AAFX TRADING

Daily Market Lookup

  • The dollar was down on Thursday morning in Asia. The U.S. currency continued its losses as increased hopes for massive U.S. stimulus measures under the newly inaugurated Joe Biden administration eroded demand for safe-haven currencies. The USD/JPY pair inched down 0.04% to 103.47. The dollar was mostly flat against its fellow safe-haven currency, after sliding to a two-week low overnight. The Bank of Japan kept the interest rate unchanged at 0.10% when it handed down its policy decision earlier in the day. The AUD/USD was up 0.32% to 0.7770. Data released earlier in the day showed that Australia’s employment change in December was 50,000, in line with the forecast prepared by Investing.com and down from November’s 90,000 figure. The NZD/USD pair gained 0.52% to 7.2026. Riskier commodity currencies gained after Asian shares followed their U.S. counterparts to new records as Biden, who has laid out plans for a $1.9 trillion COVID-19 relief package, was sworn into on Wednesday. The new 46th U.S. president vowed to end the “uncivil war” in a deeply divided country dealing with the economic impact of COVID-19 and surging case numbers.c The greenback slipped 0.1% against the Canadian dollar earlier in the session, declining for the third consecutive day and seeing a three-year low during the previous session. It also slid 0.2% against the Norwegian crown in another third day of declines. The Bank of Canada held its key overnight interest rate at 0.25% on Wednesday, with the arrival of a COVID-19 vaccine and stronger foreign demand brightening the economic outlook in the medium term. Investors had been watching for the prospect of a micro rate cut of less than 25 basis points.
  • The euro drifted lower against the dollar Wednesday as investor attention shifted to the European Central Bank meeting on Thursday. The European Central is expected keep interest rates and the pace of bond purchases unchanged on Thursday. The central bank eased policy measures last month, so many analysts believe there is little need to ease again even as Europe prepares for a prolonged period of Covid-19 restrictions Morgan Stanley (NYSE:MS) agreed and went a step further, forecasting the ECB to keep rates on hold through year-end. "We expect no change in policy, with rates unchanged at -50bp, and see the ECB on hold for the rest of the year following December's extension and top-up of the pandemic responses." With no change in policy, investor focus will zone in on the ECB's economic outlook, with some analysts warning the pandemic impact presents a risk to the central bank's current economic projections, which were published last month. The recent strength in the euro, however, could draw some commentary from council members, according to Commerzbank. The European Central bank is also due to hand down its policy decision later in the day. The euro gained 0.2%, reversing losses seen during the previous session. Europe also continues to deal with a second wave of COVID-19 cases, and fears are mounting that new strains of the virus could lead to stricter lockdowns and more economic damage.
  • Gold held gains after surging on Wednesday as the dollar extended declines and Joe Biden was sworn in as U.S. president, with investors looking ahead to the potential delivery of more fiscal stimulus. Silver was also in focus after global exchange-traded fund holdings hit an all-time high. Bullion has pushed higher this week as the Bloomberg Dollar Spot index lost ground each day, while global equities rose to a record. In confirmation hearings, Biden’s Treasury Secretary nominee Janet Yellen said spending was needed to fight the pandemic, while playing down concern over debt levels. Spot gold was steady at $1869.78 at 9:23 a.m. in Singapore after climbing 1.7% on Wednesday. Silver was 0.3% lower at $25.7687 an ounce, after ETF holdings jumped to 28,312.6 tons, according to an initial Bloomberg tally; that’s the highest figure on record. Platinum fell and palladium rose. On the virus front, Biden plans to re-engage with the World Health Organization and will dispatch the government’s top infectious-disease expert to speak to the group this week. The new president’s team is worried that a more-transmissible strain of the virus threatens his plans to contain the outbreak. Traders are also monitoring monetary policy decisions due on Thursday, including meetings of the Bank of Japan and the European Central Bank. Federal Reserve policy makers hold their inaugural meeting of 2021 next week.
  • Oil was down on Thursday morning in Asia, with investors digesting a small but surprising build in U.S. crude oil supplies that re-ignited fuel demand worries. The black liquid gave up some of the gains made during the past two days on hopes of massive COVID-19 stimulus measures under newly inaugurated U.S. President Joe Biden, but both Brent and WTI futures continued to stay firmly above the $50 mark. U.S. crude oil supply data from the American Petroleum Institute showed a build of 2.562 million barrels for the week ending Jan. 15. This was against the 300,000-barrel draw in forecasts prepared by Investing.com, and the 5.821-million-barrel draw recorded during the previous week. “Oil prices look a tad vulnerable to potential profit-taking after U.S. crude stockpiles bearishly rose 2.56 million against consensus draw,” Axi chief market strategist Stephen Innes warned in a note. However, the same data also showed a-smaller-than expected build in gasoline stocks and distillate inventories inclusive of diesel, distillate and jet fuel Crude oil supply data from the U.S. Energy Information Administration is due on Friday. COVID-19 restrictions on mobility were hurting the near-term outlook for oil demand, although investors had been looking beyond that on the hopes that vaccine rollouts would ease lockdowns, Axi’s Innes said. Meanwhile, Biden got straight to work after being inaugurated as the 46th U.S. president, and one of his first actions was to revoke a permit for the Keystone XL oil pipeline project from Canada, as well as announcing America’s return to the Paris climate accord. Biden’s administration will also commit to ending new oil and gas leasing on federal lands, Biden press secretary Jen Psaki said, although a timeline for achieving that goal has yet to be laid out.

 

 
Intraday RESISTANCE LEVELS
21st January 2021 R1 R2 R3
GOLD-XAU 1,878 1,887-1,900 1,910
Silver-XAG 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
21st January 2021 S1 S2 S3
GOLD-XAU 1,867-1,852 1,835 1,878
Silver-XAG 25.60-25.05 24.45 24.00-23.60
Crude Oil 51.90 51.90 51.20-50.50
EURO/USD 1.2090-1.2050 1.1960 1.2150
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 (21st 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$1871.72/oz and low of US$1832.29/oz. Gold up 1.707% at US$1871.18/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 1867-1817 with risk below 1800, targeting 1878-1890-1900-1910. Sell below 1878-1910 keeping stop loss closing above 1910, targeting 1867-1852-1835 and 1828-1817-1810.

 
Intraday Support Levels
S1     1,867-1,852
S2     1,835
S3     1,878
Intraday Resistance Levels
R1     1,878
R2     1,887-1,900
R3     1,910

Technical Indicators

Name   Value Action
14DRSI  

51.752

Buy
20-DMA   1874.75 Sell
50-DMA  

1858.79

Buy
100-DMA   1884.01 Sell
200-DMA   1844.58 Buy
STOCH(5,3)   86.503 Buy
MACD(12,26,9)   7.276 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$25.86/oz and low of US$25.02/oz settled up by 2.405% at US$25.75/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 26.05-28.00 with stop loss above 28.00; targeting 25.05-24.45-24.00 and 23.60-23.20. Buy silver in between 25.60-23.20, 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     25.60-25.05
S2     24.45
S3     24.00-23.60

Intraday  Resistance Levels
R1     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 Wednesday made an intra‐day high of US53.77/bbl, intraday low of US$52.79/bbl and settled down by 0.245% to close at US$52.88/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     51.90
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 Wednesday an intraday low of US$1.2076/EUR, high of US$1.2157/EUR and settled the day down by 0.190% to close at US$1.2104/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     1.2150

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 Wednesday made an intra‐day low of US$1.3621/GBP, high of US$1.3718/GBP and settled the day up by 0.199% to close at US$1.3648/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 Wednesday made intra‐day low of JPY103.44/USD and made an intraday high of JPY103.92/USD and settled the day down by 0.354% at JPY103.52/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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