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Daily Market Lookup

  • The dollar was down on Wednesday morning in Asia, while the Australian dollar hit a one-week high. Investors’ risk appetite increased over indications that the omicron COVID-19 variant is less severe, even though existing vaccines cannot afford full protection. That's put risk asset markets in an "ebullient mood" lifting stocks, commodities, as well as riskier commodity-linked currencies including the Australian and Canadian dollars, the note added. On the central bank front, the Bank of Canada, alongside the Reserve Bank of India, will hand down its policy decision later in the day. The U.S. Federal Reserve, the Bank of England, and the European Central Bank will hand down their policy decisions next week. Investors also await U.S. and Chinese inflation data. China releases its consumer and producer price indexes on Thursday, with the U.S. consumer price index following a day after. The U.S. JOLTS job openings index, due later in the day, is expected to show further proof of a tighter labor market. This would increase bets for a quicker Fed asset tapering, in turn boosting the greenback. Money markets are currently fully priced for a quarter point rate increase by June 2022.
  • Gold was up on Wednesday morning in Asia, boosted by retreating U.S. Treasury yields. Investors now await U.S. and Chinese inflation data due later in the week. Investors now await the U.S. data, including the consumer price index (CPI), due on Friday. Chinese inflation data, including the CPI and producer price index, is due the day before. The Reserve Bank of India will hand down its policy decision later in the day, while the U.S. Federal Reserve, European Central Bank (ECB), and the Bank of England (BOE) will hand down their policy decisions in the following week. Eurozone inflation could exceed the ECB's forecast in the long term, so there is no reason now to boost a legacy bond purchase program when an emergency scheme ends in March, said Bank of Estonia Governor Madis Muller. Meanwhile, the BOE could delay becoming the world's first key central bank to hike interest rates again, thanks to the discovery of the omicron COVID-19 variant. On the Fed side, U.S. President Joe Biden plans to put forward more nominees for open positions on the central bank’s board by the end of December 2021. Investors are also monitoring geopolitical tensions after Biden warned his Russian counterpart Vladimir Putin of "strong economic and other measures" if Russia invades Ukraine.
  • Oil was down Wednesday morning in Asia, giving up gains from earlier in the week. Investors continue to assess the impact of the omicron COVID-19 variant on fuel demand, alongside the effectiveness of current vaccines. The variant can partially evade the protection afforded by two doses of the Pfizer Inc. (NYSE:PFE)/BioNTech SE (F:22UAy) COVID-19 vaccine, Africa Health Research Institute head of research Alex Sigal said on Tuesday. Meanwhile, GlaxoSmithKline PLC (LON:GSK) said on Tuesday that sotrovimab, its antibody-based COVID-19 therapy co-developed with Vir Biotechnology Inc . (NASDAQ:VIR), is effective against all mutations of the omicron variant. Investors also continue to monitor talks between Iran and world powers to revive a 2015 nuclear deal. Indirect talks between the U.S. and Iran resumed a week ago but broke off on Friday, and are scheduled to resume later this week. Germany urged Iran to present realistic proposals in talks over its nuclear program, a Federal Foreign Office spokeswoman said on Monday. Alongside the talks, investors are also monitoring tensions between Russia and Ukraine, said Kikukawa. The U.S. has reportedly secured an understanding with Germany about shutting down the Nord Stream 2 natural gas pipeline if Russia invades Ukraine, according to Reuters. Meanwhile, Tuesday’s U.S. crude oil supply data from the American Petroleum Institute showed a draw of 3.089 million barrels for the week ended Nov. 30. Forecasts prepared by Investing.com predicted a 2.093-million-barrel build, while a 747,000-barrel draw was reported during the previous week. Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.
  • Oil prices eased on Wednesday, taking a breather after two days of gains, as investors waited for an assessment of full impact of the Omicron coronavirus variant on global economy and fuel demand as well as the effectiveness of existing vaccines. Oil prices rebounded earlier this week from a collapse last week on rising optimism that the new Omicron variant will not cause major economic damage. The market is also focusing on Iran nuclear talks, tensions between Russia and Ukraine and weather in northern-hemisphere winter, he added. Indirect talks between Washington and Tehran on reinstating their nuclear pact resumed a week ago but broke off on Friday, with a resumption scheduled for later this week, as Western officials voiced dismay at sweeping Iranian demands. Germany wants Iran to present realistic proposals in talks over its nuclear programme, a Foreign Ministry spokeswoman said on Monday. Meanwhile, President Joe Biden warned Russian President Vladimir Putin on Tuesday that the West would impose "strong economic and other measures" on Russia if it invades Ukraine, while Putin demanded guarantees that NATO would not expand farther eastward. Biden warned Putin he could face stiff economic sanctions, the disruption of the Nord Stream 2 gas pipeline to Europe, and that the United States and European allies would provide additional defensive capabilities to Ukraine. U.S. crude stocks fell last week while gasoline and distillate inventories rose, according to market sources citing American Petroleum Institute figures on Tuesday. Analysts polled by Reuters forecast U.S. crude inventory data would show a second straight weekly decline.

 

 
Intraday RESISTANCE LEVELS
8th December 2021 R1 R2 R3
GOLD-XAU 1,791-1,800 1,808 1,818-1,831
Silver-XAG 22.60-23.10 24.10 24.80-25.10
Crude Oil 71.50-72.30 73.00 73.80-74.50
EURO/USD 1.1310-1.1360 1.1385 1.1420-1.1485
GBP/USD 1.3270-1.3300 1.3420-1.3490 1.3420-1.3490
USD/JPY 113.60-113.90 114.50 115.00-115.90

Intraday SUPPORTS LEVELS
8th 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 70.60-70.10 69.10 71.50-72.30
EURO/USD 1.1240 1.1170 1.1120-1.1050
GBP/USD 1.3200-1.3150 1.3100 1.3050-1.3010
USD/JPY 113.20-112.70 112.10 111.50-111.00

Intra-Day Strategy (8th 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 Tuesday made its intraday high of US$1787.71/oz and low of US$1772.10/oz. Gold up 0.299% at US$1783.75/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     1,791-1,800
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 Tuesday made its intraday high of US$2/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 Tuesday made an intra‐day high of US$72.79/bbl, intraday low of US$69.49/bbl and settled up by 2.806% to close at US$71.50/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 71.90-74.50 with stop loss at 74.50; targeting 67.30-66.90-66.00 and 65.40-64.90-64.10. Buy above 70.60-67.30 with risk daily closing below 67.30 and targeting 71.50-72.30-73.00 and 73.80-74.50.

 
Intraday Support Levels
S1     70.60-70.10
S2     69.10
S3     71.50-72.30

Intraday Resistance Levels
R1     71.50-72.30
R2     73.00
R3     73.80-74.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44 .355 Sell
20-DMA   75.09 Sell
50-DMA   73.84 Buy
100-DMA   74.03 Buy
200-DMA   69.10 Buy
STOCH(5,3)   87.873 Buy
MACD(12,26,9)   0.933 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1226/EUR, high of US$1.1297/EUR and settled the day down by 0.191% to close at US$1.1262/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 Tuesday made an intra‐day low of US$1.3208/GBP, high of US$1.3288/GBP and settled the day down by 0.1440% to close at US$1.3242/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     1.3420-1.3490
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 JPY113.39/USD and made an intraday high of JPY113.77/USD and settled the day down 0.0943% at JPY113.54/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 113.60-115.90 with risk above 115.90 targeting 113.20-112.70-112.10 and 111.50-110.50.

 
Intraday Support Levels
S1     113.20-112.70
S2     112.10
S3     111.50-111.00

INTRADAY RESISTANCE LEVELS
R1     113.60-113.90
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

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