AAFX TRADING

Daily Market Lookup

  • The dollar held its recent gains in Asian trading on Wednesday as investors looked towards a key Federal Reserve policy meeting to see if it would reinforce growing market expectations for earlier and additional rate rises next year. The dollar's gains have been broad-based, though daily moves were muted ahead of the Fed decision But the Federal Reserve meeting due to wrap up later in the day stood out as the centrepiece of a week full of central bank meetings. She said traders were watching the U.S. Federal Open Market Committee for two things: firstly whether they accelerate tapering of their bond buying programme, and secondly whether policymakers bring forward their projections for interest rate rises, in their so-called "dot plot". Markets have been pricing for the Fed to wrap up bond-buying around March and then proceed with one or maybe two rate hikes in 2022. ECB officials are set to call time on the central bank's Pandemic Emergency Purchase Programme (PEPP), but investors will look to see how the six-year old Asset Purchase Programme (APP) may pick up the slack. Elsewhere, a Reuters poll showed analysts have reversed earlier expectations that the Bank of England will raise rates on Thursday, because of the spread of Omicron in Britain. The dollar was down on Wednesday morning in Asia, but moves were small as investors bet on the U.S. Federal Reserve hiking interest rates quicker than expected in 2022 from its policy meeting later in the day. Around 20 key central banks will hand down their policy decisions throughout the week, with the Fed handing down its policy decision later in the day. She added that investors were watching the Fed meeting for two reasons, firstly whether the central bank will accelerate asset tapering and secondly whether it will bring forward their projections for interest rate rises, known as "dot plots". They are betting the Fed will complete asset tapering between $25 billion-$30 billion per month, from $15 billion currently, by March 2022. They also predict one or two interest rate hikes in the same year. A figure at the lower end of that range could cause some short-term dollar weakness, said Mundy. The Bank of England (BOE) will hand down its policy decision on Thursday. The BOE is expected to keep interest rates steady, according to a Reuters poll, with the U.K. reporting the first death linked to omicron on Monday, according to Prime Minister Boris Johnson. The European Central Bank will also hand down its policy decision on Thursday, followed by the Bank of Japan a day later.
  • Gold was down on Wednesday morning in Asia, as investors await a decision on asset tapering and earlier interest rate hikes by the U.S. Federal Reserve in its latest policy decision. The Fed’s two-day policy meeting is set to wrap up later in the day, where it will hand down its policy decision. Investors are betting that the Fed will taper its assets between $25 billion-$30 billion every month, from $15 billion currently, by March 2022, and also expect one or two interest rate hikes in the same year. The Bank of England, the European Central Bank will hand down their policy decisions on Thursday, followed by the Bank of Japan (BOJ) on Friday. According to a Reuters poll, the BOE is expected to keep interest rates unchanged given that the U.K. reported the first death linked to omicron on Monday, according to Prime Minister Boris Johnson. On the data front, U.K. payrolls rose by a record 257,000 in November, putting the BOE in a dilemma as it frames its decision. Meanwhile, BOJ Governor Haruhiko Kuroda said the country's consumer inflation could hover near 2%, indicating an increase in raw material costs.
  • Oil prices fell for a third day straight on Wednesday on growing expectations that supply growth will outpace demand growth next year, even though the Omicron coronavirus variant is not seen curbing mobility as sharply as earlier COVID-19 variants. The International Energy Agency (IEA) on Tuesday said a surge in COVID-19 cases with the emergence of the Omicron variant will dent global demand for oil at the same time that crude output is set to increase, especially in the United States, with supply set to exceed demand through at least the end of next year. In contrast, the Organization of the Petroleum Exporting (OPEC) on Monday raised its world oil demand forecast for the first quarter of 2022. Energy consultancy FGE said it has a more optimistic outlook than the IEA as the consultancy expects a smaller surplus of 400,000 barrels per day, based on a comparatively lower demand risk from Omicron, against IEA's forecast of 1.7 million bpd in the first quarter Also weighing on the market is a firming U.S. dollar, which makes commodities priced in the greenback more expensive for other countries. Markets are awaiting the outcome of a key U.S. Federal Reserve policy meeting on Wednesday for signs of when the central bank may raise interest rates. In another bearish indicator, industry data showed that U.S. crude inventories last week did not decline as much as expected. American Petroleum Institute data showed U.S. crude stocks fell by 815,000 barrels in the week ended Dec. 10, according to market sources, compared with a 2.1 million barrel drop that 10 analysts polled by Reuters had expected. However, distillate stocks fell by 1 million barrels, compared with analysts' forecasts for an increase of 700,000 barrels, and gasoline stocks rose by 426,000 barrels, which was a smaller build than expected. Weekly data from the U.S. Energy Information Administration is due later on Wednesday.

 

 
Intraday RESISTANCE LEVELS
15th December 2021 R1 R2 R3
GOLD-XAU 1,778-1,791 1,800 1,808-1,818
Silver-XAG 22.10-22.60 22.50 10-23.80
Crude Oil 70.10-70.60 71.50 72.30-73.00
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 ¬113.90 115.00-115. 90 115.00-115.90

Intraday SUPPORTS LEVELS
15th December 2021 S1 S2 S3
GOLD-XAU 1,769 1,758 ,750-1,744
Silver-XAG 21.40-21.00 20.50 19.90-19.50
Crude Oil 69.30-68.50 67.90 67.00-65.40
EURO/USD 1.1240-1.1170 1.1120 1.1050-1.1100
GBP/USD 1.3200-1.3150 1.3270-1.3300 1.3270-1.3300
USD/JPY 113.60-113.20 112.70 112.10-111.50

Intra-Day Strategy (15th 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$1789.44/oz and low of US$1766.36/oz. Gold up 0.877% at US$1770.65/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 1783-1774-1769 and 1758-1750.

 
Intraday Support Levels
S1     1,769
S2     1,758
S3     ,750-1,744
Intraday Resistance Levels
R1     1,778-1,791
R2     1,800
R3     1,808-1,818

Technical Indicators

Name   Value Action
14DRSI  

46.082

Buy
20-DMA   1791.54 Buy
50-DMA  

1794

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$22.32/oz and low of US$21.67/oz settled down by 1.773% at US$21.92/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 21.60-20.50, targeting 22.10-22.60-23.20 and 23.80-24.05-24.55 with stop loss should be place on the breakage below 20.10. Sell in between 21.60-24.50 with stop loss above 24.50; targeting 21.40-21.00-20.50 and 19.90-19.50.

 
Intraday  Support Levels
S1     21.40-21.00
S2     20.50
S3     19.90-19.50

Intraday  Resistance Levels
R1     22.10-22.60
R2     22.50
R3     10-23.80

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 Tuesday made an intra‐day high of US$71.78/bbl, intraday low of US$69.30/bbl and settled down by % to close at US$70.02/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 70.10-73.00 with stop loss at 73.00; targeting 69.10-68.50-67.90-67.90 and 67.00-65.40. Buy above 69.30-67.90 with risk daily closing below 67.90 and targeting 70.10-70.60-71.50 and 72.30-73.00-73.80.

 
Intraday Support Levels
S1     69.30-68.50
S2     67.90
S3     67.00-65.40

Intraday Resistance Levels
R1     70.10-70.60
R2     71.50
R3     72.30-73.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.522 Sell
20-DMA   72.01 Sell
50-DMA   74.29 Buy
100-DMA   73.52 Buy
200-DMA   69.21 Buy
STOCH(5,3)   45.873 Buy
MACD(12,26,9)   -2.045 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1252/EUR, high of US$1.1323/EUR and settled the day down by 0.221% to close at US$1.1258/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 1.1240-1.1100 with risk below 1.1100, targeting 1.1340-1.1385-1.1420 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     1.1240-1.1170
S2     1.1120
S3     1.1050-1.1100

Intraday  Resistance Levels
R1     1.1340-1.1385
R2     1.1420
R3     1.1485-1.1510

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.652 Buy
20-DMA   1.1322 Sell
50-DMA   1.1433 Sell
100-DMA   1.1567 Sell
200-DMA   1.1688 Sell
STOCH(5,3)   44.685 Buy
MACD(12,26,9)   -0.004 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3190/GBP, high of US$1.3256/GBP and settled the day up by 0.137% to close at US$1.3230/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     1.3270-1.3300
S3     1.3270-1.3300

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   32.480 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 Tuesday made intra‐day low of JPY113.42/USD and made an intraday high of JPY113.75/USD and settled the day up 0.099% at JPY113.59/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     113.60-113.20
S2     112.70
S3     112.10-111.50

INTRADAY RESISTANCE LEVELS
R1     ¬113.90
R2     115.00-115. 90
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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