AAFX TRADING

Daily Market Lookup

  • The dollar edged up on Monday, pulling away from recent six-month lows against a basket of major currencies. The U.S. currency has weakened as markets bet a Federal Reserve tightening cycle may be nearing an end. Sentiment remained fragile and the first trading day of the year was subdued, with many countries, including big trading centres such as Britain and Japan, closed for a holiday. Having raised rates by a total of 425 basis points since March to curb surging inflation, the Fed has started to slow the pace of hikes. That Fed tightening helped lift the dollar index 8% last year in its biggest annual jump since 2015. Markets remain focused on central banks and inflation, as well as signals of how long and deep a recession might be. International Monetary Fund Managing Director Kristalina Georgieva said on Sunday that 2023 would be a tough year for the global economy. Data from China, meanwhile, showed factory activity shrank for the third straight month in December and at the sharpest pace in nearly three years. But a downturn in euro zone manufacturing activity has likely passed its trough as supply chains recover and inflationary pressures ease, a survey showed on Monday. S&P Global is final manufacturing Purchasing Managers' Index bounced to 47.8 in December from November's 47.1, matching a preliminary reading but still below the 50 mark separating growth from contraction. While the euro area economy is heading for a recession, concerns about gas supply over the winter have eased, meaning a downturn may not be as bad as feared a few months ago. Euro zone wages are growing quicker than thought and the European Central Bank (ECB) must prevent this from adding to already high inflation, ECB chief Christine Lagarde said at the weekend.
  • Data released earlier today also showed that China’s economy continues to struggle with rising infections. The country’s manufacturing sector logged a fifth straight month of declines. Risk-heavy Southeast Asian currencies logged strong gains. The Thai baht jumped 0.6%, while the Singapore dollar added 0.3% even as data showed the island state’s GDP nearly halved in the fourth quarter. Asian currencies took much relief from the prospect of smaller interest rate hikes by the Fed this year. Most regional units logged steep losses in 2022 as the Fed embarked on one of its most aggressive rate hike sprees. But with signs that U.S. inflation may now be peaking, the central bank is expected to tone down its hawkish rhetoric. The dollar index and dollar index futures steadied around 103 on Tuesday, but were both trading close to seven-month lows. Markets are awaiting a slew of major U.S. economic indicators this week, including nonfarm payrolls for December and the minutes of the Fed’s latest meeting. Traders will be closely watching for any signals from the meeting on whether the bank intends to further slow its pace of interest rate hikes this year. Markets are pricing in an over 90% probability that the bank will raise rates by 25 basis points in February.
  • Oil prices slid on Tuesday from their highest levels in a month after Chinese economic data dampened market sentiment and the head of the International Monetary Fund warned of a tougher 2023. Weaker factory data from China, the world's largest crude importer and second-largest oil consumer, weighed on prices. The Caixin/Markit manufacturing purchasing managers' index fell to 49.0 in December from 49.4 in November. The index has stayed below the 50-point mark that separates growth from contraction for five straight months. Yet there was a return to regular activity in China on Monday, as some people in key cities braved the cold and a rise in COVID-19 infections, raising the prospect of a boost to the economy and oil demand as more recover from infection. This followed news of a larger-than-expected increase in the first batch of oil product export quotas for 2023 released by China's government. A handful traders attributed that to expectations of poor domestic demand as the country continued to battle COVID-19 waves. Furthermore, IMF Managing Director Kristalina Georgieva said on Sunday that the United States, Europe and China - the main engines of global growth - were all slowing simultaneously, making 2023 tougher than 2022 for the global economy. Commodities saw a substantial $12.3 billion bullish flow in the week that ended on Dec. 27, the single largest weekly bullish flow in 2022, Societe Generale (OTC:SCGLY) analysts said in a Jan. 3 note. President Vladimir Putin banned the supply of crude and oil products from Feb. 1 for five months to nations that abided by the cap. His decree also included a clause that allowed him to overrule the ban in special cases. Russian crude has been diverted to India and China from Europe. Traders said Moscow planned to increase diesel exports from the Baltic sea port of Primorsk to 1.81 million tonnes in January, but exports from Tuapse were expected to fall to 1.333 million tonnes. Looking to coming months, lead energy analyst at DBS Bank Suvro Sarkar expects concerns over global economic slowdown to continue competing with the pace of China's reopening in driving oil prices.

 

 
Intraday RESISTANCE LEVELS
3rd January 2023 R1 R2 R3
GOLD-XAU 1,840-1,849 1860 1,879
Silver-XAG 24.90-25.50 25.90 26.20-26.90
Crude Oil 80.70-81.40 82.35 83.20-84.35
EURO/USD 1.0720 1.0790-1.0830 1.0900-1.0940
GBP/USD 1.2120 1.2170-1.2290 1.2350-1.2410
USD/JPY 134.10-134.90 135.40 136.00-138.20

Intraday SUPPORTS LEVELS
3rd January 2023 S1 S2 S3
GOLD-XAU 1,834-1,826 1,814-1,800 1,790-1,781
Silver-XAG 24.35-23.90 23.00-22.50 22.20-21.90
Crude Oil 79.90-78.10 77.00-76.10 74.50-74.10
EURO/USD 1.0640-1.0580 1.0520-1.0490 1.0450-1.0390
GBP/USD 1.2030-1.1990 1.1950-1.1890 1.0850-1.0800
USD/JPY 131.90-131.10 130.40 129.50-129.00

Intra-Day Strategy (3rd January 2023)
GOLD-XAU Sell on Strength
Silver-XAG Buy on Dips
Crude Oil Neutral to Sell
EUR/USD Neutral to Sell
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Monday made its intraday high of US$1825.91/oz and low of $1813.26/oz. Gold is up by 0.498% at US$1813.26/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above the zero line and histograms are a2lso increasing trend and it will bring an upward stance in the upcoming sessions. RSI is in the overbought region and more upside is expected before it gets stretched. The Stochastic Oscillator is in neutral territory and giving a negative crossover to a bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1840-1879 keeping stop loss closing above 1879, targeting 1834-1826-1808 and 1790-1774-1759. Buy in between 1826-1768 with risk below 1750, targeting 1840-1847-1860 and 1,870-1,879.

 
Intraday Support Levels
S1     1,834-1,826
S2     1,814-1,800
S3     1,790-1,781
Intraday Resistance Levels
R1     1,840-1,849
R2     1860
R3     1,879

Technical Indicators

Name   Value Action
14DRSI  

59.473

Buy
20-DMA   1787.74 Buy
50-DMA  

1756.61

Buy
100-DMA   1747.67 Buy
200-DMA   1764.79 Buy
STOCH(5,3)   44.601 Buy
MACD(12,26,9)   17.589 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$24.14/oz and low of US23.51/oz settled up by 0.335% at US$23.95/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (21.00), breakage above will lead to 21.60. MACD is below the zero line and histograms are decreasing trend and it will bring a bearish stance in the upcoming sessions. RSI is approaching the neutral region, indicating a buy signal for now. The Stochastic Oscillator is in the oversold region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 23.60-20.30, targeting 23.30-23.60 and 24.00-24.40-25.00 with stop loss should be placed on the breakage below 20.00. Sell in between 24.00-25.00 with stop loss above 25.00; targeting 22.10-21.70 and 21.30-20.70-20.10.

 
Intraday  Support Levels
S1     24.35-23.90
S2     23.00-22.50
S3     22.20-21.90

Intraday  Resistance Levels
R1     24.90-25.50
R2     25.90
R3     26.20-26.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.604 Buy
20-DMA   23.37 Buy
50-DMA   22.22 Buy
100-DMA   21.43 Buy
200-DMA   21.46 Buy
STOCH(5,3)   68.779 Sell
MACD(12,26,9)   0.619 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$80.63/bbl, an intraday low of US$77.74/bbl, and settled up by 2.23% to close at US$80.52/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 the zero line and histograms are in increasing mode will bring a bullish stance in the upcoming sessions. The Stochastic Oscillator is in the neutral region, giving a positive crossover for confirmation of a bullish stance; while the RSI is in the 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 80.70-84.40 with stop loss at 84.40; targeting 79.90-78.60-77.00 and 76.10-75.25-74.10. Buy above 79.90-71.70 with risk daily closing below 71.00; targeting 80.70-81.40-82.35 and 83.20-84.35.

 
Intraday Support Levels
S1     79.90-78.10
S2     77.00-76.10
S3     74.50-74.10

Intraday Resistance Levels
R1     80.70-81.40
R2     82.35
R3     83.20-84.35

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.07 Sell
20-DMA   78.33 Sell
50-DMA   80.28 Sell
100-DMA   84.02 Sell
200-DMA   87.01 Sell
STOCH(5,3)   71.679 Sell
MACD(12,26,9)   -0.0026 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0650/EUR, a high of US$1.0707/EUR, and settled the day down by 0.314% to close at US$1.0663/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which becomes immediate support, a break below will target 1.0647. MACD is above the zero line and histograms are increasing mode which will bring a bullish view. Stochastic is in overbought territory and giving positive crossovers to the bullish outlook for intraday. 14D RSI is currently in a neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Sell

Sell below 1.0650-1.0930, targeting 1.0610-1.0580-1.0520 and 1.0490-1.0450-1.0390 with stop-loss at daily closing above 1.0940. Buy above 1.0610-1.0390 with risk below 1.0390 targeting 1.0650-1.0720-1.0790 and 1.0830-1.0900-1.0940.

 
Intraday Support Levels
S1     1.0640-1.0580
S2     1.0520-1.0490
S3     1.0450-1.0390

Intraday  Resistance Levels
R1     1.0720
R2     1.0790-1.0830
R3     1.0900-1.0940

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.310 Buy
20-DMA   1.0558 Sell
50-DMA   1.0384 Buy
100-DMA   1.0293 Buy
200-DMA   1.0421 Buy
STOCH(5,3)   46.295 Buy
MACD(12,26,9)   0.0081 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2009/GBP, a high of US$1.2106/GBP, and settled the day up 0.342% to close at US$1.2091/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2113) is becoming a resistance level. 14-D RSI is currently in a neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and gives a positive crossover to confirm bullish a stance. MACD is above the zero line but histograms are increasing leading to movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.2030-1.0800 with a target of 1.2090-1.2120-1.2170 and 1.2280-1.2350-1.2410 with a stop loss closing below 1.1950. Sell in between 1.2120-1.2410 with targets at 1.2030-1.1950-1.1870 and 1.0850-1.0800 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2030-1.1990
S2     1.1950-1.1890
S3     1.0850-1.0800

Intraday Resistance Levels
R1     1.2120
R2     1.2170-1.2290
R3     1.2350-1.2410

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

48.122

Buy
20-DMA   1.2087 Buy
50-DMA   1.1931 Buy
100-DMA   1.1880 Buy
200-DMA   1.211 Buy
STOCH(5,3)   18.944 Buy
MACD(12,26,9)   0.0035 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made an intra‐day low of JPY130.60/USD and made an intraday high of JPY131.03/USD and settled the day down by 0.099% at JPY130.77/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 the overbought region and chances of downward are expected based on RSI. MACD is above the 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 a negative crossover to confirm a bearish stance.

Trading Strategy: Neutral to Sell

Sell below 134.10-136.00 with risk above 136.00 targeting 132.90-131.90-131.10 and 130.40-129.50-129.00. Long positions above 131.90-129.00 with targets of 132.90-134.10-134.90 and 135.40-136.00-137.70 with stops below 129.00.

 
Intraday Support Levels
S1     131.90-131.10
S2     130.40
S3     129.50-129.00

INTRADAY RESISTANCE LEVELS
R1     134.10-134.90
R2     135.40
R3     136.00-138.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.943 Buy
20-DMA   135.22 Buy
50-DMA   138.12 Buy
100-DMA   138.63 Buy
200-DMA   134.98 Buy
STOCH(9,6)   88.583 Buy
MACD(12,26,9)   -1.746 Sell

AAFX TRADING
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