AAFX TRADING

Daily Market Lookup

  • The dollar held firm on Wednesday after the previous day's surge in U.S. yields resulted in sharp gains against the euro and put the greenback above support levels established in recent months amid mounting expectations for U.S. interest rate increases. The greenback also held sterling below its 200-day moving average ahead of British inflation figures due later Wednesday, as talk of a leadership challenge to Prime Minister Boris Johnson added uncertainty. Annual headline inflation in Britain is seen hitting an almost decade-high 5.2% and a surprise could trigger further bets on Bank of England rate hikes and renew the pound's rally. The dollar has been boosted by U.S. Treasury yields rising further ahead of next week's Federal Reserve policy meeting at which traders are starting to fear another hawkish surprise. Two-year Treasury yields have leapt 15 basis points over two sessions to cross 1% and benchmark 10-year yields inched up on Wednesday to touch a new two-year high of 1.9%. Fed funds futures are pricing three more hikes in 2022. Analysts say dollar strength could extend if traders start expecting rates to rise not just faster but further as well. Moves in the U.S. bond market unsettled equity investors, providing some support on Wednesday to the safe-haven yen, which was at 114.41 to the dollar, slightly firmer on the day. The overall result was that the U.S. dollar index held onto most of its 0.5% gain Tuesday, to trade at 95.676. Traders also kept a wary eye on a delicate situation in Ukraine. U.S. Secretary of State Antony Blinken will seek to defuse a crisis with Moscow when he meets Russia's foreign minister in Geneva this week.
  • The dollar was up on Wednesday morning in Asia, with rising U.S. yields pushing it back above support levels that have not been hit in the past few months. Investors also continue to anticipate a hike in U.S. interest rates. With the U.S. Federal Reserve due to hand down its policy decision in the following week, investors are nervous about further hawkish moves. The Fed is widely expected to hike interest rates three more times within 2022. The dollar’s gains could continue if investors start expecting interest rates to rise not just faster but further as well. Across the Atlantic, U.S.-Russia tensions over Ukraine are also on investors’ radars. U.S. Secretary of State Antony Blinken will meet Russian foreign minister Sergey Lavrov in Geneva on Friday.
  • Gold was down on Wednesday morning in Asia and was near the one-week low hit during the previous session. U.S. Treasury yields climbed to two-year highs as expectations for a quicker-than-expected interest rate hike mount. The dollar, which normally moves inversely to gold, inched down on Wednesday, and benchmark U.S. Treasury yields hit two-year highs on Tuesday. Investors are bracing for the U.S. Federal Reserve’s next policy decision, due to be handed down on Jan. 26. The central bank is expected to take more aggressive measures to curb persistently high levels of inflation. Central banks in Indonesia, Malaysia, Norway, Turkey, and Ukraine will hand down their policy decisions on Thursday. Meanwhile, Tuesday’s U.S. NY Empire State manufacturing index fell to 0.70 in January while housing data, including building permits, is due later in the day. Across the Atlantic, the U.K. will release its consumer and producer price index figures later in the day. Elsewhere in Europe, economists polled by Reuters predicted that eurozone inflation will be much higher than expected throughout 2022, compared with expectations in December 2021. This could pressure the European Central Bank to tighten monetary policy once the spread of the omicron COVID-19 variant subsides. In Asia Pacific, Australian data showed that the Westpac Consumer Sentiment index contracted 2% in January, compared to the 1% contraction from the previous month. In neighboring New Zealand, electronic card retail sales grew 0.4% month-on-month and 4.2% year-on-year in December 2021.
  • Oil was down on Wednesday morning in Asia. A prospective tight supply, thanks to a pipeline outage and geopolitical troubles in Russia as well as the United Arab Emirates (UAE), gave the black liquid a fourth consecutive day of gains. Turkish state pipeline operator Botas said on Tuesday that it cut oil flows on the Kirkuk-Ceyhan pipeline after an explosion, the cause of which is not yet known. This pipeline carries crude from Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), to Turkey's Ceyhan port for export. he loss in supply comes in an already tight market, with fuel demand holding up better than expected amid the spread of the omicron COVID-19 variant globally. Tensions between the U.S. and Russia, the second-largest oil producer globally, added to tensions in the UAE, OPEC's third-largest producer, also contributed to supply worries. U.S. Secretary of State Antony Blinken will meet Russian foreign minister Sergey Lavrov in Geneva on Friday in a bid to resolve tensions over Ukraine. Meanwhile, the UAE on Tuesday called for a meeting of the United Nations Security Council over an attack on Abu Dhabi on Monday by Yemen's Houthi movement. These tensions, and the prospect of supply disruptions, come just as OPEC and allies (OPEC+) is struggling to hit its target of adding 400,000 barrels per day of supply each month. Meanwhile, jet fuel consumption is rising with growth in international flights, while road traffic is much higher than the same time in 2021, Commonwealth Bank commodities analyst Vivek Dhar said in a note. Investors now await U.S. crude oil supply from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
19th January 2022 R1 R2 R3
GOLD-XAU 1,818-1,832 1,841 1,848-1,860
Silver-XAG 23.80 24.50 24.90-25.50
Crude Oil 85.60 86.20 87.00-87.90
EURO/USD 1.1355-1.1400 1.1485 1.1525-1.1590
GBP/USD 1.3750 1.3750 1.3800-1.3840
USD/JPY 115.00-115.40 115.70 116.00-116.35

Intraday SUPPORTS LEVELS
19th January 2022 S1 S2 S3
GOLD-XAU 1,808-1,800 1,790 1,784-1,778
Silver-XAG 23.15-22.50 22.10 21.40-21.00
Crude Oil 84.95-84.50 83.90 83.00-82.30
EURO/USD 1.1320-1.1270 1.1230 1.1210-1.1180
GBP/USD 1.3590-1.3545 1.3490 1.3410-1.3350
USD/JPY 114.65-114.20 113.90 113.20-112.70

Intra-Day Strategy (19th 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$1822.70/oz and low of US$1813.39/oz. Gold 0.287% at US$1813.39/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 1808-1778 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     1,808-1,800
S2     1,790
S3     1,784-1,778
Intraday Resistance Levels
R1     1,818-1,832
R2     1,841
R3     1,848-1,860

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 Tuesday made its intraday high of US$23.62/oz and low of US$22.79/oz settled up by 1.889% at US$23.45/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 23.15-20.50, 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 23.50-25.50 with stop loss above 25.50; targeting 22.50-21.40-21.00 and 20.50-19.90-19.50.

 
Intraday  Support Levels
S1     23.15-22.50
S2     22.10
S3     21.40-21.00

Intraday  Resistance Levels
R1     23.80
R2     24.50
R3     24.90-25.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.673 Buy
20-DMA   22.70 Buy
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 US85.89/bbl, intraday low of US$83.51/bbl and settled up by 2.55% to close at US$85.77/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 85.90-87.90 with stop loss at 87.90; targeting 84.50-83.90 and 83.00-82.30-81.80. Buy above 83.00-80.20 with risk daily closing below 80.20 and targeting 83.90-84.50-84.95 and 85.60-86.30.

 
Intraday Support Levels
S1     84.95-84.50
S2     83.90
S3     83.00-82.30

Intraday Resistance Levels
R1     85.60
R2     86.20
R3     87.00-87.90

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$1.1313/EUR, high of US$1.1420/EUR and settled the day down by 0.761% to close at US$1.1316/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 1.1485-1.1525-1.1590 and 1.1620-1.1650. Sell below 1.1355-1.1650, 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     1.1320-1.1270
S2     1.1230
S3     1.1210-1.1180

Intraday  Resistance Levels
R1     1.1355-1.1400
R2     1.1485
R3     1.1525-1.1590

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.442 Buy
20-DMA   1.1349 Sell
50-DMA   1.1373 Sell
100-DMA   1.1473 Sell
200-DMA   1.1606 Sell
STOCH(5,3)   22.685 Buy
MACD(12,26,9)   -0.004 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3572/GBP, high of US$1.3660/GBP and settled the day down by 0.375% to close at US$1.3592/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 1.3590-1.3350 with target 1.3640-1.3700-1.3750 and 1.3800-1.3840-1.3890 with stop loss closing below 1.3950. Sell in between 1.3640-1.3840 with targets at 1.3590-1.3550-1.3490 and 1.3440-1.3390-1.3300 with stop loss should be 1.3790.

 
Intraday Support Levels
S1     1.3590-1.3545
S2     1.3490
S3     1.3410-1.3350

Intraday Resistance Levels
R1     1.3750
R2     1.3750
R3     1.3800-1.3840

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 Monday made intra‐day low of JPY114.13/USD and made an intraday high of JPY115.04/USD and settled the day up 0.404% at JPY114.60/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     114.65-114.20
S2     113.90
S3     113.20-112.70

INTRADAY RESISTANCE LEVELS
R1     115.00-115.40
R2     115.70
R3     116.00-116.35

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

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