AAFX TRADING

Daily Market Lookup

  • The dollar slid on Thursday in choppy trading, as a slew of data continued to show that the U.S. economy was slowing down in the wake of multiple hefty interest rate hikes from the Federal Reserve, with the market anticipating a pause in tightening this year. The yen, on the other hand, rallied due in part to expectations that the Bank of Japan (BOJ) will eventually shift away from ultra-loose monetary policy. In the United States, Thursday's data showed overall housing starts declined 1.4% to a rate of 1.382 million units last month. Building permits dropped as well, down 1.6% to a rate of 1.330 million units. Manufacturing activity in the Mid-Atlantic region softened as well in January. The Philadelphia Fed's monthly manufacturing index rose to negative 8.9 this month, from negative 13.7 in December, an improvement from the median estimate of negative 11. The survey also showed inflation pressures. The latter -- measured by the prices paid index -- dropped to 24.5 in January from 36.3 last month. That was the lowest in nearly 2-1/2 years. However, initial claims for state unemployment benefits dropped 15,000 to 190,000 for the week ended Jan. 14. Economists polled by Reuters had forecast 214,000 claims for the latest week. The rebound in the yen also reflects "the fact that market participants are still speculating (on) a shift in the Bank of Japan's policy," said Carol Kong, currency strategist at Commonwealth Bank of Australia (OTC:CMWAY). European Central Bank President Christine Lagarde on Thursday said inflation is far too high and the ECB will keep raising interest rates. Fed officials were in full force once again on Thursday to reinforce their message on rates. Boston Fed President Susan Collins said the Fed will probably need to raise interest rates to "just above" 5% and then hold them there for a period. Fed Vice Chair Lael Brainard, for her part, said despite the recent moderation in inflation, it remains high and "policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2 percent on a sustained basis."
  • The U.S. dollar edged lower in early European trade Thursday, continuing its recent selloff after weak U.S. economic data hinted at an upcoming recession, providing more arguments for the Federal Reserve to slow down its aggressive interest rate increases. The dollar has fallen by more than 10% since peaking in late September, after a rally sparked by aggressive tightening throughout much of 2022. This selling continued Wednesday after U.S. retail sales fell by the most in a year in December and manufacturing output recorded its biggest drop in nearly two years, stoking fears that the world's largest economy is headed for a recession. USD/JPY dropped 0.5% to 128.26, with the yen rebounding to a degree from its sharp losses after the Bank of Japan maintained the range of fluctuation in its yield curve control policy, confounding expectations for a further adjustment in the rate. However, speculation that rising inflation will push the bank into eventually altering this ultra-loose policy saw the yen recover sharply.
  • Oil prices rose further on Friday, and were set to end the week higher as optimism over an eventual recovery in Chinese demand this year largely offset fears that a global economic slowdown will dent crude markets. Markets are betting on a strong boost to the Chinese economy from the week-long Lunar New Year holiday, particularly after the country relaxed almost all anti-COVID restrictions earlier this month. China kept its key lending rates at historic lows for a fifth consecutive month on Friday, indicating that the government plans to keep liquidity conditions loose in order to spur an economic recovery. Both the Organization of Petroleum Exporting Countries and the International Energy Agency forecast that a Chinese economic recovery will spur record-high crude demand in 2023 - a notion that has been the key driver of oil prices in recent weeks. Crude markets largely looked past data showing a bigger-than-expected build in U.S. inventories over the past week. But despite the large inventory build, an unexpected drop in distillates stockpiles indicated that freight and transport demand remained strong in the world’s largest economy. U.S. supplies are also set to tighten as the Biden administration stopped drawing crude from the Strategic Petroleum Reserve. The government has also flagged that it will begin refiling the reserve from February, which could act as a buy signal for markets. But on the other hand, concerns over slowing economic growth grew following a slew of weaker-than-expected U.S. data this week. Slowing industrial production in particular has brewed uncertainty over crude demand remaining steady later in 2023. Markets were also uncertain over the path of U.S. monetary policy, following comments from several Federal Reserve members this week. While most Fed members have called for a smaller pace of interest rate hikes in the coming months, they offered differing takes on when U.S. interest rates would peak.

 

 
Intraday RESISTANCE LEVELS
20th January 2023 R1 R2 R3
GOLD-XAU 1,940-1,948 1,955 1,967-1,975
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 1.0900 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
20th January 2023 S1 S2 S3
GOLD-XAU 1,927 1,904-1,900 1,894-1,887
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 1.0830-1.0750 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 (20th 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$1935.10/oz and low of $1900.90/oz. Gold is up by 1.457% at US$1931.98/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 1930-1967 keeping stop loss closing above 1967, targeting 1914-1900-1894 and 1887-1879-1869. Buy in between 1914-1879 with risk below 1879, targeting 1931-1940-1948 and 1955-1967.

 
Intraday Support Levels
S1     1,927
S2     1,904-1,900
S3     1,894-1,887
Intraday Resistance Levels
R1     1,940-1,948
R2     1,955
R3     1,967-1,975

Technical Indicators

Name   Value Action
14DRSI  

71.673

Buy
20-DMA   1873.01 Buy
50-DMA  

1818.37

Buy
100-DMA   1785.26 Buy
200-DMA   1782.21 Buy
STOCH(5,3)   75.719 Buy
MACD(12,26,9)   36.309 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$23.92/oz and low of US23.15/oz settled up by 1.607% at US$23.83/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 Thursday made an intra‐day high of US$81.47/bbl, an intraday low of US$79.21/bbl, and settled up by 1.812% to close at US$80.82/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 Thursday made an intraday low of US$1.0781/EUR, a high of US$1.0839/EUR, and settled the day up by 0.35% to close at US$1.0830/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     1.0830-1.0750
S2     1.0690-1.0650
S3     1.0590-1.0520

Intraday  Resistance Levels
R1     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 Thursday made an intra‐day low of US$1.2312/GBP, a high of US$1.2396/GBP, and settled the day up 0.342% to close at US$1.2384/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 Thursday made an intra‐day low of JPY127.75/USD and made an intraday high of JPY128.88/USD and settled the day down by 0.342% at JPY128.41/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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