AAFX TRADING

Daily Market Lookup

  • The dollar mostly held its ground on Wednesday in spite of downward pressure from lower bond yields and higher stocks, as traders waited on this week's U.S. consumer price data to see whether it will confirm that inflation is in retreat. The greenback has lost about 11% against the common currency since hitting a 20-year peak in September, as investors have started to anticipate easing inflation and with it a falling dollar as the need for more interest rate hikes wanes. But for the past month or so the euro has struggled to make further headway, and traders have been cautious in selling dollars while the U.S. Federal Reserve continues to promise hikes and the global economic outlook is bleak. The dollar was steady at 132.30 Japanese yen and $1.2161 per British pound. U.S. government bond yields, which have been attracting investors to the dollar, fell overnight and upbeat sentiment in equities lifted stock markets. Fed Chair Jerome Powell did not give any policy clues during a panel discussion in Stockholm overnight, and with other Fed officials saying their next moves will be data-dependent, investors are keenly focused on U.S. CPI data. Futures pricing has been bumpy, but indicates markets' now lean toward a 3/4 chance of a 25 bp hike next month. China's re-opening has also supported sentiment and lifted Asia's currencies against the dollar.
  • Asian currency markets edged lower on Wednesday as traders stepped back from risk-driven assets ahead of economic cues from key inflation readings this week, while the dollar steadied from recent losses. After logging a strong start to the week on optimism over a Chinese reopening, regional units crept lower amid uncertainty over the path of U.S. monetary policy. The dollar also recovered from a seven-month low after comments from some Federal Reserve members reiterated that U.S. interest rates could rise more than expected this year, especially if inflation runs above the central bank’s target range for longer than expected The dollar index and dollar index futures showed that the greenback was trading 0.1% higher against a basket of currencies on Wednesday. Focus is now on the release of U.S. consumer price index data for December, which is expected to show that inflation eased further from the prior month. On the other hand, the Japanese yen fell 0.1% against the dollar, even as Tokyo inflation data released this week drove up expectations that the Bank of Japan could resort to more hawkish moves to support the currency and quell overheated inflation. China’s yuan hovered near five-month highs, with the currency having marked a strong start to the year on optimism over the relaxation of most anti-COVID curbs in the country. But this optimism was tempered as China saw its worst yet COVID-19 outbreak, which is expected to further disrupt economic growth in the near-term. Focus this week is also on Chinese CPI inflation data for December, although softening economic growth in the country is expected to result in deflationary trends. Separate data also showed that retail sales grew more than expected during the month, buoyed by increased discounts during the Black Friday shopping event.
  • Oil prices fell on Wednesday as an unexpected build in crude and fuel inventories in the United States, the world's biggest oil consumer, and economic uncertainty reignited demand worries. Both contracts rose on Monday and Tuesday, rebounding from a sharp selloff in the first week of 2023 U.S. crude oil stockpiles jumped by 14.9 million barrels in the week ended Jan. 6, sources said, citing data from the American Petroleum Institute (API). At the same time, distillate stocks, which include heating oil and jet fuel, rose by about 1.1 million barrels. Analysts polled by Reuters had expected crude stocks to fall by 2.2 million barrels and distillate stocks to drop by 500,000 barrels. The large increase in U.S. inventories in the API estimates has dragged down oil prices, while the risk of recession is also capping the oil price uptrend in the short run, said analyst Leon Li at CMC Markets. Traders will be looking out for inventory data from the U.S. Energy Information Administration due later on Wednesday to see if it matches the preliminary view from API. The oil market has been pulled lower by worries that sharply higher interest rate hikes to tame inflation would trigger a recession and curtail fuel demand. The prevailing market sentiment is bearish on the demand side, with China still dealing with a widespread COVID-19 outbreak and the U.S. and Europe at risk of economic slowdowns, with supply disruptions minimal for the time being, Claudio Galimberti, a senior vice president at Rystad Energy, said by email. The market structure for futures reflects that weakness with both the front-month Brent and WTI contracts remaining in contango, where prompt month prices are trading lower than forward month prices, typically a sign that there is less short-term demand for oil. Prices gained earlier this week on hopes for fuel demand growth in China, the world's second-largest oil consumer, after it eased its COVID-19 curbs and allowed the resumption of international travel. The big focus this week is on U.S. inflation data, due on Thursday. If inflation comes in below expectations that would drive the dollar down, analysts said. A weaker dollar can boost oil demand as it makes the commodity cheaper for buyers holding other currencies.

 

 
Intraday RESISTANCE LEVELS
11th January 2023 R1 R2 R3
GOLD-XAU 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 1.0790-1.0830 1.0900 1.0940-1.0990
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
11th January 2023 S1 S2 S3
GOLD-XAU 1,879-1,869 1,860-1,849 1,834-1,826
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 (11th 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 Tuesday made it’s intraday high of US$1880.66/oz and low of $1867.71/oz. Gold is up by 0.282% at US$1876.75/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 1887-1927 keeping stop loss closing above 1927, targeting 1869-1860-1849 and 1834-1826-1808. Buy in between 1879-1800 with risk below 1800, targeting 1,879-1887-1900 and 1907-1927.

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

Technical Indicators

Name   Value Action
14DRSI  

68.801

Buy
20-DMA   1829.45 Buy
50-DMA  

1787.24

Buy
100-DMA   1765.87 Buy
200-DMA   1765.87 Buy
STOCH(5,3)   90.806 Buy
MACD(12,26,9)   27.977 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$23.76/oz and low of US23.42/oz settled down by 0.122% at US$23.59/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 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   57.380 Buy
20-DMA   23.49 Buy
50-DMA   22.52 Buy
100-DMA   21.67 Buy
200-DMA   21.58 Buy
STOCH(5,3)   48.178 Sell
MACD(12,26,9)   0.379 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$76.10/bbl, an intraday low of US$74.06/bbl, and settled down by 0.255% to close at US$74.88/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 Tuesday made an intraday low of US$1.0711/EUR, a high of US$1.0758/EUR, and settled the day up by 0.494% to close at US$1.0731/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 1.0790-1.0930, targeting 1.0690-1.0650-1.0590 and 1.0520-1.0450-1.0390 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     1.0790-1.0830
R2     1.0900
R3     1.0940-1.0990

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 Tuesday made an intra‐day low of US$1.2109/GBP, a high of US$1.2197/GBP, and settled the day down 0.305% to close at US$1.2145/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 1.2120-1.1890 with a target of 1.2170-1.2290-1.2350 and 1.2390-1.2445 with a stop loss closing below 1.1850. Sell in between 1.2170-1.2445 with targets at 1.2120-1.2040-1.1990 and 1.1890-1.0850-1.0800 with stop loss should be 1.2445.

 
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 Tuesday made an intra‐day low of JPY131.37/USD and made an intraday high of JPY132.47/USD and settled the day up by 0.270% at JPY132.23/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 132.90-138.00 with risk above 138.00 targeting 131.90-131.10-130.40 and 129.50-128.90. Long positions above 131.90-129.00 with targets of 132.90-134.10-134.90 and 135.70-136.90-137.70 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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