AAFX TRADING

Daily Market Lookup

  • The U.S. dollar weakened in early European trade Friday, heading for its worst week in more than a year as traders now consider Federal Reserve interest rates hikes this year as being fully priced in. This dollar selloff has come in a week that has seen annual U.S. consumer inflation climb to levels not seen since the early 1980s and several Fed officials talk about the need for the central bank to hike interest rates and reduce its balance sheet to combat inflation. The latest policy maker to suggest prompt Fed action was Governor Lael Brainard, who said during her confirmation hearing before the Senate Banking Committee, that “we do have a powerful tool and we are going to use it to bring inflation down over time.” Sterling has been pretty resilient of late, withstanding the political turmoil surrounding Prime Minister Boris Johnson after the Bank of England raised interest rates in December. The market is also pricing in a strong likelihood of another hike in February.
  • The dollar headed for its largest weekly fall in more than a year on Friday as investors trimmed long positions and deemed, for now, that several U.S. rate hikes this year are fully priced in. In a week where data showed U.S. inflation at its hottest since the early 1980s, selling has forced the greenback through key support against the euro and yen in particular, and traders seem content to lighten their bets until a clearer trend emerges. The euro is up more than 1% for the week so far, and has punched out of a range it held since late November, hitting the highest since Nov. 11 at $1.1483. It doesn't face strong chart resistance until $1.1525. The safe-haven yen has benefited from a slide in global stocks, while Reuters also reported exclusively that the Bank of Japan is deliberating how it can start telegraphing an eventual rate hike. The dollar's doldrums have come while U.S. interest rate futures have all but locked in four hikes this year. But longer-end yields have fallen slightly on hawkish comments from Federal Reserve officials about reducing the bank's balance sheet. The Antipodean currencies have also been roused from their ranges and will have traders looking closely at labour and inflation data in both countries this month for anything that might prompt further shifts in central bank rhetoric. Sterling has been forging ahead, too, defying a political crisis threatening Prime Minister Boris Johnson's position on confidence that Britain's economy can withstand a wave of COVID-19 infections and that the Bank of England could hike rates next month. The pound traded above its 200-day moving average on Thursday and is heading for a fourth consecutive weekly gain of more than 0.5%. It last bought $1.3733.
  • Gold was up on Friday morning in Asia and was set for its best weekly gain since November 2021. Investors await U.S. data that could provide clarity regarding U.S. Federal Reserve's monetary policy, while a weakening dollar Index and U.S. Treasury yields also provided support. The dollar, which normally trades inversely to gold, was down on Friday. Benchmark U.S. 10-year Treasury yields retreated from the two-year highs hit earlier in the week. Lael Brainard on Thursday became the latest and most senior Fed official to signal that the Fed is getting ready to start raising interest rates in March 2022 at the U.S. Senate Banking Committee hearing for her vice-chair nomination. New York Fed President John Williams will also speak later in the day. Meanwhile, data released on Thursday showed that the U.S. producer price index (PPI) grew 9.7% year-on-year and 0.2% month-on-month in December. The core PPI grew 0.5% month-on-month and 8.3% year-on-year. The number of initial jobless claims was also higher than expected at 230,000 for the week. In Asia Pacific, Chinese data released earlier in the day showed that exports grew 20.9% year-on-year, imports grew 19.5% year-on-year, and the trade balance was at $94.46 billion, in December.
  • Oil was down on Friday morning in Asia over concerns that the U.S. would implement measures to cool prices. Investors were also concerned that the latest COVID-19 outbreaks in China could dent fuel demand in the country. Meanwhile, China, the world’s second-largest oil consumer, re-imposed stricter measures in response to the latest COVID-19 outbreaks. The omicron COVID-19 variant has already spread from the city of Tianjin to Dalian. Many cities, including Beijing, are urging people to stay home during the upcoming Chinese New Year holidays. Given that this is normally a peak travel season, some investors were concerned about fuel demand. Meanwhile, the U.S. Energy Department said it had sold 18 million barrels of strategic crude oil reserves to six companies, including Exxon Mobil. Other investors are optimistic that the impact of omicron on the global economy could be short-lived.

 

 
Intraday RESISTANCE LEVELS
14th January 2022 R1 R2 R3
GOLD-XAU 1,832-1,841 1,848 1,860-1,872
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 113.90-114.20 114.65 115.00-115.50

Intraday SUPPORTS LEVELS
14th 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 81.50-81.00 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 113.20-112.70 112.50

Intra-Day Strategy (14th 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$1828.10/oz and low of US$1812.29/oz. Gold down 0.197% at US$1822.29/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     1,832-1,841
R2     1,848
R3     1,860-1,872

Technical Indicators

Name   Value Action
14DRSI  

58.253

Buy
20-DMA   1808.99 Buy
50-DMA  

1802.53

Buy
100-DMA   1799.36 Buy
200-DMA   1798.94 Buy
STOCH(5,3)   92.940 Buy
MACD(12,26,9)   6.816 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$23.25/oz and low of US$22.98/oz settled down by 0.328% at US$23.06/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 22.90-20.50, targeting 23.20-23.80-24.05 and 24.55-24.90-25.50 with stop loss should be place on the breakage below 20.10. Sell in between 23.20-25.50 with stop loss above 25.50; targeting 22.50-21.40-21.00 and 20.50-19.90-19.50.

 
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 US82.29/bbl, intraday low of US$80.90/bbl and settled down by 1.186% to close at US$81.17/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     81.50-81.00
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 Thursday made an intraday low of US$1.1435/EUR, high of US$1.1480/EUR and settled the day up by 0.107% to close at US$1.1453/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

US$1.3748/GBP and settled the day up by 0.0467% to close at US$1.3703/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 Thursday made intra‐day low of JPY113.99/USD and made an intraday high of JPY114.69/USD and settled the day down 0.403% at JPY114.15/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     113.20-112.70
S2     112.50
S3    

INTRADAY RESISTANCE LEVELS
R1     113.90-114.20
R2     114.65
R3     115.00-115.50

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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