AAFX TRADING

Daily Market Lookup

  • Most Asian currencies retreated on Thursday as weak U.S. economic data pushed up fears of a potential recession, while the Japanese yen recouped most of its recent losses on speculation that the Bank of Japan may yet increase its yield control range. The currency had plummeted as much as 2.5% on Wednesday after the BOJ unexpectedly maintained its current course of yield curve control. But speculation that rising inflation will push the bank into eventually altering its ultra-loose policy saw the yen recover sharply from intraday lows. Columbia University academic Takatoshi Ito, who is considered to be a candidate to join the BOJ, said on Thursday that hotter-than-expected inflation could eventually push the central bank into widening its benchmark bond yield range this year - a move that is positive for the yen. Japanese consumer inflation data is due this Friday, and is expected to read at 4%, twice the BOJ’s annual target. Broader Asian currencies retreated as sentiment was dented by weaker-than-expected U.S. economic data, which brewed increasing fears of a potential recession this year. A global economic slowdown bodes poorly for risk-driven Asian currencies, given that capital flows into the region will likely slow as investors seek safer assets. Losses in the yuan came even as International Monetary Fund Deputy Director Gita Gopinath said China could see a strong economic recovery by as soon as the second quarter. The Australian dollar was among the worst performers for the day, falling 0.5% after data showed that the country’s job market unexpectedly cooled from the record high in December. The trend, if sustained, will give the Reserve Bank less economic headroom to keep hiking interest rates. The dollar index and dollar index futures retreated on Thursday, also taking mixed cues from overnight addresses by several Federal Reserve officials. While Fed officials almost unanimously called for more interest rates, they offered differing takes on where U.S. interest rates will peak.
  • The dollar rose against major currencies on Wednesday in choppy trading, gaining safe-haven bids as risk appetite worsened with stocks on the defensive amid hawkish comments from U.S. Federal Reserve officials that suggested more interest rate increases are likely to tame inflation. Analysts, however, remained convinced that the currency has already hit its peak and is in the midst of an overall downtrend. The greenback earlier fell across board after a slate of weak economic data backed expectations that the Fed may be nearing a pause in its rate-hiking cycle. The earlier sell-off in the dollar came after the Bank of Japan maintained ultra-low interest rates. The yen initially gained sharply, but recovered on expectations for tighter policy in the coming months. Fed officials on Wednesday, however, dampened expectations that the U.S. central bank is nearing the end of its tightening policy. Cleveland Fed President Loretta Mester said the Fed needs to raise interest rates a "little bit" above the 5.00% to 5.25% range in order to bring inflation to heel. St. Louis Fed President James Bullard, for his part, said the Fed should get the policy rate of interest above 5% "as quickly as we can" before pausing rate increases needed to battle an ongoing outbreak of inflation. Their comments helped push U.S. stocks lower and extended a rally in Treasuries that weighed on yields. The U.S. unit earlier dropped after data showed that U.S. retail sales fell more than expected in December, pulled down by declines in purchases of motor vehicles and a range of other goods. They fell 1.1% last month. Data for November was revised to show sales dropping 1.0% instead of 0.6% as previously reported. A separate report from the Labor Department showed the producer price index for final demand decreased 0.5% in December after rising 0.2% in November. The PPI report followed data last week showing that monthly consumer prices fell for the first time in more than 2-1/2 years in December.
  • Oil futures fell by nearly $1 on Thursday, extending losses from the previous day, as a surprise jump in U.S. crude stocks weighed on the market along with fears of a recession that were heightened by disappointing U.S. retail sales and output data. U.S. December retail sales fell by the most in a year, while manufacturing output recorded its biggest drop in nearly two years, as higher borrowing costs hurt demand for goods. Still, Federal Reserve officials said interest rates needed to rise beyond 5% even as inflation shows signs of having peaked and economic activity is slowing. Adding to the pall, data from the American Petroleum Institute showed U.S. crude oil inventories rose by about 7.6 million barrels in the week ended Jan. 13, according to market sources. The mean average forecast from a Reuters' poll of nine analysts had been for a fall of about 600,000 barrels. The big build marked the second consecutive week of large inventory increases. However, distillate stockpiles, which include diesel and heating oil, fell by about 1.8 million barrels against analysts' expectations for a 120,000-barrel increase. The API report was delayed by a day due to Monday's Martin Luther King Day public holiday in the United States. The government's Energy Information Administration will release its weekly inventory report on Thursday. With aggressive rate hikes still on the cards, the U.S. dollar climbed, weighing on oil demand as a stronger greenback makes the commodity more expensive for those holding other currencies.

 

 
Intraday RESISTANCE LEVELS
19th January 2023 R1 R2 R3
GOLD-XAU 1,927-1,940 1,948 1,955-1,967
Silver-XAG 24.00-24.40 24.90-25.50 25.90-26.20
Crude Oil 81.20-82.30 82.70-83.30 84.00
EURO/USD 1.0830-1.0900 1.0945-1.0990 1.1050-1.1100
GBP/USD 1.2350-1.2390 1.2445 1.2290-1.2350
USD/JPY 129.00-129.50 130.40 131.10-131.60

Intraday SUPPORTS LEVELS
19th January 2023 S1 S2 S3
GOLD-XAU 1,904-1,900 1,894-1,887 1,879-1,869
Silver-XAG 23.00-22.50 22.20-21.90 21.70-21.30
Crude Oil 80.50-79.65 78.95-78.10 77.00-76.10
EURO/USD 1.0750 1.0690-1.0650 1.0590-1.0520
GBP/USD 1.2290-1.2170 1.2120-1.2040 1.1990-1.1950
USD/JPY 127.45 126.90-126.20 125.50

Intra-Day Strategy (19th 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 Wednesday made it’s intraday high of US$1925.82/oz and low of $1896.50/oz. Gold is down by 0.224% at US$1904.18/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 1914-1967 keeping stop loss closing above 1967, targeting 1914-1900-1894 and 1887-1879-1869. Buy in between 1900-1879 with risk below 1879, targeting 1927-1940-1948 and 1955-1967.

 
Intraday Support Levels
S1     1,904-1,900
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$24.33/oz and low of US23.41/oz settled down by 1.849% at US$23.46/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     23.00-22.50
S2     22.20-21.90
S3     21.70-21.30

Intraday  Resistance Levels
R1     24.00-24.40
R2     24.90-25.50
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$82.64/bbl, an intraday low of US$79.21/bbl, and settled up by 2.23% to close at US$79.41/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 81.20-83.40 with stop loss at 83.40; targeting 80.50-79.65-78.95 and 78.10-77.00-76.10. Buy above 80.50-76.10 with risk daily closing below 76.10; targeting 81.20-82.30-82.70 and 83.30-84.00.

 
Intraday Support Levels
S1     80.50-79.65
S2     78.95-78.10
S3     77.00-76.10

Intraday Resistance Levels
R1     81.20-82.30
R2     82.70-83.30
R3     84.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.489 Sell
20-DMA   78.07 Sell
50-DMA   79.23 Sell
100-DMA   82.66 Sell
200-DMA   85.97 Sell
STOCH(5,3)   88.614 Sell
MACD(12,26,9)   -0.467 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.0773/EUR, a high of US$1.0886/EUR, and settled the day up by 0.0611% to close at US$1.0792/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 1.0760-1.0520 with risk below 1.0820 targeting 1.0900-1.0945-1.0990 and 1.1050-1.1100.

 
Intraday Support Levels
S1     1.0750
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 Wednesday made an intra‐day low of US$1.2253/GBP, a high of US$1.2435/GBP, and settled the day down 0.500% to close at US$1.2342/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 1.2290-1.1890 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 1.2350-1.2445 with targets at 1.2290-1.2170-1.2120 and 1.2040-1.1990-1.1890 with stop loss should be 1.2445.

 
Intraday Support Levels
S1     1.2290-1.2170
S2     1.2120-1.2040
S3     1.1990-1.1950

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

62.081

Buy
20-DMA   1.2148 Buy
50-DMA   1.2026 Buy
100-DMA   1.1946 Buy
200-DMA   1.2114 Buy
STOCH(5,3)   81.060 Buy
MACD(12,26,9)   0.0057 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made an intra‐day low of JPY127.55/USD and made an intraday high of JPY131.57/USD and settled the day up by 0.292% at JPY128.85/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 129.00-133.00 with risk above 133.00 targeting 127.45 and 126.90-126.20-125.00. Long positions above 127.50-126.20 with targets of 129.00-129.70-130.40 and 131.10-131.60-132.00 with stops below 130.00.

 
Intraday Support Levels
S1     127.45
S2     126.90-126.20
S3     125.50

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.839 Buy
20-DMA   131.53 Buy
50-DMA   134.88 Buy
100-DMA   136.68 Buy
200-DMA   134.42 Buy
STOCH(9,6)   30.921 Buy
MACD(12,26,9)   -1.864 Sell

AAFX TRADING
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