AAFX TRADING

Daily Market Lookup

  • The dollar has sunk through major support levels and looked set for its worst week in a month on Friday, as its accelerating slide sucked in more short sellers keen to make an easy buck. It has slumped to a nine-month low against the safe-haven yen, even though investors have been gobbling up risky assets all week, and fallen to multi-year lows against the euro, pound, Aussie, kiwi and Canadian dollar. Against a basket of currencies the dollar languished at 89.862 on Friday, just above a 2-1/2-year low hit on Thursday. The dollar index is down 1.2% for the week so far and has fallen 12.7% from a three-year peak in March. Short positions in the dollar stood not far below nine-year highs last week and news in recent days of vaccine rollouts, progress in Brexit trade talks and U.S. stimulus negotiations has only strengthened dollar bears' resolve. Britain and the European Union struck a downbeat tone about the likelihood of an agreement on Thursday, but investors are betting that is yet more brinkmanship and the pound sat comfortably at $1.3554 after hitting a 31-month high overnight. Elsewhere the Norwegian crown zoomed 1.4% higher on Thursday after Norway's central bank said a vaccine-driven recovery could prompt rate hikes early in 2022 or sooner - a move U.S. policymakers are not even beginning to consider yet. The Bank of Japan ends its two-day policy meeting on Friday and is expected to leave rates steady but announce an extension of a package of steps aimed at easing corporate funding strains. A German sentiment survey and U.S. consumer sentiment data are also due later on Friday.
  • The dollar was up on Friday morning in Asia but slid through major support levels and was headed towards its worst week in a month. The dollar was down 1.2% for the week so far and has fallen 12.7% from a three-year peak in March, falling to 89.862, just above a two-and-a-half year low seen on Thursday, earlier in the session. With investors turning to risky assets throughout the week, the dollar saw multi-year lows against the euro, pound, AUD, NZD and Canadian dollar. News about vaccine rollouts, as well as progress on both Brexit trade talks and the latest U.S. stimulus measures only increased bearish sentiment over the past week, after short positions in the dollar shot up to just below nine-year highs during the previous week. Some investors remained pessimistic about the dollar’s prospects. The Bank of Japan will hand down its policy decision during the day, which is widely expected to leave rates steady but announce an extension of a package of steps aimed at easing corporate funding strains. The NZD rose to a two-and-a-half year high of $0.7170 Thursday after New Zealand released better-than-expected national growth data. The country’s GDP grew 14% quarter-on-quarter during the third quarter, exceeding the 13.5% growth in forecasts prepared by Investing.com and the 11% contraction reported for the second quarter. Some investors remained optimistic as the NZD recorded an eighth consecutive week of growth, the longest run of weekly rises in three years. The pound was slightly down from the 31-month high overnight as both the U.K. and European Union expressed doubt that an agreement could be reached for their post-Brexit trade deal. However, some investors were betting that the warnings are just more brinkmanship on the way to a deal. The euro was headed towards a high of $1.2556 not seen since 2018 and was trading at $1.2254 after minor profit taking on Friday.The common currency has added nearly 3% in the three weeks after pushing through stiff resistance at $1.2000. Elsewhere in Europe, the Norwegian crown surged 1.4% higher on Thursday. Norges Bank kept interest rates unchanged in its policy decision handed down on the same day, but said that a COVID-19 vaccine-driven economic recovery could prompt rate hikes early in 2022 or even sooner.
  • Oil prices eased on Friday but stayed within touching distance of nine-month highs hit in the previous session as soaring COVID-19 cases weigh on fuel demand and U.S. lawmakers battle over a $900 billion economic stimulus package. More than 73.65 million people have been reported to be infected by the novel coronavirus globally and 1,654,920 have died, according to a Reuters tally on Friday. The spike in cases is leading to tough restrictions on travel, weighing on near-term fuel demand and market sentiment, analysts said. Both contracts had climbed on Thursday, on optimism around progress on a COVID-19 relief bill, strong Asian refining demand and a slide in the U.S. dollar to a two-and-a-half year low. With oil priced in dollars, a weaker greenback makes oil cheaper in other currencies. Analysts said risk appetite was still growing with the prospect of an imminent U.S. stimulus deal, which would help fuel demand, but lawmakers had yet to reach an agreement late on Thursday. The continued rollout of vaccines is also helping protect the market from steep falls. The U.S. Food and Drug Administration was expected to grant emergency use authorisation for Moderna (NASDAQ:MRNA) Inc's coronavirus vaccine after emergency use was endorsed by an independent panel. ANZ Research said with U.S. COVID-19 infections hitting new daily records, and restrictions tightening in Japan, pressure is growing on the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies, together called OPEC+. OPEC+ plans to add 500,000 barrels per day of supply to the market in January, in the first step toward returning 2 million bpd to the market. The rising number of COVID-19 cases globally and tighter restrictions in some countries such as Japan, pressure to limit oil supply on the Organization of the Petroleum Exporting Countries (OPEC) and allies, or OPEC+, is growing, according tp ANZ Research. OPEC+ is currently planning to add 500,000 barrels per day (bpd) of supply to the market from January onwards, the first step towards returning 2 million bpd to the market.

 

 
Intraday RESISTANCE LEVELS
18th December 2020 R1 R2 R3
GOLD-XAU 1,881-1,890 1,905 1,918-1,931
Silver-XAG 26.05 26.50 27.00-27.65
Crude Oil 49.20-50.00 50.40 50.90-51.50
EURO/USD 1.2275 1.2350 1.2400-1.2475
GBP/USD 1.3610-1.3660 1.3710 1.3800
USD/JPY 103.80-104.50 105.00 105.40-105.90

Intraday SUPPORTS LEVELS
18th December 2020 S1 S2 S3
GOLD-XAU 1,868-1,860 1,849 1.830-1,821
Silver-XAG 25.65-24.95 24.50 23.90-23.20
Crude Oil 48.00-47.50 46.50 45.10-44.60
EURO/USD 1.2190-1.2150 1.2090 1.2050-1.1990
GBP/USD 1.3540-1.3470 1.3400 1.3340-1.3300
USD/JPY 103.15-102.50 102.05 101.60-101.20

Intra-Day Strategy (18th 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 Thursday made its intraday high of US$1896.15/oz and low of US$1860.40.64/oz. Gold up 1.331% at US$1885.18/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 1849-1796 with risk below 1796, targeting 1868-1880 and 1890-1900. Sell below 1868-1900 keeping stop loss closing above 1900, targeting 1850-1829-1821 and 1811-1796-1790.

 
Intraday Support Levels
S1     1,868-1,860
S2     1,849
S3     1.830-1,821
Intraday Resistance Levels
R1     1,881-1,890
R2     1,905
R3     1,918-1,931

Technical Indicators

Name   Value Action
14DRSI  

54.041

Buy
20-DMA   1833.19 Sell
50-DMA  

1871.78

Sell
100-DMA   1905.27 Sell
200-DMA   1812.19 Buy
STOCH(5,3)   85.503 Buy
MACD(12,26,9)   -6.276 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$26.09/oz and low of US$25.14/oz settled up by 2.754% at US$26.00/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 26.05-27.70 with stop loss above 27.70; targeting 24.95-24.50-23.90 and 23.20-22.00-21.60. Buy silver in between 25.50-21.60, targeting 26.05-26.50-26.80 and 27.00-27.65 with stop loss should be place on the breakage below 27.65.

 
Intraday  Support Levels
S1     25.65-24.95
S2     24.50
S3     23.90-23.20

Intraday  Resistance Levels
R1     26.05
R2     26.50
R3     27.00-27.65

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.473 Buy
20-DMA   23.92 Sell
50-DMA   24.11 Sell
100-DMA   25.04 Sell
200-DMA   20.76 Buy
STOCH(5,3)   67.268 Sell
MACD(12,26,9)   0.035 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US48.77/bbl, intraday low of US$47.98/bbl and settled up by 0.957% to close at US$48.52/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 45.74 which is a support level and breakage below will call for 45.74. 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 48.00-44.00 with risk daily closing below 44.00 and targeting 49.30-50.00-50.40 and 50.90-51.50. Sell in between 49.20-51.30 with stop loss at 51.30; targeting 48.50-47.50-46.60 and 45.10-44.60-44.00.

 
Intraday Support Levels
S1     48.00-47.50
S2     46.50
S3     45.10-44.60

Intraday Resistance Levels
R1     49.20-50.00
R2     50.40
R3     50.90-51.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   72.216 Sell
20-DMA   45.74 Buy
50-DMA   42.20 Buy
100-DMA   41.50 Buy
200-DMA   36.68 Buy
STOCH(5,3)   97.130 Buy
MACD(12,26,9)   1.547 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.2189/EUR, high of US$1.2272/EUR and settled the day up by 0.403% to close at US$1.2266/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2050), which become immediate resistance level, break above will target 1.1990. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in overbought region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.2190-1.1840 with risk below 1.1800, targeting 1.2240-1.2275-1.2350 and 1.2400-1.2475. Sell below 1.2240-1.2475 targeting 1.2190-1.2150-1.2090 and 1.2050-1.1990-1.1960 with stop-loss at daily closing above 1.2475.

 
Intraday Support Levels
S1     1.2190-1.2150
S2     1.2090
S3     1.2050-1.1990

Intraday  Resistance Levels
R1     1.2275
R2     1.2350
R3     1.2400-1.2475

TECHNICAL INDICATORS
Name   Value Action
14DRSI   73.812 Buy
20-DMA   1.2050 Buy
50-DMA   1.1891 Buy
100-DMA   1.1473 Buy
200-DMA   1.1473 Buy
STOCH(5,3)   89.758 Buy
MACD(12,26,9)   0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3494/GBP, high of US$1.3623/GBP and settled the day up by 0.547% to close at US$1.3581/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 in between 1.3600-1.3710 with targets at 1.3540-1.3470-1.3400 and 1.3340-1.3290-1.3200 stop-loss should be 1.37. Buy above 1.3540-1.3290 with targets 1.3600-1.3660 and 1.3710-1.3800 with stop loss closing below 1.3290.

 
Intraday Support Levels
S1     1.3540-1.3470
S2     1.3400
S3     1.3340-1.3300

Intraday Resistance Levels
R1     1.3610-1.3660
R2     1.3710
R3     1.3800

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

53.783

Buy
20-DMA   1.3317 Sell
50-DMA   1.3133 Buy
100-DMA   1.3080 Buy
200-DMA   1.2746 Buy
STOCH(5,3)   68.940 Buy
MACD(12,26,9)   0.009 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY102.88/USD and made an intraday high of JPY103.55/USD and settled the day down by 0.367% at JPY103.07/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 103.80-108.00 with risk above 108.00 targeting 103.15-102.50-102.05 and 101.60-101.20. Long positions above 103.10-101.00 with targets of 103.80-104.50-105.00 and 105.40-105.90- with stop below 105.00.

 
Intraday Support Levels
S1     103.15-102.50
S2     102.05
S3     101.60-101.20

INTRADAY RESISTANCE LEVELS
R1     103.80-104.50
R2     105.00
R3     105.40-105.90

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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