AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged higher in early European trade Tuesday, but traded just above a seven-month low as traders looked to a speech from Fed chair Jerome Powell for more clarity over the central bank's rate hike cycle. The dollar has been under pressure following Friday's data, with the jobs report showing a slowdown in wage growth as well as the first contraction in U.S. services industry activity in more than two years. This has raised expectations that the U.S. central bank will tone down its aggressive monetary tightening policy when it next meets in early February. Federal Reserve Bank of San Francisco President Mary Daly said Monday the central bank could either raise rates by 50 basis points for a second straight time or slow down to a quarter-point hike. Fed Chair Jerome Powell is scheduled to speak later Tuesday at a bank symposium in Sweden and could provide further clarity on the pace of rate hikes ahead of U.S. inflation data out on Thursday. This was better than the 0.8% growth expected, and a healthy improvement from the revised drop of 2.5% the prior month, raising hopes that the slowdown in the Eurozone in 2023 may be milder than first feared. There was also positive economic news in the U.K. overnight, as retail sales rose 6.5% last month compared with a year earlier, according to data from the British Retail Consortium and KPMG.
  • The U.S. dollar languished near a seven-month low against other major currencies on Tuesday, as investors took heart that the Federal Reserve may be nearing the end of its rate-hike cycle and as China's reopening drove demand for riskier assets. Markets have grown increasingly doubtful that the Fed will have to take interest rates above 5% to cool inflation, as effects of its aggressive rate increases last year have already been felt. Investors now expect rates to peak just under 5% by June. Last week's employment report showed that while the U.S. economy added jobs at a solid clip in December, it also recorded a slowdown in wage growth. China's rapid reopening of its borders following pandemic restrictions also provided another boost toward riskier assets away from the safe haven appeal of the greenback, with the risk-sensitive. Elsewhere, Japan's yen edged 0.1% higher to 131.73 per dollar, drawing support from a weakening greenback and the Bank of Japan's (BOJ) surprise tweak to its yield curve policy late last year. Brazil's real snapped its three-day winning run in the previous session and last stood at 5.2546 per dollar after supporters of former President Jair Bolsonaro stormed the capital. It had yet to trade as of Asia hours on Tuesday. Investors will now turn their attention to a speech by Fed Chair Jerome Powell later on Tuesday and to U.S. inflation data on Thursday, which could give further clarity on the outlook of the Fed's rate-hike path.
  • Gold prices hovered near seven-month highs on Tuesday as markets awaited more cues on U.S. monetary policy from an upcoming speech by Federal Reserve Chair Jerome Powell, as well as key inflation data. Bullion prices logged strong gains in recent sessions, amid increasing optimism over a potential slowdown in U.S. interest rate hikes. Inflation readings for November, as well as signs of cooling in the jobs market, seemed to suggest that price pressures in the world’s largest economy had peaked, necessitating a less hawkish stance from the Fed. Markets expect Powell to shed more light on this trend when he speaks at a bank symposium in Sweden later in the day. Focus this week is also on U.S. consumer price index inflation data, which is expected to have slowed further in December from the prior month. But markets will be closely watching for the pace of slowing, given that inflation is still trending well above the Fed’s annual target range. Increased safe haven demand also boosted gold prices in recent sessions, as markets grew wary of a potential recession this year amid high inflation and rising interest rates. Dismal business activity data prints from several major economies, coupled with signs of a cooling U.S. labor market ramped up fears that global economic growth will slow in 2023. This, coupled with expectations for less severe rate hikes by the Fed, ramped up safe haven demand for gold. The Fed is widely expected to hike interest rates by 25 basis points when it meets in February. But the central bank has also warned that it could keep interest rates higher for longer. The path of U.S. monetary policy is likely to define the performance of gold and other metal markets this year.
  • Oil edged lower on Tuesday on expectations that further interest rate hikes in the United States, the world's biggest oil user, will slow economic growth and limit fuel demand. Both benchmarks climbed 1% on Monday, after China, the world's biggest oil importer and second-largest consumer, opened its borders over the weekend for the first time in three years. Fed policymakers said fresh inflation data out later this week will help them decide whether they can slow the pace of interest rate hikes at their upcoming meeting, to just a quarter point increase instead of the larger jumps they used for most of 2022. China also issued a second batch of 2023 crude import quotas, according to sources and documents reviewquarter-point on Monday, raising the total for this year by 20% from the same time last year. But analysts warned that China's demand revival may play limited role to drive up oil prices under the global economic downward pressure. Separately, U.S. crude oil stockpiles likely fell 2.4 million barrels, with distillate inventories also seen slightly down, a preliminary Reuters poll showed on Monday. Industry group American Petroleum Institute is due to release data on U.S. crude inventories at 4:30 p.m. EDT (2030 GMT) on Tuesday. The Energy Information Administration, the statistical arm of the U.S. Department of Energy, will release its own figures at 10:30 a.m. (1430 GMT) on Wednesday.

 

 
Intraday RESISTANCE LEVELS
10th 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 75.20-76.10 77.00-78.10 79.00-79.90
EURO/USD 1.0735-1.0790 1.0830 1.0900-1.0940
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
10th January 2023 S1 S2 S3
GOLD-XAU 1,869-1,860 1,849-1,834 1,826-1,814
Silver-XAG 23.40-23.00 22.50-22.20 21.90-21.10
Crude Oil 74.10-72.90 72.10 71.40-70.10
EURO/USD 1.0690-1.0650 1.0590-1.0520 1.0490-1.0450
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 (10th 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 it’s intraday high of US$1881.45/oz and low of $1866.29/oz. Gold is up by 0.220% at US$1871.57/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 Monday made its intraday high of US$24.09/oz and low of US23.57/oz settled down by 0.946% at US$23.64/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     23.40-23.00
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 Monday made an intra‐day high of US$76.88/bbl, an intraday low of US$73.88/bbl, and settled up by 1.528% to close at US$75.08/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 75.20-81.40 with stop loss at 81.40; targeting 75.20-74.10-72.90 and 72.10-71.40-70.10. Buy above 74.10-70.10 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     74.10-72.90
S2     72.10
S3     71.40-70.10

Intraday Resistance Levels
R1     75.20-76.10
R2     77.00-78.10
R3     79.00-79.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.421 Sell
20-DMA   76.51 Sell
50-DMA   79.06 Sell
100-DMA   83.02 Sell
200-DMA   86.35 Sell
STOCH(5,3)   20.524 Sell
MACD(12,26,9)   -0.998 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0637/EUR, a high of US$1.06762/EUR, and settled the day up by 0.823% to close at US$1.0727/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     1.0690-1.0650
S2     1.0590-1.0520
S3     1.0490-1.0450

Intraday  Resistance Levels
R1     1.0735-1.0790
R2     1.0830
R3     1.0900-1.0940

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 Monday made an intra‐day low of US$1.2075/GBP, a high of US$1.2209/GBP, and settled the day up 0.867% to close at US$1.2180/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 Monday made an intra‐day low of JPY131.30/USD and made an intraday high of JPY132.65/USD and settled the day up by 0.0128% at JPY131.88/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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