AAFX TRADING

Daily Market Lookup

  • The dollar was up on Wednesday morning in Asia, steadying as vote counting continues for a U.S. Senate runoff election in the state of Georgia and investors awaiting the results to determine market sentiment’s next move. The USD/CNY pair inched up 0.05% to 6.4583, with the yuan steadying in offshore trade. The Chinese currency rose to its highest since June 2018 on Tuesday in the wake of the People’s Bank of China lifted the midpoint of its trading band by 1%, the biggest one-day lifting since China abandoned the yuan’s peg to the dollar in 2005 The rising yuan boosted Asian currencies, which in turn boosted China’s purchasing power for commodities and other imports. Investors also seized the opportunity to keep buying ahead as profit taking and some selling by major state-owned Chinese banks cooled the rally. On the data front, the Caixin services Purchasing Managers Index (PMI) for December, released earlier in the day, read 56.3, which was lower than November’s 57.8 figure. With around 78% of the expected vote in, Republican incumbents Kelly Loeffler and David Perdue led their Democrat rivals Raphael Warnock Jon Ossoff by a percentage point and 1.6 percentage points respectively The winners of the two seats will determine which party controls the Senate, with a democrat victory smoothing the way for President-elect Joe Biden’s legislative agenda, which includes more stimulus measures. Results are due later in the day, but razor-thin margins could see a delay.
  • The U.S. dollar steadied in Asia on Wednesday as traders looked to the outcome of a Senate election in Georgia to drive the next move in market sentiment. The dollar had dropped through a major support level against the Japanese yen on Tuesday and it briefly fell to a fresh 10-month low of 102.60 yen on Wednesday before steadying. Georgia will determine control of the U.S. Senate, although a final result is not expected before Wednesday morning in the United States - perhaps longer if it is close. If they win both spots, Democrats will take control of the Senate and would be able to pass their legislative agenda, which could include higher taxes and more stimulus. Bets against the dollar have become crowded as investors wager that low U.S. interest rates and a big trade deficit can keep it heading lower for some time yet Asian currencies have received an added boost from China's rising yuan, which increases China's purchasing power for commodities and other imports The yuan surged to its highest since June 2018 on Tuesday after the People's Bank of China lifted the midpoint of its trading band by 1%, the biggest one-day lift since China abandoned a peg to the dollar in 2005 Traders took that as cue to keep buying, before profit taking and some selling by major state-owned Chinese banks cooled the rally. In offshore trade, the yuan steadied at 6.4293 on Wednesday.
  • It has gained 12% on the dollar since last May as China's economic rebound has led the world's pandemic recovery. Elsewhere, a rise in oil prices lifted exporters' currencies, sending the Norwegian crown to a 21-month high of 8.4350 per dollar and the Canadian dollar to a 32-month peak. Brent oil prices rose on Wednesday to the highest since February after Saudi Arabia agreed to make bigger cuts in output than expected during a meeting with allied producers, while industry data showed U.S. crude stockpiles fell last week.
  • Brent crude rose as much as 0.6% to $53.94 a barrel, the highest since Feb. 26, 2020. It was at $53.79 a barrel at 0147 GMT and gained 4.9% on Tuesday. U.S. West Texas Intermediate (WTI) futures gained 13 cents, or 0.26%, to $50.06 a barrel. The contract on Tuesday closed up 4.6% at $49.93, its highest since Feb. 24, 2020. Saudi Arabia, the world's biggest oil exporter, agreed on Tuesday to make additional, voluntary oil output cuts of 1 million barrels per day (bpd) in February and March, after a meeting with the Organization of the Petroleum Exporting Countries (OPEC) and other major producers that form the group known as OPEC+. The reductions agreed by Saudi Arabia were included in a deal to persuade other producers in the OPEC+ group to hold output steady. With coronavirus infections spreading rapidly in many parts of the world producers are trying to support prices as demand takes a hit from new lockdowns being put in place. "The decision came as a huge surprise as the organisation struggled yesterday to agree to a deal," Capital Economics said in a note. It "adds weight to our view that the oil market will be in a deficit ... which will help lift the price of Brent to $60 per barrel by end-year," it said. OPEC member Iran's seizure of a South Korean tanker in the Gulf also supported prices on Wednesday. Tehran denied it was holding the ship and its crew as hostages, a day after it seized the tanker while pushing for Seoul to release $7 billion of funds frozen under U.S. sanctions. U.S. crude oil inventories dropped by 1.7 million barrels in the week to Jan. 1 to 491.3 million barrels, data from industry group the American Petroleum Institute showed late on Tuesday.

 

 
Intraday RESISTANCE LEVELS
6th January 2021 R1 R2 R3
GOLD-XAU 1,948 1,955-1965 1,973
Silver-XAG 27.35-27.65 28.00 28.50-28.90
Crude Oil 50.25 51.00 51.90-52.50
EURO/USD 1.2300-1.2350 1.2400 1.2475-1.2545
GBP/USD 1.3670 1.3710 1.3800-1.3860
USD/JPY 103.15-103.80 104.50 105.00-105.40

Intraday SUPPORTS LEVELS
6th January 2021 S1 S2 S3
GOLD-XAU 1,940-1,931 1,918 1,900-1,887
Silver-XAG 27.00-26.50 26.05 25.60-25.05
Crude Oil 49.30-48.50 47.80 47.00-46.45
EURO/USD 1.2210-1.2170 1.2140 1.2090-1.2050
GBP/USD 1.3590-1.3540 1.3470 1.3400-1.3340
USD/JPY 102.50 102.05 101.60-101.20

Intra-Day Strategy (6th January 2021)
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$1952.91/oz and low of US$1934.23/oz. Gold up 0.375% at US$1949.14/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 1940-1878 with risk below 1878, targeting 1948-1955 and 1965-1973. Sell below 1948-1973 keeping stop loss closing above 1973, targeting 1940-1931-1885 and 1878-1860-1849.

 
Intraday Support Levels
S1     1,940-1,931
S2     1,918
S3     1,900-1,887
Intraday Resistance Levels
R1     1,948
R2     1,955-1965
R3     1,973

Technical Indicators

Name   Value Action
14DRSI  

67.447

Buy
20-DMA   1873.04 Buy
50-DMA  

1867.81

Buy
100-DMA   1895.14 Sell
200-DMA   1831.55 Buy
STOCH(5,3)   90.503 Buy
MACD(12,26,9)   16.276 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$27.68/oz and low of US$26.97/oz settled up by 1.147% at US$27.49/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 overbought region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, sell in between 27.30-28.90 with stop loss above 28.90; targeting 27.00-26.50-26.05 and 25.60-25.05-24.50. Buy silver in between 27.00-25.05, targeting 27.30-27.65-28.00 and 28.50-29.00 with stop loss should be place on the breakage below 24.60.

 
Intraday  Support Levels
S1     27.00-26.50
S2     26.05
S3     25.60-25.05

Intraday  Resistance Levels
R1     27.35-27.65
R2     28.00
R3     28.50-28.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.957 Buy
20-DMA   25.42 Sell
50-DMA   24.56 Sell
100-DMA   25.06 Sell
200-DMA   21.68 Buy
STOCH(5,3)   77.268 Buy
MACD(12,26,9)   0.7277 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US50.21/bbl, intraday low of US$47.31/bbl and settled up by 5.05% to close at US$49.38/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 49.30-46.50 with risk daily closing below 43.80 and targeting 50.25-51.00 and 51.90-52.50. Sell in between 50.25-52.50 with stop loss at 52.50; targeting 49.30-48.50-47.00 and 46.45-45.60-45.00.

 
Intraday Support Levels
S1     49.30-48.50
S2     47.80
S3     47.00-46.45

Intraday Resistance Levels
R1     50.25
R2     51.00
R3     51.90-52.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.216 Sell
20-DMA   47.44 Buy
50-DMA   43.67 Buy
100-DMA   42.07 Buy
200-DMA   37.51 Buy
STOCH(5,3)   63.130 Buy
MACD(12,26,9)   1.287 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.2243/EUR, high of US$1.2305/EUR and settled the day up by 0.353% to close at US$1.2291/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2177), which become immediate resistance level, break above will target 1.1970. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving negative crossovers to signal for bearish 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 1.2200-1.1840 with risk below 1.1800, targeting 1.2300-1.2350 and 1.2400-1.2475-1.2545. Sell below 1.2300-1.2545 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     1.2210-1.2170
S2     1.2140
S3     1.2090-1.2050

Intraday  Resistance Levels
R1     1.2300-1.2350
R2     1.2400
R3     1.2475-1.2545

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.812 Buy
20-DMA   1.2177 Buy
50-DMA   1.1972 Buy
100-DMA   1.1884 Buy
200-DMA   1.1533 Buy
STOCH(5,3)   66.758 Sell
MACD(12,26,9)   0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3553/GBP, high of US$1.3641/GBP and settled the day up by 0.443% to close at US$1.3622/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 1.3590-1.3900 with targets at 1.3540-1.3470 and 1.3400-1.3340-1.3240 stop-loss should be 1.3900. Buy above 1.3540-1.3240 with targets 1.3670-1.3710-1.3800 and 1.3860-1.3900 with stop loss closing below 1.3200.

 
Intraday Support Levels
S1     1.3590-1.3540
S2     1.3470
S3     1.3400-1.3340

Intraday Resistance Levels
R1     1.3670
R2     1.3710
R3     1.3800-1.3860

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

58.783

Buy
20-DMA   1.3461 Sell
50-DMA   1.3305 Buy
100-DMA   1.3158 Buy
200-DMA   1.2849 Buy
STOCH(5,3)   82.940 Buy
MACD(12,26,9)   0.009 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY102.59/USD and made an intraday high of JPY103.18/USD and settled the day down by 0.382% at JPY102.70/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 103.10-108.00 with risk above 108.00 targeting 102.50-102.05 and 101.60-101.20. Long positions above 102.50-101.00 with targets of 103.20-103.80-104.50 and 105.00-105.40 with stop below 105.00.

 
Intraday Support Levels
S1     102.50
S2     102.05
S3     101.60-101.20

INTRADAY RESISTANCE LEVELS
R1     103.15-103.80
R2     104.50
R3     105.00-105.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.604 Buy
20-DMA   103.60 Sell
50-DMA   104.07 Sell
100-DMA   104.83 Sell
200-DMA   106.02 Sell
STOCH(9,6)   27.253 Sell
MACD(12,26,9)   -0.290 Sell

AAFX TRADING
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