AAFX TRADING

Daily Market Lookup

  • The dollar was down on Thursday morning in Asia, with investors retreating from the safe-haven greenback and turning to the pound over expectations of an imminent Brexit deal that could help the U.K. avoid a turbulent economic rupture come Jan. 1. The index has lost more than 6% during 2020 over investor bets that the U.S. Federal Reserve will maintain an accommodative monetary policy and expectations of more fiscal stimulus in 2021 to aid economic recovery from COVID-19. Some investors forecast that an expected further decline in the greenback will boost stock markets and emerging-market currencies. A Brexit agreement will protect some $1 trillion in annual cross-channel trade between the U.K. and the European Union (EU) from tariffs and quotas. Although no official announcement of the deal has been issued by either side, with negotiations still “going through the details” and no final agreement confirmed yet, the agreement will reportedly be announced later in the day. U.K. Prime Minister Boris Johnson is reportedly ready to reach a deal with the EU, and there were reports that a deal had already been reached. Some investors were positive about the prospects for a deal, even as warnings that talks were still under way were issued. However, the note was cautious about the pound’s prospects even if a deal does transpire Brexit expectations helped to overshadow U.S. President Donald Trump’s demands to a COVID-19 aid bill, which he termed “a disgrace”, that was passed by both the House of Representatives and the Senate earlier in the week.
  • The pound surged on Wednesday on reports the UK and EU have clinched a Brexit deal after a nine months of negotiations. The UK and EU have reached an agreement on a post-Brexit trade deal and are in the process of finalizing the legal text of the accord to present to EU members. The Daily Mail's Jason Groves, citing sources, said a last-minute collapse was "highly unlikely," with UK Prime Minister Boris Johnson said to be weighing up whether to announce a deal on Wednesday or Thursday. There is mounting pressure to wrap up the deal by Thursday to allow enough time to get it ratified before the end of the transition deadline on Dec. 31. But full ratification by Jan. 1 is unlikely amid a lack of time for EU members to scrutinize the deal. The accord, would, however, be applied on a provisional basis, with EU members voting later in the month, according to media reports. The deal has been long in the making, with both sides choosing to kick the can down until the last minute. The UK and EU started talks on a post-Brexit deal on Feb 1, a day after the UK officially withdrew from the EU. Market participants piled into sterling amid numerous reports that the announcement of a deal was imminent. The bill needs to be signed by Trump in order to become law, and his reticence threatens a government shutdown after the Christmas holidays.
  • Sterling extended gains on Thursday amid expectations a long-elusive Brexit deal was imminent, raising hopes the UK can avoid a turbulent economic rupture on New Year's Day. The dollar was on the back foot in holiday-thinned trading as hopes for an agreement that would protect some $1 trillion in annual cross-channel trade from tariffs and quotas sapped demand for the safest assets. While there has been no official confirmation from either side that the months of negotiations had reached a conclusion, a senior British government source said Prime Minister Boris Johnson was poised to do a trade deal with the EU, after media reports said the agreement had already been done. A source at the EU's executive Commission said talks were still under way, and another British government source was also cautious, saying negotiations were ongoing. The Brexit headlines overshadowed U.S. President Donald Trump's demand for changes to a coronavirus aid bill, effectively threatening a government shutdown next week. The yen, another haven currency, was little changed at 103.56 per dollar. Bank of Japan Governor Haruhiko Kuroda said Thursday the central bank is ready to take new steps to make its massive monetary easing more effective and sustainable. The dollar index has lost more than 6% this year as investors bet the U.S. Federal Reserve will keep its monetary policy ultra-accommodative and fiscal stimulus will speed an economic recovery in 2021. Expectations for further declines by the dollar are helping buoy stock markets and emerging-market currencies.
  • Oil climbed for a second day on Thursday in light holiday trade as a drawdown in U.S. stockpiles of crude and gasoline raised demand hopes, while hints of an imminent Brexit deal raised investors' risk appetite. U.S. crude inventories fell by 562,000 barrels in the week to Dec. 18 to 499.5 million barrels, the Energy Information Administration said on Wednesday. Gasoline stocks fell by a surprise 1.1 million barrels to 237.8 million barrels, the EIA said, while distillate stockpiles fell by a more-than-expected 2.3 million barrels to 148.9 million barrels. Oil prices also drew support from news that Britain and the European Union were on the cusp of striking a narrow trade deal on Thursday, swerving away from a chaotic finale to the Brexit split. The potential deal boosted sterling, which was up 0.2% against the dollar after closing up 0.9%. A softer dollar makes commodities priced in the greenback more affordable for holders of other currencies. At least four drugmakers expect their COVID-19 vaccines will be effective against the new fast-spreading variant of the virus that is raging in Britain and are performing tests that should provide confirmation in a few weeks. Still, some investors remain jittery about the recovery of oil demand as Americans were warned again not to travel for Christmas as the latest surge in cases overwhelmed hospitals. On the supply side, U.S. energy firms this week added oil and natural gas rigs for a fifth week in a row. The oil and gas rig count, an early indicator of future output, rose 2 to 348 in the week to Dec. 23, energy services firm Baker Hughes Co said. Wednesday’s data from the U.S. EIA showed a draw of 562,000 barrels in U.S. crude oil supply for the week to Dec. 18. The draw was smaller than the 3.186-million-barrel draw in forecasts prepared by Investing.com, as well as the previous week’s draw of 3.135 million barrels. The EIA data follows the American Petroleum Institute’s report of a 2.7-million-barrel build in U.S. crude oil supply the day before. News that the U.K. and the European Union (EU) were close to sealing a Brexit agreement, moving away from the chaotic finale anticipated on Jan. 1, also boosted the black liquid’s prices. The dollar was also weaker on Thursday, makes commodities priced in the greenback more affordable for holders of other currencies. However, some investors remained jittery about fuel demand as the new B.1.1.7 strain of the COVID-19 virus continues to spread across the U.K. and Prime Minister Boris Johnson has imposed tougher restrictions across England. Americans were warned again not to travel for Christmas as the country deals with the latest surge of COVID-19 cases.

 

 
Intraday RESISTANCE LEVELS
24th 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 48.50-49.30 50.00 50.40-51.00
EURO/USD 1.2245-1.2275 1.2350 1.2400-1.2475
GBP/USD 1.3590-1.3670 1,3710 1,3800
USD/JPY 103.80-104.50 105.00 105.40-105.90

Intraday SUPPORTS LEVELS
24th December 2020 S1 S2 S3
GOLD-XAU 1,860-1,849 1,836 1,830-1,817
Silver-XAG 25.60-24.95 24.50 24.10-23.70
Crude Oil 48.00-47.00 46.45 45.90-45.10
EURO/USD 1.2170-1.2140 1.2090 1.2050-1.1990
GBP/USD 1.3540-1.3470 1.3400 1.3340-1.3240
USD/JPY 103.15-102.50 102.05 101.60-101.20

Intra-Day Strategy (24th 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$1878.48/oz and low of US$1856.73/oz. Gold down 1.331% at US$1872.01/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 1860-1817 with risk below 1849, targeting 1881-1890-1905 and 1918-1931-1940. Sell below 1881-1956 keeping stop loss closing above 1956, targeting 1860-1849-1836 and 1830-1817.

 
Intraday Support Levels
S1     1,860-1,849
S2     1,836
S3     1,830-1,817
Intraday Resistance Levels
R1     1,881-1,890
R2     1,905
R3     1,918-1,931

Technical Indicators

Name   Value Action
14DRSI  

61.041

Buy
20-DMA   1838.19 Sell
50-DMA  

1870.78

Sell
100-DMA   1903.27 Sell
200-DMA   1815.19 Buy
STOCH(5,3)   88.503 Buy
MACD(12,26,9)   -6.276 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$25.78/oz and low of US$25.04/oz settled down by 1.351% at US$25.50/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 in between 25.60-28.00 with stop loss above 28.90; targeting 24.95-24.50 and 24.05-23.70. Buy silver in between 25.50-23.70, targeting 26.05-26.50-27.05 and 27.65-28.00-28.50 with stop loss should be place on the breakage below 24.60.

 
Intraday  Support Levels
S1     25.60-24.95
S2     24.50
S3     24.10-23.70

Intraday  Resistance Levels
R1     26.05
R2     26.50
R3     27.00-27.65

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.473 Buy
20-DMA   24.37 Sell
50-DMA   24.28 Sell
100-DMA   25.11 Sell
200-DMA   21.21 Buy
STOCH(5,3)   90.268 Sell
MACD(12,26,9)   0.480 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US48.49/bbl, intraday low of US$46.16/bbl and settled up by 2.67% to close at US$48.04/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 48.00-44.60 with risk daily closing below 44.60 and targeting 48.50-49.30 and 50.00-50.40-51.00. Sell in between 48.50-51.30 with stop loss at 51.30; targeting 48.00-47.50-46.45 and 45.90-45.10-44.60.

 
Intraday Support Levels
S1     48.00-47.00
S2     46.45
S3     45.90-45.10

Intraday Resistance Levels
R1     48.50-49.30
R2     50.00
R3     50.40-51.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.216 Sell
20-DMA   46.44 Buy
50-DMA   42.67 Buy
100-DMA   41.71 Buy
200-DMA   36.93 Buy
STOCH(5,3)   58.130 Buy
MACD(12,26,9)   1.555 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday an intraday low of US$1.2153/EUR, high of US$1.2220/EUR and settled the day up by 0.192% to close at US$1.2183/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 and 1.2350-1.2400-1.2475. 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     1.2170-1.2140
S2     1.2090
S3     1.2050-1.1990

Intraday  Resistance Levels
R1     1.2245-1.2275
R2     1.2350
R3     1.2400-1.2475

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.812 Buy
20-DMA   1.2107 Buy
50-DMA   1.1919 Buy
100-DMA   1.1859 Buy
200-DMA   1.1490 Buy
STOCH(5,3)   76.758 Buy
MACD(12,26,9)   0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3346/GBP, high of US$1.3570/GBP and settled the day up by 0.975% to close at US$1.3486/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 1.3470-1.3540 with targets at 1.3400-1.3340-1.3240 and 1.3200-1.3140-1.3115 stop-loss should be 1.3540. Buy above 1.3400-1.3150 with targets 1.3470-1.3540 and 1.3600-1.3670 with stop loss closing below 1.3100.

 
Intraday Support Levels
S1     1.3540-1.3470
S2     1.3400
S3     1.3340-1.3240

Intraday Resistance Levels
R1     1.3590-1.3670
R2     1,3710
R3     1,3800

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

61.783

Buy
20-DMA   1.3409 Sell
50-DMA   1.3240 Buy
100-DMA   1.3128 Buy
200-DMA   1.2800 Buy
STOCH(5,3)   66.940 Buy
MACD(12,26,9)   0.009 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY103.34/USD and made an intraday high of JPY103.64/USD and settled the day down by 0.0955% at JPY103.52/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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