AAFX TRADING

Daily Market Lookup

  • The dollar slumped to multi-year lows against many currencies on Wednesday as currency traders looked past a new delay in U.S. stimulus cheques and maintained bets that additional financial aid was still likely. The greenback hit its weakest level in more than two years against the euro, the Australian and the New Zealand dollars. The greenback also fell to the lowest in more than five years against the Swiss franc and fell broadly against Asian currencies. U.S. Senate Majority Leader Mitch McConnell on Tuesday blocked immediate consideration of a measure to increase COVID-19 relief payments to $2,000, adding another twist to fractious negotiations over fiscal stimulus. The dollar has fallen and riskier assets have risen since President Donald Trump signed a coronavirus aid and spending bill on Sunday, because more stimulus for the world's largest economy reduces demand for the perceived safety of holding the greenback. While the size of relief payments is still uncertain, many analysts say the dollar is likely to weaken further next year because President-elect Joe Biden is expected to push for even more economic support measures. The dollar fell to $1.2295 per euro on Wednesday, its weakest since April 2018. Against the Swiss franc, the dollar touched 0.8815, the weakest since January 2015. Low liquidity may have exaggerated some market moves with many investors away for year-end holidays. A light data calendar is also likely to leave traders with little incentive to take out big positions. The dollar index against a basket of six major currencies skidded to 89.711, the lowest in more than two years. Last-minute infighting has cast doubt on some of the details of the U.S. aid package, but many analysts say the U.S. government will keep rolling out fiscal stimulus in some form because a second wave of coronavirus infections is becoming a big threat to the economy. In addition, many investors are already looking ahead to a new government under Biden when he is sworn in on Jan. 20. Another negative factor for the greenback is expectations that the U.S. Federal Reserve will keep interest rates low for an extremely long time, many analysts say. Elsewhere, both the Australian dollar and the New Zealand dollar reached their strongest levels in 2 1/2-years. The currencies are considered barometers of risk appetite because of their ties to global commodities.
  • The dollar was down on Wednesday morning in Asia, with investors looking past a Senate delay in U.S. stimulus checks and continuing to bet that additional financial aid is still likely. The House of Representatives approved increasing the amount of the stimulus checks from $600 to $2,000 earlier in the week. With all eyes now on the Senate, Majority Leader Mitch McConnell moved on Tuesday to block the amount increase. The greenback has seen steady losses ever since President Donald Trump signed a combined $2.3 trillion COVID-19 and spending bill on Sunday. Investors retreated from the dollar as the prospect of more U.S. stimulus reduced demand for safe-haven assets. The last-minute infighting still did little to quench hopes of more fiscal stimulus measures, as the U.S. continues to see large numbers of COVID-19 cases that threatens the country’s economic recovery. Although the size of the stimulus checks remains in question, some investors warned that the dollar is likely to continue falling in 2021 as they expect President-elect Joe Biden to roll out further stimulus measures. Biden and his administration are due to be sworn in on Jan. 20. Another factor dampening dollar sentiment is investors’ expectations that the Federal Reserve will maintain low interest rates for an extremely long period of time. China is due to release data, including the manufacturing and non-manufacturing Purchasing Managers Index (PMI), on Thursday. Market moves are expected to be subdued, with low liquidity as many investors take their year-end holidays. A light data calendar for Asia as 2020 comes to an end also gives investors little incentive to take out big positions.
  • Oil was up Wednesday morning in Asia, with a bigger-than-expected decline in U.S. crude oil inventories and hopes for a U.S. COVID-19 fiscal aid package boosting fuel demand recovery hopes. Tuesday’s crude oil supply data from the American Petroleum Institute (API) showed a draw of 4.785 million barrels for the week ending Dec. 25, bigger than the 2.1-million-barrel draw in forecasts prepared by Investing.com and the 2.7-million-barrel build seen in the previous week. The dollar remained down on Wednesday morning. Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day. The House of Representatives and President Donald Trump approved increasing the amount of Americans’ stimulus checks to $2,000 from $600 earlier in the week. However, Senate Majority Leader Mitch McConnell blocked increasing the amount on Tuesday. With COVID-19 vaccinations programs currently underway and continuing in 2021, the lifting of restrictions and the resumption of economic activity could see oil prices rise as fuel demand recovers. However, immediate concerns over the lockdowns and the ensuing impact on fuel demand could cap gains for the black liquid in the short term. The new B117 strain of COVID-19 first seen in southeastern England in September continues to spread, with the U.S. reporting its first case in the state of Colorado. More parts of the U.K. could come under the strictest Tier 4 restrictions soon. The Organization of the Petroleum Exporting Countries and allies, or OPEC+, is also due to meet in the following week. 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 discuss easing the current production cuts from February onwards during the meetings, with Russia supporting an increase of 500,000 barrels per day. Production is already set to increase by the same amount in January. Oil gained more ground on Wednesday as a U.S. coronavirus fiscal aid package and a decline in crude oil inventories lifted prices. The dollar fell to its lowest in more than two years against the euro as currency traders looked past a new delay in U.S. stimulus cheques and maintained bets that additional financial aid was still likely. The Democrat-led U.S. House of Representatives voted to meet President Donald Trump's demand to increase direct COVID-19 aid payments to Americans hurting from the pandemic to $2,000. Oil prices could gain strength as vaccination programmes around the world begin next year, allowing countries to relax restrictions on movement and business activity. U.S. physical crude oil grades strengthened on Tuesday as the API reported a decline in stockpiles, dealers said. Crude oil stocks fell by 4.8 million barrels last week to about 492.9 million barrels, exceeding analysts' expectations in a Reuters poll for a draw of 2.6 million barrels, data from API showed. 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. OPEC+ is tapering record oil output cuts made this year to support the market. The group is set to boost output by 500,000 barrels per day (bpd) in January, and Russia supports another increase of the same amount in February.

 

 
Intraday RESISTANCE LEVELS
30th 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 1.2290-1.2350 1.2400 1.2475-1.2545
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
30th 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 1.2245-1.2170 1.2140 1.2090-1.2050
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 (30th 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 Tuesday made its intraday high of US$1886/oz and low of US$1871.60/oz. Gold up 0.241% at US$1877.65/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 Tuesday made its intraday high of US$26.59/oz and low of US$25.93/oz settled down by 0.137% at US$26.19/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 Tuesday made an intra‐day high of US48.37/bbl, intraday low of US$47.71/bbl and settled up by 0.640% to close at US$48.08/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 Tuesday an intraday low of US$1.2206/EUR, high of US$1.2274/EUR and settled the day up by 0.256% to close at US$1.2246/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 1.2270-1.1840 with risk below 1.1800, targeting 1.2300-1.2350 and 1.2400-1.2475-1.2545. Sell below 1.2290-1.2545 targeting 1.2245-1.2190-1.2150 and 1.2090-1.2050-1.1990 with stop-loss at daily closing above 1.2545.

 
Intraday Support Levels
S1     1.2245-1.2170
S2     1.2140
S3     1.2090-1.2050

Intraday  Resistance Levels
R1     1.2290-1.2350
R2     1.2400
R3     1.2475-1.2545

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.812 Buy
20-DMA   1.2107 Buy
50-DMA   1.1859 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 Tuesday made an intra‐day low of US$1.3439/GBP, high of US$1.3521/GBP and settled the day up by 0.404% to close at US$1.3499/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
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 JPY103.45/USD and made an intraday high of JPY103.82/USD and settled the day down by 0.202% at JPY103.56/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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