AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower in early European trade Thursday, adding to the previous session’s sharp losses after the release of the latest inflation data failed to encourage any further bets on aggressive Federal Reserve policy tightening. Wednesday’s U.S. data showed that the headline consumer price index grew 7% year-on-year and the month-on-month figure rose by 0.5%. Stripping out the volatile energy and food sectors, the core consumer price index grew 0.6% month-on-month and 5.5% year-on-year in December. While the headline figure showed consumer prices rising at their fastest rate in nearly 40 years, it was largely as expected and is not seen changing the thinking of the Fed policy makers significantly. With at least three rate hikes already in the market price, some traders pared bets on further dollar gains. That said, “it should allow consolidation for a floor below the dollar in the near term – further cementing expectations for three Fed hikes and leaving the door open to speculate for four in 2022,” said analysts at ING, in a note. “We think this is a reason for markets to keep buying the dips in the dollar for the time being.” There are more U.S. inflation numbers on the economic data slate later Thursday, with December PPI due, but a lot of attention is likely to be on Fed Governor Lael Brainard as she appears at a hearing on Capitol Hill into her nomination as deputy chair. In prepared remarks before her appearance, Brainard said tackling inflation and getting it back down to 2% while sustaining an inclusive recovery is the U.S. central bank’s most pressing task. Fed Chairman Jerome Powell had dampened overly aggressive tightening expectations in his renomination testimony on Tuesday, stating that the Fed was still debating the time frame involved in reducing the central bank’s balance sheet.
  • The dollar was nursing losses and below key support levels on Thursday after U.S. inflation proved no hotter than expected in December and prompted investors to cut crowded long positions. December's monthly U.S. inflation figures published on Wednesday were a fraction higher than forecast and at 7%, the increase in year-on-year CPI was as expected. Even though that was the biggest jump since June 1982, traders don't see it urgently shifting an already hawkish Fed too much. With at least three rate hikes already in the market price, some investors pared bets on further dollar gains. The best performing majors in a fairly quiet Asian day were the kiwi and sterling as central banks in both places look to be on an even more aggressive path than the Fed. Sterling, which has been rallying as traders reckon Britain's economy can survive a surge in COVID-19 cases and that the Bank of England is going to get started on hikes as soon as next month, is testing its 200-day moving average at $1.3717. It is up 4% from December lows and traders have so far shrugged off a political crisis enveloping Prime Minister Boris Johnson who apologised for attending a party in the Downing Street garden during a coronavirus lockdown. Later on Thursday, Fed Governor Lael Brainard appears at Congress for a hearing into her nomination as deputy chair and in two weeks the Fed holds its first meeting of the year.
  • Oil prices slipped on Thursday, trimming big gains from the previous two sessions, amid uncertainty over near-term demand as cases of the highly contagious Omicron variant of the coronavirus surge around the globe. Data from the U.S. Energy Information Administration on Wednesday showed fuel demand has taken a hit from Omicron, with gasoline stockpiles increasing by 8 million barrels in the week to Jan. 7, compared with analyst expectations for 2.4 million-barrel rise. However, Moya added, the Omicron impact is expected to short-lived. The market had earlier latched on to a bigger drawdown than expected in crude inventories and the fact that stockpiles are at their lowest since October 2018, pushing Brent and WTI to touch their highest in two months on Wednesday. The drop in crude inventories "might have been related to end-of-year tax issues on oil stocks onshore in Texas and Louisiana", the bank added. Still, U.S. supplies are set to rise as producers are paving the way for faster production by expanding well completions in the country's top shale oil field, the Permian Basin of west Texas and New Mexico, according to research data. Separately, concerns about inflation putting pressure on the Federal Reserve to speed up the timeline for kicking off interest rate hikes are weighing on markets.
  • Gold was down on Thursday morning in Asia but remained near the one-week high hit in the previous session. The U.S. dollar and Treasury yields retreated after U.S. inflation data highlighted the need for a quicker interest rate hike. Supporting these expectations, Fed St. Louis President James Bullard told the Wall Street Journal that four rate increases may be justified in 2022 amid high inflation. Fed Bank of Cleveland President Loretta Mester and Atlanta Fed leader Raphael Bostic separately interest rate hikes as soon as March 2022. Richmond Fed President Thomas Barkin, Philadelphia Fed President Patrick Harker, and Chicago Fed President Charles Evans are among the Fed officials speaking later in the day. New York Fed President John Williams will speak on Friday. The U.S. Senate Banking Committee hearing for Fed vice-chair nominee Lael Brainard will also take place later in the day.

 

 
Intraday RESISTANCE LEVELS
13th January 2022 R1 R2 R3
GOLD-XAU 1,824-1,832 1,841 1,848-1,860
Silver-XAG 23.15-23.80 24.50 24.90-25.50
Crude Oil 82.30-83.00 83.90 84.50-85.00
EURO/USD 1.1485-1.1525 1.1590 1.1620-1.1650
GBP/USD 1.3750-1.3800 1.3840 1.3890-1.3950
USD/JPY 114.65-115.00 115.50 116.00-116.50

Intraday SUPPORTS LEVELS
13th January 2022 S1 S2 S3
GOLD-XAU 1,818-1,808 1,790 1,784-1,778
Silver-XAG 22.50-22.10 21.40 21.00-20.50
Crude Oil 81.80-81.00 80.20 79.00-78.20
EURO/USD 1.1420-1.1385 1.1320 1.1270-1.1230
GBP/USD 1.3700-1.3650 1.3590 1.3550-1.3490
USD/JPY 114.20-113.90 113.20 112.70-112.50

Intra-Day Strategy (13th 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 Wednesday made its intraday high of US$1828.00/oz and low of US$1814.62/oz. Gold up 0.254% at US$1825.94/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     1,818-1,808
S2     1,790
S3     1,784-1,778
Intraday Resistance Levels
R1     1,824-1,832
R2     1,841
R3     1,848-1,860

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$22.63/oz and low of US$22.63/oz settled up by 1.425% at US$23.11/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 Wednesday made an intra‐day high of US82.45/bbl, intraday low of US$80.58/bbl and settled up by 1.689% to close at US$82.11/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 82.30-83.90 with stop loss at 83.90; targeting 81.80-81.00-80.20 and 79.00-78.20-77.55. Buy above 81.80-78.20 with risk daily closing below 78.20 and targeting 82.30-83.00-83.90 and 84.50-85.00.

 
Intraday Support Levels
S1     81.80-81.00
S2     80.20
S3     79.00-78.20

Intraday Resistance Levels
R1     82.30-83.00
R2     83.90
R3     84.50-85.00

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 Wednesday made an intraday low of US$1.1353/EUR, high of US$1.1452/EUR and settled the day up by 1.070% to close at US$1.1441/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 1.1420-1.1120 with risk below 1.1120, targeting 1.1485-1.1525-1.1590 and 1.1620-1.1650. Sell below 1.1485-1.1650, targeting 1.1420-1.1385-1.1310 and 1.1250-1.1200-1.1170 with stop-loss at daily closing above 1.1650.

 
Intraday Support Levels
S1     1.1420-1.1385
S2     1.1320
S3     1.1270-1.1230

Intraday  Resistance Levels
R1     1.1485-1.1525
R2     1.1590
R3     1.1620-1.1650

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$1.3620/GBP, high of US$1.3714/GBP and settled the day up by 0.467% to close at US$1.3696/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 1.3700-1.3490 with target 1.3750-1.3800-1.3840 and 1.3890-1.3950 with stop loss closing below 1.3950. Sell in between 1.3750-1.3950 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     1.3700-1.3650
S2     1.3590
S3     1.3550-1.3490

Intraday Resistance Levels
R1     1.3750-1.3800
R2     1.3840
R3     1.3890-1.3950

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 Wednesday made intra‐day low of JPY114.37/USD and made an intraday high of JPY115.46/USD and settled the day down 0.575% at JPY114.62/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

Sell below 114.65-116.50 with risk above 116.50 targeting 14.50-113.90 and 113.20-112.70-112.50. Long positions above 114.20-112.50 with targets of 114.65-115.00-115.50 and 116.00-116.50-116.90 with stop below 112.50.

 
Intraday Support Levels
S1     114.20-113.90
S2     113.20
S3     112.70-112.50

INTRADAY RESISTANCE LEVELS
R1     114.65-115.00
R2     115.50
R3     116.00-116.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.1338 Buy
20-DMA   114.84 Sell
50-DMA   114.19 Buy
100-DMA   113.17 Buy
200-DMA   111.59 Buy
STOCH(9,6)   11.683 Sell
MACD(12,26,9)   0.0102 Sell

AAFX TRADING
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