AAFX TRADING

Daily Market Lookup

  • The dollar was down on Wednesday morning in Asia and the euro was near its weakest in a month versus the safe-haven dollar and Japanese yen. Investors remain concerned about a potential armed conflict in Ukraine, and faster-than-expected U.S. policy decision monetary policy tightening. The U.K. is also dealing with an investigation into whether Prime Minister Boris Johnson potentially breached COVID-19 lockdown rules. The findings of an internal inquiry could be announced later in the day. Western leaders continue to accelerate preparations to counter any Russian military action in Ukraine, while Russia expressed “great concern” after 8,500 U.S. troops were put on alert to deploy to Europe if an escalation takes place. The focus was also on the Fed, which will hand down its policy decision later in the day. Investors will be looking for clues for the timing of interest rate hikes and quantitative tightening (QT), but money markets are currently priced for a first hike as early as March 2022. From the Fed, "any hints around the starting point for QT or 'sooner' and 'faster' on hikes could be market-moving," but "we don't expect definitive signals, unfortunately, and the result could be mixed messages.” The euro hovered near its weakest in a month versus the safe-haven dollar and yen on Wednesday as traders fretted over a potential military conflict in Ukraine and the possibility of accelerated Federal Reserve policy tightening.
  • The euro was about flat at $1.1303 after dipping to $1.1264 overnight for the first time since Dec. 21. It slipped 0.06% to 128.64 yen, after touching 128.25 in the previous session, also a first since Dec. 21. Western leaders stepped up preparations for any Russian military action in Ukraine while Moscow said it was watching with great concern after 8,500 U.S. troops were put on alert to deploy to Europe in the event of an escalation. Meanwhile, the Fed ends a two-day policy meeting later in the global day, with market players anxiously awaiting further clues on the timing and pace of interest rate hikes, as well as how the central bank will go about slimming down its almost $9 trillion balance sheet, a process dubbed quantitative tightening (QT). Money markets are currently priced for a first hike in March, followed by three more quarter-point increases by year-end. The dollar index, which measures the currency against six major peers, was flat at 95.973, after climbing to 96.273 on Tuesday, the highest since Jan. 7. It has climbed as much as 1.74% from a two-month low touched on Jan. 14. From the Fed, "any hints around the starting point for QT or 'sooner' and 'faster' on hikes could be market-moving," but "we don't expect definitive signals, unfortunately, and the result could be mixed messages," they wrote. Elsewhere, sterling was little changed at $1.35095 after dipping to a more than three-week low of $1.3436 overnight. In addition to jitters over Ukraine and the Fed, sterling is contending with political uncertainty at home, with Prime Minister Boris Johnson under investigation for possible COVID-19 lockdown breaches. The findings of an internal inquiry could be announced as soon as Wednesday, according to media reports.
  • Gold was down on Wednesday morning in Asia, after hitting a more than two-month high as geopolitical concerns over Ukraine decreased risk appetite. Investors also await the U.S. Federal Reserve’s latest policy decision. Russia expressed “great concern” after the U.S. put 8,500 troops on alert to be ready to deploy in case of a Russian invasion of Ukraine. The U.K. also urged its European allies to have sanctions ready in the event of an escalation. The safe-haven yellow metal is acting as a "flight to safety trade" in a wait-and-watch scenario until after the Fed announcement, RJO Futures senior market strategist Bob Haberkorn told Reuters. The announcement, due later in the day, will be closely scrutinized for clues on how aggressive the Fed would be for the rest of 2022 and if it would signal more interest rate hikes to tackle inflation, he added. The Fed is widely expected to hike interest rates in March 2022, followed by three more hikes throughout the year. The Bank of Canada also hands down its policy decision later in the day, followed by the South African Reserve Bank on Thursday. In Asia Pacific, the Reserve Bank of Australia will hand down its policy decision in the following week.
  • Brent crude edged up on Wednesday as geopolitical tensions in Europe and the Middle East raised supply concerns while investors locked in profits ahead of updates from the U.S. Federal Reserve and U.S. oil inventory data. Oil prices hit seven-year highs last week on worries that supplies could tighten due to Ukraine-Russia tensions. U.S. President Joe Biden said on Tuesday he would consider personal sanctions on President Vladimir Putin if Russia invades Ukraine, while Western leaders stepped up military preparations and made plans to shield Europe from a potential energy supply shock. Concerns about the Middle East also rose on Monday, when Yemen's Iran-aligned Houthi movement launched a missile attack on a United Arab Emirates base hosting the U.S. military. The attack was thwarted by U.S.-built Patriot interceptors, U.S. and Emirati officials said. The Fed ends a two-day policy meeting later in the day, with market players anxiously awaiting further clues on the timing and pace of interest rate hikes, as well as how the central bank will go about slimming down its almost $9 trillion balance sheet. Weekly U.S. inventory data released overnight by the American Petroleum Institute met expectations. Market sources said the data showed U.S. crude and distillate stocks fell while gasoline inventories rose for the week ended Jan. 21. Traders were now looking forward to the Energy Information Administration (EIA) report, due for release at 1530 GMT, for confirmation of those trends, Ueno said. Separately, the U.S. Department of Energy said on Tuesday it had approved an exchange of 13.4 million barrels of crude oil from the Strategic Petroleum Reserve to seven companies as part of Biden's effort to help control oil prices.

 

 
Intraday RESISTANCE LEVELS
26th January 2022 R1 R2 R3
GOLD-XAU 1,848-¬1,860 1,870 1,877-1,885
Silver-XAG 24.10-24.90 25.40 26.00-26.50
Crude Oil 85.60-86.20 87.10 87.60-88.00
EURO/USD 1.1320-1.1355 1.1400 1.1485-1.1525
GBP/USD 1.3530-1.3590 1.3640 1.3700-1.3750
USD/JPY 115.40 115.40 115.70-116.00

Intraday SUPPORTS LEVELS
26th January 2022 S1 S2 S3
GOLD-XAU 1,841-1,832 1,818 1,808-1,800
Silver-XAG 23.70-23.15 22.50 22.10-21.50
Crude Oil 84.95-84.50 83.90 83.00-82.30
EURO/USD 1.1270-1.1230 1.1200 1.1180-1.1150
GBP/USD 1.3490-1.3440 1.3390 1.3530-1.3590
USD/JPY 113.70 113.20 112.70-112.00

Intra-Day Strategy (26th 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$1853.75/oz and low of US$1834.78/oz. Gold up 0.253% at US$1847.76/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 1841-1790 with risk below 1790, targeting 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     1,841-1,832
S2     1,818
S3     1,808-1,800
Intraday Resistance Levels
R1     1,848-¬1,860
R2     1,870
R3     1,877-1,885

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$25.97/oz and low of US$23.58/oz settled down by 0.736% at US$23.78/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 Tuesday made an intra‐day high of US85.36/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 85.60-88.20 with stop loss at 88.20; targeting 84.95-94.50-83.90 and 83.00-82.30. 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     83.00-82.30

Intraday Resistance Levels
R1     85.60-86.20
R2     87.10
R3     87.60-88.00

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 Tuesday made an intraday low of US$1.1262/EUR, high of US$1.1328/EUR and settled the day down by 0.193% to close at US$1.1300/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 1.1270-1.1120 with risk below 1.1120, targeting 1.1485-1.1525-1.1590 and 1.1620-1.1650. Sell below 1.1320-1.1650, 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     1.1270-1.1230
S2     1.1200
S3     1.1180-1.1150

Intraday  Resistance Levels
R1     1.1320-1.1355
R2     1.1400
R3     1.1485-1.1525

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$1.3435/GBP, high of US$1.3518/GBP and settled the day up by 0.054% to close at US$1.3492/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     1.3530-1.3590

Intraday Resistance Levels
R1     1.3530-1.3590
R2     1.3640
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 Tuesday made intra‐day low of JPY113.66/USD and made an intraday high of JPY114.15/USD and settled the day down 0.0166% at JPY113.84/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 113.90-112.50 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     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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