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Daily Market Lookup

  • The dollar continues to lack friends in early European trade Thursday, with optimism over the rollout of vaccines and talk of new U.S. fiscal stimulus prompting risk-on trades. EUR/USD climbed 0.1% to 1.2124, at levels not seen since April 2018, even with the European Central Bank widely expected to enhance its quantitative easing next week. Optimism over U.S. stimulus talks and bets on a successful roll-out of vaccines are leading traders to take bets on global growth and thus riskier currencies at the expense of the safe haven dollar, the world’s reserve currency, particularly with the Federal Reserve committed to keeping rates low for years. This move lower in the dollar has occurred despite the latest employment data showing a slowdown in the jobs recovery, with Wednesday’s monthly ADP report showing private payrolls grew at their slowest pace since July in November. Weekly initial jobless claims data will be studied later Thursday to see if they provide a similar picture ahead of Friday’s official employment report. Sterling received a boost Wednesday as the U.K. approved a Covid-19 vaccine developed by Pfizer (NYSE:PFE) and BioNTech and said it would start vaccinating those most at risk early next week. However, the focus remains on the Brexit trade deal talks. France warned Wednesday it could veto a trade deal between the U.K. and the European Union if it doesn’t like the terms of the deal, an intervention that puts pressure on EU negotiator Michel Barnier not to give too much ground. Over the past month, the number of short bets against sterling has increased, according to data by the U.S. Commodity Futures Trading Commission, suggesting the downside potential is quite large, should the two sides fail to agree a deal.
  • The dollar was up on Thursday morning in Asia, reversing its earlier downward trend even as the possibility of U.S. economic stimulus measures and the first approval of a COVID-19 vaccine increased investors’ risk appetites. Although Republicans and Democrats in Congress have yet to reach agreement over the latest stimulus measures’ price tag, investors remained optimistic that a $908 billion bipartisan proposal is slowly gaining traction. Congress has until Dec. 11 to pass the $1.4 trillion budget or risk a government shutdown, adding a big incentive to reach a deal before the deadlineThe news helped to give the euro a boost, despite expectations that the European Central Bank (ECB) will enhance its quantitative easing when it convenes for its monetary policy meeting on Dec. 10. The AUD saw a 26-month high overnight as investors digested Wednesday’s positive data, including GDP, that showed that the Australian economy saw a stronger-than-expected bounce back in the third quarter. Investors are also looking at the offshore yuan, which saw a two and a half year high in November and continues to maintain its strength over expectations that U.S. President-elect Joe Biden’s administration will be more conducive to Chinese economic growth. The pound was hovering near a three-month high, after trading unevenly during the previous session as Brexit talks between the U.K. and the European Union (EU) reach "a make-or-break moment", according to chief EU chief Brexit negotiator Michel Barnier. Envoys from EU member states also urged Barnier not to be rushed into an unsatisfactory agreement, even as the year-end deadline to reach a consensus looms closer. The talks reportedly remain stalled, as they have been for the past few months, over issues such as fishing rights in U.K. waters, ensuring fair competition guarantees and ways to solve future disputes.
  • Oil was up on Thursday morning in Asia, even as oil producers including Russia and Saudi Arabia remained deadlocked over the extension of production cuts, and the U.S. saw a smaller-than expected draw in crude oil supply. Saudi Arabia and Russia locked horns over whether production cuts of 7.7 million barrels per day, implemented earlier in the year, should be extended due to poor fuel demand due to COVID-19. The Organization of the Petroleum Exporting Countries (OPEC) and allies (OPEC+) is set to resume discussions on the matter at the full ministerial meeting due to take place later in the day. The meeting, delayed from the originally scheduled date after earlier talks saw no consensus on the cuts, will see the cartel set policies for 2021 as well. OPEC+ is expected to roll over the cuts until March 2021 at least during Thursday’s meeting. However, with a slew of positive COVID-19 vaccine news driving a rally in oil prices at the end of November, OPEC leader Saudi Arabia took the lead in questioning the need for tighter production cuts. The questions are only likely to get louder after the U.K.’s Medicines and Healthcare products Regulatory Agency approved BNT162b2, the vaccine candidate jointly developed by BioNTech SE (F:22UAy) and Pfizer Inc (NYSE:PFE), on Wednesday. Delegates themselves also seemed divided on whether this consensus could be reached, with an OPEC delegate telling Reuters, “things are heading towards a compromise,” while two other sources said more talks were needed. Meanwhile, data from the U.S. Energy Information Administration showed a 679,000-barrel draw in U.S. crude oil supplies for the week ending Nov. 27. The draw was smaller than the 2.358-million-barrel draw in forecasts prepared by Investing.com and the previous week’s 754,000-million-barrel draw. Gasoline stocks increased by 3.5 million barrels, while distillate inventories were up by 3.2 million barrels. Adding to international supplies, Venezuela's crude exports almost doubled last month, according to data from the state-run PDVSA and Refinitiv Eikon.Data released by the American Petroleum Institute on Tuesday showed a 4.146-million-barrel build. Outside the U.S. data from Venezuela’s state-run Petróleos de Venezuela, S.A (PDVSAO) and Refinitiv Eikon showed that Venezuela’s crude exports almost doubled in November, adding to worries of an oversupply.

 

 
Intraday RESISTANCE LEVELS
3rd December 2020 R1 R2 R3
GOLD-XAU 1.836-1,849 1,860 1,868-1,880
Silver-XAG 24.95 25.65 26.50-27.00
Crude Oil 45.90-46.50 47.50 48.00-49.20
EURO/USD 1.2150 1.2190 1.2240-1.2275
GBP/USD 1.3440-1.3480 1.3520 1.3550-1.3600
USD/JPY 104.50-105.00 105.40 105.90-106.40

Intraday SUPPORTS LEVELS
3rd December 2020 S1 S2 S3
GOLD-XAU 1,821-1,805 1,790 1,781-1,770
Silver-XAG 23.90¬-23.20 22.60 22.00-21.50
Crude Oil 45.10¬-44.60 44.00 43.60-43.00
EURO/USD 1.2100-1.2050 1.1990 1.1950-1.1905
GBP/USD 1.3400-1.3340 1.3290 1.3250-1.3200
USD/JPY 103.90 103.15 102.50-102.05

Intra-Day Strategy (3rd 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 Wednesday made its intraday high of US$1832.31/oz and low of US$1807.36/oz. Gold up 0.838% at US$1830.28/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 1821-1763 with risk below 1760, targeting 1836-1849-1860 and 1868-1880. Sell below 1836-1880 keeping stop loss closing above 1880, targeting 1821-1805-1790 and 1781-1770.

 
Intraday Support Levels
S1     1,821-1,805
S2     1,790
S3     1,781-1,770
Intraday Resistance Levels
R1     1.836-1,849
R2     1,860
R3     1,868-1,880

Technical Indicators

Name   Value Action
14DRSI  

45.041

Buy
20-DMA   1849.81 Sell
50-DMA  

1879.32

Sell
100-DMA   1909.98 Sell
200-DMA   1801.92 Buy
STOCH(5,3)   94.503 Sell
MACD(12,26,9)   -22.276 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$24.31/oz and low of US$25.53/oz settled up by 0.296% at US$24.05/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 24.95-26.80 with stop loss above 26.80; targeting 23.90-23.20-22.00 and 21.60-21.20-20.50. Buy silver in between 23.90-21.60, targeting 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     23.90¬-23.20
S2     22.60
S3     22.00-21.50

Intraday  Resistance Levels
R1     24.95
R2     25.65
R3     26.50-27.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.473 Buy
20-DMA   23.97 Sell
50-DMA   24.04 Sell
100-DMA   24.90 Sell
200-DMA   20.61 Buy
STOCH(5,3)   90.268 Buy
MACD(12,26,9)   -0.2144 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US45.95/bbl, intraday low of US$43.98/bbl and settled down by 1.299% to close at US$44.98/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 45.10-42.00 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     45.10¬-44.60
S2     44.00
S3     43.60-43.00

Intraday Resistance Levels
R1     45.90-46.50
R2     47.50
R3     48.00-49.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.489 Sell
20-DMA   42.75 Buy
50-DMA   40.75 Buy
100-DMA   40.92 Buy
200-DMA   36.44 Buy
STOCH(5,3)   41.130 Buy
MACD(12,26,9)   1.1415 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday an intraday low of US$1.2039/EUR, high of US$1.2117/EUR and settled the day down by 1.1942% to close at US$1.2112/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 12100-1.1840 with risk below 1.1800, targeting 1.2150-1.2190 and 1.2240-1.2275. Sell below 1.2150-1.2275 targeting 1.2050-1.1990-1.1960 and 1.1905-1.1860 1.1790 with stop-loss at daily closing above 1.2275.

 
Intraday Support Levels
S1     1.2100-1.2050
S2     1.1990
S3     1.1950-1.1905

Intraday  Resistance Levels
R1     1.2150
R2     1.2190
R3     1.2240-1.2275

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.812 Buy
20-DMA   1.1898 Buy
50-DMA   1.1794 Buy
100-DMA   1.1494 Buy
200-DMA   1.1426 Buy
STOCH(5,3)   97.758 Buy
MACD(12,26,9)   0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3264/GBP, high of US$1.3440/GBP and settled the day up by 0.350% to close at US$1.3364/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 1.3440-1.3600 with targets at 1.3400-1.3340-1.3290 and 1.3200-1.3150-1.3100 stop-loss should be 1.3550. Buy above 1.3400-1.2880 with targets 1.3440- 1.3480-1.3520 and 1.3550-1.3600 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.3400-1.3340
S2     1.3290
S3     1.3250-1.3200

Intraday Resistance Levels
R1     1.3440-1.3480
R2     1.3520
R3     1.3550-1.3600

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

67.443

Buy
20-DMA   1.3268 Sell
50-DMA   1.3076 Buy
100-DMA   1.3043 Buy
200-DMA   1.2732 Buy
STOCH(5,3)   69.940 Buy
MACD(12,26,9)   -0.005 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY104.21/USD and made an intraday high of JPY104.74/USD and settled the day up by 0.108% at JPY104.40/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 and 102.50-102.00. Long positions above 104.00-101.00 with targets of 105.00-106.90 and 107.50-107.90-108.40 with stop below 105.00.

 
Intraday Support Levels
S1     103.90
S2     103.15
S3     102.50-102.05

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.307 Buy
20-DMA   104.40 Sell
50-DMA   105.36 Sell
100-DMA   105.36 Sell
200-DMA   106.45 Sell
STOCH(9,6)   57.253 Sell
MACD(12,26,9)   -0.199 Sell

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