AAFX TRADING

Daily Market Lookup

  • The dollar drifted above multi-month lows on Tuesday, while the yen was perched near seven-month highs as investors held their breath for a potential policy shift at the Bank of Japan. The yen hit a top of 127.22 per dollar during Asia hours on Monday, before steadying around 128.69 on Tuesday. Options trade shows a market braced for sharp moves when the Bank of Japan (BOJ) concludes a two-day meeting on Wednesday, with overnight implied volatility surging to a six-year high. Speculation is building about a change or end to Japan's yield curve control policy, given that the market has pushed 10-year yields above a ceiling set by the BOJ of 0.5% and the amount of bond buying to defend it is becoming staggering. A newspaper report last week has also stoked expectation for a change, so traders are on the lookout for a sharp reaction even if the BOJ makes no move. The yen rose 3% against the dollar last week, and one-week implied volatility for dollar/yen is at its highest since March 2020. He sees three main possibilities: no policy change, a tweak similar to a move in December to widen the 10-year yield target band. and the total abandonment of yield curve control, with the latter likely to drive the most extreme market response. There was not a great deal of currency market reaction to far stronger-than-expected Chinese growth data At 2.9%, fourth-quarter year-on-year growth was way stronger than the 1.8% consensus forecast, helped by retail sales falling a lot less than feared in December. Economists said that bodes well for a recovery, but markets - which have already priced in big rebound - were less sure how to take it. Traders are looking ahead to British labour data, U.S. earnings and Canadian inflation figures later in the day.
  • The dollar started the week on the back foot, hitting a seven-month low against a basket of major peers in Asian trade before steadying, with the yen in particular focus due to traders' bets the Bank of Japan will tweak its yield control policy further. Thanks also to early strength from sterling and the Japanese yen, the dollar index, which tracks the greenback against a basket of currencies, slumped to a seven-month trough of 101.77, extending its selloff from last week after data showed that U.S consumer prices fell for the first time in more than 2-1/2 years in December. 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 will not go as high as previously feared. The Fed's aggressive rate increases were a main driver of the dollar index's 8% surge last year, before signs that inflation was peaking brought it back down. The dollar has largely traded steady against most currencies since last week's data. 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 hike. A particular focus for currency markets this week is the Japanese yen, due to speculation that the Bank of Japan will make further tweaks to, or fully abandon, its yield control policy at a meeting scheduled to conclude Wednesday. 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.
  • Oil prices were mixed on Tuesday after China posted its weakest economic growth in nearly half a century, while its late-2022 U-turn in COVID policy still supported hopes of recovery in the country's fuel demand this year. ANZ also pointed to a jump in crude supply from Russia weighing on the market, with seaborne exports having risen to 3.8 million barrels per day last week, the highest level since April. China's gross domestic product expanded 3% in 2022, badly missing the official target of "around 5.5%" and marking the second-worst performance since 1976, as the last quarter was hit hard by stringent COVID curbs and a property market slump. The poor economic data still beat analysts' earlier forecasts as Beijing's roll back of its zero-COVID policy in December shored up consumption. Data on Tuesday also showed China's oil refinery output in 2022 had fallen 3.4% from a year earlier, its first annual decline since 2001, while daily December oil throughput rose to the second-highest level of 2022. But Peng warned that China still faced considerable headwinds, including likely recessions in the United States and Europe this year. In a bearish survey released at the annual Davos summit, two-thirds of private and public sector economists polled expected a global recession this year, with about 18% considering it "extremely likely". At the same time, a survey of chief executives' views by PwC was the gloomiest since the firm launched the poll a decade ago. A rise in the dollar off seven-month lows also put pressure on oil prices, as a stronger greenback makes oil more expensive for those holding other currencies.

 

 
Intraday RESISTANCE LEVELS
17th 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 1.0830-1.0900 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
17th January 2023 S1 S2 S3
GOLD-XAU 1,907-1,900 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 1.0790 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 (17th 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

The dollar drifted above multi-month lows on Tuesday, while the yen was perched near seven-month highs as investors held their breath for a potential policy shift at the Bank of Japan. The yen hit a top of 127.22 per dollar during Asia hours on Monday, before steadying around 128.69 on Tuesday. Options trade shows a market braced for sharp moves when the Bank of Japan (BOJ) concludes a two-day meeting on Wednesday, with overnight implied volatility surging to a six-year high. Speculation is building about a change or end to Japan's yield curve control policy, given that the market has pushed 10-year yields above a ceiling set by the BOJ of 0.5% and the amount of bond buying to defend it is becoming staggering. A newspaper report last week has also stoked expectation for a change, so traders are on the lookout for a sharp reaction even if the BOJ makes no move. The yen rose 3% against the dollar last week, and one-week implied volatility for dollar/yen is at its highest since March 2020. He sees three main possibilities: no policy change, a tweak similar to a move in December to widen the 10-year yield target band. and the total abandonment of yield curve control, with the latter likely to drive the most extreme market response. There was not a great deal of currency market reaction to far stronger-than-expected Chinese growth data At 2.9%, fourth-quarter year-on-year growth was way stronger than the 1.8% consensus forecast, helped by retail sales falling a lot less than feared in December. Economists said that bodes well for a recovery, but markets - which have already priced in big rebound - were less sure how to take it. Traders are looking ahead to British labour data, U.S. earnings and Canadian inflation figures later in the day. The dollar started the week on the back foot, hitting a seven-month low against a basket of major peers in Asian trade before steadying, with the yen in particular focus due to traders' bets the Bank of Japan will tweak its yield control policy further. Thanks also to early strength from sterling and the Japanese yen, the dollar index, which tracks the greenback against a basket of currencies, slumped to a seven-month trough of 101.77, extending its selloff from last week after data showed that U.S consumer prices fell for the first time in more than 2-1/2 years in December. 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 will not go as high as previously feared. The Fed's aggressive rate increases were a main driver of the dollar index's 8% surge last year, before signs that inflation was peaking brought it back down. The dollar has largely traded steady against most currencies since last week's data. 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 hike. A particular focus for currency markets this week is the Japanese yen, due to speculation that the Bank of Japan will make further tweaks to, or fully abandon, its yield control policy at a meeting scheduled to conclude Wednesday. 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. Oil prices were mixed on Tuesday after China posted its weakest economic growth in nearly half a century, while its late-2022 U-turn in COVID policy still supported hopes of recovery in the country's fuel demand this year. ANZ also pointed to a jump in crude supply from Russia weighing on the market, with seaborne exports having risen to 3.8 million barrels per day last week, the highest level since April. China's gross domestic product expanded 3% in 2022, badly missing the official target of "around 5.5%" and marking the second-worst performance since 1976, as the last quarter was hit hard by stringent COVID curbs and a property market slump. The poor economic data still beat analysts' earlier forecasts as Beijing's roll back of its zero-COVID policy in December shored up consumption. Data on Tuesday also showed China's oil refinery output in 2022 had fallen 3.4% from a year earlier, its first annual decline since 2001, while daily December oil throughput rose to the second-highest level of 2022. But Peng warned that China still faced considerable headwinds, including likely recessions in the United States and Europe this year. In a bearish survey released at the annual Davos summit, two-thirds of private and public sector economists polled expected a global recession this year, with about 18% considering it "extremely likely". At the same time, a survey of chief executives' views by PwC was the gloomiest since the firm launched the poll a decade ago. A rise in the dollar off seven-month lows also put pressure on oil prices, as a stronger greenback makes oil more expensive for those holding other currencies.

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 1920-1967 keeping stop loss closing above 1967, targeting 1914-1900-1894 and 1887-1879-1869. Buy in between 1907-1879 with risk below 1879, targeting 1927-1940-1948 and 1955-1967.

 
Intraday Support Levels
S1     1,907-1,900
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 Tuesday made its intraday high of US$24.49/oz and low of US23.92/oz settled down by 0.012% at US$24.23/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 Monday made an intra‐day high of US$80.40/bbl, an intraday low of US$78.76/bbl, and settled down by 1.58% to close at US$79.07/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   55.150 Sell
20-DMA   77.58 Sell
50-DMA   79.09 Sell
100-DMA   82.66 Sell
200-DMA   86.07 Sell
STOCH(5,3)   88.721 Sell
MACD(12,26,9)   -0.245 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0800/EUR, a high of US$1.0873/EUR, and settled the day down by 0.297% to close at US$1.0818/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 1.0830-1.1100, 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 1.0790-1.0520 with risk below 1.0820 targeting 1.0900-1.0945-1.0990 and 1.1050-1.1100.

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

Intraday  Resistance Levels
R1     1.0830-1.0900
R2     1.0945-1.0990
R3     1.1050-1.1100

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.626 Buy
20-DMA   1.0691 Sell
50-DMA   1.0521 Buy
100-DMA   1.0390 Buy
200-DMA   1.0456 Buy
STOCH(5,3)   72.781 Buy
MACD(12,26,9)   0.0085 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2170/GBP, a high of US$1.2288/GBP, and settled the day down 0.022% to close at US$1.2188/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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