AAFX TRADING

Daily Market Lookup

  • The dollar largely shrugged off President Donald Trump's decision to relent on a threat to block a COVID-19 aid bill in thin trading on Monday with many investors on holiday. The pound hovered below a 2-1/2-year high in the Asian session following the agreement last week of a narrow Brexit trade deal that does not cover Britain's financial sector. Trump signed into law the $2.3 trillion pandemic aid and spending package, averting a partial federal government shutdown that would have started Tuesday. Earlier he had cryptically tweeted, "Good news on Covid Relief Bill. Information to follow!" He had previously demanded an increase in stimulus checks for struggling Americans to $2,000 from $600. The euro was little changed at $1.2216, near the 2 1/2-year high of $1.2273 touched this month. While last week's Brexit deal came as a relief to investors, the bare-bones nature of the pact leaves Britain far more detached from the EU, analysts say, suggesting the discount that has dogged UK assets since 2016 will not vanish soon. Brussels has made no decision yet on whether to grant Britain access to the bloc's financial market. The yuan creeped up after China's central bank lifted its official guidance level to the highest in 30 months. Policymakers at Japan's central were divided on how far they should go in examining yield curve control with some calling for a comprehensive review of the framework, a summary of opinions voiced at the December rate review showed on Monday.
  • The pound hovered below a 2-1/2-year high on Friday after Britain and the European Union struck a narrow Brexit trade deal, while overall sentiment in currency markets was tempered by a stalled U.S. coronavirus economic relief package. The sterling last stood at $1.3549, having failed to rise above its 2-1/2-year high of $1.3625 hit last week Britain clinched a Brexit trade deal with the EU, just seven days before it exits the world's biggest trading bloc. Against the euro, the pound fetched 89.80 pence per euro, after scaling a three-week high of 89.54 on Thursday. While the Brexit deal will preserve Britain's zero-tariff and zero-quota access to the bloc's single market and avoid a damaging "no-deal" exit, it does not cover the nation's much larger and influential finance sector. And, Brussels has made no decision yet on whether to grant Britain access to the bloc's financial market. While the deal was a relief to every market player, the bare-bones nature of the pact leaves Britain far more detached from the EU, analysts say, suggesting the discount that has dogged UK assets since 2016 will not vanish soon. Also hindering the UK economy in the near-term, the prevalence of COVID-19 cases in England jumped, with one in every 85 people infected in the latest week as a new infectious strain of virus rages in the south east of the country. The U.S. dollar was hemmed in tight range as a standoff on a $2.3 trillion coronavirus in Washington continued and raised the prospect of a partial government shutdown.
  • Oil pared some of its losses from earlier on Monday after U.S. President Donald Trump signed a $2.3 trillion coronavirus aid and spending package but lingering worries about near-term demand weighed on market sentiment. The U.S. president's move was cheered as it would restore unemployment benefits to millions of Americans and avert a federal government shutdown. But a new highly infectious variant of the coronavirus, which was first seen in Britain and has now been detected in several other countries, has led to mobility restrictions being reimposed, fuelling concern over demand recovery. The oil market would be taking cues from the virus situation as it develops in coming days, market watchers said. Oil was down on Monday morning in Asia, with continuing fuel demand worries overshadowing news that U.S. President Donald Trump signed off on the latest stimulus measures. Last week, the black liquid posted its first weekly loss since October as the B.1.1.7 strain of COVID-19, alongside the discovery of a second mutant strain of the virus possibly originating from South Africa, raised the possibility of more countries imposing lockdowns. England has already imposed tighter restrictions throughout most of the country to curb the spread of both strains, while China added itself to the list of countries suspending passenger flights to the U.K. The U.S. is also bracing for a post-Christmas surge of COVID-19 cases However, news that Trump has reportedly singed the $2.3 trillion pandemic aid and spending package, thus averting a partial federal government shutdown, boosted investor sentiment. The package was approved by both the House of Representatives and the Senate during the previous week, and Trump had threatened to withhold his signature as he fought to increase the amounts on the stimulus checks in the package. Oil is ending 2020 on a sour note, as the short-term demand risk of more lockdowns and travel restrictions outweighs both the stimulus news and optimism as COVID-19 vaccines are rolled out. The Organization of Petroleum Exporting Countries and allies, also known as OPEC+, will also ease production curbs currently in place by 500,000 barrels per day from January onwards. The pessimism is reflected on crude’s futures curve. Brent futures’ prompt timespread is 6 cents a barrel in contango and the spread was as much as 13 cents in backwardation earlier in the month. Trump has also raised geopolitical tensions in the Middle East, accusing Iran of being responsible for Sunday’s rocket attack near the U.S. embassy in Baghdad. The Iranian Foreign Ministry has denied the claims. Meanwhile, Iranian Oil Minister Bijan Namdar Zanganeh said earlier in the month that Iran plans to double its production in 2021. The move clashes with OPEC+ efforts to increase supply gradually and avoid an oversupply in the market.

 

 
Intraday RESISTANCE LEVELS
28th December 2020 R1 R2 R3
GOLD-XAU 1,890 1,905 1,918-1,931
Silver-XAG 26.50-27.00 27.30 27.65-28.00
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
28th December 2020 S1 S2 S3
GOLD-XAU 1,878-1,860 1,849 1,836-1,830
Silver-XAG 26.05-25.60 24.95 24.50-24.10
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 (28th 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$1883.32/oz and low of US$1869.43/oz. Gold up 0.3589% at US$1878.97/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 1878-1817 with risk below 1817, targeting 1890-1905 and 1918-1931-1940. Sell below 1890-1956 keeping stop loss closing above 1956, targeting 1878-1860-1849 and 1836-1830.

 
Intraday Support Levels
S1     1,878-1,860
S2     1,849
S3     1,836-1,830
Intraday Resistance Levels
R1     1,890
R2     1,905
R3     1,918-1,931

Technical Indicators

Name   Value Action
14DRSI  

61.041

Buy
20-DMA   1851.19 Buy
50-DMA  

1867.81

Buy
100-DMA   1897.27 Sell
200-DMA   1823.45 Buy
STOCH(5,3)   43.503 Buy
MACD(12,26,9)   -6.276 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$25.89/oz and low of US$25.40/oz settled up by 1.106% at US$25.75/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 26.60-28.00 with stop loss above 28.90; targeting 26.05-25.60-24.95 and 24.50-24.05-23.70. Buy silver in between 25.60-23.70, targeting 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     26.05-25.60
S2     24.95
S3     24.50-24.10

Intraday  Resistance Levels
R1     26.50-27.00
R2     27.30
R3     27.65-28.00

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 Friday made an intra‐day high of US48.61/bbl, intraday low of US$47.57/bbl and settled up by 0.414% to close at US$48.25/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 Friday an intraday low of US$1.2176/EUR, high of US$1.2215/EUR and settled the day down by 0.0221% to close at US$1.2180/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 Friday made an intra‐day low of US$1.3485/GBP, high of US$1.3618/GBP and settled the day up by 0.352% to close at US$1.3533/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 1.3590-1.3800 with targets at 1.3540-1.3470-1.3400 and 1.3340-1.3240- 1.3200 stop-loss should be 1.3800. Buy above 1.3540-1.3240 with targets 1.3600-1.3670 and 1.3710-1.3800 with stop loss closing below 1.3200.

 
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 Friday made intra‐day low of JPY103.49/USD and made an intraday high of JPY103.75/USD and settled the day up by 0.134% at JPY103.66/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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