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Daily Market Lookup

  • The dollar edged lower in early Friday dealings in Europe but remained well supported after another sharp selloff in U.S. equities on Wednesday damped risk appetite around the world. By 3 AM ET (0800 GMT), the dollar index, which tracks the greenback against a basket of advanced economy currencies, was down 0.1% at 95.67, but was still on course for a gain of around 0.5% over a week that has been dominated by fears of inflation, higher interest rates and, latterly, signs of a soft patch for the U.S. economy due to the Omicron variant of Covid-19. Initial jobless claims surged to their highest level in three months last week, while earnings disappointments from the banking sector and, on Thursday, Netflix (NASDAQ:NFLX) have cast doubt on the prevailing growth narrative of the last couple of years. Geopolitical concerns are also keeping risk appetite limited, with U.S. President Joe Biden warning on Wednesday that he expects Russia to invade neighboring Ukraine again. Secretary of State Anthony Blinken meets with his Russian counterpart Sergey Lavrov for talks later Friday to defuse the situation. The Russian ruble was unchanged at 76.64 to the dollar but is down over 3.5% this week. The European day got off to a gloomy start, as the U.K. recorded a sharp drop in both retail sales and consumer confidence, amidst surging Covid cases and household energy costs. The GfK confidence index fell to its lowest level since February while retail sales fell 3.7% on the month in December. November's figures were also revised down. Analysts said the figures likely reflected a change in spending patterns due to the pandemic, with consumers having completed their Christmas shopping earlier than usual due to fears of product shortages. October's sales had been exceptionally strong. The gap between ECB policy and that of the Federal Reserve widens. ECB President Christine Lagarde again pushed back against calls for an early rise in interest rates in a keynote speech on Thursday, despite headline inflation running over 5% in the Eurozone, its highest since the creation of the single European currency.
  • The dollar was down on Friday morning in Asia. Fears that inflation will remain high and that the U.S. Federal Reserve will tighten its monetary policy soured investor sentiment, driving gains for the safe-haven Japanese yen vis-a-vis the riskier Australian dollar. The U.S. currency took a breather from its recent gains as a rally in U.S. Treasury yields cooled. However, it was still headed for its best week in two months. U.S. shares suffered a sharp selloff overnight in the final hours of trading, while Asian counterparts were down on Friday. U.S. Treasury yields retreated from multi-year highs. However, U.S. yields advanced, driven by market expectations that the Fed will tighten monetary policy faster than anticipated. Fed funds futures have already fully priced in an interest rate hike in March 2022 and a total of four hikes within the year. The Fed will convene for a two-day policy meeting to hand down its policy decision starting Tuesday. Investors will be on the lookout for clues to the Fed’s timeline for both interest rate hikes and asset tapering espite recent volatility, the dollar could rise further as the Fed tightens its monetary policy, according to some investors. The currency "should continue to firm into next week's Fed meeting," Westpac said in a client note, adding they "wouldn't be surprised" if the dollar index tops its 2021 high at 96.938.
  • U.S. crude exports are ramping up due to increasing demand from Asia and Europe and recovering U.S. production from the lows of the coronavirus pandemic. Surging worldwide demand, supply outages and international political tension have stoked worries around crude supplies, boosting oil prices to the highest levels in seven years, with some predicting crude could even reach $100 per barrel. That has brought in more buyers of U.S. oil, increasing exports and decreasing domestic crude stockpiles. U.S. seaborne crude exports have increased in recent weeks and are close to 3 million barrels per day so far this month, according to Matt Smith, lead oil analyst for the Americas at Kpler. That's just under the 3.2 million bpd average in crude exports in December, which was the strongest month since February 2020, he said. Cargoes booked for February are headed to numerous countries including China, South Korea and India, Refinitiv Eikon shipping data showed. Those three are among the largest regular buyers of U.S. crude. Global demand in Asia in 2022 is expected to rise 4% to 37.2 million bpd, the International Energy Agency said Thursday, making it the only major region ahead of 2019's pace. Exports have helped reduce crude stockpiles in the U.S. Gulf Coast to as low as 220.3 million barrels earlier this month, which was a two-year low. Increased vehicle traffic means lighter barrels from the United States, which produce a higher volume of gasoline, are attractive to buyers. The IEA said Thursday it expects worldwide gasoline demand to rebound to 26.3 million bpd - just 1% lower than 2019's consumption. Supply hiccups from countries like Libya, which had temporary production outages starting in December, shifted U.S. exports to countries in Europe. In December, the United States shipped around 2.3 million barrels of crude to Italy, Refinitiv Eikon data showed, up from 1.6 million in November. Crude output from major U.S. shale formations is due to rise to 8.54 million bpd in February, the highest since March 2020, according to the Energy Information Administration. Of that, the Permian Basin's output is set to reach 5.1 million bpd, also a record.

 

 
Intraday RESISTANCE LEVELS
21st January 2022 R1 R2 R3
GOLD-XAU 1,841-1,848 1,860 1,870-1,877
Silver-XAG 24.90¬-25.40 26.00 26.50-27.00
Crude Oil 83.90-84.50 84.95 85.60-86.20
EURO/USD 1.1355-1.1400 1.1485 1.1525-1.1590
GBP/USD 1.3590-1.3640 1.3700 1.3750-1.3800
USD/JPY 114.65-115.00 115.40 115.70-116.00

Intraday SUPPORTS LEVELS
21st January 2022 S1 S2 S3
GOLD-XAU 1,832-1,818 1,808 1,800-1,790
Silver-XAG 23.15 23.15 22.50-22.10
Crude Oil 83.00-82.30 81.60 81.00-80.30
EURO/USD 1.1320-1.1270 1.1230 1.1210-1.1180
GBP/USD 1.3545-1.3490 1.3410 1.3350-1.3300
USD/JPY 113.90 113.20 112.70-112.00

Intra-Day Strategy (21st 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$1847.85/oz and low of US$1835.85/oz. Gold down 0.051% at US$1839.05/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$24.69/oz and low of US$24.06/oz settled up by 1.39% at US$24.45/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
S2     23.15
S3     22.50-22.10

Intraday  Resistance Levels
R1     24.90¬-25.40
R2     26.00
R3     26.50-27.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.209 Buy
20-DMA   22.7 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 US86.91/bbl, intraday low of US$84.05/bbl and settled down by 0.680% to close at US$84.30/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 83.90-86.20 with stop loss at 86.20; targeting 83.00-82.30-81.60 and 81.00-80.30. 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     83.00-82.30
S2     81.60
S3     81.00-80.30

Intraday Resistance Levels
R1     83.90-84.50
R2     84.95
R3     85.60-86.20

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$1.1302/EUR, high of US$1.1368/EUR and settled the day down by 0.273% to close at US$1.1309/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 Thursday made an intra‐day low of US$1.3586/GBP, high of US$1.3661/GBP and settled the day down by 0.093% to close at US$1.3596/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     1.3545-1.3490
S2     1.3410
S3     1.3350-1.3300

Intraday Resistance Levels
R1     1.3590-1.3640
R2     1.3700
R3     1.3750-1.3800

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 JPY113.95/USD and made an intraday high of JPY114.54/USD and settled the day down % at JPY114.08/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     113.90
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   114.84 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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