AAFX TRADING

Daily Market Lookup

  • The dollar edged a little higher on Tuesday morning in Asia, keeping the momentum from overnight. The surge in COVID-19 cases in the U.S. boosted hopes for more fiscal support, which actually provided some stimulus to the greenback. The U.S. Congress is poised to vote this week on a stopgap funding measure to give lawmakers more time to negotiate an emergency coronavirus stimulus plan. The U.S. government is likely to hammer out a new stimulus deal that could be worth around $908 billion. The new stimulus deal is urgently needed as California imposed new COVID-19 restrictions, under which all but critical infrastructure and retail operations in its worst-hit areas were ordered to shut. A ban on indoor restaurant dining also loomed in New York City. That said, the greenback still hovered at a two and half year low, dragged down by disappointing U.S. jobs data released last Friday. In Asia, the USD/JPY pair added 0.02% to 104.04. Japan’s Prime Minister Yoshihide Suga said Tuesday his adminstration will compile a new COVID-19 economic stimulus package worth JPY73.6 trillion ($708 billion), with fiscal measures at JPY 40 trillion ($385 billion). Chinese foreign trade saw a strong recovery, as data released Monday suggested exports jumped more than 21% from the same month in 2019. Market watchers also paid close attention to renewed U.S.-China tensions, after the U.S. announced sanctions on 14 Chinese officials for the crackdown on Hong Kong.
  • The dollar pushed higher in early European trade Monday, rebounding from multi-year lows as Covid-19 cases continue to mount and lockdowns expand, weighing on the U.S. economic recovery. On Sunday, California Governor Gavin Newsom ordered large parts of the most populous U.S. state to close down again as Covid-19 cases spiked to record levels. California reported more than 30,000 new cases on Sunday, exceeding the state's previous high, and marked a new record for hospitalized Covid-19 patients. New Jersey, North Carolina, Virginia and West Virginia also announced record one-day rises in new infections. This wave of cases is likely hitting the U.S. economic recovery, as evidenced by Friday’s non-farm payrolls growing by 245,000 in November, much lower than October’s rise of 610,000, and the smallest gain recorded since May. However, the gains to the safe haven dollar from this backdrop have been limited, amid growing confidence there will be new fiscal stimulus to boost the U.S. economy as a bipartisan group of lawmakers look to get through a $908 billion bill this week. Additionally, the U.S. Federal Reserve and the European Central Bank meet this week to set policy, with the ECB seen as more likely to ramp up stimulus. Elsewhere, GBP/USD dropped 0.9% to 1.3314, retreating from the two-and-a-half year high of $1.3540 seen on Friday, 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 Leyen are due to hold a call on Monday evening, but these negotiations appear to be going right to the edge amid reports Johnson is prepared to walk away.
  • Oil prices fell on Tuesday, adding to losses from the previous session that came as California tightened its pandemic lockdown through Christmas and coronavirus cases continued to surge in the United States and Europe. Globally, a sharp rise in coronavirus cases has led to a string of renewed lockdowns, including strict measures in the U.S. state of California as well as Germany and South Korea. California on Monday required most of the state to close shop and stay at home under a new order which will last at least three weeks. Government sources in France said the country may have to delay unwinding some lockdown restrictions next week after signs the downward trend in new cases had flattened out after shops were allowed to reopen late last month. Following last week's rally in oil prices on the back of vaccine rollout plans and an agreement by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, to hold back supply increases, analysts said they were closely watching U.S. lawmakers' efforts to approve a new economic stimulus package. The stimulus will be needed to drive jobs growth, and, in turn, energy demand. Data due from the American Petroleum Institute later on Tuesday and from the U.S. government on Wednesday is expected to show that U.S. crude stocks fell last week, while refined product stockpiles rose, according to estimates from five analysts polled by Reuters. The dollar also weighed on commodity prices after rising against a basket of oil. Oil prices fell slightly Tuesday morning in Asia, following the lead of U.S. markets overnight. Oil prices have come under pressure this week by the combined impact of renewed pandemic lockdowns and uncertainty about the long-term outlook of production cuts by the Organization of the Petroleum Exporting Countries and its allies (OPEC+). After some delays, OPEC+ reached a deal last week to continue with production cuts in January, although production will increase slightly. That deal helped reassure investors and pushed oil up by about 2% last week. It is uncertain how long the ongoing production cuts will remain in place. Adding to the concerns, Iran may be getting ready to boost production within three months. Putting more downward pressure on oil prices were news of record-high COVID-19 cases in the U.S. and spikes in places like Germany and South Korea, which spurred new lockdowns and increased fears that demand could plummet in the short term. The rollout of vaccines in the UK and the likelihood that the U.S. would follow suit this week were not enough to reassure investors at the beginning of the week. Oil was also hurt by a breakdown in Brexit talks between the U.K. and the Eurozone as well as news that the U.S. is getting ready to impose sanctions on more than a dozen Chinese officials in relation to their actions in Hong Kong. Investors are now looking forward to crude oil supply data from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
8th December 2020 R1 R2 R3
GOLD-XAU 1,868-1,880 1,890 1,900-1,911
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
8th December 2020 S1 S2 S3
GOLD-XAU 1,860-¬1,849 1.836 1,821-1,805
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 1.1990 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 (8th 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$1868.49/oz and low of US$1821.83/oz. Gold up 1.354% at US$1861.95/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 1860-1805 with risk below 1805, targeting 1868-1880-1890 and 1900-1911. Sell below 1868-1911 keeping stop loss closing above 1911, targeting 1860-1849-1840 and 1821-1805-1790.

 
Intraday Support Levels
S1     1,860-¬1,849
S2     1.836
S3     1,821-1,805
Intraday Resistance Levels
R1     1,868-1,880
R2     1,890
R3     1,900-1,911

Technical Indicators

Name   Value Action
14DRSI  

53.041

Buy
20-DMA   1844.17 Sell
50-DMA  

1878.01

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 Monday made its intraday high of US$24.76/oz and low of US$23.51/oz settled up by 1.342% at US$24.45/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 Monday made an intra‐day high of US46.61/bbl, intraday low of US$45.44/bbl and settled up by 1.199% to close at US$45.70/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 Monday an intraday low of US$1.2077/EUR, high of US$1.2165/EUR and settled the day down by 0.177% to close at US$1.2107/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     1.1990
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 Monday made an intra‐day low of US$1.3223/GBP, high of US$1.3437/GBP and settled the day down by 0.250% to close at US$1.3374/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 Monday made intra‐day low of JPY103.91/USD and made an intraday high of JPY104.30/USD and settled the day down by 0.0768% at JPY104.04/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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