AAFX TRADING

Daily Market Lookup

  • The dollar started the week testing a fresh nine-month low as market participants bet on the U.S. Federal Reserve trimming the size of its interest rate hikes for a second straight meeting in February. Fed officials are entering the 'quiet period' before their policy meeting on February 1st, but a report in The Wall Street Journal over the weekend strengthened expectations that the next move higher will be a modest 25 basis points, rather than the 50 basis points seen at the last meeting. A spate of weak economic data last week - with notable declines in retail sales and industrial production - gave the impression that the U.S. economy slowed sharply at the year-end, despite continued strength in the labor market. That's likely to be visible in the first reading of U.S. Gross Domestic Product on Thursday, where the QoQ rate of growth is expected to slow to 2.6% from 3.2% in the third quarter. By 02:55 ET (07:55 GMT), the dollar index which tracks the greenback against a basket of advanced economy currencies was down 0.3% at 101.515, extending its losses from the previous week. It had now unwound virtually all of the gains it made since the Fed started raising interest rates last March. Other currencies whose central banks were slower to start raising rates are, by contrast, outperforming as those institutions still play catch up. The euro rose 0.5% to $1.0913 after a succession of comments at the World Economic Forum from ECB officials insisting that its next rate move will be "significant" - i.e., more than 25 basis points. The market is nonetheless still pricing in a first ECB rate cut by the end of the year. Likewise, the yen continues to strengthen as the market tests the Bank of Japan's resolve to defend its target for long-term bond yields. Finance Minister Shun'ichi Suzuki told parliament on Monday that: "Japan's public finances have increased in severity to an unprecedented degree" as it struggles to sustain demand in the aftermath of the pandemic. That's a situation that leaves the government ill-prepared to cope with a rising debt service burden. Markets are set to be generally quiet on Monday, with the start of the Lunar New Year holiday in China and a dearth of market-moving data elsewhere.
  • The dollar slipped against the euro on Monday, at one point hitting a fresh 9-month low, as the common currency found support from European Central Bank officials' comments signalling additional jumbo interest rate rises in Europe. The euro's early gains were aided by comments from European Central Bank (ECB) governing council members Klaas Knot and Peter Kazimir, who both advocated for two more 50 basis point hikes at meetings in February and March. The ECB will keep raising interest rates quickly to slow inflation which remains far too high, ECB President Christine Lagarde said on Monday, largely repeating the bank's most recent policy guidance. A Reuters survey of analysts also favoured hikes of 50 basis points at the next two meetings and an eventual rate peak of 3.25%, from the current rate of 2%. Fed fund futures have priced out almost any chance the Fed could move by 50 basis points next month and have steadily lowered the likely peak for rates to 4.75% to 5.0%, from the current 4.25% to 4.50%. With monetary policy meetings for both the Federal Reserve and ECB set for next week, major currency pairs stuck close to familiar ranges on Monday. The euro was also being supported by an easing of recession fears amid a fall in natural gas prices, according to Rabobank head of currency strategy Jane Foley. 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.
  • Crude oil prices edged higher in Asian trade on Tuesday amid hopes of a fuel demand recovery from top importer China, although concerns about a slowdown in the U.S. economy capped gains. Crude oil prices in physical markets have started the year with a rally, as China, no longer held back by pandemic controls, has shown signs of more buying and as traders have worried that sanctions on Russia could tighten supply. The dollar hovered near a nine-month low to the euro and gave back recent gains against the yen, as traders continued to gauge the risks of a U.S. recession and the path for Federal Reserve policy. A weaker greenback makes dollar-denominated commodities, including oil, cheaper for buyers using other currencies. In the United States, "the economy still could rollover and some energy traders are still sceptical on how quickly China's crude demand will bounce back this quarter," OANDA analyst Edward Moya said in a note. Demand for products has lifted the oil market and refining margins. The 3-2-1 crack spread, a proxy for refining margins, rose to $42.18 per barrel on Monday, the highest since October. Investors have piled back into petroleum futures and options at the fastest rate for more than two years as concerns about a global business cycle downturn have eased, although flash PMI data due on Tuesday is expected to show a contraction. This week traders are watching for more business data that could indicate the health of global economies during an earnings reporting season. On the inventory side, U.S. stocks of crude oil and gasoline were expected to have risen last week, while distillate stocks were seen lower, a preliminary Reuters poll showed on Monday. The poll was conducted ahead of reports from the American Petroleum Institute, an industry group, due at 4:30 p.m. ET (2130 GMT) on Tuesday, and the Energy Information Administration, the statistical arm of the U.S. Department of Energy, due at 10:30 a.m. (1530 GMT) on Wednesday.

 

 
Intraday RESISTANCE LEVELS
24th 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 82.10-82.70 83.30-84.00 84.90-85.80
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
24th January 2023 S1 S2 S3
GOLD-XAU 1,927-1,917 1,910-1,900 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 (24th 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 Monday made it’s intraday high of US$1935.42/oz and low of $1911.28/oz. Gold is up by 0.258% at US$1930.80/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 1927-1879 with risk below 1879, targeting 1940-1948 and 1955-1967.

 
Intraday Support Levels
S1     1,927-1,917
S2     1,910-1,900
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  

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 Monday made its intraday high of US$24.14/oz and low of US22.74/oz settled down by 1.989% at US$23.45/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 23.00-20.30, 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 24.00-26.20 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 Monday made an intra‐day high of US$82.65/bbl, an intraday low of US$81.07/bbl, and settled down by 0.199% to close at US$81.63/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 81.60-83.40 with stop loss at 83.40; targeting 80.50-79.65-78.95 and 78.10-77.00-76.10. Buy above 81.50-76.10 with risk daily closing below 76.10; targeting 81.70-82.30-82.70 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     84.90-85.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.427 Sell
20-DMA   78.08 Sell
50-DMA   79.50 Sell
100-DMA   82.54 Sell
200-DMA   85.78 Sell
STOCH(5,3)   85.781 Sell
MACD(12,26,9)   0.956 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0845/EUR, a high of US$1.0926/EUR, and settled the day up by 0.0377% to close at US$1.0870/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 Monday made an intra‐day low of US$1.2322/GBP, a high of US$1.2447/GBP, and settled the day down 0.208% to close at US$1.2373/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 1.2350-1.1890 with a target of 1.2390-1.2445-1.2290 with a stop loss closing below 1.1890. Sell in between 1.2445-1.2650 with targets at 1.2350-1.2290-1.2170 and 1.2120-1.2040-1.1990 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 Monday made an intra‐day low of JPY129.03/USD and made an intraday high of JPY130.88/USD and settled the day up by 0.942% at JPY130.65/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 130.50-133.00 with risk above 133.00 targeting 129.50-129.00-127.45 and 126.90-126.20-125.00. Long positions above 129.50-126.20 with targets of 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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