AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower overall in early European trade Wednesday, handing back some overnight gains on rising Treasury yields with traders looking to the minutes from the last Federal Reserve meeting for clues on the timing of its expected tightening. U.S. yields eased back slightly Wednesday after sharp gains to pre pandemic levels on Tuesday as investors geared up for early interest rate hikes from the Federal Reserve to curb high inflation. The U.S. Federal Reserve will release the minutes from its December meeting later in the day, and will be studied for clues to the central bank’s timetable for rate hikes. Fed Funds futures suggest interest rates will start rising by May, but expectations are growing that the central bank could move sooner than that, given the strength of the U.S. economic recovery. The Fed is on track to end its asset-buying program in March, potentially opening the way for raising rates, after it on Dec. 15 doubled the pace of tapering purchases. Also due for release Wednesday will be the ADP employment data, a closely watched precursor to Friday’s nonfarm payrolls. The yen was pinned near a five-year low on the dollar on Wednesday and nursing losses on other crosses as traders wagered Japan would lag a looming wave of global policy tightening as inflation gallops ahead around the world. It made a more than six-year low against the Swiss franc and a seven-week trough on the Aussie, recovering slightly from those levels on Wednesday. A similar dynamic has the euro under pressure as European policymakers are likely to be behind peers in Britain and the United States on tightening. The risk-sensitive Australian and New Zealand dollars struggled to resume an attempt to rally as fears of Omicron derailing the world's recovery subsides. Minutes from the Federal Reserve's December meeting, due to be published at 1900 GMT, could underscore U.S. policymakers' newfound sensitivity to inflation and their readiness to act. Partial U.S. labour data on Wednesday and non-farm payrolls on Friday will also be watched for a guide to the trajectory. Fed Funds futures show traders see rates lifting off by May. Analysts at Standard Chartered now expect 25-basis point hikes in March and June rather than one hike in September. U.S. two-year and five-year yields stand near pandemic highs and benchmark 10-year yields are up about 14 basis points this week. Against that leans some element of caution as markets remain thinned by holidays. Sterling, meanwhile, has rallied about 2.7% on the dollar in a dozen trading days since Dec. 20 as traders also reckon surging Omicron cases in Britain won't deter the Bank of England from lifting rates. Prime Minister Boris Johnson is resisting lockdown measures and hoping caution and vaccinations can prevent serious illness despite surging cases.
  • Gold was up on Wednesday morning in Asia ahead of the minutes from the latest U.S. Federal Reserve meeting. Investors also weighed the possibility of an earlier-than-expected interest rate hike against surging numbers of COVID-19 cases globally. The Fed will release the minutes from its December meeting later in the day. With Minneapolis Fed President Neel Kashkari saying he supports two hikes in 2022 to curb high inflation, now await comments from St. Louis Fed President James Bullard and San Francisco Fed President Mary Daly speaking at separate events on Thursday and Friday respectively for more clues On the COVID-19 front, the omicron variant continues to fuel a surge in cases, with the U.S. reporting a global record of almost 1 million new cases on Monday according to Reuters. Meanwhile, data released on Tuesday in the U.S. showed that the Institute of Supply Management manufacturing purchasing managers index was a lower-than-expected 58.7 in December, while the JOLTs job openings survey showed 10.562 million vacancies in November.
  • Oil prices steadied on Wednesday as investors assessed the impact of a massive spike in COVID-19 cases caused by the Omicron variant, though the upside remained limited after U.S. fuel inventories climbed. The United States reported nearly 1 million new coronavirus infections on Monday, the highest daily tally of any country in the world and nearly double the previous U.S. peak set a week ago. U.S. gasoline stockpiles rose by 7.1 million barrels in the week to Dec. 31, the American Petroleum Institute (API) reported late on Tuesday. Distillate stockpiles climbed by 4.4 million barrels in the week. The surging stockpiles, which exceeded analysts' expectations, undermined the bullish outlook from investors in the previous session when prices climbed more than 1% as market participants took the decision of major producers to add supply next month as a sign of confidence that surging COVID-19 cases would not hit demand for long. Meanwhile, the Organization of the Petroleum Exporting Countries, Russia and allies, together called OPEC+, on Tuesday agreed to add another 400,000 barrels per day of supply in February, as it has every month since August. The decision to stick to their output increase reflected the group's view that Omicron will only have a short-lived impact on global energy demand. On one hand, there may be growing hopes that the Omicron variant may herald COVID-19's shift from a pandemic to a more easily manageable disease, at least in highly vaccinated parts of the world. But on the other, prices may be hit by a sobering realisation that countries remain on high alert, and governments are not ready to relax restrictions as long as infections are spiking.

 

 
Intraday RESISTANCE LEVELS
5th 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 76.90-77.55 78.20 79.00-79.90
EURO/USD 1.1320-1.1350 1.1420-1.1485 1.1420-1.1485
GBP/USD 1.3550-1.3590 1.3630 1.3700-1.3736066
USD/JPY 116.00-116.50 116.90 117.50-118.00

Intraday SUPPORTS LEVELS
5th 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 21.00-20.50
Crude Oil 75.90-75.20 74.60 74.00-73.30
EURO/USD 1.1270-1.1230 1.1170 1.1320-1.1350
GBP/USD 1.3490-1.3440 1.3390 1.3300-1.3200
USD/JPY 115.50-114.65 113.95 113.50-113.10

Intra-Day Strategy (5th 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 Tuesday 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 Tuesday made its intraday high of US$23.09/oz and low of US$23.00/oz settled up by 1.26% at US$23.03/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 Tuesday made an intra‐day high of US77.46/bbl, intraday low of US$75.52/bbl and settled up by 1.418% to close at US$76.92/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 76.90-79.00 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     76.90-77.55
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 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1271/EUR, high of US$1.1321/EUR and settled the day down by 0.069% to close at US$1.1285/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     1.1320-1.1350

Intraday  Resistance Levels
R1     1.1320-1.1350
R2     1.1420-1.1485
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     1.3700-1.3736066

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 JPY115.25/USD and made an intraday high of JPY116.34/USD and settled the day up 0.704% at JPY116.12/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     115.50-114.65
S2     113.95
S3     113.50-113.10

INTRADAY RESISTANCE LEVELS
R1     116.00-116.50
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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