AAFX TRADING

Daily Market Lookup

  • The dollar edged lower on Thursday as this week's rally in U.S. Treasury yields paused, and currencies such as the Canadian and Australian dollars were boosted by high commodity prices and continued optimism about future global economic growth. Strong Australian jobs data and a high Canadian inflation print were also factors, though the gains in commodity currencies were broad based, with the dollar losing 0.2% on the Norwegian krone. Governments worldwide are easing quarantine rules and reviewing coronavirus curbs as they bid to launch their economies back into some version of normality, motivated by the lower severity of the Omicron variant. That has helped commodities rally. [nL8N2TU3HV Brent crude futures touched $89.17 on Wednesday, its highest level since Oct. 2014, supported in by a tight short-term supply outlook, and were steady a little below that on Thursday. Newcastle coal futures are at their highest point since October, and iron ore also gained. Elsewhere the euro and sterling continued to edge higher, gradually regaining some ground after having their worst days in a month on Tuesday, when the dollar caught a lift from a jump in U.S. Treasury yields. The gains come as traders prepare for the United States to tighten monetary policy at a faster pace than previously thought. Fed funds futures have fully priced in a rate hike in March and four in all for 2022. The median forecast of analysts polled by Reuters is for the Fed to raise rates three times this year, starting in March, to 0.75-1.00% by end-2022, but nearly half of the 86 people surveyed said they expected four hikes.
  • The dollar was up on Thursday morning in Asia but retreated as the week’s rally in U.S. Treasury yields also cooled. However, higher commodity prices supported Canadian and Australian equivalents. The USD/JPY pair inched up 0.09% to 114.43. Japanese trade data released earlier in the day showed that the trade balance was –JPY582.4 billion ($5.09 billion) and the adjusted trade balance was –JPY0.44 trillion in December. Exports grew 17.5% and imports grew 41.1%. Oil was mixed on Thursday but broadly remained near October 2014 highs. Newcastle coal futures are at their highest since October 2021. Governments worldwide are beginning to ease quarantine rules and reviewing COVID-19 curbs despite the spread of omicron continuing. This attempt towards a semblance of normalcy was motivated by omicron's lower severity and boosted a rally in commodities. Meanwhile, investors are also bracing for the U.S. Federal Reserve to tighten monetary policy faster than expected in its policy decision to be handed down on Jan. 26. Fed funds futures have fully priced in an interest rate hike in March 2022, with four hikes expected within 2022.
  • Gold was down, on Thursday morning in Asia, with higher U.S. Treasury yields blocking gains as investors remain cautious in preparation for the U.S. Federal Reserve's next policy decision. The Fed is widely expected to tighten monetary policy at a much faster pace than expected a month ago to curb continually high inflation. This inflation is now the biggest threat to the U.S. economy in 2022, according to economists polled by Reuters. Investors now await the Fed’s next policy decision, due to be handed down on Jan. 26. Policy decisions from central banks in Indonesia, Malaysia, Norway, Turkey, and Ukraine are due later in the day. In the U.K., Wednesday’s inflation data showed that the consumer price index grew 5.4% year-on-year and 0.5% month-on-month in December. The producer price index input grew 13.5% year-on-year but contracted 0.2% month-on-month. The higher-than-expected figures could pressure the Bank of England to hike interest rates. Meanwhile, the People’s Bank of China looks set to embark on a divergent path from its U.S. counterpart. China’s central bank cut the one-year loan prime rate (LPR) from 3.8% to 3.7%, and the five-year LPR from 4.65% to 4.6%, on Thursday.
  • Oil slipped on Thursday as investors took profits following a month-long rally in prices, but strong demand and short-term supply disruptions continue to support prices close to their highest levels since late 2014. The February WTI contract will expire on Thursday and the most-actively traded contract, for March delivery, is at $85.41 a barrel, down 0.5%. However, the flow of crude oil through the Kirkuk-Ceyhan pipeline has resumed, after it was halted on Tuesday due to a blast near the pipeline in the southeastern Turkish province of Kahramanmaras, officials said on Wednesday. Supply concerns have mounted this week after Yemen's Houthi group attacked the United Arab Emirates, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC). Meanwhile Russia, the world's second-largest oil producer, has built up a large troop presence near Ukraine's border, stoking fears of invasion and subsequent supply uncertainties. Underpinning oil prices is the broad post-coronavirus pandemic recovery in demand for fuel. OPEC officials and analysts say that an oil rally may continue in the next few months, and prices could top $100 a barrel as demand shrugs of the spread of the Omicron COVID-19 variant. OPEC+, which groups the cartel with Russia and other producers, is struggling to hit a monthly output increase target of 400,000 barrels per day (bpd). U.S. crude and gasoline stocks rose while distillate inventories fell last week, according to market sources citing American Petroleum Institute figures on Wednesday. Crude stocks rose by 1.4 million barrels for the week ended Jan. 14. Gasoline inventories rose by 3.5 million barrels while distillate stocks fell by 1.2 million barrels, according to the sources, who spoke on condition of anonymity.

 

 
Intraday RESISTANCE LEVELS
20th January 2022 R1 R2 R3
GOLD-XAU 1,841-1,848 1,860 1,870-1,877
Silver-XAG 24.50-24.90 25.40 26.00-26.50
Crude Oil 85.60 86.20 87.00-87.90
EURO/USD 1.1355-1.1400 1.1485 1.1525-1.1590
GBP/USD 1.3640-1.3700 1.3750 1.3800-1.3840
USD/JPY 114.65-115.00 115.40 115.70-116.00

Intraday SUPPORTS LEVELS
20th January 2022 S1 S2 S3
GOLD-XAU 1,832-1,818 1,808 1,800-1,790
Silver-XAG 23.80-23.15 22.50 22.10-21.40
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 114.20-113.90 113.20 112.70-112.00

Intra-Day Strategy (20th 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$1843.31/oz and low of US$1810.18/oz. Gold 1.485% at US$1840.21/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 1832-1790 with risk below 1790, targeting 1840-1848-1854 and 1860-1870-1877. Sell in between 1841-1877 keeping stop loss closing above 1854, targeting 1834-1818-1808 and 1800-1790-1783.

 
Intraday Support Levels
S1     1,832-1,818
S2     1,808
S3     1,800-1,790
Intraday Resistance Levels
R1     1,841-1,848
R2     1,860
R3     1,870-1,877

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 Wednesday made its intraday high of US$24.19/oz and low of US$23.37/oz settled up by 2.88% at US$23.37/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     23.80-23.15
S2     22.50
S3     22.10-21.40

Intraday  Resistance Levels
R1     24.50-24.90
R2     25.40
R3     26.00-26.50

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 US85.65/bbl, intraday low of US$84.86/bbl and settled down by 1.052% to close at US$84.87/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 Wednesday made an intraday low of US$1.1312/EUR, high of US$1.1356/EUR and settled the day up by 0.220% to close at US$1.1341/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 Wednesday made an intra‐day low of US$1.3585/GBP, high of US$1.3648/GBP and settled the day down by 0.133% to close at US$1.3609/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     1.3640-1.3700
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 Wednesday made intra‐day low of JPY114.20/USD and made an intraday high of JPY114.78/USD and settled the day down 0.252% at JPY114.31/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     112.70-112.00

INTRADAY RESISTANCE LEVELS
R1     114.65-115.00
R2     115.40
R3     115.70-116.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.1338 Buy
20-DMA   114.19 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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING