AAFX TRADING

Daily Market Lookup

  • The dollar fell to a seven-month low against major peers on Monday while the yen surged to an over seven-month peak, as traders ramped up bets that the Bank of Japan may make further tweaks to its yield control policy at its meeting this week. With decades-high inflation in the world's largest economy showing signs of cooling, investors are now growing increasingly confident that the Fed is nearing the end of its rate-hike cycle, and that rates would not go as high as previously feared. The Fed's aggressive rate increases have been a huge driver of the greenback's 8% surge last year. Markets are now pricing in a 91% chance of a 25 basis point increase when the Fed announces its policy decision in February, with a 9% chance of a 50 bp increase. The Japanese yen rose to a more than seven-month peak on Monday, as market sentiment was dominated by expectations that the BOJ would make further tweaks to, or fully abandon, its yield control policy when it announces its monetary policy decision on Wednesday. The yen jumped roughly 0.5% to a high of 127.215 per dollar, and last bought 127.67 per dollar. Current BOJ Governor Haruhiko Kuroda will step down in April. Investors have been pressing for the BOJ to shift away from its ultra-easy monetary policy, which caused the yield on Japan's benchmark 10-year government bonds to breach the central bank's new ceiling for two sessions. The BOJ's yield curve control policy contributed to the yen's 12% slump last year, and since the central bank's shock decision last December to widen the band around its yield target, the yen has jumped more than 6%. U.S. markets are closed on Monday for a holiday, making for thin trading. Yen jumps on hopes of BOJ policy shift; dollar slides to seven-month low
  • Most Asian currencies advanced against the dollar on Monday, cheered largely by the prospect of smaller interest rate hikes by the Federal Reserve, while speculation over another hawkish move by the Bank of Japan pushed the yen to an over seven-month peak. The yen rose 0.4% to 127.32 against the dollar, reaching its highest level since late-May ahead of a BOJ policy meeting later this week. The currency has been on a tear since the central bank unexpectedly struck a hawkish tone during its December meeting by widening the band within which it allows the yields on its benchmark government bonds to trade. Yields on Japanese 10-year bonds rose above the 0.5% upper end set by the BOJ for a second consecutive day. Markets are now positioning for similar moves from the BOJ this week, given that inflation in the country is trending at 40-year highs. Producer price index inflation data on Monday showed that factory gate prices grew more than expected in December, while November’s reading was also revised higher. Still, the BOJ is expected to keep interest rates unchanged at ultra-low levels. Strength in the yen weighed heavily on the dollar index and dollar index futures, which fell about 0.3% each to a new seven-month low. The greenback was battered in recent weeks by signs of easing U.S. inflation, which is broadly expected to push the Fed into slowing its pace of interest rate hikes. Asian currencies rallied on the prospect of such a scenario, given that it heralds easing pressure from high U.S. yields after a sharp increase in interest rates through 2022. Risk-heavy units in Southeast Asia were the best performers for the day, with the Indonesian rupiah and the Philippine peso adding 0.8% and 0.6%, respectively. Still, markets are positioning for an eventual economic recovery in the country after it began relaxing most anti-COVID restrictions in December.
  • Oil prices fell on Monday after a sharp rally last week, as traders turned cautious and locked in some profits ahead of demand forecasts from the OPEC and the IEA, as well as a barrage of economic data due this week. Crude prices rallied over 8% last week on the prospect of a rebound in Chinese demand, after the country reopened its borders and essentially confirmed a pivot away from its strict zero-COVID policy. Weakness in the U.S. dollar, amid signs of slowing inflation in the country, also benefited oil prices Focus is now squarely on a monthly report from the Organization of Petroleum Exporting Countries (OPEC), due on Tuesday. Markets are waiting to see whether the cartel will change its forecasts for global demand in the face of a Chinese economic recovery. Traders are also awaiting a report on crude markets from the International Energy Agency (IEA), due on Wednesday, for the body’s outlook on oil prices and demand for the year. Beyond data from industry bodies, crude markets are also awaiting a slew of economic data and central bank meetings this week. The Bank of Japan’s monetary policy meeting is of key import to markets, after the lender unexpectedly struck a hawkish chord during its December meeting - a move that rattled financial markets. Inflation readings from the euro zone and England are also in focus, as is data on U.S. retail sales, factory gate inflation, and industrial production. Markets will be watching for any signs of slowing economic growth, amid increased fears of a recession in 2023. Oil prices had slumped in the first week of the year as the International Monetary Fund warned of a potential recession this year. This notion has largely limited any upside in crude markets, with traders fearing that oil demand will be impacted by slowing economic growth across the globe. While Chinese demand has shown some signs of recovery, the country is also grappling with its worst-yet COVID-19 outbreak, which markets fear could delay a bigger economic bounceback.

 

 
Intraday RESISTANCE LEVELS
16th January 2023 R1 R2 R3
GOLD-XAU 1,927-1,940 1,948 1,955-1,967
Silver-XAG 24.40-24.90 25.50 25.90-26.20
Crude Oil 79.65-80.50 81.20-82.30 82.70-83.30
EURO/USD 1.0900-1.0945 1.0990 1.1050-1.1100
GBP/USD 1.2290-1.2350 1.2390 1.2445-1.2290
USD/JPY 129.00-129.50 130.40 131.10-131.60

Intraday SUPPORTS LEVELS
16th January 2023 S1 S2 S3
GOLD-XAU 1,914-1,900 1,894-1,887 1,879-1,869
Silver-XAG 23.40-23.00 22.50-22.20 21.90-21.10
Crude Oil 78.95-78.10 77.00-76.10 75.20-74.10
EURO/USD 1.0830-1.0790 1.0690-1.0650 1.0590-1.0520
GBP/USD 1.2170-1.2120 1.2040–1.1990 1.1950-1.1890
USD/JPY 127.45-126.90 126.20 125.50-125.00

Intra-Day Strategy (16th 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 Friday made it’s intraday high of US$1921.80/oz and low of $1892.24/oz. Gold is up by 1.26% at US$1920.26/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 1927-1967 keeping stop loss closing above 1967, targeting 1914-1900-1894 and 1887-1879-1869. Buy in between 1914-1879 with risk below 1879, targeting 1927-1940-1948 and 1955-1967.

 
Intraday Support Levels
S1     1,914-1,900
S2     1,894-1,887
S3     1,879-1,869
Intraday Resistance Levels
R1     1,927-1,940
R2     1,948
R3     1,955-1,967

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 Friday made its intraday high of US$24.28/oz and low of US23.48/oz settled down by 2.09% at US$24.25/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 made an intra‐day high of US$80.33/bbl, an intraday low of US$78.16/bbl, and settled up by 2.28% to close at US$80.32/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 79.65-83.40 with stop loss at 83.40; targeting 78.95-78.10-77.00 and 76.10-75.20-74.10. 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     78.95-78.10
S2     77.00-76.10
S3     75.20-74.10

Intraday Resistance Levels
R1     79.65-80.50
R2     81.20-82.30
R3     82.70-83.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.927 Sell
20-DMA   77.41 Sell
50-DMA   79.08 Sell
100-DMA   82.73 Sell
200-DMA   86.07 Sell
STOCH(5,3)   94.721 Sell
MACD(12,26,9)   -0.245 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.0779/EUR, a high of US$1.0867/EUR, and settled the day down by 0.173% to close at US$1.0832/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 1.0900-1.1100, targeting 1.0830-1.0790-1.0690 and 1.0650-1.0590-1.0520 with stop-loss at daily closing above 1.1100. Buy above 1.0830-1.0520 with risk below 1.0820 targeting 1.0900-1.0945-1.0990 and 1.1050-1.1100.

 
Intraday Support Levels
S1     1.0830-1.0790
S2     1.0690-1.0650
S3     1.0590-1.0520

Intraday  Resistance Levels
R1     1.0900-1.0945
R2     1.0990
R3     1.1050-1.1100

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.562 Buy
20-DMA   1.0679 Sell
50-DMA   1.0510 Buy
100-DMA   1.0382 Buy
200-DMA   1.0453 Buy
STOCH(5,3)   89.149 Buy
MACD(12,26,9)   0.0086 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2149/GBP, a high of US$1.2247/GBP, and settled the day up 0.254% to close at US$1.2234/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 1.2170-1.1890 with a target of 1.2290-1.2350 and 1.2390-1.2445-1.2290 with a stop loss closing below 1.1890. 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     1.2170-1.2120
S2     1.2040–1.1990
S3     1.1950-1.1890

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

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 Thursday made an intra‐day low of JPY127.45/USD and made an intraday high of JPY129.41/USD and settled the day down by 1.079% at JPY127.84/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     127.45-126.90
S2     126.20
S3     125.50-125.00

INTRADAY RESISTANCE LEVELS
R1     129.00-129.50
R2     130.40
R3     131.10-131.60

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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