AAFX TRADING

Daily Market Lookup

  • The dollar was down on Friday morning in Asia, as investors continue to celebrate the Joe Biden administration's inauguration by turning to riskier currencies. There were also renewed bets that an economic recovery from COVID-19 could push the dollar even lower Sentiment-driven moves have eroded the dollar’s gains since the Democrats won control of the U.S. Congress earlier in the month. The dollar had risen along with U.S. Treasury yields on expectations of more stimulus measures and government borrowing under the Joe Biden administration. The pound saw a two-and-a-half year high during the previous session over hopes that the U.K.’s COVID-19 vaccine roll-out could see a rebound in economic growth. The European Central Bank kept policy steady and accommodative as it handed down its policy decision on Thursday, which lent the euro some support. The dollar was down almost 0.8% against the euro during the week and touched a week-low of $1.2173 per euro earlier in the session. Scandinavian currencies have seen gains with the Swedish crown up 1.4% for the week. The Norwegian crown was up 1.8% for the week, boosted by Norges Bank’s decision to hold its policy rate steady, albeit at zero, earlier in the week. Meanwhile, a heavy Bitcoin selloff saw the cryptocurrency slump 5% to an almost three-week low of $28,800 earlier in the session. On the data front, the European Union, the U.K. and the U.S. will release purchasing managers’Manufacturing PMI index figures later in the day. The dollar was headed for its worst week of the year on Friday, as investors cheered in the Joe Biden administration by buying riskier currencies and refreshed bets that a pandemic recovery could push the greenback lower still. The euro had found some support from the European Central Bank keeping policy steady and accommodative Scandinavian currencies have led the charge higher, with the Norwegian crown up 1.8% for the week, helped by Norges Bank's decision to hold its policy rate steady, albeit at zero. The Swedish crown is up 1.4% for the week. The risk-sensitive Antipodean currencies have also been gainers, with the Australian dollar up 0.8% and the kiwi climbing more than 1% over the week so far Sterling rose to a 2-1/2 year high of $1.3745 overnight on hopes Britain's vaccine roll-out can usher in a rebound in growth. It held at that level on Friday, up 1% for the week. Later on Friday, preliminary purchasing managers' index figures are due across Europe and the United States, and weakness is expected as fresh waves of coronavirus infection have driven new lockdowns and curtailed growth.
  • Gold was down on Friday morning in Asia, easing as U.S. Treasury yields gained but also aided by a weaker dollar and further U.S. stimulus bets. Benchmark treasury yields remained higher after data released on Thursday showed a slight decline in initial jobless claims. The past week saw 900,000 claims filed, against the 910,000 claims in forecasts prepared by Investing.com and the 926,00 claims reported during the previous week. Yields on the longer end of the curve rose alongside inflation expectations on Thursday, with investors continuing to expect more debt supply under the Joe Biden administration. The newly inaugurated president is pushing for additional spending of up to $2 trillion, which gave U.S. shares a boost overnight. There are also hopes that Biden’s 1.9 trillion COVID-19 stimulus package proposed earlier in the month, will receive the necessary Republican support in Congress. On the central bank front. the European Central Bank (ECB) handed down a policy decision on Thursday that kept interest rates steady. The central bank also pledged to provide more support for the economy if required. ECB President Christine Lagarde also issued a warning that ever-increasing COVID-19 numbers and restrictive measures, such as lockdowns, to curb the spread of the virus could challenge the region’s economic outlook.
  • Oil was down Friday morning in Asia, continuing a retreat from the previous week’s 11-month highs, over new COVID-19-induced restrictive measures in China and the ensuing fuel demand worries. Recovering fuel demand in the world’s biggest oil importer had support the black liquid’s gain in late 2020, making up for the lagging demand in the U.S. and Europe. However, a new wave of COVID-19 cases in the country has seen the reintroduction of restrictive measures to contain the spread of the virus. Shanghai reported the first locally transmitted cases in two months on Thursday, and the special administrative region of Hong Kong will reportedly begin its first ever lockdown this weekend in the city’s Yau Tsim Mong district. Other areas are adopting pre-emptive curbs and in Beijing, residents are being urged not to travel for the upcoming Lunar New Year holiday, when tens of millions of urban workers usually head back to their villages. Sudden new restrictions globally have badly hit the airline industry, with the number of flights globally down 25% during the previous week, ANZ Research analysts said in a note. U.S. crude oil supply data from the U.S. Energy Information Administration is due later in the day. The data was delayed by both a holiday and Wednesday’s inauguration of President Joe Biden. Oil prices dropped on Friday, retreating further from 11-month highs hit last week, weighed down by worries that new pandemic restrictions in China will curb fuel demand in the world's biggest oil importer. Recovering fuel demand in China underpinned market gains late last year while the United States and Europe lagged, but that source of support is fading as a fresh wave of COVID-19 cases has sparked new restrictions to contain the spread. The commercial hub of Shanghai reported its first locally transmitted cases in two months on Thursday, and Beijing is urging people not to travel during the upcoming Lunar New Year holiday, when tens of millions of urban workers typically head back to their villages. A seasonal boost to China's gasoline demand that is typically seen during the New Year holidays will be moderated by the tightened restrictions this year, consultancy FGE said in a note. The market is awaiting official oil inventory data from the U.S. Energy Information Administration on Friday, after industry data on Wednesday showed a surprise 2.6 million barrel increase in U.S. crude inventories last week compared with analysts' forecasts for a 1.2 million barrel draw.

 

 
Intraday RESISTANCE LEVELS
22nd January 2021 R1 R2 R3
GOLD-XAU 1,867-1,878 1,887 1,900-1,910
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
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
22nd January 2021 S1 S2 S3
GOLD-XAU 1,858-1845 1,835 1,828-1,817
Silver-XAG 25.05 24.45 24.00-23.60
Crude Oil 53.00-52.50 51.90 51.20-50.50
EURO/USD 1.2150-1.2090 1.2050 1.1960-1.1925
GBP/USD 1.3650-1.3590 1.3540 1.3470-1.3350
USD/JPY 103.50-103.15 102.50 102.05-101.60

Intra-Day Strategy (22nd 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 Thursday made its intraday high of US$1875.03/oz and low of US$1858.29/oz. Gold down 0.059% at US$1869.45/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 1858-1817 with risk below 1800, targeting 1867-1878-1890 and 1900-1910. Sell below 1867-1910 keeping stop loss closing above 1910, targeting 1858-1845-1835 and 1828-1817-1810.

 
Intraday Support Levels
S1     1,858-1845
S2     1,835
S3     1,828-1,817
Intraday Resistance Levels
R1     1,867-1,878
R2     1,887
R3     1,900-1,910

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$26.03/oz and low of US$25.62/oz settled up by 0.108% at US$25.85/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     25.05
S2     24.45
S3     24.00-23.60

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 US53.36/bbl, intraday low of US$52.69/bbl and settled up by 0.1626% to close at US$52.69/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 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 Thursday an intraday low of US$1.2101/EUR, high of US$1.2172/EUR and settled the day up by 0.190% to close at US$1.2161/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 1.2150-1.1840 with risk below 1.1800, targeting 1.1290-1.2300 and 1.2350-1.2400-1.2475. Sell below 1.2190-1.2545 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     1.2150-1.2090
S2     1.2050
S3     1.1960-1.1925

Intraday  Resistance Levels
R1     1.2190-1.2250
R2     1.2300
R3     1.2350

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$1.3645/GBP, high of US$1.3745/GBP and settled the day down by 0.590% to close at US$1.3729/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 Thursday made intra‐day low of JPY103.32/USD and made an intraday high of JPY103.66/USD and settled the day down by 0.036% at JPY103.48/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     103.50-103.15
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   46.604 Buy
20-DMA   103.57 Sell
50-DMA   103.88 Sell
100-DMA   104.57 Sell
200-DMA   105.57 Sell
STOCH(9,6)   28.253 Sell
MACD(12,26,9)   -0.290 Sell

AAFX TRADING
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