AAFX TRADING

Daily Market Lookup

  • Gold was up on Wednesday morning in Asia, thanks to a weaker dollar and comments from Secretary of the Treasury nominee Janet Yellen calling for more COVID-19 relief spending helping to lift the yellow metal’s appeal as an inflation hedge. Yellen made the comments during her Senate confirmation hearing before the Senate Finance Committee on Tuesday, arguing that the economic benefits of a large stimulus will far outweigh the risks of a higher debt burden. The dollar fell for a second consecutive session on Tuesday, while most U.S. Treasury yields fell after Yellen said in her hearing that tax cuts enacted in 2017 for large corporations should be repealed. The greenback continued the losses on Wednesday. Meanwhile, President-elect Joe Biden and his administration takes office later in the day, with investors focused on the previous week’s $1.9 trillion stimulus package proposal to boost the economy and speed up COVID-19 vaccine distribution. On the COVID-19 front, the number of deaths from the virus in the U.S. surpassed 401,000 and the number of cases in the country topped 24 million as of Jan. 20, according to Johns Hopkins University. The data also showed that the number of cases globally has topped 96 million. The Bank of Japan and the European Central Bank will hand down their policy decisions on Thursday. Meanwhile, Bank of England chief economist Andrew Haldane predicted during a webinar on Tuesday that the U.K.’s economy could begin to recover “at the rate of knots” from the second quarter of 2021, as vaccine rollouts continue.
  • The dollar weakened in early European trade Wednesday, with risk sentiment on the rise after comments Janet Yellen, Joe Biden's nominee for Treasury Secretary, pointed towards substantial additional fiscal spending t reflate the U.S. economy. Yellen appeared Tuesday in front of the Senate Finance Committee as part of her confirmation hearing, and the former Federal Reserve head urged Congress to “act big” on Covid-19 relief. She defended the need for President-elect Joe Biden’s proposed $1.9 trillion relief package to revive a flagging economy and protect itself against long-term scarring from the impact of the coronavirus pandemic. Opposition to the plan from Republican lawmakers over its cost given the already sizable budget deficit, but Yellen stated that its benefits will far exceed the costs over the long term. Attention now turns to Joe Biden’s inauguration as U.S. President in Washington, at 12 PM ET (1700 GMT), amid a strong security presence given concerns about possible civil unrest. In Italy, Prime Minister Giuseppe Conte won a confidence vote in the Senate late Tuesday, following on from Monday’s victory in the House, after the departure of a junior member of his coalition. However, he will continue without a solid majority in the Senate. While this is unlikely to completely end Italian political uncertainty, it does suggest “continued limited impact on the euro and limited build-up of risk premia in the currency,” ING added. The European Central Bank’s latest rate-setting meeting on Thursday looms large, but changes to its monetary policy are unlikely given it delivered a hefty easing package only in December. The U.S. dollar nursed losses on Wednesday and the euro hung on to gains as investors' mood brightened in the wake of a better-than-expected sentiment survey in Germany and big spending talk from U.S. Treasury Secretary nominee Janet Yellen. The safe-haven yen was sold with the improvement in sentiment and briefly eased past 104 per dollar, as well as falling against other major currencies. It last traded at 103.84 per dollar. Sterling found support from the Bank of England's chief economist's prediction that Britain's economy begins to "recover at a rate of knots" in the second half of the year, and extended overnight gains slightly to $1.3649. The Chinese yuan clung to modest gains in offshore trade at 6.4757 to the dollar ahead of a monthly interest rate fixing where traders expect no change in either one-year or five-year loan prime rates. Later on Wednesday Malaysia's central bank meets, with a decision due at 0700 GMT. Nine of 15 economists polled by Reuters expect it will cut benchmark interest rates to historic lows.
  • Oil was up Wednesday morning in Asia, holding onto gains seen during the previous session. Expectations that the incoming Joe Biden administration will push through more, massive U.S. stimulus measures boosted hopes for fuel demand and a draw down on crude oil stocks. Secretary of the Treasury nominee Janet Yellen urged Congress to “act big” on pandemic relief spending during her Senate confirmation hearing before the Senate Finance Committee on Tuesday. The comments served to re-enforce investor hopes of massive U.S. spending to boost economic recovery and growth from COVID-19. Even a 580,000 barrels-per-day cut in the International Energy Agency (IEA)’s outlook for first-quarter oil demand failed to dampen sentiment for the black liquid. The IEA’s cut came as the incessant rise in COVID-19 numbers see tight lockdowns and border closures in Europe. Germany on Tuesday extended a lockdown for most shops and schools for another two weeks to Feb. 14. Investors now await U.S. crude oil supply data from the American Petroleum Institute, which is due later in the day. Oil prices rose in early trade on Wednesday, adding to solid gains overnight, on expectations the incoming U.S. administration will go ahead with massive stimulus spending that would boost fuel demand and draw down crude stocks. U.S. President-elect Joe Biden's Treasury Secretary nominee Janet Yellen urged lawmakers on Tuesday to "act big" on pandemic relief spending, reinforcing hopes of massive spending to boost growth. Germany on Tuesday extended a lockdown for most shops and schools for another two weeks, to Feb. 14. Traders will be watching out for U.S. crude and products inventory data due from the American Petroleum Institute on Wednesday and from the Energy Information Administration on Friday. Six analysts polled by Reuters estimated, on average, that crude stocks fell by 300,000 barrels in the week to Jan. 15, but expect gasoline stockpiles rose by 3.0 million barrels. Distillate inventories, which include diesel, heating oil and jet fuel, were seen up by 800,000 bbl.

 

 
Intraday RESISTANCE LEVELS
20th 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 1.2150 1.2190 1.2250-1.2300
GBP/USD 1.3710-1.3800 1.3860 1.3910-1.3990
USD/JPY 104.00-104.50 105.00 105.40-106.00

Intraday SUPPORTS LEVELS
20th 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 51.20-50.50
EURO/USD 1.2090-1.2050 1.1960 1.1925-1.1870
GBP/USD 1.3650-1.3590 1.3540 1.3470-1.3350
USD/JPY 103.70-103.15 102.50 102.05-101.60

Intra-Day Strategy (20th 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$1845.38/oz and low of US$1832.94/oz. Gold up 0.143% at US$1839.76/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  

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$25.40/oz and low of US$24.88/oz settled up by 1.249% at US$25.19/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 US53.14/bbl, intraday low of US$52.15/bbl and settled up by 1.520% to close at US$52.96/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 53.0-48.50 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     53.00-52.50
S2     51.90
S3     51.20-50.50

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 Tuesday an intraday low of US$1.2073/EUR, high of US$1.2144/EUR and settled the day up by 0.444% to close at US$1.2127/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 1.2100-1.1840 with risk below 1.1800, targeting 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     1.2090-1.2050
S2     1.1960
S3     1.1925-1.1870

Intraday  Resistance Levels
R1     1.2150
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 Tuesday made an intra‐day low of US$1.3573/GBP, high of US$1.3636/GBP and settled the day down by 0.2760% to close at US$1.3621/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 1.3710-1.3900 with targets at 1.3650-1.3590-1.3540 and 1.3470-1.3400-1.3340 stop-loss should be 1.3900. Buy above 1.3650-1.3240 with targets 1.3710-1.3800-1.3860 and 1.3910-1.3990 with stop loss closing below 1.3200.

 
Intraday Support Levels
S1     1.3650-1.3590
S2     1.3540
S3     1.3470-1.3350

Intraday Resistance Levels
R1     1.3710-1.3800
R2     1.3860
R3     1.3910-1.3990

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 JPY103.64/USD and made an intraday high of JPY103.93/USD and settled the day up by 0.207% at JPY103.89/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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