AAFX TRADING

Daily Market Lookup

  • The dollar edged higher Thursday, but remained on the back foot as risk appetite remained strong on positive news surrounding the likely economic damage caused by the Omicron Covid variant. GBP/USD dropped 0.1% to 1.3203, after falling to a 2021 low on Wednesday after U.K. Prime Minister Boris Johnson imposed tougher Covid-19 restrictions in England, ordering people to work from home and wear masks in public places. Social gatherings will still be allowed, however. It has been politically impossible to restrict them due to public outrtage over a party held last Christmas by staff at 10 Downing Street in defiance of the government's own social distancing rules Despite this news out of England, risk-friendly currencies have seen demand this week following indications that the worst fears associated with the new Covid variant may not be realised. Pfizer (NYSE:PFE) said on Wednesday that three doses of its Covid-19 vaccine, developed with BioNTech, neutralised the new Omicron variant in a laboratory test, indicating that booster shots could be key to protection against infection. With the uncertainty surrounding the Omicron variant beginning to dissipate, attention is turning back to central banks and how they tackle the conflict between confronting high inflation and ensuring growth continues. The Federal Reserve is still widely expected to announce it will accelerate tapering of its bond-buying program at its meeting next week, but last week’s nonfarm payrolls release disappointed. Traders will likely keep a watchful eye on the release of the latest weekly U.S. jobless claims data, at 8:30 AM ET (1330 GMT), the most up-to-date gauge of the strength of the country’s labor market.
  • This week's rally in risk-friendly assets and currencies like the Australian dollar petered out on Thursday, but the U.S. dollar struggled to regain its lost ground as investors waited for a key Federal Reserve policy meeting due next week. Markets have been roiled week by news of the new strain of COVID-19, which drove investors to safe havens last week, but have since taken heart from signs that the worst fears may not be realised. BioNTech and Pfizer (NYSE:PFE) said on Wednesday a three-shot course of their COVID-19 vaccine neutralised the new Omicron variant in a laboratory test, an early signal that booster shots could be key to protection against infection from the newly identified variant. Illustrating this, the pound dropped to a year low on Wednesday after British Prime Minister Boris Johnson imposed tougher COVID-19 restrictions in England, ordering people to work from home, wear masks in public places and use vaccine passes. On Thursday it too was quiet, having rebounded a little to last trade at $1.3207. The new strain is also making it harder for market participants to predict how quickly central banks will cut back pandemic-era emergency stimulus and raise interest rates. Banks' different schedules had been the major factor shaping currency markets in recent weeks. Most importantly the U.S. Federal Reserve is expected to announce it will accelerate tapering of its bond-buying programme at its meeting next week. Expectations of U.S. tapering had helped the dollar index rise to over a year high in late November, before Omicron's emergence sent it lower. CPI inflation data due Friday could also have an effect on the Fed's decision.
  • Gold was down on Thursday morning in Asia, while U.S. dollar and Treasury yields are on an upward trend. Investors now await U.S. inflation data which could provide clues on the Federal Reserve's next policy move. U.S. data, including the consumer price index (CPI), is due on Friday. Investors also digested Wednesday’s JOLTs job opening figure, which surged to 11.033 million in October. However, decreasing hiring also suggests a worsening worker shortage. The Fed is expected to hike interest rates in the third quarter of 2022, earlier than expected a month ago, according to a Reuters poll. Most of the respondents added that the risk was of an even-sooner interest rate hike. Across the Atlantic, European Central Bank vice president Luis de Guindos said on Wednesday that Eurozone inflation will take longer to fall back to target than earlier thought, but so far there is no evidence that high prices are becoming embedded in wages. The Fed, European Central Bank, and the Bank of England are all due to hand down their policy decisions next week.
  • Oil was up Thursday morning in Asia, extending gains as fears about the omicron COIVD-19 variant’s impact on economic recovery and fuel demand continue to ease. However, the black liquid’s gains were capped as some governments reimposed restrictive measures to curb omicron’s spread. The U.K. imposed a work-from-home mandate, while Denmark closed restaurants, bars, and schools. China also halted group tourist trips from Guangdong. Meanwhile, Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration showed a draw of 240,000 barrels for the week ended Dec. 3. Forecasts prepared by Investing.com had predicted a 1.705-million-barrel draw, while a 910,000-barrel draw was reported during the previous week. Crude oil supply data from the American Petroleum Institute released the day before, showed a draw of 3.809 million barrels.

 

 
Intraday RESISTANCE LEVELS
9th 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 72.30-73.00 73.80 74.50-75.05
EURO/USD 1.1340-1.1385 1.1420 1.1485-1.1510
GBP/USD 1.3270-1.3300 1.3390 1.3420-1.3490
USD/JPY ¬113.60-113.90 114.50 115.00-115.90

Intraday SUPPORTS LEVELS
9th 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 71.50-70.60 70.10 69.10-67.90
EURO/USD 1.1310-1.1240 1.1170 1.1120-1.1050
GBP/USD 1.3100 1.3100 1.3050-1.3010
USD/JPY 113.20-112.70 112.10 111.50-111.00

Intra-Day Strategy (9th 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$1793.00/oz and low of US$1779.52/oz. Gold down 0.066% at US$1782.74/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 Wednesday made its intraday high of US$22.55/oz and low of US$22.29/oz settled down by 0.138% at US$22.41/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 Wednesday made an intra‐day high of US$72.78/bbl, intraday low of US$70.75/bbl and settled up by 1.134% to close at US$72.45/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     71.50-70.60
S2     70.10
S3     69.10-67.90

Intraday Resistance Levels
R1     72.30-73.00
R2     73.80
R3     74.50-75.05

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 Wednesday made an intraday low of US$1.1260/EUR, high of US$1.1354/EUR and settled the day up by 0.706% to close at US$1.1341/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 1.1340-1.1540 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     1.1340-1.1385
R2     1.1420
R3     1.1485-1.1510

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.042 Buy
20-DMA   1.1337 Sell
50-DMA   1.1453 Sell
100-DMA   1.1585 Sell
200-DMA   1.1700 Sell
STOCH(5,3)   63.685 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 1.3200-1.3050 with targets 1.3300-1.3390-1.3420 and 1.3490-1.3540 with stop loss closing below 1.3050. Sell in between 1.3270-1.3540 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     1.3100
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 Monday made intra‐day low of JPY113.30/USD and made an intraday high of JPY113.94/USD and settled the day up 0.0299% at JPY113.57/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

AAFX TRADING
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