AAFX TRADING

Daily Market Lookup

  • The dollar was headed for its best week in seven months on Friday, driven higher by a flight from risky assets and markets pricing a year ahead of aggressive hikes in U.S. interest rates. Federal Reserve chair Jerome Powell unleashed bets on five or more hikes this year after he left the door open on Wednesday to raising rates faster than in previous cycles. Data showing the best annual U.S. growth in nearly four decades didn't hurt either. The yuan also copped a kicking on Thursday, its worst session in seven months, as softening industrial profit growth in China bolstered the case for monetary easing there. That compares with a Fed funds futures market pricing in as many as five U.S. hikes this year with some analysts forecasting six. Ahead on Friday are growth figures for Germany and France, and sentiment surveys in the United States. Beyond that looms a week of central bank meetings in Britain, Europe and Australia. Sterling was pushed to a one-month low of $1.3360 on Thursday but has bounced to $1.3409 as traders await the Bank of England's meeting next week. Rates markets have priced a 90% chance of a hike. After the dust settles on the rates outlook, some analysts think the dollar then starts to run out of steam.
  • The dollar was down on Friday morning in Asia but was headed towards its best week in seven months. The U.S. currency broke through key levels against the euro after investors increased bets on multiple U.S. interest rate hikes in 2022. The U.S. Federal Reserve took a hawkish stance as it handed down its policy decision on Wednesday, driving bets on five or more interest rate hikes in 2022. Some investors even expect up to six hikes. Sentiment was also bolstered by the U.S. GDP growing a better-than-expected 6.9% quarter-on-quarter in the fourth quarter of 2021. Meanwhile, the prospect of the People’s Bank of China taking the opposite direction to the Fed, made more likely thanks to soft industrial profit growth data earlier in the week, led the dollar to its best session in seven months against the yuan. Across the Atlantic, the pound was near a one-month low, with the Bank of England handing down its policy decision in the following week. The European Central Bank and the Reserve Bank of Australia will also hand their policies. However, the dollar's rally is starting to lose steam as economies and central banks globally slowly emerge from COVID-19, according to some investors.
  • Gold was up on Friday morning in Asia but moves remained small and the yellow metal was headed for its sharpest weekly decline since November 2021. Investors continue to digest the U.S. Federal Reserve's policy latest policy decision that drove the dollar to a multi-month high. The ripple effect from the Fed’s hawkish turn in its latest policy decision, handed down on Wednesday, continues. With expectations of interest rate hikes sky-high, markets are now pricing in five to six hikes from the Fed in 2022. Investor sentiment was also bolstered by U.S. data that showed the GDP grew a better-than-expected 6.9% quarter-on-quarter in the fourth quarter of 2021. Other central banks handing down their policy decisions in the following week include the Bank of England, the European Central Bank, and the Reserve Bank of Australia. However, a Reuters poll warned that gold is expected to drift lower in 2022 and 2023 as central banks hike interest rates, lifting bond yields and dulling the appeal of non-yielding bullion. On the supply side, Swiss customs data showed that the country's gold exports in 2021 rose to their highest since 2018. This was bolstered by demand in China and India, two of the biggest consumer markets which are recovering from the impact of COVID-19.
  • Oil was up on Friday morning in Asia and was set for a sixth consecutive weekly gain. Concerns over a tightening market remain as major producers continue their policy of limited output increases even as fuel demand increases. The black liquid has gained around 15% in 2022 to date, thanks to geopolitical tensions in Eastern Europe and the Middle East. Tensions between Russia, the world's second-largest oil producer, and Western powers over Ukraine and threats to the United Arab Emirates from Yemen's Houthi movement have raised concerns about energy supply. Also on investors radars is the Organization of the Petroleum Exporting Countries and allies (OPEC+)’s next meeting, scheduled for Feb. 2, 2022. The cartel is expected to continue with a planned rise in its oil output target for March, according to Reuters. An increase in oil output by producer nations cashing in on increasing prices depleted the spare capacity that cushions the markets from sudden shocks. This has also increased the risk of price hikes and even fuel shortages. In Asia Pacific, China’s crude oil imports could rebound by as much as 7% in 2022, according to analysts and oil company officials. The world’s top oil importer is slowly reversing a rare decline recorded in 2021, with buyers increasing purchases for new refining units and replenishing low inventories, they added. The market is focusing on a Feb. 2 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a group known as OPEC+. OPEC+ is likely to stick with a planned rise in its oil output target for March, several sources in the group told Reuters. An increase in oil output by producer nations cashing in on expensive crude has depleted the cushion of spare capacity that protects the market from sudden shocks and raised the risk of price spikes or even fuel shortages On the demand side, crude oil imports in China, the world's biggest importer of the commodity, could rebound by a much as 7% this year, reversing 2021's rare decline as buyers step up purchases for new refining units and to replenish low inventories, analysts and oil company officials said.

 

 
Intraday RESISTANCE LEVELS
28th January 2022 R1 R2 R3
GOLD-XAU 1,801-1,808 1,818 1,832-1,841
Silver-XAG 23.15-23.70 24.10 24.90-25.40
Crude Oil 87.10¬- 87.60 88.00 88.70-89.50
EURO/USD 1.1150-1.1180 1.1230 1.1270-1.1320
GBP/USD 1.3440-1.3490 1.3530 1.3590-1.3640
USD/JPY 115.00-115.40 115.70 116.10-116.80

Intraday SUPPORTS LEVELS
28th January 2022 S1 S2 S3
GOLD-XAU 1,790-1,783 1,777 1,769-1,760
Silver-XAG 22.50-22.10 21.90 21.40-21.00
Crude Oil 86.20-85.60 84.95 84.50-83.90
EURO/USD 1.1100-1.1050 1.1010 1.1950-1.0870
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 (28th 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$1822.02/oz and low of US$1791.71/oz. Gold down 1.229% at US$1797.30/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 1790-1769 with risk below 1769, targeting 1800-1808-1818 and 1832-1848-1854-1860. Sell in between 1800-1860 keeping stop loss closing above 1860, targeting 1790-1783-1777 and 1769-1760.

 
Intraday Support Levels
S1     1,790-1,783
S2     1,777
S3     1,769-1,760
Intraday Resistance Levels
R1     1,801-1,808
R2     1,818
R3     1,832-1,841

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$23.58/oz and low of US$22.56/oz settled down by 3.26% at US$22.75/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 22.50-20.50, targeting 23.15-23.70-24.10 and 24.55-24.90- 25.40 with stop loss should be place on the breakage below 20.50. Sell in between 23.15-25.40 with stop loss above 25.40; targeting 22.50-22.10-21.90 and 21.40-21.00.

 
Intraday  Support Levels
S1     22.50-22.10
S2     21.90
S3     21.40-21.00

Intraday  Resistance Levels
R1     23.15-23.70
R2     24.10
R3     24.90-25.40

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 Thursday made an intra‐day high of US87.98/bbl, intraday low of US$85.69/bbl and settled up by 0.191% to close at US$86.73/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     86.20-85.60
S2     84.95
S3     84.50-83.90

Intraday Resistance Levels
R1     87.10¬- 87.60
R2     88.00
R3     88.70-89.50

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$1.1130/EUR, high of US$1.1242/EUR and settled the day down by 0.526% to close at US$1.1138/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 1.1100-1.0870 with risk below 1.0870, targeting 1.1150-1.1180-1.1230 and 1.1270-1.1485-1.1525. 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     1.1100-1.1050
S2     1.1010
S3     1.1950-1.0870

Intraday  Resistance Levels
R1     1.1150-1.1180
R2     1.1230
R3     1.1270-1.1320

TECHNICAL INDICATORS
Name   Value Action
14DRSI   33.485 Buy
20-DMA   1.1312 Sell
50-DMA   1.1352 Sell
100-DMA   1.1451 Sell
200-DMA   1.1587 Sell
STOCH(5,3)   11.685 Sell
MACD(12,26,9)   -0.004 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3357/GBP, high of US$1.3467/GBP and settled the day down by 0.600% to close at US$1.3380/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     1.3530
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   1.3530 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 JPY114.46/USD and made an intraday high of JPY115.48/USD and settled the day up 0.708% at JPY115.35/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
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