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Daily Market Lookup

  • The dollar traded largely unchanged Thursday, with the safe haven Japanese yen more in demand as worries over the omicron Covid variant mounted, weighing on the South African rand and the Australian dollar. Adding to the concerns was the news late Wednesday that the U.S. recorded its first case of the omicron variant, while the number of new cases reported in South Africa, where omicron was first discovered, doubled from Tuesday to Wednesday with the new variant becoming the dominant strain, accounting for nearly three-quarters of cases. Much remains unknown about the new variant, which has spread to at least two dozen countries in around three weeks, but the World Health Organization said Wednesday that it expects to have more information on its transmissibility within days. However, Australia's Chief Medical Officer Paul Kelly was quoted as saying there was no evidence to suggest it was more dangerous than the Delta variant. Elsewhere, GlaxoSmithKline (NYSE:GSK) said its antiviral treatment Sotrovimab, which has already been approved in the U.K., appears 79% effective against Omicron. The dollar should still receive some support after Federal Reserve Chair Jerome Powell reiterated during the second day of his testimony to Congress on Wednesday that the central bank is set to consider at its December meeting a faster tapering of its bond-buying program, which could lead to earlier interest rates hikes. Cleveland Fed President Loretta Mester indicated in an interview on Wednesday that she expects two 25 basis point hikes next year. The main U.S. economic data release scheduled for Thursday will be the weekly initial jobless claims, another indication of the health of the U.S. labor market. This follows ADP private payrolls rising 534,000 in November, less than in October but more than expected, and ahead of the much anticipated government jobs report on Friday.
  • The U.S. dollar recovered from a loss on Wednesday after reports the Omicron coronavirus variant is spreading and oil prices turned down, hurting commodity currencies. The shifts underscored the hour-to-hour fragility of foreign exchange rates as traders weigh what the Omicron variant might do to plans that Federal Reserve Chair Jerome Powell signaled on Tuesday to move more quickly to raise U.S. interest rates. The variant is becoming dominant in South Africa and has appeared in the United States. The dollar's rebound started as a report from the Institute for Supply Management came out showing that U.S. manufacturing activity picked up in November amid strong demand for goods, keeping inflation high as factories continued to struggle with pandemic-related shortages of raw materials. An earlier report on U.S. private payrolls suggested that Friday will bring a "solid jobs report" when the government posts more comprehensive payroll numbers, Chandler said.
  • Gold was down on Thursday morning in Asia, but was climbed up from a three-week low. Investors are mulling how central banks are likely to respond to surging inflation, while concerns are also growing about the risk posed by the newly discovered omicron variant of COVID-19 to the global economic recovery. The U.S. Federal Reserve must prepare for the possibility that inflation may not recede in the second half of 2022 as most forecasters currently expect, Chairman Jerome Powell said on Wednesday. He testified before the House Financial Services Committee on Wednesday alongside U.S. Treasury Secretary Janet Yellen, after the duo testified before a Senate Banking Committee hearing the day before. Omicron could extend some of the supply-chain challenges and shortages that have led to higher inflation, and officials will need to factor that in as they decide how to withdraw their monetary policy support, said New York Fed President John Williams. Although the Fed has adopted a more hawkish tone to inflation, the Bank of England and European Central Bank are sticking to their dovish tones. On the data front, the Institute of Supply Management manufacturing purchasing managers index was a higher-than-expected 61.1 in November.
  • OPEC and its allies will decide on Thursday whether to release more oil into the market or restrain supply amid big gyrations in crude prices, a U.S. release from oil reserves and fears over the new Omicron coronavirus variant. The OPEC+ group of producers comprising the Organization of the Petroleum Exporting Countries (OPEC) and its allies has been at odds with U.S. requests for increased oil output to support the global economy. Producers said they didn't want to hamper a fragile energy industry recovery with a new supply glut. Russia and Saudi Arabia, the biggest OPEC+ producers, said ahead of this week's meetings that there was no need for a knee-jerk reaction to amend policy. Iraq said that OPEC+ was expected to extend existing output policy in the short term. Since August the group has been adding an additional 400,000 barrels per day (bpd) of output to global supply, gradually winding down record cuts agreed in 2020 when demand crashed because of the pandemic. On Wednesday OPEC+ experts said in a report seen by Reuters that the impact from Omicron was not yet clear, even though many countries were introducing lockdowns and other restrictions. Even before concerns about Omicron emerged, OPEC+ had been weighing the effects of last week's announcement by the United States and other major consumers to release emergency crude reserves to temper energy prices. OPEC+ forecast a 3 million bpd surplus in the first quarter of 2022 after the release of reserves, up from 2.3 million bpd previously. However, the report said that the impact of the release would be muted because some countries made it voluntary and the duration was uncertain. U.S. President Joe Biden's administration could adjust the timing of the release if prices drop substantially, U.S. Deputy Energy Secretary David Turk told Reuters on Wednesday OPEC+ has been scaling back last year's record output cuts of 10 million bpd, equivalent to about 10% of global supply. About 3.8 million bpd of cuts are still in place. However, OPEC's November oil output has again undershot the planned level, with some OPEC producers struggling to raise production capacity.

 

 
Intraday RESISTANCE LEVELS
2nd December 2021 R1 R2 R3
GOLD-XAU 1,778-1,784 1,800 1,808-1,818
Silver-XAG 22.60-23.10 24.10 24.80-25.10
Crude Oil 66.90-67.30 68.10 69.25-70.10
EURO/USD 1.1360 1.1385 1.1420-1.1485
GBP/USD 1.3300-1.3390 1.3420 1.3490-1.3540
USD/JPY 113.45-113.90 114.50 115.00-115.90

Intraday SUPPORTS LEVELS
2nd December 2021 S1 S2 S3
GOLD-XAU 1,769-1,758 1,750 1,744-1,736
Silver-XAG 22.10 21.40 21.00-20.50
Crude Oil 66.00-65.40 64.90 64.50-64.00
EURO/USD 1.1310-1.1240 1.1170 1.1120-1.1050
GBP/USD 1.3270-1.3200 1.3150 1.3100-1.3050
USD/JPY 113.00-112.70 112.10 111.50-111.00

Intra-Day Strategy (2nd December 2021)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Sell
EUR/USD Neutral to Buy
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Wednesday made its intraday high of US$1794.47/oz and low of US$1772.12/oz. Gold up 0.382% at US$1781.36/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in neutral territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Buy in between 1769-1740 with risk below 1740, targeting 1778-1790-1800 and 1808-1818-1834. Sell in between 1790-1818 keeping stop loss closing above 1820, targeting 1771-1765.

 
Intraday Support Levels
S1     1,769-1,758
S2     1,750
S3     1,744-1,736
Intraday Resistance Levels
R1     1,778-1,784
R2     1,800
R3     1,808-1,818

Technical Indicators

Name   Value Action
14DRSI  

58.7997

Buy
20-DMA   1830.22 Buy
50-DMA  

1807.29

Buy
100-DMA   1800.78 Buy
200-DMA   1800.07 Sell
STOCH(5,3)   21.940 Sell
MACD(12,26,9)   19.816 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$23.01/oz and low of US$22.17/oz settled down by 2.351% at US$22.30/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. 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 positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 22.10-20.90, targeting 23.20-24.05-24.55 and 25.05-25.50-25.90 with stop loss should be place on the breakage below20.90. Sell in between 22.60-26.50 with stop loss above 26.50; targeting 22.10-21.40 and 21.00-20.50.

 
Intraday  Support Levels
S1     22.10
S2     21.40
S3     21.00-20.50

Intraday  Resistance Levels
R1     22.60-23.10
R2     24.10
R3     24.80-25.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.051 Buy
20-DMA   23.86 Sell
50-DMA   23.87 Sell
100-DMA   24.15 Sell
200-DMA   24.42 Sell
STOCH(5,3)   10.891 Buy
MACD(12,26,9)   -0.186 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$69.31/bbl, intraday low of US$64.70/bbl and settled down by 2.048% to close at US$65.50/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. MACD is above zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in neutral 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 Sell

Sell in between 66.90-71.90 with stop loss at 71.90; targeting 66.00-65.40 and 64.90-64.10. Buy above 66.00-64.90 with risk daily closing below 64.90 and targeting 66.90-67.30-68.10 and 69.25-70.10-71.00.

 
Intraday Support Levels
S1     66.00-65.40
S2     64.90
S3     64.50-64.00

Intraday Resistance Levels
R1     66.90-67.30
R2     68.10
R3     69.25-70.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.850 Sell
20-DMA   77.28 Sell
50-DMA   77.28 Buy
100-DMA   74.66 Buy
200-DMA   69.21 Buy
STOCH(5,3)   29.873 Sell
MACD(12,26,9)   0.933 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1301/EUR, high of US$1.1359/EUR and settled the day down by 0.133% to close at US$1.1318/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1700), which become immediate resistance level, break above will target 1.1825. 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 neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.1310-1.1170 with risk below 1.1170, targeting 1.1360-1.1385-1.1420 and 1.1485-1.1510-1.1590. Sell below 1.1350-1.1540 targeting 1.1540 and 1.1310-1.1250-1.1200 and 1.1170-1.1120 with stop-loss at daily closing above 1.1540.

 
Intraday Support Levels
S1     1.1310-1.1240
S2     1.1170
S3     1.1120-1.1050

Intraday  Resistance Levels
R1     1.1360
R2     1.1385
R3     1.1420-1.1485

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.804 Buy
20-DMA   1.1477 Sell
50-DMA   1.1580 Sell
100-DMA   1.1683 Sell
200-DMA   1.1767 Sell
STOCH(5,3)   39.685 Buy
MACD(12,26,9)   -0.007 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3261/GBP, high of US$1.3351/GBP and settled the day down by 0.155% to close at US$1.3275/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3760) 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 overbought territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.3300-1.3200 with targets 1.3420-1.3490-1.3540 and 1.3605-1.3685 with stop loss closing below 1.3200. Sell in between 1.3390-1.3685 with targets at 1.3390-1.3350 and 1.3310-1.3265-1.3200 with stop loss should be 1.3790.

 
Intraday Support Levels
S1     1.3270-1.3200
S2     1.3150
S3     1.3100-1.3050

Intraday Resistance Levels
R1     1.3300-1.3390
R2     1.3420
R3     1.3490-1.3540

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

32.480

Buy
20-DMA   1.3403 Buy
50-DMA   1.3528 Buy
100-DMA   1.3631 Buy
200-DMA   1.3650 Buy
STOCH(5,3)   51.766 Buy
MACD(12,26,9)   -0.006 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY109.58/USD and made an intraday high of JPY110.07/USD and settled the day down 0.0746% at JPY109.98/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

Long positions above 113.20-110.50 with targets of 113.45-113.90-114.20 and 114.90-115.60-116.00 with stop below 106.00. Sell below 113.45-115.90 with risk above 115.90 targeting 113.20-112.70-112.10 and 111.50-110.50.

 
Intraday Support Levels
S1     113.00-112.70
S2     112.10
S3     111.50-111.00

INTRADAY RESISTANCE LEVELS
R1     ¬113.45-113.90
R2     114.50
R3     115.00-115.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.340 Buy
20-DMA   114.25 Sell
50-DMA   113.18 Sell
100-DMA   111.96 Sell
200-DMA   110.46 Sell
STOCH(9,6)   94.683 Buy
MACD(12,26,9)   0.1202 Sell

AAFX TRADING
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