AAFX TRADING

Daily Market Lookup

  • The euro edged off a three-week peak on Monday as the dollar took heart from strong U.S. jobs data and ahead of inflation figures due later this week, which will likely cement expectations for a March Federal Reserve rate hike. The European common currency dropped around 0.14% to as low as $1.1423 in Asian trading on Monday, having hit its highest since mid-January on Friday Those gains had been driven by a hawkish turn from the European Central Bank last week, which led markets to bring forward the likely timing of euro zone rate rises and sent bond yields sharply higher. However, the dollar then found support as U.S. Treasury yields rose after far better than expected jobs data. Markets have now priced in a one-in-three chance the Fed might hike by a full 50 basis points in March, and a reasonable chance rates will reach 1.5% by year end. These expectations could be bolstered by the U.S. consumer price index due Thursday. U.S. two-year yields were holding firm in Asian hours on Monday after gaining sharply after the jobs data, and briefly touched a new a two-year high of 1.33%. Markets will also be watching scheduled speeches by policymakers at the Fed and the UK, European, Australian and Canadian central banks, to see whether they drop any further hints on rate policy. Klaas Knot, the Dutch Central Bank president and one of the more hawkish members of the ECB's governing council, said on Sunday he expects a hike in the fourth quarter of this year.
  • The dollar was up on Monday morning in Asia, with the euro near a three-week high hit during the previous week. Investors continued to digest the European Central Bank (ECB)’s hawkish turn while saying further short-term gains are less likely as the U.S. Federal Reserve’s imminent interest rate provided support to the dollar. Investors now await U.S. inflation data, including the consumer price index, due on Thursday. A strong reading could escalate bets of a Fed interest rate hike in March 2022. The euro traded at $1.1451, not far from the high of $1.4183 hit during the previous week and near levels last hit in mid-January 2022. The dollar, meanwhile, received a late boost at the end of a bruising week from a strong U.S. jobs report. The report showed that non-farm payrolls were at 467,000 in January and the unemployment rate was 4%. The safe-haven U.S. currency could also see further gains, according to some investors. In the short term, "with little fresh information from Europe likely this week to further boost market pricing for ECB hikes, material further upside to the euro is unlikely,” the note added. Markets are pricing in a one-in-three chance that the Fed could start hiking interest rates in March, with a reasonable chance that rates will reach 1.5% by the end of 2022. Investors now await speeches from the Fed, ECB, Bank of England, Reserve Bank of Australia (RBA), and the Bank of Canada throughout the week. Klaas Knot, Dutch Central Bank president and a member of the ECB's governing council, said on Sunday he expects a hike in the fourth quarter of 2022.
  • Gold was up on Monday morning in Asia, hitting a more than one-week high. Inflationary pressures helped counter the impact of a U.S. Treasury yield rally after better-than-expected U.S. employment data. Meanwhile, Asia Pacific shares were mostly down on Monday, with a strong U.S. jobs report calming dears about the global economic recovery from COVID-19. Benchmark 10-year U.S. Treasuries were at their highest levels since December 2019 on Friday. The report showed that non-farm payrolls were at 467,000 in January, while the unemployment rate was 4%. Investors now await U.S. inflation data, including the consumer price index, with strong data likely to increase bet that the U.S. Federal Reserve will begin hiking interest rates. Chinese data released earlier in the day showed that the Caixin services purchasing managers index was 51.4 in January. Australia also released retail sales figures. Meanwhile, geopolitical tensions in Eastern Europe also supported the safe-haven yellow metal. The U.S. and Russia continue to clash over Ukraine, with two U.S. officials warning on Saturday Russia had in place about 70% of the combat power it could need to invade Ukraine.
  • Oil was mixed on Monday morning in Asia, reversing some earlier losses. Expectations that global supply would remain tight continued as fuel demand increases and investors took little notice of the small steps forward in the U.S.-Iran nuclear talks. Both Brent and WTI futures rose more than $2 on the previous Friday, recording a seventh consecutive week of gains as ongoing worries over supply disruptions continued to give the black liquid a boost. The U.S. during the previous week restored sanctions waivers to Iran to allow international nuclear cooperation projects, as talks on the 2015 international nuclear deal enter their final phase. Should the sanctions on Iran be completely lifted, the country could boost oil shipments and add to global supply. Other investors agreed, expecting "more twists and turns in the U.S.-Iranian talks and no agreement to be reached anytime soon," Fujitomi Securities Co. Ltd. chief analyst Kazuhiko Saito told Reuters The Organization of the Petroleum Exporting Countries (OPEC) and allies (OPEC+)’s struggle to meet targets continues, despite pressure ongoing to raise production more quickly. In the U.S., although the rig count has been on an upward trend for a record consecutive 18 months, oil production is still far from pre-COVID-19 record levels. Tensions in Eastern Europe also remain, with U.S. White House national security adviser Jake Sullivan warning on Sunday that Russia could invade Ukraine within days or weeks but could still opt for a diplomatic path. Russia is the world’s second-largest oil exporter.

 

 
Intraday RESISTANCE LEVELS
7th February 2022 R1 R2 R3
GOLD-XAU 1,818-1,831 1,841 1,849-1,856
Silver-XAG 22.90-23.15 23.80 24.40-24.90
Crude Oil 91.00-91.90 92.55 93.25-94.00
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 115.40 115.70 116.10-116.80

Intraday SUPPORTS LEVELS
7th February 2022 S1 S2 S3
GOLD-XAU 1,808-1,800 1,783 1,777-1,770
Silver-XAG 22.50-21.90 21.50 21.05-19.50
Crude Oil 90.00-89.50 89.00 88.20-87.60
EURO/USD 1.1400-1.1355 1.1270 1.1230-1.1210
GBP/USD 1.3500 1.3410 1.3350-1.3300
USD/JPY 115.00-114.50 114.05 113.70-113.20

Intra-Day Strategy (7th 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 Friday made its intraday high of US$1814.82/oz and low of US$1792.09/oz. Gold up 0.167% at US$1807.81/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 1808-1769 with risk below 1769, targeting 1818-1832-1841 and 1849-1856. Sell in between 1818-1860 keeping stop loss closing above 1860, targeting 1804-1790-1783 and 1777-1769-1760.

 
Intraday Support Levels
S1     1,808-1,800
S2     1,783
S3     1,777-1,770
Intraday Resistance Levels
R1     1,818-1,831
R2     1,841
R3     1,849-1,856

Technical Indicators

Name   Value Action
14DRSI  

49.409

Buy
20-DMA   1811.62 Sell
50-DMA  

1808.32

Buy
100-DMA   1803.82 Buy
200-DMA   1801.48 Buy
STOCH(5,3)   78.923 Buy
MACD(12,26,9)   0.746 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$22.85/oz and low of US$22.45/oz settled up by 0.083% 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 23.10-25.40 with stop loss above 25.40; targeting 22.50-22.10-21.90 and 21.40-21.00.

 
Intraday  Support Levels
S1     22.50-21.90
S2     21.50
S3     21.05-19.50

Intraday  Resistance Levels
R1     22.90-23.15
R2     23.80
R3     24.40-24.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.015 Buy
20-DMA   22.93 Sell
50-DMA   23.05 Sell
100-DMA   23.35 Sell
200-DMA   23.81 Sell
STOCH(5,3)   54.764 Buy
MACD(12,26,9)   -0.119 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US91.74/bbl, intraday low of US$88.84/bbl and settled up by 1.897% to close at US$90.62/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 91.00-94.00 with stop loss at 94.00; targeting 90.00-89.50-882.20 and 87.60-86.20-85.60. Buy above 90.00-87.60 with risk daily closing below 87.60 and targeting 91.00-91.90-92.55 and 93.25-94.00.

 
Intraday Support Levels
S1     90.00-89.50
S2     89.00
S3     88.20-87.60

Intraday Resistance Levels
R1     91.00-91.90
R2     92.55
R3     93.25-94.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   77.730 Sell
20-DMA   85.44 Buy
50-DMA   81.10 Buy
100-DMA   77.93 Buy
200-DMA   72.96 Buy
STOCH(5,3)   85.873 Buy
MACD(12,26,9)   2.990 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1410/EUR, high of US$1.1483/EUR and settled the day up by 0.121% to close at US$1.1449/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.347), which become immediate support, break below will target 1.1270. 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   59.407 Buy
20-DMA   1.1328 Buy
50-DMA   1.1347 Buy
100-DMA   1.1435 Buy
200-DMA   1.1570 Sell
STOCH(5,3)   89.547 Sell
MACD(12,26,9)   0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3503/GBP, high of US$1.3614/GBP and settled the day up by 0.478% to close at US$1.3530/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

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.

 
Intraday Support Levels
S1     1.3500
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  

50.849

Buy
20-DMA   1.3520 Buy
50-DMA   1.3500 Buy
100-DMA   1.3535 Buy
200-DMA   1.3580 Buy
STOCH(5,3)   66.766 Buy
MACD(12,26,9)   -0.039 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY114.76/USD and made an intraday high of JPY115.42/USD and settled the day up 0.209% at JPY115.18/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     115.00-114.50
S2     114.05
S3     113.70-113.20

INTRADAY RESISTANCE LEVELS
R1     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

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