AAFX TRADING

Daily Market Lookup

  • The dollar edged lower Tuesday, consolidating after recent gains as the safe haven rebounded from recent lows on the back of rising Treasury yields. Despite today’s losses, the tone surrounding the greenback has changed over the last few days as the prospect of fiscal stimulus and hints that the Federal Reserve may start tapering its bond purchases by the end of the year has driven U.S. Treasury yields higher. U.S. President-elect Joe Biden takes office on Jan. 20 and has promised “trillions” in extra Covid-19 stimulus measures, largely funded by additional borrowing. This has resulted in 10-year Treasury yields climbing above 1% for the first time since March, rising as high as 1.158%. Morgan Stanley (NYSE:MS) has now abandoned their weak-dollar call as a result of the shift in U.S. rates. Traders will be keeping a wary eye on the release of the JOLTs job openings data for November, due out at 10 AM ET (1400 GMT), as it will provide a glimpse at what is happening in the labor market with respect to hiring, especially after Friday’s disappointing payrolls release. Also of interest will be a number of Federal Reserve speakers, starting with Atlanta Fed President Raphael Bostic. Investors will be interested of their views of the strength of the U.S. economy, given the rising uncertainty over the length of time the central bank will keep interest rates at rock bottom levels Also scheduled to speak Tuesday are Governor Lael Brainard, Dallas Fed President Robert Kaplan, Cleveland Fed President Loretta Mester and, later, Kansas City's Esther George. The dollar was up on Tuesday morning in Asia, seeing its fourth consecutive day of gains against major peers as the prospect of large stimulus measures drove U.S. Treasury yields higher. Support from rising yields has allayed fears that extra spending on the stimulus measures could lead to faster inflation, in ordinary cases making the U.S. currency less attractive. However, some investors expect that the dollar will continue a decline that saw the index lose close to 7% in 2020, once the stimulus spending and COVID-19 vaccination rollouts kickstart a global economic recovery and improve investor risk sentiment. Meanwhile, bitcoin was trading below the $35,000 mark, a sign that the rally that saw the digital currency touch an all-time high of $42,000 on Jan. 8 may be over. Prices slid as much as 20% on Monday, with some investors saying that the recent gains defy logic and the U.K.’s financial watchdog, the Financial Conduct Authority, issuing a statement that consumers should “be prepared to lose all their money.”
  • Gold was down on Tuesday morning in Asia, declining slightly as a firmer dollar and high Treasury yields outweighed U.S. political uncertainty and rising numbers of COVID-19 cases globally. Benchmark Treasury yields continued at 10-month highs as investor prepare for higher government spending under the incoming Joe Biden administration. The expectations drove the dollar, which usually moves inversely to gold, up on Tuesday. Money markets are also increasingly betting on higher interest rates from 2023, which increased jitters for stocks, as investors start bracing for the Federal Reserve to slowly scale back its aid to the economy. Fed Chairman Jerome Powell will take part in a webinar on Thursday, while European Central Bank President Christine Lagarde will speak at an online conference on Wednesday. On the COVID-19 front, the number of global cases continues to increase and has surpassed 90.87 million as of Jan. 12, according to Johns Hopkins University data. The rising numbers have prompted some countries, including China, to extend or re-introduce lockdown measures. Of the global cases, over 22.6 million cases are in the U.S., with over 22,000 American lives lost to the virus during the previous week. The U.S. continues its rollout of COVID-19 vaccines, with nearly 9 million Americans inoculated with their first vaccination dose as of Monday. Also in the U.S., political turmoil continues after House of Representatives Democrats introduced a resolution on Monday to impeach incumbent President Donald Trump for the second time. Trump has been banned from social media platforms, in Twitter’s case permanently, in the aftermath of the siege on Capitol Hill seen during the previous week. Although a vote is due to take place later in the week unless Vice President Mike Pence makes use of his constitutional authority to remove Trump from power, Trump and Pence reportedly agreed to work together until Biden and his administration begin their terms on Jan. 20, during a meeting on Monday.
  • Oil was down Tuesday morning in Asia, with rising numbers of COVID-19 cases globally contributing to rising fuel demand worries. However, expectations of a drawdown in U.S. crude oil inventory helped to limit losses for the black liquid. The number of global COVID-19 cases surpassed 90.87 million as of Jan. 12, according to Johns Hopkins University data. A worldwide scramble to procure and roll out COVID-19 vaccines continues, with some countries extending or re-instating lockdown measures to curb the spread of the virus. President-elect Joe Biden, who alongside with his administration will be sworn into the role on Jan 20, has promised “trillions” worth of further COVID-19 stimulus measures. Meanwhile, U.S. crude oil supply data from the American Petroleum Institute (API) is forecast to show a fifth consecutive week of draws, with data released during the previous week showing a draw of 1.663 million barrels. Investors now await the API data, which is due later in the day. However, Goldman Sachs (NYSE:GS) is predicting that Brent futures could rise to $65 per barrel by summer 2021, after previously predicting that the level would be reached by the end of the year. The investment bank expects that the move will be driven by the production cuts announced by Saudi Arabia during the previous week, as well as the transition to a White House and Congress controlled by Democrats.

 

 
Intraday RESISTANCE LEVELS
12th January 2021 R1 R2 R3
GOLD-XAU 1,867 1,878 1,887-1,900
Silver-XAG 25.60-26.05 26.50 27.00-27.65
Crude Oil 52.50-53.00 53.60 54.00-54.60
EURO/USD 1.2190-1.2250 1.2300 1.2350-1.2400
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
12th January 2021 S1 S2 S3
GOLD-XAU 1,852-1,838 1,828 1,817-1,810
Silver-XAG 25.05-24.45 24.00 23.60-23.20
Crude Oil 51.90-51.20 50.25 49.30-48.50
EURO/USD 1.2140-1.2090 1.2050 1.1960-1.1910
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 (12th 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 Monday made its intraday high of US$1856.48/oz and low of US$1816.88/oz. Gold down 0.291% at US$1842.49/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 1852-1800 with risk below 1800, targeting 1867-1918-1931-1948 and 1955-1965-1973. Sell below 1867-1900 keeping stop loss closing above 1900, targeting 1900-1885 and 1878-1860.

 
Intraday Support Levels
S1     1,852-1,838
S2     1,828
S3     1,817-1,810
Intraday Resistance Levels
R1     1,867
R2     1,878
R3     1,887-1,900

Technical Indicators

Name   Value Action
14DRSI  

43.114

Buy
20-DMA   1879.04 Buy
50-DMA  

1867.81

Buy
100-DMA   1891.14 Sell
200-DMA   1837.55 Buy
STOCH(5,3)   23.503 Sell
MACD(12,26,9)   7.276 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$25.49/oz and low of US$24.32/oz settled down by 2.14% at US$24.82/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     25.05-24.45
S2     24.00
S3     23.60-23.20

Intraday  Resistance Levels
R1     25.60-26.05
R2     26.50
R3     27.00-27.65

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 Monday made an intra‐day high of US52.65/bbl, intraday low of US$51.48/bbl and settled up by 0.863% to close at US$52.14/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     51.90-51.20
S2     50.25
S3     49.30-48.50

Intraday Resistance Levels
R1     52.50-53.00
R2     53.60
R3     54.00-54.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.2031 Sell
20-DMA   48.67 Buy
50-DMA   44.96 Buy
100-DMA   42.54 Buy
200-DMA   38.45 Buy
STOCH(5,3)   91.130 Buy
MACD(12,26,9)   1.697 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.2131/EUR, high of US$1.2223/EUR and settled the day down by 0.512% to close at US$1.2149/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 1.2140-1.1840 with risk below 1.1800, targeting 1.1250-1.2300-1.2350 and 1.2400-1.2475-1.2545. Sell below 1.2190-1.2545 targeting 1.2140-1.2090 and 1.2050-1.1990 with stop-loss at daily closing above 1.2545.

 
Intraday Support Levels
S1     1.2140-1.2090
S2     1.2050
S3     1.1960-1.1910

Intraday  Resistance Levels
R1     1.2190-1.2250
R2     1.2300
R3     1.2350-1.2400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.812 Buy
20-DMA   1.2219 Buy
50-DMA   1.2020 Buy
100-DMA   1.1908 Buy
200-DMA   1.1570 Buy
STOCH(5,3)   66.758 Sell
MACD(12,26,9)   0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3449/GBP, high of US$1.3563/GBP and settled the day up by 0.300% to close at US$1.3509/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 Monday 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     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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