AAFX TRADING

Daily Market Lookup

  • The dollar declined to a more than a one-week low on Wednesday after data showed a drop in U.S. private sector employment in January due to the increase in COVID-19 infections. However, the data is unlikely to prevent the Federal Reserve from hiking interest rates at the March 15-16 policy meeting. But the report has eased expectations of a large interest rate increase of half a percentage point. In contrast, the euro gained for a third consecutive day, coming off a 20-month low last week, as euro zone inflation rose to a new record high last month. That fuelled bets the European Central Bank could raise interest rates sooner than expected. ADP reported on Wednesday that U.S. private payrolls dropped by 301,000 jobs last month. Data for December was revised lower to show 776,000 jobs added instead of the initially reported 807,000. Economists polled by Reuters had forecast an increase of 207,000 in private payrolls. In late afternoon trading, U.S. rate futures priced in about 4.7 hikes this year, or 118.6 basis points of policy tightening, down from the five rate increases seen over the last two days. Futures also showed the probability of a 50-basis-point hike in March have settled at 12.5%, from as high as 32% late last week. Fed officials this week also backtracked on some of the central bank's hawkish comments, pushing the dollar lower. Although they said the Fed would raise interest rates next month, these officials have all but ruled out a 50-basis-point increase in the benchmark overnight interest rate in March and will keep their options open after that. Even St. Louis Fed President James Bullard, a voter this year on the policy-setting Federal Open Market Committee and one of the more hawkish Fed officials, also pushed back against a larger rate hike in March, noting that markets have on their own started to push up borrowing costs already. In the euro zone, markets are expecting the ECB to turn hawkish after an annualized inflation number of 5.1% in January, up more than twice the ECB's 2% target. The euro firmed 0.3% to $1.1310, after earlier touching more than a one-week high, on growing expectations the ECB might signal a faster path for policy tightening at Thursday's meeting on Thursday. In the short term, the euro depends depend on what ECB President Christine Lagarde says on Thursday. Some analysts believe the bank will stick to its guidance of no hikes this year, which should weigh on the euro. Investors have fully priced in an expected increase in the BoE base rate by 25 basis points to 0.5% on Thursday.
  • The U.S. dollar edged lower Wednesday as gains in global equity markets boosted risk sentiment while Federal Reserve officials reined in interest rate hike expectations. The dollar, often seen as the ultimate safe haven in times of stress, has seen selling Wednesday following gains on equity markets around the globe on the back of strong results from tech giant Alphabet. Also weighing on the dollar have been recent moves by a series of Fed officials to dilute expectations of a hefty 50 basis points hike in March by the U.S. central bank even with inflation at a 40-year high. St. Louis Federal Reserve President James Bullard, often seen as one of the more hawkish of the Fed policymakers, said on Tuesday he favors successive rate increases at the Fed's March, May and June meetings. But he disagreed with the idea of starting with a half-percentage point hike in March, saying markets have already started to push up borrowing costs. Additionally, Federal Reserve Bank of Kansas City President Esther George, another hawk, said the central bank should be cautious and could take less aggressive actions in raising interest rates by shrinking the balance sheet more forcefully. Traders will keep an eye on the release of the ADP private payrolls, at 8:15 AM ET (1315 GMT), ahead of Friday’s monthly official jobs report. Private job growth is likely to have decelerated to 207,000 in January after recording its fastest pace in seven months in December, when it rose 807,000.
  • Oil prices edged up on Wednesday after OPEC+ stuck to planned moderate output increases despite pressure from top consumers to raise output more quickly. Global benchmark Brent has remained within striking distance of $90 for several days now, buoyed by ongoing concerns about tight supply across major world producers and steadily increasing demand. On Friday, both benchmarks hit their highest since October 2014, with Brent touching $91.70 and U.S. crude hitting $88.84. The market has been unable to push higher, leading analysts to believe sellers have been jumping in to take profits at these levels despite bullish fundamentals. In a Wednesday note, Bank of America (NYSE:BAC) analysts said the market was vulnerable to short-term pullbacks after the year's gains so far. U.S. crude stockpiles fell by 1 million barrels last week, the U.S. Energy Information Administration said, against expectations for an increase, while distillate inventories also dropped amid strong demand both domestically and in export markets. The Organization of the Petroleum Exporting Countries and allies including Russia - known as OPEC+ - stuck with previously agreed-upon plans to boost output by 400,000 barrels per day. The group, however, is struggling to meet existing targets, and wary of responding to calls on its strained capacity for more crude from top consumers to cap surging prices. The group has blamed rising prices on the failure of consuming nations to ensure adequate investment in fossil fuels as they shift to greener energy. Several OPEC+ sources also said prices were pushed up by Russia-U.S. tensions that have fanned fears that energy supplies to Europe could be disrupted. Washington has accused Moscow of planning to invade Ukraine, which Russia, the world's second-largest oil producer, denies. The United States said on Wednesday it will send nearly 3,000 troops to Poland and Romania in the coming days to reinforce Eastern European NATO allies as the alliance continues to engage in diplomatic efforts with Russian President Vladimir Putin to defuse the crisis. A major winter storm is expected to wallop much of the central United States and stretch to parts of the Northeast this week, bringing heavy snow, freezing rain and ice, the National Weather Service said. The storm comes days after a deadly winter blast and could boost prices of oil, especially as some regions substitute out natural gas where supply may be scarce.
  • Oil prices edged up on Wednesday after OPEC+ stuck to planned moderate output increases despite pressure from top consumers to raise output more quickly. Global benchmark Brent has remained within striking distance of $90 for several days now, buoyed by ongoing concerns about tight supply across major world producers and steadily increasing demand. On Friday, both benchmarks hit their highest since October 2014, with Brent touching $91.70 and U.S. crude hitting $88.84. The market has been unable to push higher, leading analysts to believe sellers have been jumping in to take profits at these levels despite bullish fundamentals. In a Wednesday note, Bank of America (NYSE:BAC) analysts said the market was vulnerable to short-term pullbacks after the year's gains so far. U.S. crude stockpiles fell by 1 million barrels last week, the U.S. Energy Information Administration said, against expectations for an increase, while distillate inventories also dropped amid strong demand both domestically and in export markets. The Organization of the Petroleum Exporting Countries and allies including Russia - known as OPEC+ - stuck with previously agreed-upon plans to boost output by 400,000 barrels per day. The group, however, is struggling to meet existing targets, and wary of responding to calls on its strained capacity for more crude from top consumers to cap surging prices. The group has blamed rising prices on the failure of consuming nations to ensure adequate investment in fossil fuels as they shift to greener energy. Several OPEC+ sources also said prices were pushed up by Russia-U.S. tensions that have fanned fears that energy supplies to Europe could be disrupted. Washington has accused Moscow of planning to invade Ukraine, which Russia, the world's second-largest oil producer, denies. The United States said on Wednesday it will send nearly 3,000 troops to Poland and Romania in the coming days to reinforce Eastern European NATO allies as the alliance continues to engage in diplomatic efforts with Russian President Vladimir Putin to defuse the crisis. A major winter storm is expected to wallop much of the central United States and stretch to parts of the Northeast this week, bringing heavy snow, freezing rain and ice, the National Weather Service said. The storm comes days after a deadly winter blast and could boost prices of oil, especially as some regions substitute out natural gas where supply may be scarce.

 

 
Intraday RESISTANCE LEVELS
3rd February 2022 R1 R2 R3
GOLD-XAU 1,808-1,818 1,832 1,841-1,850
Silver-XAG 22.50-23.15 23.80 24.40-24.90
Crude Oil 87.60-88.20 89.00 89.50-90.00
EURO/USD 1.1355-1.1400 1.1485 1.1525-1.1590
GBP/USD 1.3590-1.3640 1.3700 1.3750-1.3800
USD/JPY 115.00-115.40 115.70 116.10-116.80

Intraday SUPPORTS LEVELS
3rd February 2022 S1 S2 S3
GOLD-XAU 1,800-1,783 1,777 1,770-1,764
Silver-XAG 22.40-21.90 21.50 21.05-19.50
Crude Oil 86.90-86.20 85.60 84.95-84.50
EURO/USD 1.1270-1.1230 1.1210 1.1180-1.1120
GBP/USD 1.3530-1.3490 1.3410 1.3350-1.3300
USD/JPY 114.50-114.05 113.70 113.20-112.70

Intra-Day Strategy (3rd February 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$1810.71/oz and low of US$1794.37/oz. Gold up 0.432% at US$1806.71/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 1794-1769 with risk below 1769, targeting 1808-1818-1832 and 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     1,800-1,783
S2     1,777
S3     1,770-1,764
Intraday Resistance Levels
R1     1,808-1,818
R2     1,832
R3     1,841-1,850

Technical Indicators

Name   Value Action
14DRSI  

41.005

Buy
20-DMA   1814.38 Sell
50-DMA  

1808.53

Sell
100-DMA   1803.45 Sell
200-DMA   1801.18 Sell
STOCH(5,3)   13.940 Sell
MACD(12,26,9)   0.746 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$22.85/oz and low of US$22.45/oz settled up by 0.0839% at US$22.64/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     22.40-21.90
S2     21.50
S3     21.05-19.50

Intraday  Resistance Levels
R1     22.50-23.15
R2     23.80
R3     24.40-24.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.607 Buy
20-DMA   23.16 Sell
50-DMA   23.15 Sell
100-DMA   23.43 Sell
200-DMA   23.88 Sell
STOCH(5,3)   15.891 Buy
MACD(12,26,9)   0.034 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesaday made an intra‐day high of US88.19/bbl, intraday low of US$85.84/bbl and settled down by 0.239% to close at US$86.66/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 87.90-89.50 with stop loss at 89.50; targeting 86.20-85.60-84.95 and 84.50-83.00-82.30. Buy above 87.20-83.90 with risk daily closing below 83.90 and targeting 87.90-88.20 and 89.00-89.50.

 
Intraday Support Levels
S1     86.90-86.20
S2     85.60
S3     84.95-84.50

Intraday Resistance Levels
R1     87.60-88.20
R2     89.00
R3     89.50-90.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.312 Sell
20-DMA   82.96 Buy
50-DMA   79.32 Buy
100-DMA   76.57 Buy
200-DMA   72.14 Buy
STOCH(5,3)   78.873 Buy
MACD(12,26,9)   2.930 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1265/EUR, high of US$1.1329/EUR and settled the day up by 0.288% to close at US$1.1302/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 1.1355-1.1650, 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     1.1270-1.1230
S2     1.1210
S3     1.1180-1.1120

Intraday  Resistance Levels
R1     1.1355-1.1400
R2     1.1485
R3     1.1525-1.1590

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 Wednesday made an intra‐day low of US$1.3512/GBP, high of US$1.3586/GBP and settled the day up by 0.409% to close at US$1.3574/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 Wednesday made intra‐day low of JPY114.14/USD and made an intraday high of JPY114.14/USD and settled the day up 0.157% at JPY114.44/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     114.50-114.05
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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