AAFX TRADING

Daily Market Lookup

  • The U.S. dollar pushed higher in early European trade Tuesday, making particular gains against the yen on rising Treasury yields as expectations rise that the Federal Reserve will lift interest rates early in 2022 despite rising Covid-19 cases. EUR/USD fell 0.1% to 1.1285, close to a one-week low, despite German retail sales rebounding in November. GBP/USD edged lower to 1.3466, falling back toward the overnight trough of 1.3431, a level not seen since Nov. 29, while the risk-sensitive AUD/USD rose 0.2% to 0.7208, just above its near two-week low hit overnight. The number in coronavirus cases caused by the Omicron variant has continued to rise, with the U.S. recording a global daily record of over one million cases. While this is affecting global travel and some public services, investors remain optimistic that the economic impact will be limited, allowing the recovery to continue and the Federal Reserve to raise interest rates a number of times in 2022. Investors will focus on the release of the ISM manufacturing PMI for December as well as the November JOLTs job openings later Tuesday as the latest gauges of the strength of the U.S. economy. Polish Governor Adam Glapinski said last week inflation would peak at above 8% in June, and the central bank is expected to hike the benchmark rate by 50 basis points to 2.25% on Tuesday, according to 15 of 17 economists surveyed by Bloomberg. The other two expect a 75 basis-point rise.
  • The U.S. dollar reached its strongest level in nearly five years against the Japanese yen on Tuesday, lifted by a jump in Treasury yields as traders bet on an early Federal Reserve interest rate hike despite surging COVID-19 cases. Money markets have fully priced in a first U.S. rate increase by May, and two more by the end of 2022. The dollar index, which measures the currency against the yen and five other major peers, held close to the one-week high of 96.328 reached on Monday. While the surge in coronavirus cases caused by the Omicron variant continued to impact global travel and public services, and delay the reopening of some U.S. schools after the holidays, investors remained optimistic that lockdowns would be averted. On Monday, the U.S. Food and Drug Administration authorized the use of a third dose of the Pfizer (NYSE:PFE) and BioNTech COVID-19 vaccine for children aged between 12 and 15 years, and narrowed the time for all booster shots to five months from six months after primary doses. Signs that Omicron is highly contagious but leads to less severe illness than variants such as Delta have led to an "Omicron relief trade" buoying stocks and bond yields that could dominate market sentiment through January, OANDA analyst Jeffrey Halley wrote in a note.
  • Gold was up on Tuesday morning in Asia, with investors turning to the safe-haven asset as rising numbers of COVID-19 cases globally led to some countries tightening restrictive measures short of a lockdown. However, rising U.S. Treasury yields and interest rate hikes bets kept the yellow metal’s gains small. The number of COVID-19 cases globally continues to rise, but Reuters data suggests that the omicron variant is less virulent than Delta. However, omicron is more transmissible, leading to various preventive measures including thousands of U.S. schools delaying returning to classrooms or switching to online learning. Several major banks have also encouraged employees to work from home for a few weeks. Meanwhile the U.S. Food and Drug Administration on Monday approved a third dose of the Pfizer Inc (NYSE:PFE)./BioNTech SE COVID-19 vaccine for children ages 12 to 15. It also shortened the interval for booster shot eligibility to five months from six. Monetary policies are also on investors’ radars, with the minutes from the latest U.S. Federal Reserve meeting due on Wednesday. The Fed is expected to hike interest rates several times throughout 2022. In Asia Pacific, Chinese data released earlier in the day showed that the Caixin manufacturing purchasing managers index was 50.9 in December, better than expected.
  • Oil was up on Tuesday morning in Asia, but moves were small ahead of a major producers' meeting to discuss plans to add supply in February 2022. Meanwhile, the fuel demand outlook remained optimistic as the rising number of COVID-19 cases globally has yet to spark tightened restrictive measures in the biggest fuel-consuming countries The Organization of the Petroleum Exporting Countries (OPEC), and allies, together called OPEC+, will meet later in the day. The Joint Ministerial Monitoring Committee will meet at 1200 GMT, followed by a ministerial meeting an hour later, all taking place virtually. The cartel is likely to stick to its plan to increase output by 400,000 barrels per day in February, as it has done each month since August 2021, according to Reuters. OPEC+ is unlikely to change course given the current price outlook, pressure from U.S. President Joe Biden’s administration to boost supply, and no major new COVID-19 mobility curbs, RCB analysts said in a note. However, the cartel could be forced to change its positions if tensions between Western powers and Russia over Ukraine flare up and hit fuel supplies. Progress in nuclear talks between Iran and major powers progress, leading to an end to oil sanctions on Iran, could also alter OPEC+’s plans. Investors also await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
4th January 2022 R1 R2 R3
GOLD-XAU 1,808-1,824 1,832 1,841-1,850
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 1.1320-1.1350 1.1385 1.1420-1.1485
GBP/USD 1.3550-1.3590 1.3630 1.3700-1.3730
USD/JPY 115.90-116. 116.906 117.50-118.00

Intraday SUPPORTS LEVELS
4th January 2022 S1 S2 S3
GOLD-XAU 1,800-1,784 1,778 1,770-1,764
Silver-XAG 22.60-22.10 21.40 23.15-23.80
Crude Oil 75.90-75.20 74.60 74.00-73.30
EURO/USD 1.1270-1.1230 1.1170 1.1120-1.1050
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 (4th 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 Monday made its intraday high of US$1831.69/oz and low of US$1798.28/oz. Gold down 1.542% at US$1801.23/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 1800-1778 with risk below 1778, targeting 1808-1824-1834 and 1840-1848-1854. Sell in between 1808-1854 keeping stop loss closing above 1854, targeting 1800-1790 and 1783-1774-1769

 
Intraday Support Levels
S1     1,800-1,784
S2     1,778
S3     1,770-1,764
Intraday Resistance Levels
R1     1,808-1,824
R2     1,832
R3     1,841-1,850

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 Monday 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     23.15-23.80

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 Monday made an intra‐day high of US76.25/bbl, intraday low of US$74.10/bbl and settled up by 0.583% to close at US$75.80/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 Monday made an intraday low of US$1.1279/EUR, high of US$1.1377/EUR and settled the day down by 0.607% to close at US$1.1295/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     1.1270-1.1230
S2     1.1170
S3     1.1120-1.1050

Intraday  Resistance Levels
R1     1.1320-1.1350
R2     1.1385
R3     1.1420-1.1485

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 Monday made an intra‐day low of US$1.3430/GBP, high of US$1.3534/GBP and settled the day down by 0.286% to close at US$1.3475/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 Tuesday made intra‐day low of JPY114.94/USD and made an intraday high of JPY115.36/USD and settled the day up 0.300% at JPY115.31/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.
R2     116.906
R3     117.50-118.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.065 Buy
20-DMA   113.676 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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING