AAFX TRADING

Daily Market Lookup

  • The dollar hit its highest level this year in early dealings in Europe on Thursday, after the Federal Reserve’s press conference led many to expect more monetary policy tightening than previously expected. Fed Chair Jerome Powell dodged a question about whether the Fed would hike in successive meetings this year, leaving open the possibility of more than three hikes by the end of 2022. He also all but confirmed that the first hike will be in March, as widely expected. By 3 AM ET (0800 GMT), the dollar index, which tracks the greenback against a basket of six developed market currencies, was up 0.5% at 96.83, with its biggest gains coming against higher-yielding currencies such as the Australian and New Zealand dollar. The Canadian dollar also slipped 0.5% to C$1.2725 after the Bank of Canada kept its key rate unchanged on Wednesday but signalled that its first hike would not be long in coming. That’s the lowest level for sterling this year, but the pound has enjoyed more support from expectations that the Bank of England will raise its key rate for the second time at its meeting next week. Analysts at ING said they expected the dollar to remain bid going into the Fed’s next meeting in March. Later Thursday, the South African central bank is expected to raise its key rate by 25 basis points to 4.0%, while Chile’s raised on Wednesday by 150 basis points to 5.5%.
  • The dollar was up on Thursday morning in Asia, hitting multi-week highs. The safe-haven U.S. currency got a boost after U.S. Federal Reserve chair Jerome Powell hinted at imminent interest hikes. The Fed left its interest rate unchanged at 0.25% as it handed down its latest policy decision on Wednesday. However, Powell signaled a sustained battle to curb high inflation, saying there was "quite a bit of room to raise interest rates without threatening the labor market" and that the Fed would likely begin hiking interest rates in March 2022. The dollar gained 0.7% against the safe-haven yen after Powell's remarks, its steepest daily jump in more than two months. The prospect of imminent interest rate hikes unnerved stock markets and saw bond yields climb. In other data from Asia Pacific, Chinese industrial profit growth slowed to 4.2% year-on-year in December 2021. Investors now await U.S. data, including GDP and core durable goods orders, due later in the day. Meanwhile, the pound tested support as the following week’s Bank of England policy decision looms and the political turmoil over U.K. Prime Minister Boris Johnson’s breaking of COVID-19 lockdown rules. Cryptocurrencies mostly held their ground after the Fed policy decision after taking a tumble during the previous week. However, bitcoin saw some pressure early in the Asia session, last trading nearly 2% down at $36,100.
  • Gold was down on Thursday morning in Asia, extending its losses after falling the most in two months. Investors continue to digest a more hawkish-than-expected stance from the U.S. Federal Reserve, amid hints of an “imminent” interest rate hike. Speaking afterward, Fed Chairman Jerome Powell did not rule out raising interest rates at every meeting in a bid to curb ever-climbing inflation. The fall erased gold’s gains in 2022 to date, with the gains driven by investor bets for continuing negative real rates even as expectations of an interest rate hike grew. With the Fed’s hawkish turn challenging that bet, safe-haven gold could still be boosted by rising geopolitical risks that include the potential Russian invasion of Ukraine. Responding to the Fed decision, Goldman Sachs Group Inc raised its 12-month outlook for gold to $2,150 an ounce from $2,000, over expectations for slower U.S. growth, a rebound in emerging markets excluding China, and faster inflation. Investors now await the South African Reserve Bank’s policy decision, due to be handed down later in the day. The Bank of England and the Reserve Bank of Australia are also due to hand down their respective policy decisions in the following week.
  • Oil prices fell on Thursday as the U.S. dollar strengthened following signs that the Federal Reserve will tighten monetary policy soon in the world's biggest oil user. Futures pulled back amid a broader decline in financial markets after the Fed telegraphed a March interest rate increase and as the dollar climbed against its major peers. Dollar-denominated oil becomes more expensive for buyers using other currencies when the greenback gains. Crude prices surged on Wednesday, with Brent climbing to $90 a barrel for the first time in seven years, amid tensions between Ukraine and Russia, the world's second-largest oil producer, that have fanned fears of energy supply disruptions to Europe. Commonwealth Bank's Dhar echoed those concerns, while noting that efforts by OPEC and its allies, known as OPEC+, to boost supply also were not materialising and that demand has not been hit as badly by the rapid spread of the Omicron coronavirus variant as earlier feared. OPEC missed its planned supply increase target in December, highlighting capacity constraints that are limiting supply as global demand recovers from the COVID-19 pandemic. OPEC+ is gradually relaxing 2020's output cuts as demand recovers from the demand collapse that year. But many smaller producers can't raise supply and others have been wary of pumping too much in case of renewed COVID-19 setbacks. Still, an increase in crude oil and gasoline inventories in the United States alleviated some of the concerns about supply. Crude inventories rose by 2.4 million barrels in the week to Jan. 21 to 416.2 million barrels, compared with analysts' expectations in a Reuters poll for a 728,000-barrel drop, the Energy Information Administration (EIA) said on Wednesday. Gasoline stockpiles rose by 1.3 million barrels last week to 247.9 million barrels, the EIA said, the most since February 2021.

 

 
Intraday RESISTANCE LEVELS
27th January 2022 R1 R2 R3
GOLD-XAU 1,818-1,832 1,841 1,848-1,860
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 1.1230-1.1270 1.1320 1.1355-1.1400
GBP/USD 1.3440-1.3490 1.3590-1.3640 1.3590-1.3640
USD/JPY 115.00-115.40 115.70 116.10-116.80

Intraday SUPPORTS LEVELS
27th January 2022 S1 S2 S3
GOLD-XAU 1,808-1,801 1,790 1,783-1,769
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 1.1180-1.1150 1.1090 1.1050-1.1010
GBP/USD 1.3390-1.3350 1.3300 1.3270-1.3250
USD/JPY 114.65-114.05 113.70 113.20-112.70

Intra-Day Strategy (27th 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$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 1808-1790 with risk below 1790, targeting 1818-1832-1848 and 1854-1860-1870. Sell in between 1808-1860 keeping stop loss closing above 1860, targeting 1834-1818-1808 and 1800-1790-1783.

 
Intraday Support Levels
S1     1,808-1,801
S2     1,790
S3     1,783-1,769
Intraday Resistance Levels
R1     1,818-1,832
R2     1,841
R3     1,848-1,860

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$23.96/oz and low of US$23.42/oz settled down by 1.218% at US$23.51/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 Wednesday made an intra‐day high of US87.45/bbl, intraday low of US$84.61/bbl and settled up by 2.156% to close at US$86.68/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 86.90-88.20 with stop loss at 88.20; targeting 86.20-84.60-84.95 and 94.50-83.90-83.00. Buy above 86.20-82.30 with risk daily closing below 82.30 and targeting 85.686.90-87.50-88.00.

 
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 Wednesday made an intraday low of US$1.1234/EUR, high of US$1.1310/EUR and settled the day down by 0.526% to close at US$1.1240/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 1.1180-1.1020 with risk below 1.1020, targeting 1.1230-1.1270-1.1485-1.1525-1.1590 and 1.1620-1.1650. Sell below 1.1230-1.1400, targeting 1.1190-1.1150-1.1090 and 1.1050-1.1010 with stop-loss at daily closing above 1.1650.

 
Intraday Support Levels
S1     1.1180-1.1150
S2     1.1090
S3     1.1050-1.1010

Intraday  Resistance Levels
R1     1.1230-1.1270
R2     1.1320
R3     1.1355-1.1400

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$1.3443/GBP, high of US$1.3523/GBP and settled the day down by 0.226% to close at US$1.3461/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 1.3390-1.3250 with target 1.3440-1.3490-1.3530 and 1.3590-1.3640-1.3700 with stop loss closing below 1.3250. Sell in between 1.3440-1.3750 with targets at 1.3390-1.3350-1.3300 and 1.3270-1.3250 with stop loss should be 1.3790.

 
Intraday Support Levels
S1     1.3390-1.3350
S2     1.3300
S3     1.3270-1.3250

Intraday Resistance Levels
R1     1.3440-1.3490
R2     1.3590-1.3640
R3     1.3590-1.3640

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

63.834

Buy
20-DMA   1.3466 Buy
50-DMA   1.3453 Buy
100-DMA   1.3588 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 JPY113.77/USD and made an intraday high of JPY114.68/USD and settled the day up 0.626% at JPY114.55/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 114.90-116.50 with risk above 116.50 targeting 14.50-113.90 and 113.20-112.70-112.50. Long positions above 114.50-112.50 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     114.65-114.05
S2     113.70
S3     113.20-112.70

INTRADAY RESISTANCE LEVELS
R1     115.00-115.40
R2     115.70
R3     116.10-116.80

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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING