AAFX TRADING

Daily Market Lookup

  • The U.S. dollar traded largely flat in Europe Wednesday, with risk sentiment on the rise but attention firmly on this week's key U.S. inflation release. The dollar has been under pressure since hitting a 20-year peak in September, as investors have started to factor in the end of the Federal Reserve's rate-hiking cycle as inflation eases. Fed Chair Jerome Powell steered clear of providing any policy clues during a panel discussion in Sweden on Tuesday, and with the economic calendar largely empty Wednesday, the focus is turning squarely on to Thursday's U.S. CPI release. This is expected to show that inflation eased further from the prior month, with the headline annual rate seen coming in at 6.5% in December, a drop from 7.1%. The core CPI figure, which excludes volatile energy and food prices, is seen showing annual growth of 5.7%, down from 6.0% in November. The Bank of Japan meets next week, and speculation is rising that the central bank could further adjust its benchmark bond yield target after Tokyo's CPI rose this week to levels last seen in 1981. Chinese trade data for December is due at the end of the week, and this should give indications how the country's economy is recovering as the authorities started reining in its travel restrictions during the last month of 2022.
  • Most Asian currencies crept higher on Thursday and the dollar fell in anticipation of data showing a further easing in U.S. consumer inflation, while the Japanese yen rallied sharply after the country logged a record-high current account surplus. The dollar retreated further on Thursday, and was close to its lowest level in over seven months against a basket of currencies. The strong reading was driven largely by a record rise in returns on Japanese overseas investments, which largely helped offset the country’s growing trade deficit. It also points to some strength in the Japanese economy despite headwinds from worsening growth and increased inflation in 2022. China’s yuan was also bolstered by positive economic data, rising 0.2% and hovering just below a five-month high. Data showed that Chinese consumer inflation grew slightly more than expected in December from the prior month, indicating that economic activity was beginning to perk up after the government relaxed most anti-COVID measures. But weakness in producer price inflation showed that certain facets of the economy were still lagging. The country is grappling with a massive spike in COVID-19 cases after the removal of most restrictions. Broader Asian currencies were mildly positive, but were sitting on strong gains for the week in anticipation of data that is expected to show that U.S. consumer inflation retreated further in December. The reading is likely to spur a less hawkish stance by the Federal Reserve, which in turn could weaken the dollar and offer much relief to Asian currencies. Regional markets were battered by a sharp spike in interest rates through 2022, and are awaiting any signs that this trend could reverse in 2023. The dollar index and dollar index futures both fell about 0.1%, and were down nearly 0.8% this week in anticipation of the inflation data. The greenback has been on a sharp decline since late-2022, amid an increasing number of bets that U.S. inflation has peaked, and that the Fed will raise rates at a slower pace in the coming months. But given that inflation is still trending well over the Fed’s annual target range, markets are cautious over whether interest rates will stay higher for longer.
  • Oil prices traded mostly flat on Thursday, giving up gains made earlier in the day, as optimism over China's demand outlook was tempered by caution ahead of upcoming inflation data from the United States. Both benchmarks had risen 3% in Wednesday's session, boosted by hopes for an improved global economic outlook and concern over the impact of sanctions on Russian crude output. Top oil importer China is reopening its economy after the end of strict COVID-19 curbs, boosting optimism that demand for fuel will grow in 2023. Its industrial output is expected to have grown by 3.6% in 2022 from the previous year, the Ministry of Industry and Information Technology said, despite production and logistics disruptions from COVID-19 curbs. China's outbound flight bookings surged but even so were at only 15% of pre-pandemic levels in the week after the country announced it would reopen its borders, travel data firm ForwardKeys said on Thursday. Upcoming U.S. inflation data, however, is a key risk factor for oil, CMC Market's Teng added. That is leading traders to become cautious ahead of the data release on Thursday. Economists are expecting the rise in core U.S. consumer prices to slow to an annual pace of 5.7% in December, versus 6% a month earlier. Month-on-month headline inflation is seen at zero. The market is also bracing for additional curbs aimed at Russian fuel products sales set to come into force in February as the European Union (EU) keeps working on more sanctions against Moscow over the invasion of Ukraine. The U.S. Energy Information Administration said the upcoming EU ban on seaborne imports of petroleum products from Russia on Feb. 5 could be more disruptive than the EU ban on seaborne imports of crude oil from Russia implemented in December. An international price cap imposed on sales of Russian crude took effect on Dec. 5

 

 
Intraday RESISTANCE LEVELS
12th 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 78.10-78.95 79.65-80.50 81.20-82.40
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
12th 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 77.00-76.10 75.20-74.10 72.90-72.10
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 131.60-131.10 130.40 129.50-129.00

Intra-Day Strategy (12th 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$1886.58/oz and low of $1867.07/oz. Gold is down by 0.079% at US$1875.31/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 Wednesday made its intraday high of US$23.20/oz and low of US23.20/oz settled down by 0.653% at US$23.40/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 Wednesday .,kkmade 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 78.10-82.40 with stop loss at 82.40; targeting 77.00-76.10-75.20 and 74.10-72.90-72.10. Buy above 77.10-70.10 with risk daily closing below 70.10; targeting 78.10-78.90-79.65 and 80.50-81.20-82.40.

 
Intraday Support Levels
S1     77.00-76.10
S2     75.20-74.10
S3     72.90-72.10

Intraday Resistance Levels
R1     78.10-78.95
R2     79.65-80.50
R3     81.20-82.40

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 Wednesday made an intraday low of US$1.0725/EUR, a high of US$1.0775/EUR, and settled the day up by 0.2245% to close at US$1.0755/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 Wednesday made an intra‐day low of US$1.2099/GBP, a high of US$1.2177/GBP, and settled the day down 0.074% to close at US$1.2142/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 Wednesday made an intra‐day low of JPY132.33/USD and made an intraday high of JPY132.86/USD and settled the day up by 0.083% at JPY132.33/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     131.60-131.10
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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