AAFX TRADING

Daily Market Lookup

  • The dollar was slightly up on Monday morning in Asia, holding onto gains seen at the end of the previous week, as investors turned to the safe-haven asset amid disappointing U.S. economic data and the rising number of COVID-19 cases. The euro, which saw a surge in 2020, has slipped more than 2% in 2021 and touched a six-week low over ever-increasing COVID-19 cases and an Italian political crisis that is casting doubts over the region’s economic recovery. Chinese industrial production grew 7.3% year-on-year in December, above the 6.9% in forecasts prepared by Investing.com, and the 7% growth seen in November, according to data released earlier in the day. The data also showed that GDP rose 6.5% year-on-year in the fourth quarter, above the forecast 6.1% growth but below the 4.9% growth in the third quarter. The GDP also grew 2.6% quarter-on-quarter, this time below the forecast 3.2% and the 2.7% growth seen during the previous quarter. Meanwhile, investors are also digesting U.S. economic data released on Friday. The data showed that core retail sales contracted 1.4% month-on-month in December, larger than the 0.1% contraction in forecasts prepared by Investing.com and the 1.3% contraction recorded in November. The Producer Price Index (PPI) grew 0.3% month-on-month in December, while retail sales contracted 0.7% month-on-month in December. The dollar has been supported by the Democrat victories in the runoff Senate elections in the state of Georgia earlier in the month, which saw a surge in U.S. yields as Democrats gained control of the Congress and investors see fewer resections on a borrow-and-spend administration. U.S. President-Elect Joe Biden and his administration are also due to be inaugurated in a heavily guarded ceremony on Wednesday. Alongside the risk that supporters of incumbent President Donald Trump will perpetrate further violence in the runup to the inauguration, investors are also beginning to question how much of the $1.9 trillion stimulus measures proposed by Biden during the previous week will make it through Congress Incoming Treasury Secretary Janet Yellen is also reportedly expected to rule out seeking a weaker dollar when she testifies on Capitol Hill on Tuesday. Some investors remained cautious, however.
  • The dollar clung to gains on Monday and the Japanese yen edged higher as softening U.S. economic data and rising global coronavirus cases kept investors cautious, while lockdowns and Italian political turmoil held the euro under pressure. Better-than-expected Chinese economic data headed off further selling, but was not enough to shift currency traders' mood. The safety bid has added another layer of support for the dollar since the Democrats won control of U.S. Congress a fortnight ago, which triggered a surge in yields as investors priced in bigger stimulus from a borrow-and-spend Biden administration. The mood soured after Friday data showed U.S. retail sales fell for a third straight month in December, stoking worries that the recovery is running into trouble as health authorities warned that the worst of the latest COVID-19 wave might be yet to come. Europe is also facing surging cases and an Italian government that must survive crucial votes in parliament on Monday and Tuesday in order to cling to power. The dollar index steadied after touching a one-month high and last traded at 90.827. Sterling on Monday sat near at a one-week low of $1.3567. Nevertheless, many investors appear to be sticking in crowded dollar shorts, which hit an almost 10-year high last week, even though the bounce has carried the dollar index about 1.9% higher and pushed the euro more than 2% lower in two weeks.Later in the week, President-elect Biden is due to be inaugurated in a heavily-guarded Washington. Tensions are high after mob violence a few weeks ago.
  • Oil prices on Monday fell further from 11-month highs touched last week, ending a rally that started at end-October on production cuts and strong Chinese demand, with the market's outlook questioned as coronavirus infections rise. The benchmarks had rallied in recent weeks, buoyed by the start of COVID-19 vaccine rollouts and a surprise cut of crude output by the world's biggest oil exporter, Saudi Arabia. Surging new infections throughout the world, however, have raised doubts about how long demand would hold up. U.S. drillers added further pressure by putting more oil and natural gas rigs to work for an eighth consecutive week last week because rising prices have made production more profitable. Still, the number of operating rigs is less than half of the level of a year ago. U.S. shale producers have quickly responded to market gains in recent years, winning market share as Saudi Arabia and other major producers such as Russia have cut production in an attempt to support global oil and gas prices. Shale companies are also taking advantage of market gains by locking in prices for future sales, sources familiar with the matter told Reuters at the end of last week. In China, where new COVID-19 infections have been rising, more than 28 million people are in lockdown as Beijing tries to avoid a resurgence of the coronavirus in the country where it was first discovered. Friday’s disappointing U.S. data saw futures in New York tumble up to 2.3% on the same day. The data showed that core retail sales contracted 1.4% month-on-month in December, larger than the 0.1% contraction in forecasts prepared by Investing.com and the 1.3% contraction recorded in November. The data also showed that the Producer Price Index (PPI) grew 0.3% month-on-month in December, while retail sales contracted 0.7% month-on-month in December. The data demonstrated the challenges facing the U.S. economic recovery from COVID-19, and increased worries about weak fuel demand. Also adding to those worries is the ever-growing number of global COVID-19 cases, with the number close to 95 million as of Jan. 18, according to Johns Hopkins University data. The U.K has closed its travel corridors globally due to the spike in cases, while the number of deaths in the U.S. could reach 400,000 before President-elect Joe Biden's inauguration on Wednesday. A strengthening dollar over the past few days also capped gains for the black liquid, as it is priced in the U.S. currency. The dollar was slightly up on Monday. Despite the above, oil prices still saw modest gains during the previous week, thanks in part to a rebalancing of commodity indexes and the promise of more U.S. stimulus measures. However, the $1.9 trillion relief package unveiled by Biden during the previous week includes initiatives opposed by many Republicans and could lead to a drawn-out legislative battle in the Senate. Meanwhile, Libya’s oil output decreased about 200,000 barrels a day after a leaking pipeline was closed. The incident underscores the difficulties faced by the country in maintaining its production following a civil war that lasted almost ten years.

 

 
Intraday RESISTANCE LEVELS
18th 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 1.2090-1.2140 1.2190 1.2250-1.2300
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
18th January 2021 S1 S2 S3
GOLD-XAU 1,835-1,828 1,817 1,810-1,800
Silver-XAG 25.05-24.45 24.00 23.60-23.20
Crude Oil 53.00 52.50 51.90-51.20
EURO/USD 1.2050-1.1960 1.1925 1.1870
GBP/USD 1.3540-1.3470 1.3430 1.3350-1.3290
USD/JPY 103.70-103.15 102.50 102.05-101.60

Intra-Day Strategy (18th 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$1829.76/oz and low of US$1804.39/oz. Gold down 0.173% at US$1810.66/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 1835-1800 with risk below 1800, targeting 1844-1852-1867 and 1878-1890-1900. Sell below 1852-1900 keeping stop loss closing above 1900, targeting 1835-1828-1817 and 1810-1800.

 
Intraday Support Levels
S1     1,835-1,828
S2     1,817
S3     1,810-1,800
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  

1891.14

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 Friday made its intraday high of US$24.83/oz and low of US$24.20/oz settled down by 2.18% at US$24.33/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 Friday made an intra‐day high of US52.34/bbl, intraday low of US$51.83/bbl and settled down by 0.06% to close at US$52.23/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 Friday an intraday low of US$1.2067/EUR, high of US$1.2091/EUR and settled the day down by 0.198% to close at US$1.2067/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 1.2050-1.1840 with risk below 1.1800, targeting 1.2090-1.1250-1.2300 and 1.2350-1.2400-1.2475. Sell below 1.2090-1.2545 targeting 1.2050-1.1990-1.1960 and 1.1925-1.1870 with stop-loss at daily closing above 1.2545.

 
Intraday Support Levels
S1     1.2050-1.1960
S2     1.1925
S3     1.1870

Intraday  Resistance Levels
R1     1.2090-1.2140
R2     1.2190
R3     1.2250-1.2300

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 Friday made an intra‐day low of US$1.3570/GBP, high of US$1.3603/GBP and settled the day down by 0.198% to close at US$1.3570/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 1.3470-1.3400 and 1.3340-1.3240 stop-loss should be 1.3900. Buy above 1.3540-1.3240 with targets 1.3590-1.3670-1.3710 and 1.3800-1.3860-1.3900 with stop loss closing below 1.3200.

 
Intraday Support Levels
S1     1.3540-1.3470
S2     1.3430
S3     1.3350-1.3290

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 Friday made intra‐day low of JPY103.72/USD and made an intraday high of JPY103.93/USD and settled the day up by 0.173% at JPY103.92/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     103.70-103.15
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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