AAFX TRADING

Daily Market Lookup

  • The dollar was down on Wednesday morning in Asia, with a retreat in U.S. Treasury yields sapping momentum from the U.S. currency’s recent rally and investors cautiously resumed bets on a continuous slide for the dollar. Bank of England governor Andrew Bailey played down the notion of negative interest rates to boost growth, saying that “there are a lot of issues” with them during his online speech to the Scottish Chambers of Commerce on Tuesday. Baily’s comments saw the dollar drop more than 1% against the pound. Benchmark 10-year Treasury yields fell nearly 7 basis points from a 10-month high seen on Tuesday, in turn snuffing out the dollar’s three-day rally and pushing it back towards multi-year lows. However, the greenback clung above those levels earlier in the session, with the rally tempering some investors’ confidence in the consensus view that U.S. trade and budget deficits will drive the dollar lower. The Democrat victory in Senate runoff elections in the state of Georgia earlier in the month sparked a bond-market selloff that drove U.S. yields sharply higher, in turn stalling the dollar’s decline. The victory also raised hopes for huge sums of government borrowing to fund the big stimulus measures promised by President-elect Joe Biden when he and his administration take office on Jan. 20. However, the strong demand seen at a $38 billion 10-year auction overnight and comments from Federal Reserve officials reiterating that monetary policy is going to stay supportive could see the dollar back on a downward slide. Investors now await U.S. inflation figures for December, with the Consumer Price Index to be released later in the day. Further data, including the Producer Price Index, core retail sales and industrial production, are due on Friday. Kansas City Fed President Esther George said on Tuesday that she does not expect the Fed to react if inflation exceeds the central bank’s 2% goal, adding that it would take a large surprise to unnerve investors.
  • The dollar nursed losses on Wednesday as a retreat in U.S. yields sapped momentum from its recent rebound and investors cautiously resumed bets that it can resume sliding. Against the euro, it posted its sharpest daily fall in more than a month and it dropped more than 1% against the pound, which was also boosted by the Bank of England governor talking down the prospect of negative rates. The dollar fell through 104 Japanese yen to trade at 103.63 yen on Wednesday and the Chinese yuan also held gains to begin the day at a one-week high in offshore trade. The moves press the dollar back toward multi-year lows, although it clung above those levels in Asia as the bounce this week has tempered some traders' confidence in the consensus view that U.S. trade and budget deficits will drive it lower. The euro steadied at $1.2208 and dollar index was steady at 89.991 on Wednesday after falling 0.5% on Tuesday. Sterling hit a week-high of $1.3680. The bond-market selloff that has driven U.S. yields sharply higher this year and stalled the dollar's decline was triggered by Democrats winning control of U.S. Congress at elections in Georgia last week. Investors expect to usher in huge sums in government borrowing to fund big-spending stimulus plans and have figured that higher U.S. rates might make dollars more attractive. However, strong demand at a $38 billion 10-year auction overnight and comments from U.S. Federal Reserve officials reiterating that monetary policy is going to stay supportive seem to have once more turned the blowtorch on the greenback. December U.S. inflation figures are due at 1330 GMT and, after Kansas City Fed President Esther George said overnight she does not expect the Fed to react if inflation tips over its 2% goal, it may take a large surprise to unnerve investors.
  • Gold was up on Wednesday morning in Asia, with both the dollar and U.S. Treasury yields hitting the pause button in their recent rallies. The U.S. economy could see a strong rebound in the second half of this year as vaccinations become widely available, but COVID-19 is still driving the economy and monetary policy will remain accommodative, Boston Federal Reserve Bank President Eric Rosengren said on Tuesday. Fed St. Louis President James Bullard also pushed back on speculation that the Fed will begin to ease its asset-purchase program any time soon in separate comments. 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 later in the day. On the data front, the U.S. will release December’s core Consumer Price Index later in the day. Data on December’s Producer Price Index (PPI), core retail sales and industrial production is scheduled to follow on Friday. Meanwhile, the House of Representatives has voted 223-205 to demand that Vice President Mike Pence use the Constitution’s 25th Amendment to remove incumbent President Donald Trump from office, ahead of a vote later in the day on whether to impeach Trump for a second time over his supporter’s violent siege of Capitol Hill during the past week. The number of global cases exceeded 91.57 million as of Jan. 13, with some Asian and European countries enforcing tighter restrictions to curb the spread of the virus. The ever-rising number of cases also saw investors turn to the safe-haven asset.
  • Oil prices gained more than 1% on Wednesday, with U.S. crude rising for a seventh day, after industry data showed a bigger than expected drop in inventories and investors shrugged off worsening developments in the pandemic. Both benchmarks are trading at the highest since February, before the coronavirus outbreak in China began spreading across the world and billions of people went into lockdown to prevent a pandemic that is now in a deadlier second wave. Prices are shrugging off the latest developments in Europe and the United States where death tolls and new infections keep rising, with the focus on rollouts of vaccines, however patchy. Even as China is grappling with its biggest coronavirus spike in months, comments from President Xi Jinping providing an upbeat assessment of the world's second-biggest economy and biggest oil importer supported prices. Oil stocks in the U.S. dropped by 5.8 million barrels last week to around 484.5 million barrels, data from the American Petroleum Institute showed late on Tuesday. That was more than analysts' expectations in a Reuters poll for a fall of 2.3 million barrels. Still, falling inventories and rising oil prices are likely to tempt U.S. drillers back into the fray, especially as Saudi Arabia and other major producers cut their output, effectively ceding market share to American producers, analyst said.

 

 
Intraday RESISTANCE LEVELS
13th 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 54.00-54.60 55.00 55.70
EURO/USD 1.2250 1.2300 1.2350-1.2400
GBP/USD 1.3710-1.3800 1.3860 1.3900-1.3950
USD/JPY 104.00-104.50 105.00 105.40-106.00

Intraday SUPPORTS LEVELS
13th 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 53.60-53.00 52.50 51.90-51.20
EURO/USD 1.2190-1.2140 1.2090 1.2050-1.1960
GBP/USD 1.3670-1.3590 1.3540 1.3470-1.3400
USD/JPY 103.80-103.15 102.50 102.05-101.60

Intra-Day Strategy (13th 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 Tuesday made its intraday high of US$1863.71/oz and low of US$1836.63/oz. Gold up 0.611% at US$1853.96/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 Tuesday made its intraday high of US$25.62/oz and low of US$24.87/oz settled down by 2.14% at US$25.51/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 Tuesday made an intra‐day high of US53.41/bbl, intraday low of US$52.04/bbl and settled up by 2.089% to close at US$53.24/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     53.60-53.00
S2     52.50
S3     51.90-51.20

Intraday Resistance Levels
R1     54.00-54.60
R2     55.00
R3     55.70

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 Tuesday an intraday low of US$1.2136/EUR, high of US$1.2209/EUR and settled the day up by 0.460% to close at US$1.2205/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     1.2190-1.2140
S2     1.2090
S3     1.2050-1.1960

Intraday  Resistance Levels
R1     1.2250
R2     1.2300
R3     1.2350-1.2400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.812 Buy
20-DMA   1.2226 Buy
50-DMA   1.2051 Buy
100-DMA   1.1916 Buy
200-DMA   1.1584 Buy
STOCH(5,3)   27.758 Sell
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3502/GBP, high of US$1.3669/GBP and settled the day up by 1.119% 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     1.3670-1.3590
S2     1.3540
S3     1.3470-1.3400

Intraday Resistance Levels
R1     1.3710-1.3800
R2     1.3860
R3     1.3900-1.3950

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 Tuesday made intra‐day low of JPY103.71/USD and made an intraday high of JPY104.32/USD and settled the day up by 0.171% at JPY103.74/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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