AAFX TRADING

Daily Market Lookup

  • The dollar was down on Thursday morning in Asia, with the U.S. Federal Reserve tightening its monetary policy in a hawkish pivot. The Fed will accelerate its asset tapering program to $30 billion per month, it said in its policy decision meeting on Wednesday. The central bank also kept its interest rate unchanged at 25% but will have three quarter-point interest-rate increases in 2022, another three in 2023, and two more in 2024 to tackle inflation. Investors are now looking to policy decisions from the European Central Bank (ECB) and Bank of England (BOE) later in the day, while that of the Bank of Japan will come on Friday. The ECB is set to end their Pandemic Emergency Purchase Program, but investors are still betting that the central bank will not hike interest rates just yet. The BOE is attempting to tackle inflation and calm concerns about the fast-spreading omicron variant. U.K. data on Wednesday showed that the consumer price index (CPI) grew 5.1% year-on-year in November, its highest level in a decade. The CPI grew 0.7% month-on-month.
  • The dollar paused for breath on Thursday, having given up a brief rally made after the U.S Federal Reserve said it would end pandemic-era bond purchases in March, as investors awaited imminent decisions from other major central banks. Investors are now sitting tight ahead of meetings from the European Central Bank, the Bank of England, and others before firming up their positions at the end of a busy week for central banks. All three main U.S. stock indexes reversed earlier losses and climbed into positive territory after the meeting, extending gains as Fed Chair Jerome Powell struck an upbeat tone in a news conference and expressed willingness to raise interest rates as necessary to control inflation. But the Fed was not the only game in town. The ECB, BOE, as well as the Swiss National Bank and Norges Bank will hold policy meetings later Thursday. ECB officials are set to call time on the central bank's Pandemic Emergency Purchase Programme but investors will look to see how the six-year old Asset Purchase Programme may pick up the slack, though rate rises are a way away. The pound rested at $1.1326 ahead of a meeting in which the BOE is trying to both hose down inflation and address concerns about an economy already worried about the looming fast-spreading Omicron variant of COVID-19. Data on Wednesday showed UK inflation surged to 5.1% in November, its highest in more than 10 years, the same day the country recorded its highest daily coronavirus cases since the start of the pandemic.
  • Gold was up on Thursday morning in Asia, with the dollar weakening after the U.S. Federal Reserve announced that it would quicken its asset tapering and hike interest rates in its latest policy decision. The yellow metal clawed back up after an initial decline of almost 1% to a two-month low after the Fed handed down its policy decision on Wednesday. It will accelerate its asset tapering program to $30 billion per month. It also left its interest rate unchanged at 25% but project three quarter-point interest-rate increases in 2022, another three in 2023, and two more in 2024.
  • Oil was up Thursday morning in Asia, with the U.S. signaling that consumer petroleum demand surged to a record high despite the threat posed by the omicron COVID-19 for fuel demand. The U.S. Federal Reserve is also acting to tackle inflation before it impacts the economic recovery, which also gave the black liquid a boost Wednesday’s U.S. crude supply data from the U.S. Energy Information Administration (EIA) showed a draw of 4.584 million barrels in the week to Dec. 10. Forecasts prepared by Investing.com had predicted a 2.082-million-barrel draw, while a 240,000-barrel draw was recorded during the previous week. Crude supply data from the American Petroleum Institute released the day before showed a draw of 815,000 barrels. Gains in gasoline, diesel, and other refined products saw product supplied by refineries, a gauge for demand, surge in the most recent week to 23.2 million barrels per day (bpd). The upcoming holiday season could also see more people traveling and loosen supply-chain bottlenecks that will have more trucks on the road delivering goods, according to analysts. However, worries about omicron remain, with the U.K., South Africa, and South Korea reporting record numbers of daily COVID-19 cases. South Korea is one of the latest countries to tighten restrictive measures, and many firms globally are asking employees to work from home, which could impact fuel demand. Meanwhile, the Fed said it would quicken its asset tapering and hike interest rates as it handed down its policy decision on Wednesday. While keeping its interest rate steady at 25%, the Fed projected three quarter-point interest rate hikes in 2022, three in 2023, and two in 2024.

 

 
Intraday RESISTANCE LEVELS
16th December 2021 R1 R2 R3
GOLD-XAU 1,791-1,800 1,808 1,818-1,824
Silver-XAG 22.60 22.50 23.10-23.80
Crude Oil 71.50-72.30 73.00 73.50-74.20
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 114.50-115.00 115.90 116.50-117.00

Intraday SUPPORTS LEVELS
16th 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 69.30 68.50-67.90
EURO/USD 1.1240-1.1170 1.1120 1.1050-1.1100
GBP/USD 1.3200-1.3150 1.3100 1.3050-1.3010
USD/JPY 113.90-113.60 113.20 112.70-112.10

Intra-Day Strategy (16th 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$1780.79/oz and low of US$1752.87/oz. Gold up 0.328% at US$1776.60/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     1,778-1,769
S2     1,758
S3     1,750-1,744
Intraday Resistance Levels
R1     1,791-1,800
R2     1,808
R3     1,818-1,824

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 Wednesday made its intraday high of US$22.11/oz and low of US$21.41/oz settled up by 0.569% at US$22.05/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     22.10-21.40
S2     21.00
S3     20.50-19.90

Intraday  Resistance Levels
R1     22.60
R2     22.50
R3     23.10-23.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.673 Buy
20-DMA   22.70 Sell
50-DMA   23.24 Sell
100-DMA   24.17 Sell
200-DMA   24.17 Sell
STOCH(5,3)   54.891 Buy
MACD(12,26,9)   -0.186 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$71.43/bbl, intraday low of US$69.30/bbl and settled down by % to close at US$71.22/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 71.50-74.20 with stop loss at 74.20; targeting 70.90-70.10-69.10 and 68.50-67.90-67.90. Buy above 70.60-67.90 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     70.60-70.10
S2     69.30
S3     68.50-67.90

Intraday Resistance Levels
R1     71.50-72.30
R2     73.00
R3     73.50-74.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.522 Sell
20-DMA   72.09 Sell
50-DMA   74.24 Buy
100-DMA   73.51 Buy
200-DMA   69.25 Buy
STOCH(5,3)   43.873 Buy
MACD(12,26,9)   -1.741 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1220/EUR, high of US$1.1298/EUR and settled the day up by 0.199% to close at US$1.1280/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 Wednesday made an intra‐day low of US$1.3170/GBP, high of US$1.3282/GBP and settled the day up by 0.205% to close at US$1.3257/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 Wednesday made intra‐day low of JPY113.56/USD and made an intraday high of JPY114.26/USD and settled the day up 0.329% at JPY113.97/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 113.90-110.50 with targets of 114.50-114.90-115.60 and 116.00-116.50-117.00 with stop below 106.00. Sell below 114.50-117.00 with risk above 117.00 targeting 113.90-113.20-112.70 and 112.10-111.50.

 
Intraday Support Levels
S1     113.90-113.60
S2     113.20
S3     112.70-112.10

INTRADAY RESISTANCE LEVELS
R1     114.50-115.00
R2     115.90
R3     116.50-117.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.065 Buy
20-DMA   113.67 Sell
50-DMA   113.29 Sell
100-DMA   112.34 Sell
200-DMA   110.87 Sell
STOCH(9,6)   69.683 Buy
MACD(12,26,9)   0.0102 Sell

AAFX TRADING
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