AAFX TRADING

Daily Market Lookup

  • The dollar was up on Thursday morning in Asia, remaining near a five-year high to the yen as investors digested the hawkish tone in the minutes from the latest U.S. Federal Reserve meeting. Meanwhile, In the minutes from its December meeting, released on Wednesday, the Fed said the "very tight" U.S. labor market could justify faster-than-expected interest rate hikes to curb high inflation. Futures on the federal funds rate were quick to price in a roughly 80% chance of a quarter-percentage-point Fed hike by the March 2022 meeting. Five-year U.S. Treasury yields, which are especially sensitive to interest rate expectations, climbed to an almost two-year high. Investors also digested Tuesday’s ADP nonfarm employment change, which was a much higher-than-expected 807,000 in December. The U.S. jobs report, including non-farm payrolls, is due on Friday. Despite the hawkish stance taken by the Fed in recent months, the dollar’s gains have languished since it hit a 16-month high of 96.938 in late November 2021.
  • Bitcoin fell below $43,000 on Thursday, testing multi-month lows after minutes from the Federal Reserve's last meeting showed it leaning toward more aggressive policy action, which sapped investor appetite for riskier assets. The world's largest cryptocurrency was last at $42,700, down 1.7%, having lost 5.2% on Wednesday. A break below last month's trough of $42,000 would make it the weakest since September. The token hit a record high of $69,000 in November. Moves in cryptocurrency markets are becoming more aligned with those in traditional markets as the number of institutions trading both crypto and other assets grows. The Nasdaq plunged more than 3% overnight in its biggest one-day percentage drop since February, after Fed minutes showed U.S. policymakers had discussed reducing the bank's balance sheet at their December meeting, when they also decided to accelerate finishing their bond buying programme. Ether, the world's second-largest cryptocurrency which underpins the ethereum network, lost 5.2% on Wednesday, and touched its lowest level since October, before bouncing back slightly to $3,460. Crypto analysts were also watching to see whether anti-government protests in Kazakhstan, which were initially sparked by rising fuel prices, would affect the bitcoin network. The central Asian nation was the world's second-largest centre for bitcoin mining, Britain's Cambridge Centre for Alternative Finance said last year The Kazakh government late last year began cracking down on some miners, fearing the energy-intensive process was using too much power.
  • Gold was down on Thursday morning in Asia, as the minutes released from the U.S. Federal Reserve meeting signaled a hawkish stance amid surging COVID-19 cases. The Fed released the minutes from its December meeting on Wednesday, which signaled that the central bank is likely to hike interest rates quicker than expected. The minutes also said the Fed could accelerate the pace of the bank’s asset tapering to calm high inflation. On the COVID-19 front, the number of new cases continued to surge with the rolling seven-day average number of new COVID-19 cases hitting 540,000 in the U.S. on Tuesday. Hospitalizations of COVID-19 patients in the U.S. have also risen 45% in the past seven days and were at 111,000, a figure last seen in January 2021. Investors also digested U.S. data, with Tuesday’s ADP nonfarm employment change a much higher-than-expected 807,000 in December. They now await the U.S. jobs report, including non-farm payrolls, due on Friday. Meanwhile, Chinese data released earlier in the day showed that the Caixin services purchasing managers index (PMI) was 53.1 in December.
  • Oil was down on Thursday morning in Asia, with a draw in U.S. crude oil supplies smaller than expected. Doubt also remains as to whether the Organization of the Petroleum Exporting Countries and allies (OPEC+) will be able to meet its output hike for February. Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration showed a draw of 2.144 million barrels for the week ended Dec. 31. Forecasts prepared by Investing.com predicted a draw of 3.283 million while a draw of 3.576 million was recorded during the previous week. Crude oil supply data from the American Petroleum Institute released the day before, showed a draw of 6.432 million barrels. Meanwhile, OPEC+ agreed on Tuesday to increase another 400,000 barrels per day (bpd) of supply for February. However, some investors are not confident that the agreed output hike will be met. Adding pressure on oil prices, the minutes from the U.S. Federal Reserve’s December meeting indicated the central bank is likely to interest rates quicker than expected. In Asia Pacific, Hong Kong tightened its COVID-19 restrictive measures on Wednesday.

 

 
Intraday RESISTANCE LEVELS
6th 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 1.1385 1.1420-1.1485
GBP/USD 1.3550-1.3590 1.3630 1.3700-1.3730
USD/JPY 116.00-116.50 116.90 117.50-118.00

Intraday SUPPORTS LEVELS
6th January 2022 S1 S2 S3
GOLD-XAU 1,800-1,784 1,778 1,770-1,764
Silver-XAG 22.50-22.10 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 1.1120-1.1050
GBP/USD 1.3490-1.3440 1.3390¬1.3390 1.3300-1.3200
USD/JPY 115.50-114.65 113.95 113.50-113.10

Intra-Day Strategy (6th 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$1829.55/oz and low of US$1808.18/oz. Gold up 0.237% at US$1810.19/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 Wednesday made its intraday high of US$23.24/oz and low of US$22.70/oz settled down by 1.079% at US$22.79/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 22.50-20.50, 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 19.90-19.50.6

 
Intraday  Support Levels
S1     22.50-22.10
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)   54.861 Buy
MACD(12,26,9)   -0.185 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US78.27/bbl, intraday low of US$76.29/bbl and settled down by 0.149% to close at US$76.85/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 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1276/EUR, high of US$1.1345/EUR and settled the day up by 0.237% to close at US$1.1312/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 Wednesday made an intra‐day low of US$1.3521/GBP, high of US$1.3597/GBP and settled the day up by 0.198% to close at US$1.3553/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

6Based 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¬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 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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