AAFX TRADING

Daily Market Lookup

  • The dollar's rebound from a near three-year low faltered on Friday after U.S. Federal Reserve Chair Jerome Powell said interest rates would not rise any time soon. The release of details of President-elect Joe Biden's $1.9 trillion stimulus on Thursday failed to give the greenback additional support, with the main points of the plan already reported by the media. Bitcoin continued to recover after a nearly $12,000 plunge from the record $42,000 reached last week, briefly topping $40,000 overnight. The dollar index has rallied after reaching its lowest level since March 2018 last week, as the prospect of more stimulus weighed on U.S. government bonds, sending the benchmark 10-year Treasury yield above 1% for the first time since March. Although many analysts predict the greenback will resume the decline that saw it slide almost 7% last year versus major peers as the global economy recovers from the coronavirus pandemic, there is growing concern that the rise in yields will temper that weakness. Powell said in a live-streamed interview with a Princeton University professor on Thursday that the economy remains far from where the Fed wants it to be, and that he sees no reason to alter its highly accommodative stance "until the job is well and truly done." The central bank's asset-buying program has weighed on the dollar as it increases supply of the currency, diminishing its value. The Chinese yuan inched up, underpinned by the China central bank's decision to drain a small amount of cash from the banking system while keeping interest rates unchanged. The moved reinforced investors' views that it is slowly shifting to a tightening bias in monetary policy as economic activity bounces back to pre-pandemic levels. The dollar was up on Friday morning in Asia, however Federal Reserve Chair Jerome Powell’s dovish comments that interest rates would not rise any time soon capped its gains. During a live-streamed interview with Princeton University, Powell said that the economy remains far from where the Fed wants it to be, and that he sees no reason to alter its highly accommodative stance “until the job is well and truly done.” The Fed’s asset-buying program has also weighed on the dollar, as it increases supply of the currency and thus diminished its value. Biden released details of the $1.9 trillion “American Rescue Plan” on Thursday, which includes a wave of new spending, more direct payments to households, an expansion of jobless benefits and an enlargement of vaccinations and virus-testing programs. However, questions have been raided over how he and his administration plan to foot the bill. The dollar rebounded to as high as 90.73 at the start of the week from as low as 89.206 on Jan. 6. It continued a rally driven by the prospect of further stimulus, which weighed on U.S. government bonds and sent the benchmark 10-year Treasury yield above 1% for the first time since March 2020. However, some investors are already predicting that the greenback will resume a decline that saw it slide almost 7% last year versus major peers as the global economy recovers from COVID-19, concerns are mounting that the rise in yields will temper that weakness.
  • Gold was slightly up on Friday morning in Asia, with U.S. President-elect Joe Biden’s unveiling of a massive $1.9 trillion COVID-19 relief plan and Federal Reserve Chairman Jerome Powell's commitment to keep monetary policy dovish giving the safe-haven asset a boost. Biden unveiled his “American Rescue Plan” on Thursday, which includes a wave of new spending, more direct payments to households, an expansion of jobless benefits and an enlargement of vaccinations and virus-testing programs. However, questions have been raised over how he and his administration plan to foot the bill. Data released on Thursday showed that the number of initial jobless claims filed in the U.S. soared to 965,000, higher than the 795,000 claims in forecasts prepared by Investing.com and the 784,000 claims filed during the previous week. The figures confirmed weakening labor market conditions and a worsening COVID-19 situation. Global coronavirus cases rose to more than 92.22 million. For his part, Powell said during a virtual symposium at Princeton University that the Fed will raise interest rates “no time soon”, unless there are troubling signs of inflation. He added that policy makers would “let the world know” well in advance of any decision to taper bond purchases, with the comments further steepening the yield curve and seeing a rise in breakeven rates. Meanwhile, investors will be looking to the U.S. Senate, which meets as soon as next week to being incumbent President Donald Trump’s second impeachment trial. The House of Representatives already voted for the impeachment on Wednesday, with Trump facing charges of inciting his supporters’ riot in Capital Hill during the previous week.
  • Oil was steady near a 10-month high on optimism that a potential U.S. stimulus package may boost spending and lift fuel demand. Futures in New York traded near $54 a barrel and are poised for the 10th weekly increase in eleven weeks. President-elect Joe Biden will ask Congress for $1.9 trillion to fund immediate relief for the coronavirus-wracked economy. The Covid-19 outbreak that eviscerated fuel consumption globally continues to spread rapidly in the U.S., even as states ramp up vaccination. Worsening U.S.-China relations, meanwhile, are back in the spotlight after Washington blacklisted deepwater explorer China National Offshore Oil Corp. -- known as CNOOC (NYSE:CEO) -- for involvement in the disputed South China Sea. Covid-19 vaccine breakthroughs and a recent pledge by Saudi Arabia to deepen output cuts has driven oil 50% higher since the end of October. Commodities are showing all the signs of a structural bull market, according to Goldman Sachs Group Inc (NYSE:GS)., and OPEC said in its monthly report on Thursday that the group was on track to deplete the world’s bloated crude inventories. A resurgent virus across some regions, however, may cap further price gains. China is seeing rising cases again after largely containing the outbreak, while in Europe, France is extending tighter curfew measures and Germany is considering strengthening its lockdown. Brent’s prompt timespread was 3 cents in backwardation on Thursday -- a bullish market structure where near-dated prices are more expensive than later-dated ones -- compared with 7 cents at the start of the week. Biden’s pandemic package, which includes more than $1 trillion in direct relief spending, comes in at more than double the bipartisan bill approved last month. China, meanwhile, is forecast to report on Monday that its gross domestic product rose 2.1% in 2020 due to its success controlling the virus, the only major economy to have avoided a contraction.

 

 
Intraday RESISTANCE LEVELS
15th January 2021 R1 R2 R3
GOLD-XAU 1,852-1,867 1,878 1,887-1,900
Silver-XAG 25.60-26.05 26.50 27.00-27.65
Crude Oil 53.60-54.00 54.60 55.00-55.70
EURO/USD 1.2190-1.2250 1.2300 1.2350-1.2400
GBP/USD 1.3670-1.3710 1.3800 1.3860-1.3900
USD/JPY 104.00-104.50 105.00 105.40-106.00

Intraday SUPPORTS LEVELS
15th January 2021 S1 S2 S3
GOLD-XAU 1,838 1,828 1,817-1,810
Silver-XAG 25.05-24.45 24.00 23.60-23.20
Crude Oil 53.00 52.50 51.90-51.20
EURO/USD 1.2140 1.2090 1.2050-1.1960
GBP/USD 1.3590 1.3540 1.3470-1.3400
USD/JPY 103.80-103.15 102.50 102.05-101.60

Intra-Day Strategy (15th 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 Wednesday made its intraday high of US$1857.87/oz and low of US$1827.87/oz. Gold up 0.048% at US$1845.54/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     1,838
S2     1,828
S3     1,817-1,810
Intraday Resistance Levels
R1     1,852-1,867
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 Thursday made its intraday high of US$25.88/oz and low of US$25.03/oz settled up by 1.1786% at US$25.49/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 Thursday made an intra‐day high of US53.74/bbl, intraday low of US$52.27/bbl and settled up by 1.571% to close at US$53.69/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 52.50-48.50 with risk daily closing below 48.50 and targeting 53.60-54.00-54.60 and 55.00-55.70. Sell in between 53.60-55.70 with stop loss at 55.70; targeting 52.50-51.90-51.20 and 50.25-49.30-48.50.

 
Intraday Support Levels
S1     53.00
S2     52.50
S3     51.90-51.20

Intraday Resistance Levels
R1     53.60-54.00
R2     54.60
R3     55.00-55.70

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 Thursday an intraday low of US$1.2110/EUR, high of US$1.2177/EUR and settled the day down by 0.025% to close at US$1.2153/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
S2     1.2090
S3     1.2050-1.1960

Intraday  Resistance Levels
R1     1.2190-1.2250
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 Thursday made an intra‐day low of US$1.3615/GBP, high of US$1.3709/GBP and settled the day up by 0.366% to close at US$1.3684/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 1.3590-1.3240 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
S2     1.3540
S3     1.3470-1.3400

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

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 Wednesday made intra‐day low of JPY103.51/USD and made an intraday high of JPY103.99/USD and settled the day up by 0.110% at JPY103.86/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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