AAFX TRADING

Daily Market Lookup

  • The dollar was down on Tuesday morning in Asia, starting the new month on a lower note even after closing its worst month since July in November. Giving the dollar a boost, however, was the expectation of more monetary easing measures from the U.S. Federal Reserve. Promising data from COVID-19 vaccine developers have driven investors towards riskier currencies and higher-yielding assets outside the U.S., leading to a shortage of dollars. Moderna Inc plans to request clearance for its candidate mRNA-1273 in the U.S. and Europe after announcing that the vaccine was 94.1% effective. Pfizer Inc and BioNTech SEare also awaiting word on their own approval request for its candidate BNT162b2, which will be reviewed before Moderna’s application. The rising number of COVID-19 cases globally has also not provided much support to the dollar, with expectations growing that the Fed will step in to boost the economy ahead of the vaccines. Fed Chairman Jerome Powell will testify before Congress later in the day and on Wednesday, ahead of the central bank’s policy meeting on Dec. 15 and 16. Both events will be closely watched by investors for clues on next moves. Some investors remained hopeful. Dallas Fed President Robert Kaplan also said on Monday that difficult months lie ahead. “We’re bracing ourselves here,” he said. Kaplan added that the central bank is open-minded about shifting or even expanding its bond buying program, but “we are going to have to figure out whether it’s in the December meeting or a future meeting.” The yuan was firm in offshore trade in the afterglow of Monday’s positive manufacturing and non-manufacturing Purchasing Managers Indexes (PMI). The Caixin manufacturing PMI is due later in the day, with the Caixin services PMI due later in the week. The GBP/USD pair edged with hopes that the U.K. and the European Union (EU) will reach a Brexit deal before the end of the month boosting the pound. Both sides warned the other that time was of the essence and talks between EU chief negotiator Michel Barnier and U.K. chief negotiator David Frost continue. The EU teams are expected to stay in London for two or three more days for the talks.
  • The dollar was under pressure on Tuesday, after closing out its worst month since July with a little bounce and as investors reckon on even more U.S. monetary easing. The risk-sensitive Australian and New Zealand dollars clawed back some of Monday's losses, each rising roughly 0.2% early in the Asia session, although both remained just below milestone peaks hit a day ago. The euro rose 0.1% but kept shy of $1.20, while sterling held on to gains made against the dollar as traders cling to hopes for a Brexit trade deal before the year's end. Investors are heavily short dollars as optimism about promising vaccine trials drives buying of riskier currencies and higher yielding assets outside the United States. Even worries about rising coronavirus cases have not offered too much support to the greenback, as speculation grows that the Federal Reserve might act to support the economy through a tough winter before vaccinations can turn the tide on the pandemic. The Fed meets to set policy on Dec. 15 and 16, though before then - on Tuesday and Wednesday - Fed Chair Jerome Powell will appear before Congress and his remarks will be closely watched for any clues as to the next moves. The policymakers gather as authorities mull approving two effective vaccines, developed by Pfizer and Moderna for distribution, but as surging virus cases put the brakes on the U.S. economic recovery. Dallas Fed President Robert Kaplan said on Monday that difficult months lie ahead. "We're bracing ourselves here," he said, adding that the central bank is open-minded about shifting or even expanding its bond buying programme. The Reserve Bank of Australia announces the outcome of its final policy meeting for the year at 0330 GMT, though traders expect no changes and few surprises. European inflation figures and U.S. manufacturing data is due later on Tuesday. Britain and the European Union also warned each other on Monday that time was running out to reach a Brexit trade deal, though investors remain hopeful and have kept the pound at $1.3337 and 89.48 pence per euro Talks between EU chief negotiator Michel Barnier and British chief negotiator David Frost are ongoing and the EU team are expected to stay in London for two or three more days.
  • Oil was down on Tuesday morning in Asia, with investors unclear as to whether the world’s major producers would extend output cuts, which would support oil prices. The OPEC and its allies (OPEC+) put off output policy talks until Thursday, Reuters reported. The market is now waiting to see whether the organization will continue with current production cuts of 7.7 million barrels per day or curb those cuts. The group was originally set to ease cuts by about 2 million bpd starting in January, but demand remains weak. Some investors were expectant that the cuts would happen. But any accord would require some producers to agree to larger cuts moving forward, with those barrels being allocated to the UAE "for the balance of the agreement", Yawger added. November was a strong month for oil, with both benchmarks rising by about 27% as investors held on to hopes that a vaccine would speed up a return to normalcy from COVID-19 lockdowns. Investors are now weighing a renewed surge of COVID-19 cases around the world and new lockdowns in places as disparate as London, Hong Kong and New York as well as the likely approval of multiple COVID-19 vaccines in the coming weeks. Moderna Inc (NASDAQ:MRNA) will request clearance for its vaccine candidate mRNA-1273 in the U.S. and Europe, the company said on Monday. Investors are also looking to distill testimony from U.S. Federal Reserve Chairman Jerome Powell and Treasury Secretary Steve Mnuchin on Monday to the Senate Banking Committee, both of whom said the US economy is on the path to recovery but will need some help. Mnuchin called on Congress to use the CARES Act, worth $455 billion, to put in place a stimulus package to give the economy a boost. Powell, in turn, pointed to moderate growth as a concern. Powell will continue to testify before Congress later in the day and on Wednesday, with the Fed convening for its policy meeting on Dec. 15 and 16. Also supporting prices, China’s Caixin manufacturing Purchasing Managers Index (PMI) for November came in at 54.9 in November, up from 53.6 in October. Investors are now looking to crude oil supply data from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
1st December 2020 R1 R2 R3
GOLD-XAU 1,790 1,796 1,805-1,821
Silver-XAG 23.20 23.90 24.95-25.65
Crude Oil 45.10-45.90 46.50 47.50-48.60
EURO/USD 1.1990-1.2010 1.2050 1.2100-1.2150
GBP/USD 1.3400-1.3440 1.3480 1.3550
USD/JPY 104.50-105.00 105.40 105.90-106.40

Intraday SUPPORTS LEVELS
1st December 2020 S1 S2 S3
GOLD-XAU 1,781-1,770 1,763 1,748-1,738
Silver-XAG 22.60-22.00 21.50 21.20-20.50
Crude Oil 44.60 44.00 43.60-43.00
EURO/USD 1.1950-1.1905 1.1840 1.1790-1.1750
GBP/USD 1.3340-1.3290 1.3250 1.3200-1.3150
USD/JPY 103.90 103.15-102.50 102.05

Intra-Day Strategy (1st December 2020)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Buy
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Monday made its intraday high of US$1789.87/oz and low of US$1764.24/oz. Gold down 0.55% at US$1776.31/oz.

Technicals in Focus:

In daily charts, prices are below 50DMA (1899) and breakage above will call for 1916. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1781-1725 with risk below 1725, targeting 1781-1790-1805 and 1821-1833. Sell below 1781-1833 keeping stop loss closing above 1833, targeting 1770-1763-1748 and 1738-1725.

 
Intraday Support Levels
S1     1,781-1,770
S2     1,763
S3     1,748-1,738
Intraday Resistance Levels
R1     1,790
R2     1,796
R3     1,805-1,821

Technical Indicators

Name   Value Action
14DRSI  

29.377

Buy
20-DMA   1864.10 Sell
50-DMA  

1882.42

Sell
100-DMA   1909.38 Sell
200-DMA   1799.23 Buy
STOCH(5,3)   14.503 Sell
MACD(12,26,9)   -27.276 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$22.73/oz and low of US$21.88/oz settled down by 0.357% at US$22.58/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 50DMA (24.30), breakage above will lead to 25.00. MACD is below zero line and histograms are decreasing trend and it will bring bearish stance in the upcoming sessions. RSI is approaching neutral region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, Sell below 22.60-26.80 with stop loss above 26.80; targeting 22.00-21.60-21.20 and 20.50-20.00. Buy silver in between 23.20-21.60, targeting 23.90-24.95-25.65 and 26.05-26.40-26.80 with stop loss should be place on the breakage below 21.50.

 
Intraday  Support Levels
S1     22.60-22.00
S2     21.50
S3     21.20-20.50

Intraday  Resistance Levels
R1     23.20
R2     23.90
R3     24.95-25.65

TECHNICAL INDICATORS
Name   Value Action
14DRSI   32.681 Buy
20-DMA   24.02 Sell
50-DMA   24.00 Sell
100-DMA   24.76 Sell
200-DMA   20.52 Buy
STOCH(5,3)   20.268 Sell
MACD(12,26,9)   -0.4573 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US45.85/bbl, intraday low of US$44.48/bbl and settled down by 0.426% to close at US$45.07/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 40.58 which is a support level and breakage below will call for 40.10. MACD is above zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving positive crossover for confirmation of bullish stance; while the RSI is in neutral region and more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 45.00-42.00 with risk daily closing below 42.00 and targeting 45.90-46.50-47.50 and 48.60-49.30. Sell in between 46.00-49.30 with stop loss at 49.30; targeting 44.60-44.00-43.60 and 43.00-42.50-41.50.

 
Intraday Support Levels
S1     44.60
S2     44.00
S3     43.60-43.00

Intraday Resistance Levels
R1     45.10-45.90
R2     46.50
R3     47.50-48.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.489 Sell
20-DMA   40.98 Buy
50-DMA   40.26 Buy
100-DMA   40.70 Buy
200-DMA   36.60 Buy
STOCH(5,3)   89.130 Buy
MACD(12,26,9)   1.1415 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.1922/EUR, high of US$1.2002/EUR and settled the day down by 0.269% to close at US$1.1926/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1031), which become immediate resistance level, break above will target 1.1090. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.1960-1.1635 with risk below 1.1600, targeting 1.1990-1.2010 and 1.2050-1.2100-1.2150. Sell below 1.1990-1.2110 targeting 1.1960-1.1905-1.1860 and 1.1790-1.1750-1.1710 with stop-loss at daily closing above 1.2010.

 
Intraday Support Levels
S1     1.1950-1.1905
S2     1.1840
S3     1.1790-1.1750

Intraday  Resistance Levels
R1     1.1990-1.2010
R2     1.2050
R3     1.2100-1.2150

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.812 Buy
20-DMA   1.1794 Buy
50-DMA   1.1774 Buy
100-DMA   1.1748 Buy
200-DMA   1.1386 Buy
STOCH(5,3)   55.758 Sell
MACD(12,26,9)   0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3304/GBP, high of US$1.3384/GBP and settled the day down by 0.0217% to close at US$1.3321/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.3134) is become immediate support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in oversold territory and giving negative crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.3400-1.3550 with targets at 1.3340-1.3290-1.3200 and 1.3150-1.3100-1.3020 stop-loss should be 1.3550. Buy above 1.3340-1.2880 with targets 1.3400-1.3450 and 1.3480-1.3550 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.3340-1.3290
S2     1.3250
S3     1.3200-1.3150

Intraday Resistance Levels
R1     1.3400-1.3440
R2     1.3480
R3     1.3550

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

63.539

Buy
20-DMA   1.3132 Sell
50-DMA   1.3005 Buy
100-DMA   1.2988 Buy
200-DMA   1.2717 Buy
STOCH(5,3)   78.940 Buy
MACD(12,26,9)   -0.005 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY103.82/USD and made an intraday high of JPY104.40/USD and settled the day down by % at JPY104.29/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 overbought region and chances of downward are expected based on RSI. MACD is above 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 negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 104.50-108.00 with risk above 108.00 targeting 103.90-103.10-102.50 and 102.00-101.50. Long positions above 103.10-101.00 with targets of 103.90-104.00-106.90 and 107.50-107.90-108.40 with stop below 105.00.

 
Intraday Support Levels
S1     103.90
S2     103.15-102.50
S3     102.05

INTRADAY RESISTANCE LEVELS
R1     104.50-105.00
R2     105.40
R3     105.90-106.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.726 Buy
20-DMA   104.61 Sell
50-DMA   105.11 Sell
100-DMA   105.73 Sell
200-DMA   106.28 Sell
STOCH(9,6)   34.253 Sell
MACD(12,26,9)   -0.099 Sell

AAFX TRADING
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING