AAFX TRADING

Daily Market Lookup

  • The U.S. dollar was steady on Monday as investors digested a clutch of economic data released last week that stoked hopes of the Federal Reserve slowing the pace of its interest rate hikes. Data on Friday showed U.S. nonfarm payrolls rose by 223,000 jobs in December, while a 0.3% rise in average earnings was smaller than expected and less than the previous month's 0.4%. There were further signs of an economy slowing down, with the U.S. services industry activity contracting for the first time in more than 2-1/2 years in December amid weakening demand. That led the dollar index, which measures the U.S. dollar against six major currencies, 1.15% lower on Friday. On Monday, the index, which gained 8% in 2022, was 0.01% higher at 103.720. Investors have pinned their hopes on the U.S. central bank toning down its aggressive monetary tightening policy. Fed fund futures now imply around a 25% chance of a half-point hike in February, down from around 50% a month ago. Analysts, however, point to the still tight labour market that is likely to concern Fed officials. With the next Fed meeting scheduled at the start of next month, investors will focus on the consumer price index data due on Thursday. Citi said it expects another "softer" core CPI print with some upside risk but said core inflation could pick up again in early 2023. Elsewhere, the Brazilian real had yet to trade after supporters of far-right former President Jair Bolsonaro were arrested after invading the country's Congress, presidential palace and Supreme Court.
  • The Japanese yen strengthened 0.12% versus the U.S. currency to 131.94 per dollar, while sterling was last trading at $1.2099, up 0.06% on the day, having gained 1.5% on Friday.
  • The dollar fell on Friday after U.S. jobs data showed a strong, but not blockbuster employment picture in December, while a separate report showed that U.S. services industry activity contracted for the first time in more than 2-1/2 years that month. Employers added 223,000 jobs in December, more than economists' forecasts of 200,000. Wages also grew 0.3% last month, less than the 0.4% in November and below forecasts of 0.4%. That lowered the year-on-year increase in wages to 4.6% from 4.8% in November. The easing wage growth was also "encouraging," Issa added, though he noted hawkish elements in the data. The greenback extended losses after the Institute for Supply Management (ISM) said its non-manufacturing PMI dropped to 49.6 last month from 56.5 in November. It was the first time since May 2020 that the services PMI fell below the 50 threshold, which indicates contraction in the sector that accounts for more than two-thirds of U.S. economic activity. The Commerce Department also said on Friday that factory orders dropped 1.8% in November, after gaining 0.4% in October. Economists polled by Reuters had forecast orders falling 0.8%. Atlanta Federal Reserve President Raphael Bostic said on Friday that the latest U.S. jobs data was another sign that the economy is gradually slowing and should that continue the Fed can step down to a quarter percentage point interest rate hike at its next policy meeting. Richmond Fed President Thomas Barkin also said the U.S. central bank's move to smaller interest rate hike increments would help limit damage to the economy. The Fed hiked rates 50 basis points at its December meeting, after making four consecutive 75-bp increases. Fed funds futures traders increased bets the Fed will hike rates by 25 bps at the conclusion of its two-day meeting on Feb. 1 after Friday's data. A 25-bp increase is now seen as a 73% probability, compared with 54% before the jobs report, with a 50-bp hike now seen as a 27% probability. Highly anticipated consumer price data due on Jan. 12 could influence U.S. central bank policy.
  • Oil prices climbed on Monday as the borders reopened in China, the world's top crude importer, boosting the outlook for fuel demand growth and offsetting global recession concerns. Hopes for less-aggressive U.S. interest rate rises are buoying financial markets and depressing the dollar. A weaker U.S. currency makes dollar-denominated commodities more affordable for investors holding other currencies. As part of a "new phase" in the fight against COVID-19, China opened its borders over the weekend for the first time in three years. Domestically, some 2 billion trips are expected during the Lunar New Year season, nearly double last year's movement and recovering to 70% of 2019 levels, Beijing says. Over the last week, airlines have boosted their January international seat capacity to and from China by 9.5% as they ramp up flights after its border opening, according to aviation data provider Cirium. Despite the gains in oil on Monday, concerns remain that the massive flow of Chinese travellers may cause another surge in COVID infections, while broader economic concerns also lingered. Those concerns are reflected in the market structure for the benchmark oil futures. Both front-month Brent and WTI contracts are in contango, when current prices are below prices for later-delivery contracts, which typically indicates bearish sentiment for the market. Energy futures for crude oil, refined products and natural gas have plummeted in the New Year as traders have reconsidered near-term worries over cold weather and fears of supply shortages and dumped contracts. Last week, U.S. energy firms cut the number of operating oil and natural gas rigs by seven, the biggest weekly decline since September 2021, energy services firm Baker Hughes Co said on Friday.

 

 
Intraday RESISTANCE LEVELS
9th January 2023 R1 R2 R3
GOLD-XAU 1,879-1,887 1,894-1,900 1,907-1,927
Silver-XAG 24.40-24.90 25.50 25.90-26.20
Crude Oil 76.10-77.00 78.10 79.00-79.90
EURO/USD 1.0690-1.0735 1.0790-1.0830 1.0900
GBP/USD 1.2170-1.2290 1.2350 1.2390-1.2445
USD/JPY 132.90- 134.10 134.90 135.70- 136.90

Intraday SUPPORTS LEVELS
9th January 2023 S1 S2 S3
GOLD-XAU 1,869-1,860 1,849-1,834 1,826-1,814
Silver-XAG 23.60-23.00 22.50-22.20 21.90-21.10
Crude Oil 75.20-74.10 72.90-72.10 71.40-70.10
EURO/USD 1.0650-1.0590 1.0520-1.0490 1.0450-1.0390
GBP/USD 1.2120-1.2040 1.1990-1.1950 1.1890-1.0850
USD/JPY 131.90-131.10 130.40 129.50-129.00

Intra-Day Strategy (9th 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 Thursday made it’s intraday high of US$1869.82/oz and low of $1830.54/oz. Gold is up by 1.842% at US$1865.76/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 1879-1927 keeping stop loss closing above 1927, targeting 1869-1860-1849 and 1834-1826-1808. Buy in between 1869-1800 with risk below 1800, targeting 1,879-1887-1900 and 1907-1927.

 
Intraday Support Levels
S1     1,869-1,860
S2     1,849-1,834
S3     1,826-1,814
Intraday Resistance Levels
R1     1,879-1,887
R2     1,894-1,900
R3     1,907-1,927

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 Friday made its intraday high of US$23.90/oz and low of US23.19/oz settled up by 2.66% at US$23.82/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 23.90-20.30, targeting 24.40-25.00-25.90 and 26.20-26.90 with stop loss should be placed on the breakage below 20.30. Sell in between 24.40-26.20 with stop loss above 26.20; targeting 23.60-23.00-22.10 and 21.70-21.30-20.70.

 
Intraday  Support Levels
S1     23.60-23.00
S2     22.50-22.20
S3     21.90-21.10

Intraday  Resistance Levels
R1     24.40-24.90
R2     25.50
R3     25.90-26.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.178 Buy
20-DMA   23.47 Buy
50-DMA   22.43 Buy
100-DMA   21.60 Buy
200-DMA   21.54 Buy
STOCH(5,3)   42.115 Sell
MACD(12,26,9)   0.457 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$75.63/bbl, an intraday low of US$73.41/bbl, and settled down by 0.325% to close at US$73.85/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 76.10-81.40 with stop loss at 81.40; targeting 75.20-74.10-72.90 and 72.10-71.40-70.10. Buy above 75.20-70.10 with risk daily closing below 70.10; targeting 76.10-77.00-78.10 and 79.00-79.90-80.70.

 
Intraday Support Levels
S1     75.20-74.10
S2     72.90-72.10
S3     71.40-70.10

Intraday Resistance Levels
R1     76.10-77.00
R2     78.10
R3     79.00-79.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.904 Sell
20-DMA   76.77 Sell
50-DMA   79.27 Sell
100-DMA   83.21 Sell
200-DMA   86.48 Sell
STOCH(5,3)   20.524 Sell
MACD(12,26,9)   -0.998 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.0481/EUR, a high of US$1.0647/EUR, and settled the day up by 1.165% to close at US$1.0641/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 1.0690-1.0930, targeting 1.0650-1.0590-1.0520 and 1.0450-1.0390-1.0325 with stop-loss at daily closing above 1.0940. Buy above 1.0650-1.0390 with risk below 1.0390 targeting 1.0690-1.0735-1.0790 and 1.0830-1.0900.

 
Intraday Support Levels
S1     1.0650-1.0590
S2     1.0520-1.0490
S3     1.0450-1.0390

Intraday  Resistance Levels
R1     1.0690-1.0735
R2     1.0790-1.0830
R3     1.0900

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.806 Buy
20-DMA   1.0583 Sell
50-DMA   1.0434 Buy
100-DMA   1.0330 Buy
200-DMA   1.0432 Buy
STOCH(5,3)   40.307 Buy
MACD(12,26,9)   0.0051 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.1840/GBP, a high of US$1.2099/GBP, and settled the day up 1.586% to close at US$1.2090/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 1.1890-1.0640 with a target of 1.1950-1.1990-1.2090 and 1.2120-1.2170-1.2280 with a stop loss closing below 1.0640. Sell in between 1.1950-1.2290 with targets at 1.1890-1.0850-1.0800 and 1.0730-1.1640 with stop loss should be 1.2290.

 
Intraday Support Levels
S1     1.2120-1.2040
S2     1.1990-1.1950
S3     1.1890-1.0850

Intraday Resistance Levels
R1     1.2170-1.2290
R2     1.2350
R3     1.2390-1.2445

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.367

Buy
20-DMA   1.2065 Buy
50-DMA   1.1962 Buy
100-DMA   1.1904 Buy
200-DMA   1.2106 Buy
STOCH(5,3)   71.671 Buy
MACD(12,26,9)   0.0013 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made an intra‐day low of JPY131.99/USD and made an intraday high of JPY134.76/USD and settled the day down by % at JPY132.09/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 134.90-138.00 with risk above 138.00 targeting 134.10-132.90-131.90 and 131.10-130.40-129.50. Long positions above 134.10-130.00 with targets of 134.90-135.70-136.90 and 137.70-139.50 with stops below 130.00.

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

INTRADAY RESISTANCE LEVELS
R1     132.90- 134.10
R2     134.90
R3     135.70- 136.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.943 Buy
20-DMA   133.90 Buy
50-DMA   136.85 Buy
100-DMA   137.89 Buy
200-DMA   134.81 Buy
STOCH(9,6)   81.067 Buy
MACD(12,26,9)   -1.485 Sell

AAFX TRADING
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