AAFX TRADING

Daily Market Lookup

  • The dollar was up on Monday morning in Asia, but holidays in many key Asia Pacific markets meant that it had a quiet start to 2022. The Japanese, Chinese, Australian, and New Zealand markets were all closed for a holiday, and the thin trade could make it more difficult to see the dollar’s real moves. The global spread of the omicron COVID-19 variant also continues to impact on sentiment. Although the number of cases in the western Chinese city of Xi’an edged down, Johns Hopkins University data showed that the global number of cases topped 290 million as of Jan. 3. Meanwhile, China Evergrande Group's Hong Kong shares were suspended from trading earlier in the day, with the property developer declining to provide a reason for the suspension. However, Chinese property developer Cifi Holdings offered to buy China Evergrande’s outstanding 5.5% bond due in 2022. The offer was $1,000.5 for each $1,000 in principal amount plus accrued and unpaid interest, according to Cifi Holdings’ statement to the Hong Kong stock exchange. The offer to buy the $505.1 million of notes that remain outstanding expires at 4pm London time on Jan. 7. Investors also await China’s Caixin manufacturing and service purchasing managers indexes, due later in the week.
  • Gold was down on Monday morning in Asia, but higher U.S. Treasury yields supported the safe-haven asset amid concerns about rising COVID-19 cases. Trade also remained thin as key Asia Pacific markets, including China, Japan, and Australia, were closed for a holiday. Meanwhile, rising COVID-19 cases are also on investors’ radars, with an average of over a million cases detected a day between Dec. 24 and 30, according to Reuters. Given the surging number of cases and adverse weather, more than 4,000 flights were canceled globally on Sunday, with over half of them U.S. flights. In Asia Pacific, gold discounts in India widened to the highest level in five months in the last week, thanks to COVID-19 linked restrictions and consumers in major Asian countries holding back on purchases in the runup to the year-end holidays. China Evergrande Group's Hong Kong shares were suspended from trading earlier in the day. The indebted developer did not provide a reason for the suspension.
  • The dollar index dipped on Friday in quiet holiday trading, but was set to end 2021 with a gain of nearly 7% as investors bet the U.S. Federal Reserve will raise rates earlier than most other major economies amid surging inflation driven by COVID-19 stimulus initiatives. Set for its best year since 2015, the dollar has been supported by an improving U.S. economy and persistent inflation that led to a hawkish turn by the Fed, which is now expected to begin raising interest rates as early as March. The best performer of the major currencies against the dollar in 2021 was the Canadian dollar, which was around flat for the year, helped by expectations the Bank of Canada will begin tightening its monetary policy as soon as January. The worst performer versus the greenback among the majors was the Japanese yen, which is down around 10% this year. The euro, which makes up the biggest weighting in the dollar index, was down a little more than 7% in 2021, with the European Central Bank (ECB) "sticking to ultra-dovish monetary policy settings while the Fed accelerates its taper and looks to hiking," analysts at Scotiabank said in a note to clients. The euro was down around 6% on the year versus sterling, as easing concerns in Britain about the economic impact of the pandemic boosted the British currency, with analysts expecting more rate rises from the Bank of England in 2022. While sterling was at its highest level against the euro since February 2020, it was down a little over 1% against the dollar for the year. The biggest laggard of the year by far, while not considered a major currency, was the Turkish lira, which was down around 44% against the dollar in its worst year in two decades, battered by soaring inflation and the Turkish government's unorthodox monetary policy.
  • Oil was up on Monday morning in Asia, as Libyan tightened supplies ahead of an Organization of the Petroleum Exporting Countries and allies (OPEC+) meeting. Concerns about falling fuel demand as COVID-19 continues to spread also capped gains for the black liquid. Workers are still attempting to fix a damaged pipeline in Libya, less than two weeks after militia shut down its biggest field. Both these factors are likely to drag output down to its lowest level in more than a year, with oil production expected to drop by another 200,000 barrels a day over the next week. Alongside the supply lost from the closure of its Sharara field, the country's overall output is expected to decrease to around 700,000 barrels a day. Meanwhile, OPEC+ will meet on Tuesday to discuss its production policy for February 2022. Some investors expect the cartel to stick to its plan to add another 400,000 barrels a day to global supply. COVID-19 also remains a concern, with China continuing to tackle its latest outbreak in the city of Xi’an and other countries also battling outbreaks fueled by the omicron variant of the virus. In the U.S., infection rates are likely to rise thanks to increased holiday travel, New Year celebrations, and school reopenings following winter breaks, which could lead to severe disruptions in the coming weeks.

 

 
Intraday RESISTANCE LEVELS
3rd January 2022 R1 R2 R3
GOLD-XAU 1,824-1,834 1,840 1,848-1,854
Silver-XAG 23.15-23.80 24.50 24.90-25.50
Crude Oil 76.70-77.55 78.20 79.00-79.90
EURO/USD 1.1350-1.1385 1.1420 1.1485-1.1510
GBP/USD 1.3550-1.3590 1.3630 1.3700-1.3730
USD/JPY 115.90-116.50 116.90 117.50-118.00

Intraday SUPPORTS LEVELS
3rd January 2022 S1 S2 S3
GOLD-XAU 1,818-1,808 1,800 1,785-1,778
Silver-XAG 22.60-22.10 21.40 21.00-20.50
Crude Oil 75.90-75.20 74.60 74.00-73.30
EURO/USD 1.1320-1.1270 1.1230 1.1170-1.1120
GBP/USD 1.3490-1.3440 1.3390 1.3300-1.3200
USD/JPY 115.00-114.50 113.90 113.50-113.10

Intra-Day Strategy (3rd January 2022)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Sell
EUR/USD Neutral to Buy
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Friday made its intraday high of US$1828.53/oz and low of US$1814.09/oz. Gold up 0.751% at US$1828.30/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in neutral territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Buy in between 1818-1778 with risk below 1778, targeting 1824-1834-1840 and 1848-1854. Sell in between 1831-1854 keeping stop loss closing above 1854, targeting 1818-1808-1790 and 1783-1774-1769.

 
Intraday Support Levels
S1     1,818-1,808
S2     1,800
S3     1,785-1,778
Intraday Resistance Levels
R1     1,824-1,834
R2     1,840
R3     1,848-1,854

Technical Indicators

Name   Value Action
14DRSI  

48.253

Buy
20-DMA   1789.95 Buy
50-DMA  

1793.06

Buy
100-DMA   1794.81 Buy
200-DMA   1796.27 Buy
STOCH(5,3)   53.940 Buy
MACD(12,26,9)   -3.816 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$23.32/oz and low of US$23.00/oz settled up by 1.26% at US$23.30/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. 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 oversold region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 22.60-20.50, targeting 22.60-23.20 and 23.80-24.05-24.55 with stop loss should be place on the breakage below 20.10. Sell in between 22.90-24.50 with stop loss above 24.50; targeting 21.40-21.00-20.50 and 19.90-19.50.

 
Intraday  Support Levels
S1     22.60-22.10
S2     21.40
S3     21.00-20.50

Intraday  Resistance Levels
R1     23.15-23.80
R2     24.50
R3     24.90-25.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.673 Buy
20-DMA   22.70 Sell
50-DMA   23.24 Sell
100-DMA   24.17 Sell
200-DMA   24.17 Sell
STOCH(5,3)   54.891 Buy
MACD(12,26,9)   -0.186 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US76.84/bbl, intraday low of US$74.93/bbl and settled down by 1.745% to close at US$75.04/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. MACD is above zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in neutral 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 Sell

Sell in between 76.70-79.00 with stop loss at 79.00; targeting 75.20-74.60-74.00 and 73.30-72.50-71.60. Buy above 76.50-72.90 with risk daily closing below 72.90 and targeting 76.00-76.50-77.55 and 78.20-79.00.

 
Intraday Support Levels
S1     75.90-75.20
S2     74.60
S3     74.00-73.30

Intraday Resistance Levels
R1     76.70-77.55
R2     78.20
R3     79.00-79.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.535 Sell
20-DMA   73.60 Sell
50-DMA   74.19 Buy
100-DMA   73.59 Buy
200-DMA   69.69 Buy
STOCH(5,3)   85.873 Buy
MACD(12,26,9)   -0.535 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1302/EUR, high of US$1.1385/EUR and settled the day up by 0.619% to close at US$1.1383/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1700), which become immediate resistance level, break above will target 1.1825. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.1270-1.1120 with risk below 1.1120, targeting 1.1350-1.1385-1.1420 and 1.1485-1.1510-1.1590. Sell below 1.1350-1.1540 targeting 1.1540 and 1.1310-1.1250-1.1200 and 1.1170-1.1120 with stop-loss at daily closing above 1.1540.

 
Intraday Support Levels
S1     1.1320-1.1270
S2     1.1230
S3     1.1170-1.1120

Intraday  Resistance Levels
R1     1.1350-1.1385
R2     1.1420
R3     1.1485-1.1510

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.652 Buy
20-DMA   1.1322 Sell
50-DMA   1.1433 Sell
100-DMA   1.1567 Sell
200-DMA   1.1688 Sell
STOCH(5,3)   44.685 Buy
MACD(12,26,9)   -0.004 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3464/GBP, high of US$1.3549/GBP and settled the day up by 0.372% to close at US$1.3541/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3760) 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 overbought territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.3490-1.3200 with target 1.3550-1.3590-1.3630 and 1.3700-1.3730 with stop loss closing below 1.3200. Sell in between 1.3550-1.3730 with targets at 1.3490-1.3440-1.3390 and 1.3300-1.3265-1.3200 with stop loss should be 1.3790.

 
Intraday Support Levels
S1     1.3490-1.3440
S2     1.3390
S3     1.3300-1.3200

Intraday Resistance Levels
R1     1.3550-1.3590
R2     1.3630
R3     1.3700-1.3730

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

63.0914

Buy
20-DMA   1.3392 Buy
50-DMA   1.3427 Buy
100-DMA   1.3257 Buy
200-DMA   1.3588 Buy
STOCH(5,3)   85.766 Buy
MACD(12,26,9)   -0.003 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY114.99/USD and made an intraday high of JPY115.20/USD and settled the day up 0.0810% at JPY114.99/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

Long positions above 114.90-110.50 with targets of 114.50-114.90-115.60 and 116.00-116.50-117.00 with stop below 106.00. Sell below 115.90-117.00 with risk above 117.00 targeting 113.90-113.20-112.70 and 112.10-111.50.

 
Intraday Support Levels
S1     115.00-114.50
S2     113.90
S3     113.50-113.10

INTRADAY RESISTANCE LEVELS
R1     115.90-116.50
R2     116.90
R3     117.50-118.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.065 Buy
20-DMA   113.67 Sell
50-DMA   113.29 Sell
100-DMA   112.34 Sell
200-DMA   110.87 Sell
STOCH(9,6)   69.683 Buy
MACD(12,26,9)   0.0102 Sell

AAFX TRADING
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