AAFX TRADING

Daily Market Lookup

  • The dollar was slightly down on Monday morning in Asia, with investor wariness remaining as the Wall Street battle between hedge funds and retail investors continues to rage on. The index was little changed at the beginning of trade in Asia on Monday but has recently been largely range-bound, after climbing from a nearly three-year low of 89.206 at the start of 2021. The riskier AUD reversed earlier losses against the dollar despite disappointing economic data from China, a key customer for Australian commodities. The Reserve Bank of Australia will also hand down its policy decision on Tuesday Chinese economic data for January indicated a slowdown in the Chinese economic recovery thanks to a recent resurgence of cases in the country. The manufacturing PMI was 51.3, against the 51.6 in forecasts prepared by Investing.com and December’s 51.9. The non-manufacturing PMI came in at 52.4, against December’s 55.7 The Caixin manufacturing PMI, released earlier in the day, was 51.5 and the Caixin services PMI is due later in the week. In the U.S., Congressional debate over President Joe Biden’s $1.9 trillion fiscal stimulus package continues, with a group of Republican lawmakers urging a significant reduction in the package’s price tag to $600 billion. Investors are also calculating whether the almost 7% selloff seen in 2020 will continue into 2021. The selloff was driven by, among other things, expectations of a global recovery from COVID-19, huge fiscal stimulus packages and a continuous ultra-easy monetary policy. On the COVID-19 front, a slower-than-expected COVID-19 vaccine rollout saw investors turn to safer assets, including the U.S. currency and capping its losses. U.S. shares are also bracing for more volatility ahead of the first trading day of February, with some investors concerned about a potential market correction. GameStop (NYSE:GME) and other shares saw wild swings after retail investor groups organized via social media targeted hedge fund short positions during the previous week.
  • The safe-haven dollar found support at the start of a new week with traders remaining wary amid the battle on Wall Street between hedge funds and retail investors. Wrangling over the size of President Joe Biden's fiscal stimulus package and delays to vaccine rollouts also weighed on sentiment, stoking demand for safer assets. The dollar index was little changed at 90.58 early on Monday, holding on to last week's gain of about half a percent, as Asian stocks traded weaker for a fifth session. The gauge has been largely range-bound in recent weeks, after bouncing from a nearly three-year low of 89.206 at the start of the year. Investors are trying to evaluate whether an almost 7% selloff in 2020 -- driven by expectations of a global pandemic recovery amid massive fiscal spending and continued ultra-easy monetary policy -- is likely to continue. A group of Republican senators are urging Biden, a Democrat, to significantly downsize his proposed $1.9 trillion pandemic relief package, and have floated a $600 billion alternative. Elsewhere, Wall Street is bracing for more volatility after retail investor groups that organised via social media targeted hedge fund short positions, with some traders worried that the wild swings in GameStop (NYSE:GME) and other stocks could foreshadow a market correction.
  • Gold was up on Monday morning in Asia, but investor focus was on silver as the precious metal soared up to a nearly six-month high of 7.4%. The silver surge was driven by posts on the Reddit platform urging retail investors to buy silver mining stocks and iShares Silver Trust, an exchange traded fund (ETF) backed by physical silver bars, in a squeeze like that seen in GameStop shares during the previous week. The squeeze saw silver climb nearly 15% since Thursday, as investors flooded the market and pushed up silver prices. The gold/silver ratio, measuring the number of silver ounces needed to buy an ounce of gold, fell to its lowest level since 2014. Data released on Friday also showed that speculators increased their bullish positions in COMEX gold and silver contracts in the week to Jan. 26. On the stimulus front, a group of moderate Republican lawmakers urged for U.S. President Joe Biden to cut the $1.9 trillion price tag on his proposed COVID-19 stimulus package The group of ten senators, including Susan Collins Lisa Murkowski, and Mitt Romney, requested a meeting with Biden to discuss a compromise plan which could garner bipartisan support and be passed more quickly. More details are due to be released later in the day.
  • Oil prices edged higher on Monday after a weak start, holding on to the past three months of gains, although patchy coronavirus vaccine rollouts, new infections and the discovery of new variants are keeping a lid on prices. Oil prices have been boosted by vaccination programmes getting underway in hard-hit countries and output cuts by major producers like Saudi Arabia. But euphoria over a possible end to the pandemic has been undermined by the slow pace of vaccinations and the rise of new variants of the coronavirus. Still, with more vaccines proving successful in trials and infections falling in some areas, demand for oil and fuels is likely to pick up as more of the world's population gets inoculated against COVID-19 Oil prices are expected to remain around current levels for most of this year before a recovery gains ground towards year-end, a Reuters poll showed late on Friday. U.S. oil and gas drillers are gearing up for a pickup in demand and as higher prices make news wells profitable again, adding rigs for a sixth month in a row in January. U.S. output is rising and was above 11 million barrels per day in November for the first time since April, according to the Energy Information Administration. Continuous fuel demand worries stalled a rally in oil that started at the beginning of November. However, the futures curve points to a more balanced market as WTI and Brent futures move further into backwardation, indicating a tightness in supply, despite headline prices treading water. Demand worries also continue in the world’s largest economy. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, warned on Sunday that the new COVID-19 variant circulating in the U.K. could become the dominant strain in the U.S., potentially leading to future restrictions on in-person gatherings. However, discipline on the part of producers helped to check the black liquid’s losses. The Organization of the Petroleum Exporting Countries and its partners, or OPEC+, reportedly implemented an estimated 99% of the agreed-to production cuts in January. OPEC members’ cuts implementation were at 103% in January, while those for non-OPEC partners, including Russia and Kazakhstan, were at 93%.

 

 
Intraday RESISTANCE LEVELS
1st February 2021 R1 R2 R3
GOLD-XAU 1,862-1,867 1,878 1,887-1,900
Silver-XAG 28.90-29.50 29.90 30.50-31.00
Crude Oil 52.50-53.00 53.60 54.00-54.60
EURO/USD 1.2150-1.2190 1.2250 1.2300-1.2355
GBP/USD 1.3800 1.3860 1.3910-1.3990
USD/JPY 105.00 105.60-106.10 106.90

Intraday SUPPORTS LEVELS
1st February 2021 S1 S2 S3
GOLD-XAU 1,849-1,835 1,828 1,817-1,800
Silver-XAG 28.20-27.65 27.00 26.50-26.05
Crude Oil 51.90 51.10 50.50-49.80
EURO/USD 1.2090 1.2050 1.1960-1.1925
GBP/USD 1.3710-1.3600 1.3540 1.3470-1.3410
USD/JPY 104.50-104.00 103.15-102.50 103.15-102.50

Intra-Day Strategy (1st February 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$1875.54/oz and low of US$1839.52/oz. Gold up 0.327% at US$1847.54/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 1849-1800 with risk below 1800, targeting 1867-1878-1890-1900. Sell below 1867-1910 keeping stop loss closing above 1910, targeting 1849-1835-1828 and 1817-1810-1800.

 
Intraday Support Levels
S1     1,849-1,835
S2     1,828
S3     1,817-1,800
Intraday Resistance Levels
R1     1,862-1,867
R2     1,878
R3     1,887-1,900

Technical Indicators

Name   Value Action
14DRSI  

42.752

Buy
20-DMA   1866.89 Sell
50-DMA  

1855.60

Buy
100-DMA   1879.75 Sell
200-DMA   1848.29 Buy
STOCH(5,3)   86.503 Buy
MACD(12,26,9)   7.276 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$27.64/oz and low of US$26.03/oz settled up by 1.776% at US$26.97/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 28.90-31.00 with stop loss above 31.00; targeting 28.30-27.65-27.00 and 26.50-25.05-24.45. Buy silver in between 28.20-26.00, targeting 28.90-29.50-29.90 and 30.50-31.00 with stop loss should be place on the breakage below 24.60.

 
Intraday  Support Levels
S1     28.20-27.65
S2     27.00
S3     26.50-26.05

Intraday  Resistance Levels
R1     28.90-29.50
R2     29.90
R3     30.50-31.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.168 Buy
20-DMA   25.81 Sell
50-DMA   25.06 Sell
100-DMA   24.80 Sell
200-DMA   22.65 Buy
STOCH(5,3)   66.468 Sell
MACD(12,26,9)   0.1334 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US53.16/bbl, intraday low of US$51.87/bbl and settled down by 0.0076% to close at US$52.03/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 52.50-53.00-53.60 and 54.00-54.60-55.00. 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
S2     51.10
S3     50.50-49.80

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.203 Sell
20-DMA   52.00 Buy
50-DMA   48.58 Buy
100-DMA   44.10 Buy
200-DMA   40.37 Buy
STOCH(5,3)   32.130 Sell
MACD(12,26,9)   1.1602 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.2080/EUR, high of US$1.2155/EUR and settled the day up by 0.141% to close at US$1.2136/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 1.2090-1.1840 with risk below 1.1800, targeting 1.2150-1.2190-1.2300 and 1.2350-1.2400-1.2475. Sell below 1.2150-1.2545 targeting 1.2090-1.1990-1.1960 and 1.1925-1.1870 with stop-loss at daily closing above 1.2545.

 
Intraday Support Levels
S1     1.2090
S2     1.2050
S3     1.1960-1.1925

Intraday  Resistance Levels
R1     1.2150-1.2190
R2     1.2250
R3     1.2300-1.2355

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.812 Buy
20-DMA   1.2182 Buy
50-DMA   1.2115 Buy
100-DMA   1.1942 Buy
200-DMA   1.1942 Buy
STOCH(5,3)   64.758 Sell
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3656/GBP, high of US$1.3750/GBP and settled the day down by 0.045% to close at US$1.3709/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 1.3800-1.3990 with targets at 1.3710-1.3600-1.3540 and 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     1.3710-1.3600
S2     1.3540
S3     1.3470-1.3410

Intraday Resistance Levels
R1     1.3800
R2     1.3860
R3     1.3910-1.3990

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.999

Buy
20-DMA   1.3637 Buy
50-DMA   1.3501 Buy
100-DMA   1.3239 Buy
200-DMA   1.2961 Buy
STOCH(5,3)   57.940 Buy
MACD(12,26,9)   0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY104.17/USD and made an intraday high of JPY104.93/USD and settled the day up by 0.448% at JPY104.65/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 105.00-108.00 with risk above 108.00 targeting 104.50-104.00-103.10 and 102.50-102.05-101.60. Long positions above 104.00-101.00 with targets of 103.80-104.50 and 105.00-105.40 with stop below 105.00.

 
Intraday Support Levels
S1     104.50-104.00
S2     103.15-102.50
S3     103.15-102.50

INTRADAY RESISTANCE LEVELS
R1     105.00
R2     105.60-106.10
R3     106.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.407 Buy
20-DMA   103.66 Sell
50-DMA   103.80 Sell
100-DMA   104.45 Sell
200-DMA   105.66 Sell
STOCH(9,6)   79.253 Sell
MACD(12,26,9)   0.0750 Sell

AAFX TRADING
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING