AAFX TRADING

Daily Market Lookup

  • The dollar was down on Friday morning in Asia but set for a fifth consecutive weekly gain on the Japanese yen. This rally could be extended if the latest U.S. jobs report justifies early Federal Reserve interest rate hikes. The dollar hit a five-year high against the yen at 116.35 on Tuesday but has since fallen back somewhat. The U.S. currently is up about 0.7% on the yen this week and about 2.7% over five weeks, over expectations that the Fed will start hiking interest rates several times in 2022, beginning in March that drove a bond market selloff and a rise in yields. The yen is the most prominent loser among major currencies, with investors betting that the Bank of Japan will lag its peers in hiking interest rates. The dollar, meanwhile, is set for its best week in more than a month against its Australian and New Zealand counterparts. Meanwhile, St. Louis Fed President James Bullard said on Thursday that the Fed could also start reducing its balance sheet soon after it begins hiking interest rates. San Francisco Fed President Mary Daly added that the balance sheet reduction would follow normalizing rates. Investors now await the U.S. job report due later in the day and particularly the non-farm payrolls figure. The dollar retreated slightly on Friday but was still on course to gain over the week before the release of U.S. labour data that investors think could reinforce the case for early Federal Reserve interest rate hikes. Traders were also awaiting the latest euro zone inflation data scheduled for release at 1000 GMT to gauge whether the European Central Bank might tilt towards a more hawkish stance. Earlier data showed German exports grew in November despite persisting supply bottlenecks in manufacturing, while industrial output fell The yen has been the most prominent casualty of the dollar's strength in the first trading week of the year, as investors reckon the Bank of Japan will lag others on rate hikes. The release on Federal Reserve meeting minutes on Wednesday supported expectations that the Fed could raise rates as soon as March and several times this year, pushing up U.S. yields and the currency. On Thursday, St. Louis Fed President James Bullard said the Fed could start reducing its balance sheet soon after it begins hiking. Even dovish San Francisco Fed President Mary Daly said the balance sheet reduction would follow normalising rates. Elsewhere, sterling has held its own this week as traders figure the Bank of England will soon begin its own hiking path. It last bought $1.3546, not far from Tuesday's two-month high of $1.3599. It is near a two-year high on the euro.
  • Gold was up on Friday morning in Asia but remained close to a two-week low hit during the previous session. A warning from the World Health Organization (WHO) that the omicron COVID-19 variant cannot be considered “mild”, alongside stronger yields, gave the safe-haven asset a boost. Although omicron appears to produce less severe disease than the delta strain of the virus, it should not be categorized as "mild", according to WHO director-general Tedros Adhanom Ghebreyesus. Even the most dovish of U.S. Federal Reserve officials are on board with the central bank’s hawkish policy. San Francisco Fed President Mary Daly said at an event on Thursday that trimming the Fed balance sheet would come after normalizing the Fed funds rate. St. Louis Fed President James Bullard said at a separate event that the Fed could raise its target interest rate as soon as March 2022. According to the CME FedWatch tool, investors are currently anticipating a greater than 70% chance for a rate hike of at least 25 basis points at the March Fed meeting. On the data front, investors now await the U.S. jobs report, including non-farm payrolls, due later in the day. Thursday’s initial jobless claims data showed that the number rose to 207,000 for the previous week.
  • Oil was up on Friday morning in Asia. However, ongoing protests in Kazakhstan prompted fears of a disrupted crude supply from the Organization of the Petroleum Exporting Countries and allies (OPEC+) producer alongside decreased production in Libya. The government has declared a state of emergency in Kazakhstan, after days of unrest that began in the country’s oil-rich western regions after price caps on butane and propane were removed on New Year's Day. Russia has also sent paratroopers on Thursday to help put down the protests. For now, supply concerns are overtaking worries about the impact of the omicron COVID-19 variant on fuel demand. Supply additions from OPEC+ announced earlier in the week are not keeping up with demand growth. The cartel’s output in December 2021 rose by 70,000 barrels per day from November, falling short of the 253,000-bpd increase allowed under its 2021 supply deal. Meanwhile, production in Libya fell to 729,000 barrels per day, down from a high of 1.3 million bpd last year, thanks in part to pipeline maintenance work.

 

 
Intraday RESISTANCE LEVELS
7th 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 80.10-80.60 81.00 81.80-82.50
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
7th January 2022 S1 S2 S3
GOLD-XAU 1,790-1,784 1,778 1,770-1,764
Silver-XAG 22.50-22.10 21.40 21.00-20.50
Crude Oil 79.00-78.20 76.90-75.90 76.90-75.90
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 115.50-114.65 113.95 113.50-113.10

Intra-Day Strategy (7th 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 Thursday made its intraday high of US$1811.38/oz and low of US$1786.29/oz. Gold down 1.066% at US$1790.99/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 1790-1778 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     1,790-1,784
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 Thursday made its intraday high of US$22.81/oz and low of US$21.99/oz settled down by 2.591% at US$22.18/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.

 
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)   54.891 Buy
MACD(12,26,9)   -0.186 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US79.73/bbl, intraday low of US$76.39/bbl and settled up by 3.143% to close at US$79.15/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 80.10-82.50 with stop loss at 82.50; targeting 79.00-78.20-77.55 and 76.90-75.90. Buy above 79.00-75.90 with risk daily closing below 75.90 and targeting 80.10-80.60-81.00 and 81.80-82.50.

 
Intraday Support Levels
S1     79.00-78.20
S2     76.90-75.90
S3     76.90-75.90

Intraday Resistance Levels
R1     80.10-80.60
R2     81.00
R3     81.80-82.50

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 Thursday made an intraday low of US$1.1283/EUR, high of US$1.1331/EUR and settled the day down by 0.234% 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     1.1120-1.1050

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 Thursday made an intra‐day low of US$1.3489/GBP, high of US$1.3558/GBP and settled the day down by 0.1888% to close at US$1.3528/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 Thursday made intra‐day low of JPY115.61/USD and made an intraday high of JPY116.18/USD and settled the day down 0.232% at JPY115.81/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

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.

 
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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