AAFX TRADING

Daily Market Lookup

  • The dollar was down on Tuesday morning in Asia, staying near two-and-a-half-year lows as progress on the latest U.S. stimulus measures increased risk appetite. The House of Representatives voted to increase the amount of stimulus checks to qualified Americans from $600 to $2,000 on Monday, with the Senate preparing to vote on the increased amount. The post-Brexit trade deal reached between the European Union (EU) and the U.K. during the previous week also increased investors’ risk appetite. Although the agreement was lacking in detail, the improved outlook for global growth and economic recovery from COVID-19 saw gains in global shares. Some investors expected the dollar’s decline to continue The pound reversed two days of decline, and even saw a high of $1.3625 earlier in the month, a level it has not reached since May 2018. Investors took profits in the U.K. currency as the Brexit deal, already widely expected, was confirmed just before the Christmas holidays. Although investors breathed a sigh of relief as the agreement came before the end-of-year deadline, there were arguments that the deal leaves the U.K. more detached from the EU. Investors are also still figuring out what the agreement means for the pound. The fact that the deal does not cover the financial markets is also a nagging concern.
  • The pound fell sharply against the dollar Monday, as market participants flagged concerns the post-Brexit trade accord will slow trade after the crucial services sector was largely excluded from the deal. Services, meanwhile, "were largely left out of the negotiations, even though they are much more important for the UK in particular than the exchange of goods," it added. Market participants continue to parse the agreement, which received the backing of all European Union members on Monday, paving the way for the new agreement to come into effect on a provisional basis from Jan. 1. The deal will require the backing of lawmakers in the UK, with a vote expected to get underway on Dec. 30. The European Central Bank estimates that Brexit will shave about 2.1% from GDP in the UK and 0.4% in the 27 EU member states in the EU over the long term. Prime Minister Boris Johnson, meanwhile, has indicated the UK can sign trade deals with numerous nations including the U.S. to boost growth. But trade between the EU and UK dwarfs that of the US and UK. In 2019, the EU made up 43% of all UK exports and 53% of all UK imports, with value of exports to the EU valued at £294 billion (about $400 billion) compared with U.S. imports of $63 billion. A new U.S.-UK trade deal in the near-term is unlikely as president-elect Biden has suggested that domestic policies will take priority. Despite the 4% rise in the pound against the dollar in the final quarter of the year, sterling still remains below its pre-Brexit level of $1.41 seen in June 2016, just before the outcome of the EU referendum.
  • Oil rose on Tuesday, for the third time in four sessions, on expectations for rising fuel demand as the United States may expand their pandemic aid payments and a final Brexit deal is set to stabilize trade between Europe and the UK. Crude rose along with gains in Asian shares, with Japanese stocks hitting a 30-year high, on rising investor risk appetite as the U.S. House of Representatives voted to raise pandemic relief payments to $2,000 from $600. The Senate still needs to vote on the measure. Forecasts for tightening U.S. crude oil stocks also added support to prices. U.S. crude oil stockpiles are expected to have declined last week, while refined products inventories likely rose, a preliminary Reuter’s poll ahead of this week's data showed on Monday Five analysts polled by Reuters estimated, on average, that crude stocks likely fell by 2.1 million barrels in the week to Dec. 25. Still, concerns over coronavirus lockdowns are capping gains. A new variant of the virus in the United Kingdom has led to the reimposition of movement restrictions, hitting near-term demand and weighing on prices, while hospitalizations and infections have surged in parts of Europe and Africa. A Jan. 4 meeting of the OPEC and allies including Russia, a group known as OPEC+, also looms over the market. OPEC+ is tapering record oil output cuts made this year to support the market. The group is set to boost output by 500,000 bpd in January and Russia supports another increase of the same amount in February. Russian Deputy Prime Minister Alexander Novak said on Monday he expected there would be 5 million to 6 million bpd additional oil demand in 2021, which has not fully recovered from the pandemic. Money managers raised their net-long U.S. crude futures and options positions in the week to December 21, the U.S. Commodity Futures Trading Commission said on Monday. The speculator group raises its combined futures and options position in New York and London by 4,455 contracts to 325,787 during the period. Oil was up on Tuesday morning in Asia, as a worsening short-term demand outlook is weighed against the eventual demand rebound as COVID-19 vaccines continue to be rolled out. A surge in COVID-19 cases prompted Southern California to extend its lockdown, and German authorities are concerned that the economic damage due to the virus could be prolonged by the slow pace of the nation’s vaccine rollout. Asian shares were mostly higher on Tuesday, buoyed by the latest U.S. stimulus measures becoming law earlier in the week. A weaker dollar also gave the black liquid, as well as other commodities priced in the currency, a boost. Oil's rally, driven by the recent rollout of vaccines, has been threatened in the last couple of weeks as fears grow that prices have run on ahead of the actual recovery in fuel demand. The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, will ease production cuts currently in place by 500,000 barrels per day in January. Russian deputy prime minister Alexander Novak also said during the previous week that his country would still support an increase in production from Feb 1 "if the situation is normal, stable." COVID-19 developments will continue to drive price moves, he added. OPEC+’s Joint Technical Committee and the Joint Ministerial Monitoring Committee will meet on Jan. 3 and 4 respectively. The 13th OPEC and non-OPEC Ministerial Meeting is scheduled for Jan. 4. The cartel will decide on production levels for February during the meetings, with investors looking out for any change of sentiment among its members. Iran’s plans to increase oil production over the longer term threatens OPEC plans to gradually increase supply without causing an oversupply in the market. Investors now await crude oil supply data from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
29th 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 1.3540-1.3590 1.3670 1.3710-1.3800
USD/JPY 103.80-104.50 105.00 105.40-105.90

Intraday SUPPORTS LEVELS
29th 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 47.80-47.00 46.45 45.90-45.10
EURO/USD 1.2170-1.2140 1.2090 1.2050-1.1990
GBP/USD 1.3470 1.3400 1.3340-1.3240
USD/JPY 103.15-102.50 102.05 101.60-101.20

Intra-Day Strategy (29th 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$1900.12/oz and low of US$1869.01/oz. Gold down 0.478% at US$1873.29/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 Monday made its intraday high of US$26.76/oz and low of US$25.83/oz settled up by 1.094% at US$26.23/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 Monday made an intra‐day high of US48.97/bbl, intraday low of US$47.53/bbl and settled down by 1.068% to close at US$47.69/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 47.80-44.60 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     47.80-47.00
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 Monday an intraday low of US$1.2179/EUR, high of US$1.2249/EUR and settled the day up by 0.249% to close at US$1.2215/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 Monday made an intra‐day low of US$1.3428/GBP, high of US$1.3574/GBP and settled the day down by 0.719% to close at US$1.3446/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 1.3540-1.3800 with targets at 1.3470-1.3400 and 1.3340-1.3240- 1.3200 stop-loss should be 1.3800. Buy above 1.3470-1.3240 with targets 1.3540-1.3600-1.3670 and 1.3710-1.3800 with stop loss closing below 1.3200.

 
Intraday Support Levels
S1     1.3470
S2     1.3400
S3     1.3340-1.3240

Intraday Resistance Levels
R1     1.3540-1.3590
R2     1.3670
R3     1.3710-1.3800

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 Monday made intra‐day low of JPY103.39/USD and made an intraday high of JPY103.89/USD and settled the day up by 0.349% at JPY103.75/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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