AAFX TRADING

Daily Market Lookup

  • The dollar pushed higher in early dealings on Tuesday, as the violent snap back in U.S. stocks in the second half of Monday’s trading failed to convince global markets that the recent volatility has run its course. The euro was the weakest of the major currencies, falling 0.2% to $1.1305, while the pound was also extending its losses, albeit in narrow ranges, down less than 0.1% at $1.3470, after disclosures of yet another unauthorized party in 10 Downing Street put further pressure on beleaguered Prime Minister Boris Johnson. Also hurting sterling were figures showing another bigger-than-expected government borrowing requirement in December. Ranges are likely to stay narrow as the U.S. Federal Reserve begins its two-day policy meeting, where the focus will be on the guidance given by Chairman Jerome Powell at his press conference on Wednesday. The Fed isn’t widely expected to change its policy settings, but its ‘dot plot’ and Powell’s comments will indicate whether the central bank feels it needs to speed up the process of withdrawing stimulus. Before that, the focus in Europe will be on the German business confidence index published by Ifo at 4 AM ET (0900 GMT). The ZEW Economic Sentiment index for January had risen surprisingly strongly last week, while IHS Markit’s purchasing managers index also pointed to a bright start to the year for Europe’s biggest economy. However, the Ifo survey is usually the most granular and reliable guide to economic trends there. On Monday, the Deutsche Bundesbank had warned that the economy had likely contracted in the fourth quarter, as industry struggled with sustained chip shortages and, from December, a fresh wave of Covid-19. Central European currencies continue to struggle by regional association with Ukraine, where there has been no meaningful change in the situation overnight.
  • The dollar was up on Tuesday morning in Asia, with the safe-haven asset remaining near a two-week high. Concerns about faster-than-expected U.S. Federal Reserve monetary policy tightening and possible armed conflict in Ukraine also continued to mount. The higher-than-expected number boosted the case for a Reserve Bank of Australia (RBA) interest rate hike in 2022, despite the central bank’s governor Philip Lowe previously maintaining that such an eventuality was extremely unlikely. However, money markets have long disagreed with the RBA's stance and are priced for a rate hike by June 2022. The Fed will hand down its policy decision on Wednesday, which will be scrutinized for clues on a timetable for interest rate hikes and asset tapering. Money markets are priced for a first hike in March, with three more quarter-point increases by the end of 2022.
  • Gold was up on Tuesday morning in Asia, but remained little changed. Investors look to the U.S. Federal Reserve's latest policy decision for clues on interest rate hikes, while concerns about the geopolitical tension in Eastern Europe boosted the safe-haven yellow metal. U.S.-Russia tensions over Ukraine continued, with the U.S. putting as many as 8,500 troops on heightened alert. The U.K. also said it was withdrawing some staff and dependents from its embassy in Ukraine, a day after the U.S. said it was ordering diplomats' family members from its own embassy to leave the country. U.S. shares ended on an upward note after a volatile session on Monday. The steep sell-off later in the session, and the ensuing bargain hunting, pushed the indexes into positive territory. Benchmark U.S. 10-year Treasury yields tumbled to a one-week low on Monday. Investors’ focus is now on the Fed policy decision, due to be handed down on Wednesday after a two-day meeting. It is widely expected that the U.S. central bank will indicate that it plans to hike interest rates by 25 basis points in March 2022. Meanwhile, the Republic of Sudan will bolster its use of gold exports to cover imports of essential goods. The country is embarking on a new 2022 budget without foreign aid amid an economic downturn following a coup.
  • Oil prices bounced back on Tuesday, recovering some of the previous day's losses, as growing tension in Eastern Europe and the Middle East fuelled concerns over possible supply disruptions. Oil prices reached seven-year highs last week, bolstered by tight worldwide supply and resurgent global demand. NATO said on Monday it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets, in what Russia denounced as Western "hysteria" in response to its build-up of troops on the Ukraine border. In the Middle East, Yemen's Houthi movement, aligned with Iran, launched a missile attack at the United Arab Emirates on Monday that targeted a base hosting the U.S. military, but was thwarted by U.S.-built Patriot interceptors, U.S. and Emirati officials said.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). Lower U.S. oil inventories are also providing support, with crude inventories around the NYMEX WTI delivery point at Cushing in Oklahoma at the lowest for the time of year since 2012. Portfolio investors added to their bullish positions in oil for the fifth week running, as the worst of the latest wave of coronavirus infections passed and governments began to lift restrictions on business and travel.

 

 
Intraday RESISTANCE LEVELS
25th January 2022 R1 R2 R3
GOLD-XAU 1,841-1,848 1,860 1,870-1,877
Silver-XAG 24.10-24.90 25.40 26.00-26.50
Crude Oil 83.90-84.50 84.95 85.60-86.20
EURO/USD 1.1485 1.1485 1.1525-1.1590
GBP/USD 1.3530-1.3590 1.3700-1.3750 1.3700-1.3750
USD/JPY 114.65-115.00 115.40 115.70-116.00

Intraday SUPPORTS LEVELS
25th January 2022 S1 S2 S3
GOLD-XAU 1,832-1,818 1,808 1,800-1,790
Silver-XAG 23.70-23.15 22.50 22.10-21.50
Crude Oil 83.00-82.30 81.70 80.95-80.10
EURO/USD 1.13200-1.1270 1.1230 1.1210-1.1180
GBP/USD 1.3490-1.3440 1.3390 1.3350-1.3300
USD/JPY 113.70 113.20 112.70-112.00

Intra-Day Strategy (25th 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 Monday made its intraday high of US$1844.25/oz and low of US$1829.64/oz. Gold down 0.548% at US$1843.11/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 Monday 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     23.70-23.15
S2     22.50
S3     22.10-21.50

Intraday  Resistance Levels
R1     24.10-24.90
R2     25.40
R3     26.00-26.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.503 Buy
20-DMA   23.35 Sell
50-DMA   23.21 Sell
100-DMA   23.48 Sell
200-DMA   23.92 Sell
STOCH(5,3)   59.891 Buy
MACD(12,26,9)   -0.186 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US85.83/bbl, intraday low of US$81.67/bbl and settled down by 1.083% to close at US$83.83/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 83.90-83.00-82.30 and 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     83.00-82.30
S2     81.70
S3     80.95-80.10

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 Monday made an intraday low of US$1.1289/EUR, high of US$1.1344/EUR and settled the day up by 0.112% to close at US$1.1324/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     1.13200-1.1270
S2     1.1230
S3     1.1210-1.1180

Intraday  Resistance Levels
R1     1.1485
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 Monday made an intra‐day low of US$1.3439/GBP, high of US$1.3564/GBP and settled the day down by 0.462% to close at US$1.3485/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 1.3490-1.3300 with target 1.3530-1.3590-1.3640 and 1.3700-1.3750-1.3800 with stop loss closing below 1.3950. Sell in between 1.3530-1.3750 with targets at 1.3490-1.3440 and 1.3390-1.3300 with stop loss should be 1.3790.

 
Intraday Support Levels
S1     1.3490-1.3440
S2     1.3390
S3     1.3350-1.3300

Intraday Resistance Levels
R1     1.3530-1.3590
R2     1.3700-1.3750
R3     1.3700-1.3750

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 JPY113.46/USD and made an intraday high of JPY113.99/USD and settled the day up 0.214% at JPY113.87/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     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

AAFX TRADING
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