AAFX TRADING

Daily Market Lookup

  • The dollar was firm on Friday as traders wagered U.S. inflation figures could settle the course of interest rate rises next year, while the Chinese yuan regained its footing after being knocked back by official policy. The dollar index, at 96.197, was drifting toward its seventh consecutive weekly rise ahead of the data, which is due at 1330 GMT. Annual price gains of 6.8% are expected and any upside surprise will likely be interpreted as a case for a faster Federal Reserve taper and sooner interest rate rises. Consumer confidence data is also due on Friday and if it holds up could portend even more price pressures ahead. The Fed, European Central Bank, Bank of England and Bank of Japan also all meet next week and the combination of the inflation data and the possibility of a central bank response have set market volatility gauges surging. Volatility has also been stoked by the ebb and flow of concern about the Omicron variant and by policy in China. A slight rise in the safe-haven yen on Thursday pointed to persistent caution, although a broad relaxation of concern in earlier sessions has the Aussie dollar up more than 2% this week and within sight of its largest weekly rise since August. The yuan fell on Thursday after the People's Bank of China (PBOC) raised FX reserve requirements for the second time since June and was further pressured when the central bank set its trading band midpoint weaker than expected. However, sustained yuan buying from corporates who've amassed an enormous dollar stockpile over the pandemic years drove a bit of a recovery to 6.3650 per dollar on Friday - suggesting to analysts it might steady rather than reverse too far. Elsewhere, sterling has been under pressure as England has tightened restrictions to try and curb the spread of the Omicron variant. It last bought $1.3220.
  • The dollar was down on Friday morning in Asia ahead of U.S. inflation data that could provide clues as to when the Federal Reserve will hike interest rates. The Chinese yuan also recorded its sharpest drop in months after authorities moved to halt its recent rally. The U.S. currency is moving towards its seventh consecutive weekly rise ahead of the U.S. data, including the consumer price index (CPI) and due later in the day. Investors also await policy decisions from the Fed, European Central Bank, Bank of England, and Bank of Japan next week. Meanwhile, the People’s Bank of China raised FX reserve requirements for the second time since June 2021, dunking the yuan about half a percent in offshore trade on Thursday. The move will also encourage yuan selling and cool a rally that has lifted the Chinese currency by more than 2% against the dollar since late July 2021. "It also sent a clear signal on PBOC's discomfort on the rapid and continued appreciation of the currency," Goldman Sachs analysts said in a note.
  • Gold was up on Friday morning in Asia, but set for a fourth consecutive weekly fall. Investors kept moves small, however, ahead of U.S. inflation data that could impact the Federal Reserve's next monetary policy move. The yellow metal has fallen 0.4% so far in the week over concerns that higher inflation and a tightening labor market could spur the Fed to quicken its asset tapering and hike interest rates earlier than expected. The U.S. data, including the consumer price index, is due later in the day. Data released on Thursday showed that 184,000 initial jobless claims were filed throughout the week. This is the lowest number in more than 52 years, as labor market conditions continued to tighten amid an acute worker shortage. European Central Bank (ECB) policymakers are homing in on a temporary increase in the regular bond purchase scheme that would still significantly reduce overall debt buys once a much larger COVID-19-fighting scheme ends in March 2022, according to Reuters. The Fed, ECB, Bank of England, and Bank of Japan will hand down their policy decisions next week.
  • Oil prices drifted in a narrow range on Friday, on track to their biggest weekly gain since late August, as the easing concerns over the Omicron coronavirus variant on global growth and fuel demand drove market sentiment. Earlier in the week, the oil market had recovered about half the losses it suffered since the Omicron outbreak on Nov. 25 as early studies suggest getting three doses of Pfizer vaccine offers protection against the Omicron variant. But Lee warns that the market is not out of the woods yet and there is still some lingering concern on whether the Omicron variant may push border movement restrictions during the festive season. Prices are under pressure as China's domestic air traffic, once the world's envy after a fast rebound during the pandemic, is faltering amid a zero-COVID policy that has led to tighter travel rules in Beijing and weaker consumer confidence after repeated small outbreaks. Meanwhile, ratings agency Fitch downgraded property developers China Evergrande Group and Kaisa Group, saying they had defaulted on offshore bonds. That reinforced fears of a potential slowdown in China's property sector, as well as the broader economy of the world's biggest oil importer. In addition, headlines about a Japanese study showing Omicron is more than four times as transmissible as the Delta variant also sparked some selling, OANDA analyst Jeffrey Halley said. A stronger dollar, rising ahead of U.S. inflation data due later on Friday, also weighed on oil prices. Oil typically falls when the dollar firms as it makes oil more expensive for those holding other currencies. The inflation figures are expected to lead to a push for a U.S. rate hike as early as March 2022.

 

 
Intraday RESISTANCE LEVELS
10th December 2021 R1 R2 R3
GOLD-XAU 1,778-1,791 1,800 1,808-1,818
Silver-XAG 22.10-22.60 23.10 24.10-24.80
Crude Oil 71.50-72.30 73.00 73.50-74.50
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
10th December 2021 S1 S2 S3
GOLD-XAU 1,769-1,758 1,750 1,744-1,730
Silver-XAG 21.40-21.00 20.50 22.10-22.60
Crude Oil 70.60 70.10 69.10-67.90
EURO/USD 1.1290-1.1240 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 (10th 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 Thursday made its intraday high of US$1787.55/oz and low of US$1773.23/oz. Gold down 0.423% at US$1775.25/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 1769-1740 with risk below 1740, targeting 1783-1790-1800 and 1808-1818-1834. Sell in between 1778-1818 keeping stop loss closing above 1820, targeting 1774-1769-1758 and 1750-1744.

 
Intraday Support Levels
S1     1,769-1,758
S2     1,750
S3     1,744-1,730
Intraday Resistance Levels
R1     1,778-1,791
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 Thursday made its intraday high of US$22.46/oz and low of US$21.85/oz settled down by 2.12% at US$21.93/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 21.50-20.90, targeting 22.10-22.60-23.20 and 24.05-24.55-25.05 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     21.40-21.00
S2     20.50
S3     22.10-22.60

Intraday  Resistance Levels
R1     22.10-22.60
R2     23.10
R3     24.10-24.80

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 71.50-74.50 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
S2     70.10
S3     69.10-67.90

Intraday Resistance Levels
R1     71.50-72.30
R2     73.00
R3     73.50-74.50

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 Thursday made an intraday low of US$1.1277/EUR, high of US$1.1344/EUR and settled the day down by 0.435% to close at US$1.1292/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 1.1290-1.1170 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     1.1290-1.1240
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 Wednesday made an intra‐day low of US$1.3169/GBP, high of US$1.3221/GBP and settled the day up by 0.130% to close at US$1.3219/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     1.3200-1.3150
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 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

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