AAFX TRADING

Daily Market Lookup

  • The euro scaled a nine-month high on the dollar on Monday as more hawkish comments on European interest rates contrasted with market pricing for a less aggressive Federal Reserve. It was aided by European Central Bank (ECB) governing council member Klaas Knot, who said interest rates would rise by 50 basis points in both February and March and continue climbing in the months after. Knot is considered a hawk among policymakers and the comment was taken as push back against recent reports that the ECB would scale back to quarter-point moves from March. Investors also have around 50 basis points of U.S. rate cuts priced in for the second half of the year, reflecting softer data on inflation, consumer spending and housing. Flash surveys on January manufacturing due this week are forecast to show more improvement in Europe, in part thanks to falling energy costs, than in the United States. Much the same argument goes for sterling, with markets wagering the Bank of England will hike by half a point to 4.0% at its policy meeting next week. The dollar has at least managed to steady on the yen after the BOJ defied market pressure to reverse its ultra-easy bond control policy. Analysts assume the BOJ will stand the line until at least the next policy meeting in March, though one hurdle will be the expected naming of a new BOJ governor in February. Any hint the replacement is less dovish than current governor Haruhiko Kuroda could see the yen climb anew. The focus on interest rates will make the Bank of Canada's meeting on Wednesday of some note, with markets leaning toward another quarter-point hike to 4.5%, but that to be the end of the tightening cycle there.
  • Profit taking dampened a dollar surge against the yen on Friday, but the buck ended higher and still logged the biggest weekly gain since early December, as the Japanese currency remained on the defensive after the Bank of Japan governor repeated that the central bank will maintain its ultra-loose monetary policy. Dollar/yen in early trade looked on track for its best day since Dec. 5 after BOJ Governor Haruhiko Kuroda, addressing the World Economic Forum in Davos, Switzerland, on Friday, said the central bank will continue its current "extremely accommodative" monetary policy to achieve its 2% inflation target in a stable, sustainable manner. Its 0.88% gain as of late Friday was still the largest since Jan. 4 and its weekly 1.32% rally from a seven-month low on Monday was the biggest since the week ending Dec. 9. Data on Friday showed Japan's core consumer prices in December rose 4.0% from a year earlier, double the BOJ's target. The greenback has been mostly on the defensive this week, as a slew of data from consumer spending to business activity and inflation across major economies highlighted an increasingly fragile outlook for U.S. growth. U.S. Treasury yields have been trending lower all month but rose on Thursday and Friday. With much top-tier data out of the way now, investors are waiting for the first Fed meeting of the year in early February to see if it raises interest rates by 25 basis points (bps) or 50 bps as it did in December after four straight 75 bps increases. The market is eagerly pricing in another step down in its tightening policy. ING economists said the intense scrutiny of U.S. growth means that the dollar remains vulnerable to data releases as markets keep scaling back Fed rate expectations. Meanwhile, the euro was up 0.25% at $1.0856, and the pound was nearly flat at $1.2397, after UK data showed a surprise drop in retail sales in December, as British shoppers bought less but spent more.
  • Oil prices edged lower from a recent rally on Monday, as traders awaited more cues on an economic recovery in China and a potential U.S. recession, although Asian trading volumes were slim amid a slew of market holidays in the region. China and other major Asian markets were closed for the Lunar New Year holiday, which is expected to keep volumes slim for the remainder of the week. Still, markets are positioning for a strong boost to the Chinese economy from the week-long holiday, especially after the country withdrew most anti-COVID measures and reopened its international borders this year. The prospect of a recovery in Chinese demand boosted oil prices in recent weeks, with major industry bodies also forecasting a big rebound in demand this year as China reopens. But given that the country is also grappling with its worst yet COVID-19 outbreak, markets remain uncertain over the timing of such a recovery. Focus this week now turns to U.S. fourth quarter GDP data due on Thursday to gauge whether the world’s largest economy drew closer to a recession in late-2022. Growth is expected to have slowed in the fourth quarter from the third, as the effects of a sharp rise in interest rates were felt by the economy. While a recovery in China is expected to benefit crude demand this year, markets fear that a potential recession in the U.S. and other Western majors could hamper crude consumption. U.S. and Eurozone economies are struggling with elevated inflation and tight monetary policy, both of which are expected to persist for the bulk of the year. Economic indicators for December already indicate a cooling in activity, likely heralding a bigger downturn in the coming months. On the supply side, focus is squarely on Russia, as the country copes with strict price caps on its oil exports. Moscow is widely expected to scale down crude production as its margins are hit by weaker selling prices. This in turn could tighten global crude supply, providing some upside to prices.

 

 
Intraday RESISTANCE LEVELS
23rd January 2023 R1 R2 R3
GOLD-XAU 1,927-1,940 1,948-1,955 1,967-1,975
Silver-XAG 24.00-24.40 24.90-25.50 25.90-26.20
Crude Oil 82.10-82.70 83.30-84.00
EURO/USD 1.0900 1.0945-1.0990 1.1050-1.1100
GBP/USD 1.2445-1.2490 1.2550 1.2590-1.2650
USD/JPY 130.40-131.10 131.60 132.00-132.90

Intraday SUPPORTS LEVELS
23rd January 2023 S1 S2 S3
GOLD-XAU 1,917-1,910 1,904-1,900 1,894-1,887
Silver-XAG 23.00-22.50 22.20-21.90 21.70-21.30
Crude Oil 81.20-80.50 79.65-78.95 78.10-77.00
EURO/USD 1.0830-1.0750 1.0690-1.0650 1.0590-1.0520
GBP/USD 1.2350-1.2290 1.2170-1.2120 1.2040-1.1990
USD/JPY 129.50-129.00 127.45 126.90-126.20

Intra-Day Strategy (23rd 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$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     1,917-1,910
S2     1,904-1,900
S3     1,894-1,887
Intraday Resistance Levels
R1     1,927-1,940
R2     1,948-1,955
R3     1,967-1,975

Technical Indicators

Name   Value Action
14DRSI  

68.915

Buy
20-DMA   1877.43 Buy
50-DMA  

1822.34

Buy
100-DMA   1787.92 Buy
200-DMA   1783.58 Buy
STOCH(5,3)   76.720 Buy
MACD(12,26,9)   Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$24.06/oz and low of US23.69/oz settled up by 0.369% at US$23.92/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 Friday made an intra‐day high of US$81.90/bbl, an intraday low of US$79.91/bbl, and settled up by 1.062% to close at US$81.73/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     81.20-80.50
S2     79.65-78.95
S3     78.10-77.00

Intraday Resistance Levels
R1     82.10-82.70
R2     83.30-84.00
R3    

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 Friday 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 1.0900-1.1100, 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     1.0830-1.0750
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 Friday made an intra‐day low of US$1.2334/GBP, a high of US$1.2403/GBP, and settled the day up 0.128% to close at US$1.2398/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     1.2350-1.2290
S2     1.2170-1.2120
S3     1.2040-1.1990

Intraday Resistance Levels
R1     1.2445-1.2490
R2     1.2550
R3     1.2590-1.2650

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

65.409

Buy
20-DMA   1.2214 Buy
50-DMA   1.2068 Buy
100-DMA   1.1972 Buy
200-DMA   1.2122 Buy
STOCH(5,3)   81 Buy
MACD(12,26,9)   0.0057 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made an intra‐day low of JPY128.34/USD and made an intraday high of JPY130.60/USD and settled the day up by 0.860% at JPY129.51/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     129.50-129.00
S2     127.45
S3     126.90-126.20

INTRADAY RESISTANCE LEVELS
R1     130.40-131.10
R2     131.60
R3     132.00-132.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.839 Buy
20-DMA   130.88 Buy
50-DMA   134.21 Buy
100-DMA   136.23 Buy
200-DMA   134.26 Buy
STOCH(9,6)   47.381 Buy
MACD(12,26,9)   -1.705 Sell

AAFX TRADING
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