levels
S1     15.60-15.40
S2     15.10
S3     14.90-14.75

Intraday  Resistance Levels
R1     15.80-16.00
R2     16.40
R3     17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.66 Buy
20-DMA   15.12 Buy
50-DMA   14.67 Buy
100-DMA   14.56 Buy
200-DMA   15.34 Sell
STOCH(5,3)   61.852 Sell
MACD(12,26,9)   0.328 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US52.70/bbl, intraday low of US$50.39/bbl and settled up by 3.331% to close at US$52.66/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 51.90-48.50 with risk daily closing below 48.50 and targeting 52.50-53.00-53.60 and 54.00-54.60. Sell in between 52.25-54.50 with stop loss at 54.50; targeting 51.90-51.20 and 50.25-49.30-48.50-47.00.

 
Intraday Support Levels
S1     52.70-51.70
S2     51.00
S3     50.20-49.50

Intraday Resistance Levels
R1     53.00-53.50
R2     54.00
R3     54.60-55,.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.709 Sell
20-DMA   48.05 Sell
50-DMA   52.99 Sell
100-DMA   61.57 Sell
200-DMA   64.82 Sell
STOCH(5,3)   91.750 Buy
MACD(12,26,9)   -1.085 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.22192/EUR, high of US$1.2383/EUR and settled the day down by 0.423% to close at US$1.2217/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 1.2170-1.1840 with risk below 1.1800, targeting 1.1250-1.2300-1.2350 and 1.2400-1.2475-1.2545. Sell below 1.2250-1.2545 targeting 1.2170-1.2140 and 1.2090-1.2050-1.1990 with stop-loss at daily closing above 1.2545.

 
Intraday Support Levels
S1     1.1490
S2     1.1460
S3     1.1420-1.1390

Intraday  Resistance Levels
R1     1.1560
R2     1.1590-1.1620
R3     1.1660

TECHNICAL INDICATORS
Name   Value Action
14DRSI   79.111 Buy
20-DMA   1.1412 Buy
50-DMA   1.1379 Sell
100-DMA   1.1476 Sell
200-DMA   1.1632 Sell
STOCH(5,3)   79.561 Sell
MACD(12,26,9)   0.0032 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3537/GBP, high of US$1.3635/GBP and settled the day up by 0.118% to close at US$1.3571/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     1.2750-1.2700
S2     1.2660
S3     1.2600-1.2550

Intraday Resistance Levels
R1     1.2800
R2     1.2850
R3     1.2895-1.2940

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.519

Buy
20-DMA   1.2670 Sell
50-DMA   1.2771 Sell
100-DMA   1.2893 Sell
200-DMA   1.3137 Sell
STOCH(5,3)   88.636 Sell
MACD(12,26,9)   -0.0029 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY103.59/USD and made an intraday high of JPY104.08/USD and settled the day up by 0.171% at JPY103.91/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     108.10
S2     107.50
S3     107.05-106.60

INTRADAY RESISTANCE LEVELS
R1     108.50-109.10
R2     109.60
R3     110.20-111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   31.926 Buy
20-DMA   110.36 Sell
50-DMA   112.11 Sell
100-DMA   112.18 Buy
200-DMA   111.11 Buy
STOCH(9,6)   69.250 Buy
MACD(12,26,9)   -1.213 Sell

AAFX TRADING
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