AAFX TRADING

Daily Market Lookup

  • The dollar was down on Friday morning and was set for the worst week in nearly two years, as the Bank of England (BOE) and European Central Bank (ECB) tightened their monetary policies. This comes after the dollar's gains during the previous week, with investors bracing for faster-than-expected interest rate hikes from the U.S. Federal Reserve. The Fed took a hawkish stance of its own as it handed down its policy decision earlier in the month. The USD/JPY pair inched down 0.01% to 114.93. Analysts expect that the Bank of Japan might follow its peers to tighten monetary policy when it hands down its policy decision in the following week. The euro reached its highest since January 14, 2021. ECB president Christine Lagarde said it is unlikely to continue increasing interest rates due to growing inflation risks. On the data front, investors await the latest U.S. jobs report, including non-farm payrolls, due later in the day.
  • The euro was heading for its best week since March 2020 and was testing a near three-month high after Thursday's hawkish shift from the European Central Bank stoked speculation about the pace and timing of rate hikes. Though the ECB kept rates on hold as widely expected, the euro climbed 0.26%, reaching as high as high as $1.468 in Asian trading on Friday in reaction to ECB president Christine Lagarde acknowledging the mounting inflation risks and declining to repeat previous guidance that an interest rate increase this year was extremely unlikely. The European single currency was up 2.86% for the week, its best weekly gain since March 2020, during the early stages of the pandemic. A break above $1.1482, a level last seen on Jan.14, would be euro's strongest since mid November. The ECB had been seen as among the most dovish of the world's leading central banks. Sterling was at $1.361 having risen to a two-week top of $1.3626 on Thursday after BoE raised rates by 25 basis points and nearly half of its policymakers wanted a bigger increase to contain rampant inflation. As a result the dollar index, measuring the greenback against six major peers, was at 95.169 having tumbled 2% this week - its biggest weekly fall since March 2020. This is a sharp reversal after the index gained 1.65% a week earlier, when traders rejigged positions preparing for faster Federal Reserve rate hikes than had been previously expected. The markets are now factoring in five U.S. rate hikes this year. U.S. non-farm payroll data is due later on Friday, but though it is expected to show a sharp slowdown in jobs growth due to the spread of the Omicron strain of COVID-19 in January, the data won't be as crucial for the Fed as in the past, as the focus is more on inflation. The Reserve Bank of Australia governor, on Wednesday said a rate hike this year was possible, though argued there was a rare opportunity to reach full employment that justified being patient.
  • Gold was up on Friday morning in Asia and set for a weekly gain. A weakening dollar, alongside continuing concerns over high inflation, and U.S.-Russia tensions over Ukraine gave the safe-haven yellow metal a boost. The dollar, which normally moves inversely to gold, was down on Friday and was set for its biggest weekly drop since March 2020. The U.S. Federal Reserve's inflation fight should be its top priority, the nominees to the central bank’s Board of Governors told lawmakers on Thursday. The nominees, Lisa Cook, Philip Jefferson, and Sarah Bloom Raskin, comments underlined support for a hawkish pivot in the Fed’s monetary policy. Across the Atlantic, the European Central Bank hinted on Thursday that it could reverse its dovish stance and hike interest rates in 2022. The Bank of England hiked its interest rate to 0.5% as it handed down its policy decision on the same day. In Asia Pacific, the Bank of Japan is due to hand down its policy decision in the following week. However, the International Monetary Fund warned that it was "too early" to say if the world is facing a period of sustained inflation. Meanwhile, U.S.-Russia tensions over Ukraine continue to escalate. Russia has formulated several options as an excuse to invade Ukraine, including the potential use of a propaganda video showing a staged attack, according to the U.S.
  • Oil was up on Friday morning in Asia, as supply concerns and frigid weather in the U.S. extended already sharp gains from the previous session. A massive winter storm continues across central and northeast United States since Thursday and knocked out power and caused schools to close in several states. It also threatens already fragile oil supplies. Rising demand means that oil markets are more vulnerable to supply shortages, according to analysts. Geopolitical tensions in Eastern Europe and the Middle East have also driven sharp gains for oil. So far, Brent futures are already up by 17% and WTI by 20% for the year.The U.S. has signaled that Russia was planning to use a staged attack as a reason to invade Ukraine. But Russia's President Vladimir Putin has put the blame on NATO and the West for increased tensions, even as he moves thousands of troops near to Ukraine's border. Nonetheless, some analysts predict the oil market to flip into surplus by the next quarter, which would ease the recent surge in prices over the medium term.

 

 
Intraday RESISTANCE LEVELS
4th 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 89.50-90.00 90.90 91.90-92.55
EURO/USD 1.1485-1.1525 1.1570 1.1600-1.1640
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
4th 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 89.00-88.20 87.60 86.90-86.20
EURO/USD 1.1400-1.1355 1.1270 1.1230-1.1210
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 (4th 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 Thursday made its intraday high of US$1808.88/oz and low of US$1788.56/oz. Gold down 0.116% at US$1804.65/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 Thursday made its intraday high of US$22.64/oz and low of US$21.99/oz settled down by 0.99% at US$22.40/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 Thursday made an intra‐day high of US89.31/bbl, intraday low of US$85.82/bbl and settled down by 2.32% to close at US$89.03/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     89.00-88.20
S2     87.60
S3     86.90-86.20

Intraday Resistance Levels
R1     89.50-90.00
R2     90.90
R3     91.90-92.55

TECHNICAL INDICATORS
Name   Value Action
14DRSI   75.128 Sell
20-DMA   84.75 Buy
50-DMA   80.65 Buy
100-DMA   77.64 Buy
200-DMA   72.77 Buy
STOCH(5,3)   79.873 Buy
MACD(12,26,9)   2.990 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1266/EUR, high of US$1.1450/EUR and settled the day up by 1.191% to close at US$1.1435/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 1.1400-1.1220 with risk below 1.1220, targeting 1.1485-1.1525-1.1570 and 1.1620-1.1650. Sell below 1.1485-1.1650, 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     1.1400-1.1355
S2     1.1270
S3     1.1230-1.1210

Intraday  Resistance Levels
R1     1.1485-1.1525
R2     1.1570
R3     1.1600-1.1640

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.1904 Buy
20-DMA   1.1318 Sell
50-DMA   1.1344 Sell
100-DMA   1.1435 Sell
200-DMA   1.1571 Sell
STOCH(5,3)   93.685 Sell
MACD(12,26,9)   -0.004 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3537/GBP, high of US$1.3627/GBP and settled the day up by 0.165% to close at US$1.3595/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  

57.530

Buy
20-DMA   1.3525 Buy
50-DMA   1.3501 Buy
100-DMA   1.3537 Buy
200-DMA   1.3581 Buy
STOCH(5,3)   89.766 Buy
MACD(12,26,9)   -0.039 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday 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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