AAFX TRADING

Daily Market Lookup

  • The dollar was slightly down on Monday morning in Asia. However, the U.S. currency was holding ground against riskier currencies over fresh COVID-19 worries and weak European economic data, in turn stretching dollar selling positions as investors turn to safe-haven assets. Bets against the dollar have become overcrowded, with U.S. data released on Friday showing that net dollar short positions rising to their highest levels since May 2011. Data from the U.K. also showed that retail sales grew 0.3% month-on-month in December. U.K. Prime Minister Boris Johnson also said on Friday that the B117 variant of COVID-19 could be 30% more deadly, adding that stricter travel curbs and continued lockdown measures while the infection rate remains “forbiddingly high” could be possible. Data released on Friday indicated that economic activity in the European Union shrank notably in January. The manufacturing and service purchasing managers indexes came in at 54.7 and 45 respectively, while the Markit Composite purchasing managers index came in at 47.5. Elsewhere in Europe, the euro capped gains partly due to growing political instability in Italy. Italian Prime Minister Giuseppe Conte has so far failed to secure a ruling majority in parliament, receiving few replies to his appeal to centrist and unaligned upper house lawmakers to join his minority government. The political impasse saw Italian bond yields rise, with spreads over German Bunds hitting their highest since November. However, the situation demonstrates the widespread risks of political instability from popular discontent as COVID-19 fatigue settles in. Across the Atlantic, investors remain hopeful that the $1.9 trillion stimulus package proposed by U.S. President Joe Biden will be passed by Congress soon. Senators are hoping to pass the measures before the second impeachment trial of former president Donald Trump, which is due to start the week of Feb. 8. Meanwhile, the Federal Reserve meets for its first policy meeting of 2021 on Tuesday, with the policy decision to be handed down on Wednesday. The central bank is expected to maintain its commitment to accommodative monetary policy during the meeting.
  • The dollar held ground against riskier currencies on Monday as weak economic data from Europe and fresh worries about the coronavirus supported investor demand for safe-havens, stretching greenback selling positions. Economic activity in the euro zone shrank markedly in January as stringent lockdowns to contain the coronavirus pandemic hit the bloc's dominant service industry hard while UK data showed British retailers struggled to recover in December. British Prime Minister Boris Johnson also said on Friday there was evidence a new variant of COVID-19 discovered late last year could be associated with higher mortality. The news came as bets against the dollar have become overcrowded, analysts said, with U.S. data on Friday showing net dollar short positions swelling to the largest since May 2011. The euro was also little changed at $1.2163, taking a pause after a 0.8% gain last week. The common currency is capped in part by signs of political instability in Rome. Italian bond yields rose with spreads over German Bunds hitting their highest since November amid a political impasse for Prime Minister Giuseppe Conte who has so far failed to drum up a ruling majority in Italy's parliament Conte appealed to centrist and unaligned upper house lawmakers outside the coalition to join his minority government's ranks but few have responded Nonetheless, Italy's case demonstrates the widespread risks of political instability from popular discontent as communities grow weary of the pandemic. In Washington, the honeymoon after Joe Biden's inauguration as President last week means investors are hopeful that at least a part of his $1.9 trillion coronavirus relief plan will come through fairly soon. But Biden will likely need bipartisan support to push his agenda as Democratic Party narrowly controls Congress while the second impeachment trial of former U.S. President Donald Trump expected early next month could complicate his efforts. Against this backdrop, the Federal Reserve is expected to maintain its strong commitment to accommodative monetary policy when it holds its first policy meeting later this week.
  • Oil prices slipped for a second straight session on Monday as renewed COVID-19 lockdowns raised fresh concerns about global fuel demand. China reported a climb in new COVID-19 cases on Monday, casting a pall over demand prospects in the world's largest energy consumer, the main pillar of strength for global oil consumption. The number of oil and natural gas rigs added by U.S. energy firms rose for a ninth week in a row in the week to Jan. 22, but are still 52% below this time last year, data from Baker Hughes showed. The rig count is expected to rebound further in the weeks ahead as producers maximise output ahead of spring, according to Stephen Schork, editor of oil market newsletter editor The Schork Report. Some support for prices has come in recent weeks from additional production cuts from the world's top exporter, Saudi Arabia. But investors are watching for a resumption of talks between the United States and Iran on a nuclear accord - which could see Washington lifting sanctions on Tehran's oil exports, boosting supply. Iran's oil minister said on Friday the country's oil exports have climbed in recent months and its sales of petroleum products to foreign buyers reached record highs despite U.S. sanctions. On Sunday, Indonesia said its coast guard had seized the Iranian-flagged MT Horse and the Panamanian-flagged MT Freya vessels over suspected illegal fuel transfers off the country's waters. China’s National Health Commission recorded 124 COVID-19 cases on Jan. 24, up from 80 and the worst wave of new infections seen since March 2020. The numbers dimmed demand prospects in the world’s largest oil importer, and in turn dimming prospects for global oil consumption. Prices also came under pressure on Friday after the U.S. Energy Information Administration released U.S. crude oil supply data showing a surprise build. The data showed a build of 4.351 million barrels in the week to Jan. 15, against the 1.167-million-barrel draw in forecasts prepared by Investing.com and the 3.247-million-barrel build reported during the previous week. Data from the American Petroleum Institute released during the previous week showed a build of 2.562 million barrels. U.S. energy firms added more oil and natural gas rigs for a ninth consecutive week in the week to Jan. 22, but are still 52% below this time last year, according to data from Baker Hughes. Investors are also monitoring whether the U.S. and Iran will resume talks on a nuclear accord, which, if successful, could see sanctions on Iranian oil exports lifted and boost supply. Iran’s oil exports have climbed in recent months and its sales of petroleum products to overseas buyers reached record highs despite U.S. sanctions, Iranian oil minister Bijan Zanganeh said on Friday.

 

 
Intraday RESISTANCE LEVELS
25th January 2021 R1 R2 R3
GOLD-XAU 1,858-1,867 1,878 1,887-1,900
Silver-XAG 25.60-26.05 26.50 27.00-27.65
Crude Oil 52.50-53.00 53.60 54.00-54.60
EURO/USD 1.2190-1.2250 1.2300 1.2355
GBP/USD 1.3800 1.3860 1.3910-1.3990
USD/JPY 104.00-104.50 105.00 105.40-106.00

Intraday SUPPORTS LEVELS
25th January 2021 S1 S2 S3
GOLD-XAU 1,845-1,835 1,828 1,817-1,800
Silver-XAG 25.05 24.45 24.00-23.60
Crude Oil 51.90-51.10 50.50 49.80-47.70
EURO/USD 1.2150-1.2090 1.2050 1.1960-1.1925
GBP/USD 1.3710-1.3650 1.3590 1.3540-1.3470
USD/JPY 103.50-103.15 102.50 102.05-101.60

Intra-Day Strategy (25th 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$1870.70/oz and low of US$1837.24/oz. Gold down 0.727% at US$1855.72/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 1845-1800 with risk below 1800, targeting 1854-1867-1878 and 1890-1900-1910. Sell below 1854-1910 keeping stop loss closing above 1910, targeting 1845-1835 and 1828-1817-1810.

 
Intraday Support Levels
S1     1,845-1,835
S2     1,828
S3     1,817-1,800
Intraday Resistance Levels
R1     1,858-1,867
R2     1,878
R3     1,887-1,900

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 Friday made its intraday high of US$25.95/oz and low of US$25.62/oz settled up by 0.108% at US$25.47/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)   51.90-51.10 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US53.10/bbl, intraday low of US$51.40/bbl and settled down by 0.1626% to close at US$51.91/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 51.90-48.50 with risk daily closing below 48.50 and targeting 52.50-53.60-54.00 and 54.60 55.00-55.70. Sell in between 52.60-55.70 with stop loss at 55.70; targeting 51.90-51.20 and 50.25-49.30-48.50.

 
Intraday Support Levels
S1     51.90-51.10
S2     50.50
S3     49.80-47.70

Intraday Resistance Levels
R1     52.50-53.00
R2     53.60
R3     54.00-54.60

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$1.2150/EUR, high of US$1.2188/EUR and settled the day up by 0.0912% to close at US$1.2169/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     1.2355

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$1.3634/GBP, high of US$1.3735/GBP and settled the day down by 0.340% to close at US$1.3682/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.3610) 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 1.3750-1.3900 with targets at 1.3700-1.3650-1.3590 and 1.3540-1.3470-1.3400 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     1.3710-1.3650
S2     1.3590
S3     1.3540-1.3470

Intraday Resistance Levels
R1     1.3800
R2     1.3860
R3     1.3910-1.3990

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

59.783

Buy
20-DMA   1.3610 Buy
50-DMA   1.3463 Buy
100-DMA   1.3215 Buy
200-DMA   1.2935 Buy
STOCH(5,3)   82.940 Buy
MACD(12,26,9)   0.0067 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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING