AAFX TRADING

Daily Market Lookup

  • The dollar firmed slightly on Monday with traders nervous about tensions in Ukraine and a possible hawkish tilt by the Federal Reserve at a much-watched meeting this week, while bitcoin lay near a six-month low, a further sign of the "risk off" mood. Tensions in Ukraine have been increasing for months after the Kremlin massed troops near its borders, which the West says is preparation for a war to prevent Ukraine from joining NATO. The U.S. State Department announced on Sunday it was ordering diplomats' family members to leave Ukraine. The world's largest cryptocurrency has nearly halved in value since its record peak of $69,000 hit November. Traders say that as institutional investors increase their exposure to cryptocurrencies, their moves are more closely correlated with other risk assets, such as stocks. The Nasdaq Composite posted its worst week since March 2020 last week. The sell-off hurt most digital assets, and ether, the world's second-largest cryptocurrency, was at $2,440, having hit its lowest since July on Saturday Investors say the sell off in risk assets has come as expectations rise that the Fed will raise rates more aggressively than markets had thought a month ago. Edgy markets are now even pricing in a small chance the Fed hikes rates this week, though the overwhelming expectation is for a first move to 0.25% in March and three more to 1.0% by year end. The dollar index, which measures the greenback against six major peers, was 0.11% higher on Monday. Also in view this week is the Bank of Canada's policy meeting, which wraps up just before the Fed and at which a rate hike is a possibility.
  • The dollar was up on Monday morning in Asia, with the U.S. Federal Reserve’s latest policy decision due later in the week. A key driver currently driving the currency markets is when and how quickly central banks will hike interest rates and begin asset tapering. The Fed will hand down its policy decision on Wednesday, with some investors starting to speculate that it is possible, although unlikely, that the central bank will hike interest rates for the first time since early 2020. Investors also await the Bank of Canada’s policy decision, due to be handed down just ahead of the Fed’s. In Asia Pacific, Australia releases its consumer price index on Tuesday which will guide the Reserve Bank of Australia's stance in its policy decision to be handed down in February. In cryptocurrencies, bitcoin traded at $36,026, after tumbling 10% on Friday and dropping as low as $34,000 on Saturday. Institutional investors’ increased exposure to cryptocurrencies means that their moves are more closely correlated with other risk assets, some investors warned. Expectations that the Fed will tighten monetary policy at a faster pace than previously anticipated had driven a rise in yields and the dollar earlier this week, and the U.S. dollar index was set for biggest weekly percentage gain since mid-December. U.S. Treasury yields fell as stock market declines reflected poor risk appetite, while concerns about potential conflict in Ukraine drove demand for the safe haven debt. Markets are pricing in as many as four rate hikes this year, starting from March and expect the Fed to start trimming its $8 trillion-plus balance sheet within months. Next week's Fed meeting could shed some light on how fast it will tighten.
  • Gold was up on Monday morning in Asia but remained little changed. Investors continue bracing for the U.S. Federal Reserve’s latest policy decision, while concerns over inflation and geopolitical tensions in Eastern Europe burnish the yellow metal’s safe-haven appeal. The Fed will hand down its policy decision on Wednesday. It is widely expected to tighten monetary policy at a faster pace than expected to curb the continuously high inflation, now viewed as the biggest threat to the U.S. economy in 2022 according to a Reuters poll. The Bank of Canada will also hand down its policy decision on the same day as its U.S. counterpart. Tensions between the U.S. and Russia over Ukraine continue, with the U.S. on Sunday ordering the departure of eligible family members of staff from its embassy in Ukraine. It also urged all its citizens to leave the country as the risk of armed conflict increased. Meanwhile, British Deputy Prime Minister Dominic Raab warned on Sunday that Russia faces severe economic sanctions if it installs a puppet regime in Ukraine. Raab was responding to reports that Russia aims to place a pro-Russian leader in power in Ukraine. Meanwhile, gold was sold at a discount in India during the previous week, with rising domestic prices impacting demand and jewelers looked ahead to the country's annual Union Budget 2022-23, which will be presented by Finance minister Nirmala Sitharaman on Feb. In other key Asian centers, the upcoming Lunar New Year holiday is driving demand.
  • Oil prices rose on Monday on worries about supply disruption amid rising tensions in Eastern Europe and the Middle East, which could make an already tight market even tighter, while OPEC and its allies continued to struggle to raise output. Both benchmarks rose for a fifth week in a row last week, gaining around 2% to hit their highest since October 2014. Prices are already up more than 10% this year on the concerns over tightening supplies. Fuelling fears of supply disruption in Eastern Europe, the New York Times reported late on Sunday that U.S. President Joe Biden was considering deploying several thousand U.S. troops to NATO allies in Eastern Europe and the Baltics. Russia will face severe economic sanctions if it installs a puppet regime in Ukraine, a senior British government minister said on Sunday, after Britain accused the Kremlin of seeking to place a pro-Russian leader in power there. The U.S. State Department also announced it was ordering diplomats' family members to leave Ukraine, as President Biden weighed options for boosting America's military assets in Eastern Europe to counter a buildup of Russian troops. In the Middle East, the United Arab Emirates intercepted and destroyed two Houthi ballistic missiles targeting the Gulf country on Monday with no casualties, its defence ministry said, following a deadly attack a week earlier. OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) with Russia and other producers, is struggling to hit its monthly output increase target of 400,000 barrels per day (bpd). OPEC+ compliance with long-installed oil production cuts rose to about 122% in December, two sources from the producer group told Reuters, indicating that some members continue to struggle to raise their output. Money managers raised their net long U.S. crude futures and options positions in the week to Jan. 18, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. In the United States, petroleum inventories have continued to slide over the last month, while energy firms cut oil rigs this week for the first time in 13 weeks. Analysts expect cold weather to boost heating demand over the next few weeks.

 

 
Intraday RESISTANCE LEVELS
24th 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 85.60-86.20 86.90 87.50-88.00
EURO/USD 1.1355-1.14001.1210-1.1180 1.1485 1.1525-1.1590
GBP/USD 1.3590-1.3640 1.3700 1.3750-1.3800
USD/JPY 115.40 115.40 115.70-116.00

Intraday SUPPORTS LEVELS
24th January 2022 S1 S2 S3
GOLD-XAU 1,832-1,818 1,800-1,790832-1,818 1,800-1,790
Silver-XAG 24.10-23.80 23.15 22.50-22.10
Crude Oil 84.95-84.50 83.90 85.60-86.20
EURO/USD 1.1320-1.1270 1.1230 1.1210-1.1180
GBP/USD 1.3530-1.3490 1.3410 1.3350-1.3300
USD/JPY 113.70 113.20 115.40

Intra-Day Strategy (24th 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 Friday made its intraday high of US$1843.77/oz and low of US$1828.41/oz. Gold down 0.239% at US$1834.77/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     1,800-1,790832-1,818
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 Thursday made its intraday high of US$24.15/oz and low of US$24.15/oz settled down by 0.736% at US$24.27/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 23.80-20.50, targeting 24.55-24.90 and 25.40-26.00-27.00 with stop loss should be place on the breakage below 20.50. Sell in between 24.90-27.00 with stop loss above 27.00; targeting 24.10-23.80-23.15 and 22.50-21.40-21.00.

 
Intraday  Support Levels
S1     24.10-23.80
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 Friday made an intra‐day high of US85.34/bbl, intraday low of US$82.59/bbl and settled down by 0.0153% to close at US$84.58/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 85.60-88.00 with stop loss at 88.00; targeting 84.95-84.50-83.90 and 83.00-82.30-81.60. Buy above 84.95-82.30 with risk daily closing below 82.30 and targeting 85.60-86.30 and 86.90-87.50-88.00.

 
Intraday Support Levels
S1     84.95-84.50
S2     83.90
S3     85.60-86.20

Intraday Resistance Levels
R1     85.60-86.20
R2     86.90
R3     87.50-88.00

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 Friday made an intraday low of US$1.1302/EUR, high of US$1.1359/EUR and settled the day up by 0.292% to close at US$1.1343/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     1.1355-1.14001.1210-1.1180
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 Friday made an intra‐day low of US$1.3544/GBP, high of US$1.3601/GBP and settled the day down by 0.323% to close at US$1.3544/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 1.3530-1.3350 with target 1.351.3640-1.3700-1.3750 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     1.3530-1.3490
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 Friday made intra‐day low of JPY114.13/USD and made an intraday high of JPY114.64/USD and settled the day down 0.404% at JPY114.59/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     113.70
S2     113.20
S3     115.40

INTRADAY RESISTANCE LEVELS
R1     115.40
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

AAFX TRADING
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