AAFX TRADING

Daily Market Lookup

  • The dollar started the week on the back foot on Monday after soft U.S. jobs data only solidified expectations of a fresh economic package, while the British pound eyed last-ditch trade talks between the United Kingdom and European Union. Friday's U.S. jobs data showed non-farm payrolls increased by 245,000 last month, the smallest gain since May, in a sign the jobs recovery is losing momentum on the third wave of coronavirus infections. Yet traders perceived the data as putting pressure on Washington to pass a new round of stimulus to help the coronavirus-battered economy, keeping overall risk appetite intact and capping the U.S. dollar against riskier currencies. Talks aimed at delivering a fresh infusion of coronavirus relief gathered momentum in the U.S. Congress on Friday, as a bipartisan group of lawmakers worked to put the finishing touches on a $908 billion bill they hope to get through this week The U.S. Federal Reserve is unlikely to rush to ramp up stimulus at its meeting next week, with Chicago Federal Reserve Bank President Charles Evans on Friday saying it would take until springtime to see the effects of a vaccine roll-out and gauge the economic trajectory. The European Central Bank sets policy on Thursday. Chinese policymakers are comfortable with the yuan's rise as the country's economic rebound accelerates and the central bank gives the market greater leeway in setting the currency's value, sources told Reuters. The yuan, also known as the renminbi, moved little after data showing China's exports rose at the fastest pace in nearly three years in November. Sterling traded little changed at $1.3422, stepping back from 2 1/2-year high of $1.3540 touched on Friday as investors looked to talks between Britain and the EU this week to avert a chaotic parting of ways at the end of the year. British Prime Minister Boris Johnson and European Commission President Ursula von der Leyden are due to hold a call on Monday evening in the hope that, by then, differences over fishing rights waters around the United Kingdom, fair competition and ways to solve future disputes will have narrowed.
  • The dollar was down on Monday morning in Asia, starting the week on a down note as disappointing U.S. jobs data raised expectations of fresh economic stimulus measures, and pound investors monitored Brexit trade talks between the U.K. and the European Union. The dollar hit a two and half year low, while the Euro climbed to its highest level since April 2018, during Friday’s session. U.S. jobs data released on Friday disappointed, with manufacturing payrolls increasing by 27,000 in November, lower than both the 43,000 reading in forecasts prepared by Investing.com and October’s 33,000 increase. Non-farm payrolls grew by 245,000, much lower than the forecasted 469,000 and October’s rise of 610,000. It was also the smallest gain recorded since May. The unemployment rate fell to 6.7%, below the forecast 6.8% and October’s 6.9% rate. The data suggested that job recovery is losing speed as the U.S. continues to battle a third wave of COVID-19 cases. However, investors are hopeful that the disappointing data will be a catalyst for Congress to pass the latest round of stimulus measures to aid the economic recovery. Talks over the stimulus measures seemed to gather momentum on Friday, with a bipartisan group of lawmakers working on perfecting their $908 billion bill, which they hope will be passed within the week. Congress has until Dec. 11 to pass the measures to avoid a government shutdown. Meanwhile, Chinese trade data, including exports, imports and the trade balance, is due to be released later in the day. The pound retreated from the two-and-a-half year high of $1.3540 seen on Friday, as all eyes are on the talks between the U.K. and the EU as the end-of-year deadline to reach a deal draws closer. It had seen a fall to $1.3360 earlier, after talks over the weekend stalled over issues such as fishing rights waters around the U.K., fair competition and ways to solve future disputes. British Prime Minister Boris Johnson and European Commission President Ursula von der Leyden are due to speak over the phone later in the day, with hopes that the differences over the issues will have narrowed by then. Some investors remained optimistic, however
  • Oil prices fell on Monday as a continued surge in coronavirus cases globally forced a series of renewed lockdowns, including strict new measures in Southern California in the United States, the world's top oil consume. The restrictions in California call for bars, hair and nail salons and tattoo shops to close again. The southern German region of Bavaria announced on Sunday it would impose a tougher lockdown from Wednesday until Jan. 5, while South Korean authorities heightened social distancing rules for the capital Seoul and surrounding areas that would last until at least the end of the month Also weighing on prices, U.S. energy firms last week added oil and natural gas rigs for the 11th time in 12 weeks as producers return to the wellpad even as most are cutting spending this year and next Iran, meanwhile, has instructed its oil ministry to prepare installations for production and sale of crude oil at full capacity within three months, state media said on Sunday. Still, rapid demand recovery in China and developments in COVID-19 vaccines capped price losses. China's exports in November rose at their fastest pace since February 2018, helped by strong global demand and as the recovery in manufacturing in the world's second-largest economy outpaced those of its major trading partners. Oil prices stumble as corona virus resurgence forces more lockdowns. The restrictions in California will see bars, hair and nail salons and tattoo shops close again. The rising number of cases in South Korea will see the imposition of heightened social distancing rules for Seoul and surrounding areas that will last until at least the end of December. The southern German region of Bavaria said on Sunday that it will impose a tougher lockdown from Wednesday until Jan. 5. The new restrictions increase fears of an oversupply, even after the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed to maintain production cuts at 7.2 million barrels per day (bpd) from January 2021, compared to the current cuts of 7.7 million bpd. Also adding to the fears and dampening prices was producers’ addition of oil and natural gas rigs for the 11th time in 12 weeks, even as most are cutting expenditures during 2020 and 2021. Meanwhile, Iran instructed its oil ministry to prepare installations for production and sale of crude oil at full capacity within three months, state media reported on Sunday.

 

 
Intraday RESISTANCE LEVELS
7th December 2020 R1 R2 R3
GOLD-XAU 1,849 1,860 1,868-1,880
Silver-XAG 24.95 25.65 26.50-27.00
Crude Oil 46.50-47.50 48.00 49.20-50.00
EURO/USD 1.2150 1.2190 1.2240-1.2275
GBP/USD 1.3400-1.3480 1.3520 1.3550-1.3600
USD/JPY 104.50-105.00 105.40 105.90-106.40

Intraday SUPPORTS LEVELS
7th December 2020 S1 S2 S3
GOLD-XAU 1.836-1,821 1,805 1,790-1,781
Silver-XAG 23.90¬-23.20 22.60 22.00-21.50
Crude Oil 45.10-44.60 44.60 44.00-43.60
EURO/USD 1.2100-1.2050 1.1990 1.1950-1.1905
GBP/USD 1.3340 1.3290 1.3250-1.3200
USD/JPY 103.90 103.15 102.50-102.05

Intra-Day Strategy (7th 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 Friday made its intraday high of US$1848.17/oz and low of US$1829.07/oz. Gold up 0.178% at US$1837.09/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 1836-1763 with risk below 1760, targeting 1849-1860 and 1868-1880. Sell below 1849-1880 keeping stop loss closing above 1880, targeting 1840-1821-1805 and 1790-1781.

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

Technical Indicators

Name   Value Action
14DRSI  

47.041

Buy
20-DMA   1843.81 Sell
50-DMA  

1878.32

Sell
100-DMA   1910.98 Sell
200-DMA   1804.92 Buy
STOCH(5,3)   90.503 Sell
MACD(12,26,9)   -17.276 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$24.39/oz and low of US$23.92/oz settled up by 0.569% at US$24.18/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   51.473 Buy
20-DMA   23.90 Sell
50-DMA   24.08 Sell
100-DMA   25.00 Sell
200-DMA   20.68 Buy
STOCH(5,3)   87.268 Buy
MACD(12,26,9)   -0.121 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US46.72/bbl, intraday low of US$45.67/bbl and settled up by 0.934% to close at US$46.12/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     44.60
S3     44.00-43.60

Intraday Resistance Levels
R1     46.50-47.50
R2     48.00
R3     49.20-50.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.216 Sell
20-DMA   43.20 Buy
50-DMA   40.88 Buy
100-DMA   40.98 Buy
200-DMA   36.44 Buy
STOCH(5,3)   70.130 Buy
MACD(12,26,9)   1.547 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.2109/EUR, high of US$1.2176/EUR and settled the day down by 0.197% to close at US$1.2120/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 Friday made an intra‐day low of US$1.3409/GBP, high of US$1.3538/GBP and settled the day up by 0.022% to close at US$1.3437/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 1.3400-1.3600 with targets at 1.3340-1.3290 and 1.3200-1.3150-1.3100 stop-loss should be 1.3550. Buy above 1.3340-1.2880 with targets 1.3400-1.3480-1.3520 and 1.3550-1.3600 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.3340
S2     1.3290
S3     1.3250-1.3200

Intraday Resistance Levels
R1     1.3400-1.3480
R2     1.3520
R3     1.3550-1.3600

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

66.783

Buy
20-DMA   1.3294 Sell
50-DMA   1.3103 Buy
100-DMA   1.3060 Buy
200-DMA   1.2737 Buy
STOCH(5,3)   68.940 Buy
MACD(12,26,9)   0.009 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY103.73/USD and made an intraday high of JPY104.23/USD and settled the day up by 0.45% at JPY104.13/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

AAFX TRADING
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