AAFX TRADING

Daily Market Lookup

  • The dollar was up on Monday morning in Asia, with uncertainty surrounding the omicron COVID-19 variant and expectations of more hot U.S. inflation data increasing the pressure on interest rates. The AUD/USD pair was up 0.30% to 0.7022, with the Reserve Bank of Australia handing down its policy decision on Tuesday. The NZD/USD pair was up 0.28% to 0.6758. The USD/CNY pair edged down 0.11% to 6.3689, while the GBP/USD pair inched up 0.03% to 1.3236. The riskier Antipodean currencies led an attempted bounce earlier in the session, helped along by preliminary observations from South Africa suggesting that omicron patients had relatively mild symptoms. However, ANZ Bank analysts suggested, “perhaps we should be looking for volatility rather than a trend." Volatility gauges for the Australian and New Zealand dollars hit their highest in about eight months on Friday. Omicron has found its way into around one-third of U.S. states. Although research into the variant continues, an article by the South African Medical Research Council said the majority of COVID-19 patients were admitted for other reasons and were oxygen-dependent. Treasury markets have also been volatile in recent sessions, with the U.S. yield curve flattening sharply over expectations that the U.S. Federal Reserve will move too quickly to curb inflation and eventually impact long-term economic growth. Friday’s mixed job report also reinforced views of quicker Fed asset tapering. The consumer price index figure due later in the week is also expected to support the view and give the dollar a boost. Interest rate futures markets have priced U.S. interest rate hikes around mid-2022, but only reaching as high as around 1.5% in late 2026 and investors remain wary of that changing quickly. However, a year-on-year inflation print above 7%, against economists' expectations for 6.7%, could change things. "Inflation with a 7 as the big number would get the dollar higher,” said Weston.
  • The dollar traded higher Monday, boosted by uncertainty over the omicron Covid variant and expectations the Federal Reserve will quickly tighten monetary policy, while the euro weakened after disappointing German factory orders. Additionally, EUR/USD fell 0.3% to 1.1284, with the euro hit hard after German manufacturing orders fell much more than expected in October, dropping 6.9% on the month after a revised increase of 1.8% in September, further clouding the growth outlook for manufacturers in Europe's largest economy. The safe-haven dollar has received a boost from the uncertainty surrounding the omicron variant of the coronavirus, with the U.S. Centers for Disease Control and Prevention stating on Sunday that the new variant has now been found in about 15 U.S. states so far. However, the dominant factor helping the greenback has been the public acceptance by Federal Reserve Chair Jerome Powell last week that inflation was going to stay high for longer than previously predicted, and the central bank would have to take this into account when setting policy. Even last week’s disappointing nonfarm payrolls release did little to shake market expectations of a more aggressive U.S. tightening, especially with Friday’s consumer price report expected to show another sharp rise in the annual November number. Aside from the Federal Reserve, the Reserve Bank of Australia is expected on Tuesday to hold its cash rate at a record low of 0.1% at its final meeting of the year. Traders will be looking for any clues about the RBA’s review of its bond-buying program on Feb. 1, the first meeting of 2022.
  • Gold was up on Monday morning in Asia, with investors continuing to digest a mixed U.S. report and weighing its impact on the U.S. Federal Reserve’s next move. The U.S. job report, released on Friday, was mixed. Non-farm payrolls were at 210,000 in November, lower than the 550,000 figure in forecasts prepared by Investing.com and the previous month’s 546,000 figure. The unemployment rate fell to 4.2%, a 21-month low. Separate data said that the Institute of Supply Management (ISM) non-manufacturing purchasing managers' index was at a higher-than-expected 69.1 in November, a record high. Although an indication that businesses are boosting hiring, prices remain high and there is little sign of supply constraints easing. The Fed will likely speed up its asset tapering when it meets later in the month, in response to a tightening labor market. This could also lead to earlier-than-expected interest rate hikes. Potential interest rate hikes also remained of interest across the Atlantic. Michael Saunders, an external member of the Bank of England's Monetary Policy Committee, is awaiting more information about the new omicron COVID-19 variant before deciding how to vote at the central bank’s meeting later in the month. Saunders voted to hike interest rates in November.
  • Oil prices rose by more than $1 a barrel on Monday after top exporter Saudi Arabia raised prices for its crude sold to Asia and the United States, and as indirect U.S.-Iran talks on reviving a nuclear deal appeared to hit an impasse. On Sunday, Saudi Arabia raised January official selling prices for all crude grades sold to Asia and the United States by up to 80 cents from the previous month. The price hikes were implemented despite a decision last week by the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, to continue increasing monthly supply by 400,000 barrels per day in January. Prices were also buoyed by diminishing prospects of a rise in Iranian oil exports after indirect U.S.-Iranian talks on saving the 2015 Iran nuclear deal broke off last week Iran says the main challenge to a deal is the United States' reluctance to lift all sanctions while Western powers questioned Tehran's determination to salvage the agreement. The talks are expected to resume this week Despite the planned increase, Russia's total output failed to rise as its major producers are probably facing technical difficulties in raising output in line with the current agreement, the consultancy said. JBC Energy has lowered its base case crude demand outlook over December and January by some 300,000 barrels per day. The revision has erased most of the supply tightness the market has seen previously, it added.

 

 
Intraday RESISTANCE LEVELS
6th December 2021 R1 R2 R3
GOLD-XAU 1,788-1,800 1,808 1,818-1,831
Silver-XAG 22.60-23.10 24.10 24.80-25.10
Crude Oil 67.90-69.10 70.10 70.60-71.50
EURO/USD 1.1310-1.1360 1.1385 1.1420-1.1485
GBP/USD 1.3270-1.3300 1.3390 1.3420-1.3490
USD/JPY ¬113.45-113.90 114.50 115.00-115.90

Intraday SUPPORTS LEVELS
6th December 2021 S1 S2 S3
GOLD-XAU 1,778-1,769 1,758 1,750-1,744
Silver-XAG 22.10-21.40 21.00 20.50-19.90
Crude Oil 67.30-66.90 66.00 65.40-64.90
EURO/USD 1.1240 1.1170 1.1120-1.1050
GBP/USD 1.3200-1.3150 1.3100 1.3050-1.3010
USD/JPY 113.00-112.70 112.10 111.50-111.00

Intra-Day Strategy (6th 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 Friday made its intraday high of US$1786.02/oz and low of US$1766.05/oz. Gold down 0.835% at US$1783.25/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 1778-1740 with risk below 1740, targeting 1790-1800 and 1808-1818-1834. Sell in between 1790-1818 keeping stop loss closing above 1820, targeting 1774-1769-1758 and 1750-1744.

 
Intraday Support Levels
S1     1,778-1,769
S2     1,758
S3     1,750-1,744
Intraday Resistance Levels
R1     1,788-1,800
R2     1,808
R3     1,818-1,831

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 Friday made its intraday high of US$22.56/oz and low of US$22.02/oz settled up by 0.723% at US$22.53/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     22.10-21.40
S2     21.00
S3     20.50-19.90

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   31.467 Buy
20-DMA   23.46 Sell
50-DMA   23.70 Sell
100-DMA   24.04 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 Friday made an intra‐day high of US$69.03/bbl, intraday low of US$65.48/bbl and settled down by 1.973% to close at US$66.11/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 67.90-71.90 with stop loss at 71.90; targeting 67.30-66.90-66.00 and 65.40-64.90-64.10. Buy above 67.30-64.90 with risk daily closing below 64.90 and targeting 67.90-68.40 and 69.10-70.10-71.00.

 
Intraday Support Levels
S1     67.30-66.90
S2     66.00
S3     65.40-64.90

Intraday Resistance Levels
R1     67.90-69.10
R2     70.10
R3     70.60-71.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   33.044 Sell
20-DMA   73.74 Sell
50-DMA   75.67 Buy
100-DMA   74.03 Buy
200-DMA   69.10 Buy
STOCH(5,3)   28.873 Buy
MACD(12,26,9)   0.933 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1265/EUR, high of US$1.1332/EUR and settled the day up by 0.1646% to close at US$1.1314/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 1.1240-1.1170 with risk below 1.1170, targeting 1.1360-1.1385-1.1420 and 1.1485-1.1510-1.1590. Sell below 1.1310-1.1540 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     1.1240
S2     1.1170
S3     1.1120-1.1050

Intraday  Resistance Levels
R1     1.1310-1.1360
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 Friday made an intra‐day low of US$1.3208/GBP, high of US$1.3309/GBP and settled the day down by 0.442% to close at US$1.3237/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 1.3270-1.3050 with targets 1.3300-1.3390-1.3420 and 1.3490-1.3540 with stop loss closing below 1.3050. Sell in between 1.3300-1.3540 with targets at 1.3265-1.3200-1.3150 and 1.3100-1.3050 with stop loss should be 1.3790.

 
Intraday Support Levels
S1     1.3200-1.3150
S2     1.3100
S3     1.3050-1.3010

Intraday Resistance Levels
R1     1.3270-1.3300
R2     1.3390
R3     1.3420-1.3490

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 Friday made intra‐day low of JPY112.55/USD and made an intraday high of JPY113.60/USD and settled the day down 0.182% at JPY112.76/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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