AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged higher in early European trade Wednesday, stabilizing after the previous session’s weakness as Federal Reserve Chair Jerome Powell soothed fears the central bank will tighten monetary policy aggressively this year. Powell expressed confidence, in his renomination testimony on Tuesday, that the U.S. economy was strong enough to cope with higher interest rates and a runoff of its asset holdings to combat inflation. However, he added policymakers were still debating their plans on reducing the central bank’s balance sheet, allaying market fears for a sudden withdrawal of monetary support. Previous Fed speakers had taken a more hawkish line, with Atlanta Fed President Raphael Bostic and his Kansas City counterpart Esther George saying this week that high inflation and a strong recovery warrant a rapid rundown of Fed asset holdings. Attention will now turn to the release of the latest U.S. consumer inflation data later in the session, with headline CPI expected to come in at a hefty 7% on a year-on-year basis. The figures give the People's Bank of China space to loosen monetary policy further to cushion the impact from a slowdown in the giant real estate sector.
  • The dollar slid to its weakest since mid-November against major peers on Wednesday, after Federal Reserve Chair Jerome Powell said it may take several months to make a decision on running down the central bank's $9 trillion balance sheet. In testimony at his renomination hearing on Tuesday, Powell said the U.S. economy was ready for higher interest rates and a runoff of its asset holdings - dubbed quantitative tightening (QT) - to combat inflation. But he said policymakers were still debating approaches to reducing the Fed's balance sheet, and that it could sometimes take two, three or four meetings for them to make such decisions. Powell's comments were less hawkish than those of some of his colleagues, allaying market fears for a sudden withdrawal of monetary support. Atlanta Fed President Raphael Bostic, for example, said on Monday that high inflation and a strong recovery warrant a rapid rundown of Fed asset holdings. The dollar index, which measures the greenback against six major peers, dipped to 95.543 in the Asian session, the lowest since Nov. 18. U.S. consumer inflation data is due later in the global day, with headline CPI seen coming in at a red-hot 7% on a year-on-year basis, boosting the case for an early increase in rates. Money markets currently price about 85% odds of a rates lift-off by March, and a total of at least three quarter-point hikes by year-end. The dollar appears to be suffering from "fatigue" after rallying hard in the six months to late November amid the Fed's hawkish tilt, Ken Cheung, a strategist at Mizuho Bank, wrote in a research note. The dollar rally could take a break until other major central banks have laid out their own policy roadmaps in response to the Fed's aggressive tightening cycle, he said.
  • Gold was up on Wednesday morning in Asia. Investors shifting their focus to U.S. inflation data for interest rate hike clues after U.S. Federal Reserve Chairman Jerome Powell set a less hawkish tone and reiterated that the central bank would tackle inflation. At his Senate Banking Committee hearing for a second term as Fed chairman, Powell said the Fed could need several months to decide on the running down of its $9 trillion balance sheet, adding it would also ensure that high inflation did not become “entrenched”. The Senate Banking Committee hearing for Fed vice-chair nominee Lael Brainard will take place on Thursday. Fed officials including Richmond Fed President Thomas Barkin, Philadelphia Fed President Patrick Harker, and Chicago Fed President Charles Evans will also speak on the same day. Investors now await the U.S. CPI and the Fed Beige Book later in the day. The PPI will follow on Thursday.
  • Oil prices steadied on Wednesday after rising in the previous session on expectations that fuel demand will continue to strengthen as the U.S. Federal Reserve is likely to raise interest rates more slowly than expected. Brent and U.S. crude oil futures are trading at their highest since the highly contagious Omicron COVID-19 variant emerged in late November has not impacted fuel demand the way previous variants did. Brent crude futures were up 2 cents at $83.74 a barrel, after jumping 3.5% in the previous session. Federal Reserve Chairman Jerome Powell said on Tuesday the economy of the United States, the world's biggest oil consumer, should weather the current COVID-19 surge with only "short-lived" impacts and was ready for the start of tighter monetary policy. Data from the American Petroleum Institute (API) industry group, however, painted a weaker picture on fuel demand, with a smaller decline in crude stockpiles than expected and bigger builds than expected in gasoline and distillate inventories. Crude stocks fell by 1.1 million barrels for the week ended Jan. 7, according to market sources citing API figures. That was less than the 1.9 million barrel draw that 10 analysts polled by Reuters had expected. However, supporting the market was the U.S. Energy Information Administration's upgraded oil demand outlook released on Tuesday, seeing total U.S. demand rising by 840,000 barrels per day (bpd) in 2022 from last year, up from a previous forecast for an increase of 700,000 bpd.

 

 
Intraday RESISTANCE LEVELS
12th January 2022 R1 R2 R3
GOLD-XAU 1,818-1,824 1,832 1,841-1,850
Silver-XAG 23.15-23.80 24.50 24.90-25.50
Crude Oil 81.00-81.80 82.30 83.00-83.90
EURO/USD 1.1385 1.1420 1.1485-1.1525
GBP/USD 1.3650-1.3700 1.3750 1.3800-1.3890
USD/JPY 115.50-116.00 116.50 116.90-117.50

Intraday SUPPORTS LEVELS
12th January 2022 S1 S2 S3
GOLD-XAU 1,808-1,790 1,784 1,778-1,770
Silver-XAG 22.50-22.10 21.40 21.00-20.50
Crude Oil 78.20 78.20 77.55-76.90
EURO/USD 1.1320-1.1270 1.1230 1.1170-1.1120
GBP/USD 1.3590-1.3550 1.3490 1.3440-1.3390
USD/JPY 115.00-114.65 113.95 113.50-113.10

Intra-Day Strategy (12th 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$1823.22/oz and low of US$1800.01/oz. Gold up 1.109% at US$1821.45/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 1805-1778 with risk below 1778, targeting 1818-1824-1834 and 1840-1848-1854. Sell in between 1818-1854 keeping stop loss closing above 1854, targeting 1800-1790 and 1783-1774-1769.

 
Intraday Support Levels
S1     1,808-1,790
S2     1,784
S3     1,778-1,770
Intraday Resistance Levels
R1     1,818-1,824
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$22.79/oz and low of US$22.43/oz settled up by 1.425% at US$22.76/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 Tuesday made an intra‐day high of US81.02/bbl, intraday low of US$77.88/bbl and settled up by 3.543% to close at US$80.74/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 81.00-83.90 with stop loss at 83.90; targeting 80.20-79.00-78.20 and 77.55-76.90. Buy above 80.20-75.90 with risk daily closing below 75.90 and targeting 79.00-80.10-80.60 and 81.00-81.80.

 
Intraday Support Levels
S1     78.20
S2     78.20
S3     77.55-76.90

Intraday Resistance Levels
R1     81.00-81.80
R2     82.30
R3     83.00-83.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.2822 Sell
20-DMA   76.33 Buy
50-DMA   75.31 Buy
100-DMA   74.27 Buy
200-DMA   70.34 Buy
STOCH(5,3)   85.873 Buy
MACD(12,26,9)   -0.535 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1312/EUR, high of US$1.1374/EUR and settled the day down by 0.391% to close at US$1.1364/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 1.1320-1.1120 with risk below 1.1120, targeting 1.1350-1.1385-1.1420 and 1.1485-1.1510-1.1590. Sell below 1.1380-1.1540 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     1.1385
R2     1.1420
R3     1.1485-1.1525

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 Tuesday made an intra‐day low of US$1.3551/GBP, high of US$1.3634/GBP and settled the day up by 0.425% to close at US$1.3632/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 1.3590-1.3200 with target 1.3650-1.3700-1.3740 and 1.3800-1.3890 with stop loss closing below 1.3200. Sell in between 1.3590-1.3730 with targets at 1.3550-1.3490-1.3440 and 1.3390-1.3300-1.3265 with stop loss should be 1.3790.

 
Intraday Support Levels
S1     1.3590-1.3550
S2     1.3490
S3     1.3440-1.3390

Intraday Resistance Levels
R1     1.3650-1.3700
R2     1.3750
R3     1.3800-1.3890

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

63.834

Buy
20-DMA   1.3466 Buy
50-DMA   1.3453 Buy
100-DMA   1.3530 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 JPY115.11/USD and made an intraday high of JPY115.67/USD and settled the day up 0.140% at JPY115.28/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 115.50-113.50 with targets of 116.00-116.50-116.90 and 117.50-118.00 with stop below 113.50. Sell below 116.00-118.00 with risk above 118.00 targeting 115.50-114.65-113.90 and 113.20-112.70-112.10.

 
Intraday Support Levels
S1     115.00-114.65
S2     113.95
S3     113.50-113.10

INTRADAY RESISTANCE LEVELS
R1     115.50-116.00
R2     116.50
R3     116.90-117.50

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

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