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Daily Market Lookup

  • The dollar was up on Friday morning in Asia, with higher-than-expected U.S. inflation data and hawkish comments from a Federal Reserve policymaker accelerating expectations of aggressive interest rate hikes. However, similar pressures globally capped gains. The U.S. inflation data showed that the consumer price index (CPI) grew 7.5% year-on-year, and 0.6% month-on-month, in January. The core CPI grew 0.6% month-on-month and 6% year-on-year. It also prompted St. Louis Fed President James Bullard to say that the Fed should hike rates by 100 basis points over the next three meetings. U.S. Treasuries climbed and the dollar rose to a five-week high against the yen during a volatile session overnight. The U.S. currency also vacillated against other currencies, before broadly firming earlier in the Asia session. The ECB will update its economic projections in March 2022, where bond markets expect an even more hawkish turn. Swaps pricing is also pointing to a nearly 30% chance the Bank of England will hike interest rates by 50 bps next month. Even central banks that have stuck to a more dovish approach, such as the Reserve Bank of Australia (RBA), are changing their tune. RBA Governor Philip Lowe said earlier in the day that if the economic recovery hits forecasts, interest rate hikes could potentially take place in 2022. The dollar swung in choppy trade on Thursday after U.S. consumer prices rose higher than forecast in January, leading markets to boost expectations for the Federal Reserve to aggressively fight soaring inflation.
  • The consumer price index rose 0.6% from December, the Labor Department said, while in the 12 months through January, CPI jumped 7.5%, the biggest year-on-year gain since February 1982. The data marked the fourth straight month of annual gains in excess of 6% and made St Louis Federal Reserve Bank President James Bullard, a voting member of the Fed's policy-setting committee, "dramatically" more hawkish, he said. Higher interest rates typically would lift the dollar, but the market is already sufficiently long dollars, said Bipan Rai, head of FX strategy at CIBC Capital Markets. Chances of a 50 basis point interest-rate hike rose to more than the likelihood of a 25 basis point increase as was expected before. The market also considered how other central banks will fight inflation that's on the rise globally, driven especially by rising commodity prices. Rates, especially at the short end, soared after the CPI data was released. The two-year U.S. Treasury yield, which typically moves in step with rate expectations, rose 26.1 basis points to 1.609%. The yield on 10-year Treasury notes topped 2% for the first time in 2-1/2 years. The rates market was questioning the extent of inflation, said Nancy Davis, managing partner and chief investment officer at Quadratic Capital Management LLC. Earlier in Europe, the Swedish central bank kept its monetary policy plans broadly unchanged and stressed its view that surging inflation is temporary. The dovish stance by the Riksbank led the dollar to post its biggest gain among major currencies, leading the Swedish crown to fall 2.01% versus the greenback at 9.31 per dollar.
  • Gold was down on Friday morning in Asia, with stronger-than-expected U.S. inflation data and hawkish comments from a Federal Reserve policymaker increasing bets of a substantial interest rate hike. U.S. Treasury yields were also higher after the data. Thursday’s U.S. data showed that the consumer price index (CPI) grew 7.5% year-on-year, and 0.6% month-on-month, in January. The core CPI grew 0.6% month-on-month and 6% year-on-year. It was the biggest annual increase in inflation in 40 years and accelerated bets that the Fed would hike interest rates by 50 basis points in March 2022. St. Louis Fed President James Bullard said after the data’s release that he wanted to see a full percentage point worth of rate hikes from the Fed over the next three policy meetings. Rate futures indicated a 62% chance that the central bank will hike interest rates by 50 basis points in March 2022 following Bullard's remarks, more than double the 30% chance recorded late on Wednesday. Meanwhile, geopolitical tensions in Eastern Europe also continue as Russia and Ukraine failed to reach any breakthrough in talks with France and Germany. The talks ultimately did not achieve their aim at ending the conflict over Ukraine, with the U.K. adding that the "most dangerous moment" in the tensions appeared imminent. Russia is holding military exercises in Belarus and the Black Sea following the buildup of its forces near the border with Ukraine.
  • Oil was down on Friday morning in Asia, as strong U.S. inflation data stoked fears of aggressive interest rate hikes. Investors' focus is also on the outcome of U.S.-Iran talks. U.S. data released on Thursday showed that the consumer price index (CPI) grew 7.5% year-on-year, and 0.6% month-on-month, in January. The core CPI grew 0.6% month-on-month and 6% year-on-year. The data also prompted St. Louis Fed President James Bullard to say the Fed should hike rates by 100 basis points over the next three meetings. Talks between the U.S. and Iran to revive a 2015 nuclear deal were also revived earlier in the week. If reached, a deal could mean that the U.S. lifting sanctions on Iranian oil and easing current market tightness. The talks have "reached an urgent point," and a "deal that addresses the core concerns of all sides is in sight,” according to White House spokeswoman Jen Psaki. The Organization of the Petroleum Exporting Countries (OPEC) also said global fuel demand could rise even more steeply in 2022. The cartel forecasted a gain of 4.15 million barrels per day (bpd) in the year as the global economic recovery from COVID-19 continues.

 

 
Intraday RESISTANCE LEVELS
11th February 2022 R1 R2 R3
GOLD-XAU 1,833-1,841 1,849 1,856-1,864
Silver-XAG 23.15-23.80 24.40 24.90-25.50
Crude Oil 89.00-90.40 91.00 91.90-92.50
EURO/USD 1.1400-1.1485 1.1525 1.1570-1.1600
GBP/USD 1.3590-1.3640 1.3700 1.3750-1.3800
USD/JPY 116.10 116.80 117.50-118.00

Intraday SUPPORTS LEVELS
11th February 2022 S1 S2 S3
GOLD-XAU 1,824-1,808 1,800 1,783-1,777
Silver-XAG 22.90-22.50 21.90 21.50-20.90
Crude Oil 88.20-87.60 87.00 85.90-85.50
EURO/USD 1.1355-1.1305 1.1270 1.1230-1.1210
GBP/USD 1.3500 1.3410 1.3350-1.3300
USD/JPY 115.70-115.00 114.50 114.05-113.70

Intra-Day Strategy (11th 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$1841.86/oz and low of US$1821.47/oz. Gold down 0.358% at US$1826.49/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 1824-1778 with risk below 1778, targeting 1832-1841 and 1849-1856. Sell in between 1838-1860 keeping stop loss closing above 1860, targeting 1818-1804-1790 and 1783-1777-1769.

 
Intraday Support Levels
S1     1,824-1,808
S2     1,800
S3     1,783-1,777
Intraday Resistance Levels
R1     1,833-1,841
R2     1,849
R3     1,856-1,864

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 Thursday made its intraday high of US$23.70/oz and low of US$23.11/oz settled down by 0.480% at US$23.17/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 23.15-20.50, targeting 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 23.50-25.40 with stop loss above 25.40; targeting 22.50-22.10-21.90 and 21.40-21.00.

 
Intraday  Support Levels
S1     22.90-22.50
S2     21.90
S3     21.50-20.90

Intraday  Resistance Levels
R1     23.15-23.80
R2     24.40
R3     24.90-25.50

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 Thursday made an intra‐day high of US90.50/bbl, intraday low of US$88.05/bbl and settled down by 0.112% to close at US$88.83/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 89.00-92.00 with stop loss at 92.00; targeting 88.20-87.60-87.00 and 86.20-85.60. Buy above 88.20-84.00 with risk daily closing below 84.00 and targeting 88.20-89.00-90.40 and 91.00-91.90-92.55.

 
Intraday Support Levels
S1     88.20-87.60
S2     87.00
S3     85.90-85.50

Intraday Resistance Levels
R1     89.00-90.40
R2     91.00
R3     91.90-92.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.730 Sell
20-DMA   86.31 Buy
50-DMA   81.96 Buy
100-DMA   78.56 Buy
200-DMA   73.43 Buy
STOCH(5,3)   46.873 Sell
MACD(12,26,9)   2.802 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1374/EUR, high of US$1.1494/EUR and settled the day up by 0.066% to close at US$1.1426/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     1.1355-1.1305
S2     1.1270
S3     1.1230-1.1210

Intraday  Resistance Levels
R1     1.1400-1.1485
R2     1.1525
R3     1.1570-1.1600

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 Thursday made an intra‐day low of US$1.3522/GBP, high of US$1.3643/GBP and settled the day down by 0.154% to close at US$1.3553/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 1.3500-1.3350 with target 1.3590-1.3640-1.3700 and 1.3750-1.3800-1.3840 with stop loss closing below 1.3300. Sell in between 1.3590-1.3840 with targets at 1.3500-1.3440-1.3390 and 1.3300-1.3250 with stop loss should be 1.3790.

 
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 Thursday made intra‐day low of JPY115.35/USD and made an intraday high of JPY116.33/USD and settled the day up 0.491% at JPY115.92/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 115.70-118.00 with risk above 118.00 targeting 115.40-115.00-114.50 and 113.90-113.20-112.70. Long positions above 115.40-113.70 with targets of 115.50-116.35-116.90 with stop below 113.70.

 
Intraday Support Levels
S1     115.70-115.00
S2     114.50
S3     114.05-113.70

INTRADAY RESISTANCE LEVELS
R1     116.10
R2     116.80
R3     117.50-118.00

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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