AAFX TRADING

Daily Market Lookup

  • The dollar was down on Friday morning in Asia, remaining under pressure as investors digest a surprise interest rate hike from the Bank of England (BOE), and the European Central Bank (ECB) adopted a more hawkish stance. Key central banks have adopted different policies as uncertainty about the omicron COVID-19 variant’s impact on economic recovery remains. The debate on the extent to which central banks should act to curb high inflation also continues. The pound climbed as high as $1.33755 for the first time since Nov. 24 during the previous session, after the BOE hiked interest rates to 0.25% in a surprise move as it handed down its policy decision on Thursday. It is now the first key central bank to hike interest rates since the beginning of the COVID-19 pandemic. The ECB, in its own policy decision handed down on the same day as the BOE, announced plans toward asset tapering over the upcoming quarters. However, the central bank also emphasized policy flexibility. The Fed turned hawkish in its latest policy decision, handed down on Wednesday. The central bank will accelerate its asset tapering program to end in March 2022, while projecting three quarter-point rate increases that year. In Asia Pacific, the Bank of Japan kept its interest rate steady at -0.10% as it handed down its policy decision earlier in the day. Although keeping within investor expectations, inflation still remains well below the central bank’s target.
  • The U.S. dollar remained under pressure on Friday, a day after the Bank of England and European Central Bank adopted more hawkish stances than markets had expected, giving a boost to sterling and the euro. The dollar index, which measures the currency against six major peers including the euro and British pound, started the Asian session at 95.933 following a 0.61% two-day slide that took it as low as 95.850 on Thursday for the first time since Dec. 8. Sterling edged up to $1.33305, after surging as high as $1.33755 for the first time since Nov. 24 in the previous session, when the BoE surprised most market participants to become the first major central bank to raise interest rates since the beginning of the pandemic. On Wednesday, the Fed said it would accelerate a tapering of its bond-buying stimulus to end the program in March, setting up three quarter-point rate increases next year. The dollar index initially jumped to a three-week high, before beginning its current slump. The different paths taken by major central banks underline deep uncertainties about how the fast-spreading Omicron variant will hit economies and about how much each should do to fight surging inflation, which is hitting hard in the United States and Britain, but less so in Europe. The Bank of Japan announces a policy decision later on Friday, but no change is expected to the core elements of its ultra-loose policy with inflation still stuck well below the central bank's target.
  • Gold was up on Friday morning in Asia after key central banks tightened their monetary policies at their respective meetings this week. Key central banks are tightening monetary policies to calm high inflation while also keeping an eye on the impact of the omicron COVID-19 variant. In a move that surprised markets, the Bank of England (BOE) hiked its interest rate to 0.25% when it handed down its policy decision on Thursday, becoming the first Group of 7 (G7) central bank to hike interest rates since the onset of COVID-19. Meanwhile, the European Central Bank boosted regular monthly bond-buying for half a year when it handed down its policy decision on the same day as BOE. The Fed will accelerate its asset tapering program to $30 billion every month, it said in its policy decision meeting on Wednesday. The central bank also kept its interest rate unchanged but will have three quarter-point interest-rate increases in 2022, three in 2023, and two more in 2024. Supporting the case for interest rates hikes, U.S. data on Thursday showed that the number of initial jobless claims for the week of December 6 was higher-than-expected 206,000.
  • Oil prices dipped on Friday, putting the market on track for a weekly loss, as surging cases of the Omicron coronavirus variant raised fears new curbs may hit fuel demand, while a weaker dollar supported commodity markets broadly. In Denmark, South Africa and the United Kingdom, the number of new Omicron cases has been doubling every two days. Denmark's Prime Minister Mette Frederiksen on Thursday warned the government may impose further curbs to limit the spread of Omicron. In the United States, the rapid spread of the Omicron variant has led some companies to pause plans to get workers back into offices. The Organization of the Petroleum Exporting Countries, Russia and allies, together known as OPEC+, have said they could meet ahead of their scheduled Jan. 4 meeting if changes in the demand outlook warrant a review of their plan to add 400,000 barrels per day of supply in January. Despite the Omicron threats to demand, Goldman Sachs (NYSE:GS) said on Friday the new variant has had a limited impact on mobility or oil demand, adding it expects oil consumption to hit record highs in 2022 and 2023. Oil prices have also retreated from multi-year highs earlier in the fourth quarter on improved supplies. Benchmark Brent and WTI both gained around 2% on Thursday, buoyed by record U.S. implied demand and a weaker U.S. dollar as the Bank of England surprised markets with a rate hike, taking a more hawkish stance than the Federal Reserve.

 

 
Intraday RESISTANCE LEVELS
17th December 2021 R1 R2 R3
GOLD-XAU 1,808-1,818 1,824 1,831-1,840
Silver-XAG 22.60-23.10 23.80 24.20-24.90
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 113.90-114.50 115.00 115.90-116.50

Intraday SUPPORTS LEVELS
17th December 2021 S1 S2 S3
GOLD-XAU 1,800-1,791 1,778 1,769-1,758
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 113.50-113.10 112.70 112.10-111.30

Intra-Day Strategy (17th 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$1799.55/oz and low of US$1775.44/oz. Gold up 1.252% at US$1799.18/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 1800-1758 with risk below 1758, targeting 1808-1818-1824 and 1831-1840. Sell in between 1790-1818 keeping stop loss closing above 1820, targeting 1783-1774-1769 and 1758-1750.

 
Intraday Support Levels
S1     1,800-1,791
S2     1,778
S3     1,769-1,758
Intraday Resistance Levels
R1     1,808-1,818
R2     1,824
R3     1,831-1,840

Technical Indicators

Name   Value Action
14DRSI  

55.975

Buy
20-DMA   1790.95 Buy
50-DMA  

1794.06

Buy
100-DMA   1794.81 Buy
200-DMA   1796.27 Buy
STOCH(5,3)   88.940 Buy
MACD(12,26,9)   19.816 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$22.52/oz and low of US$21.89/oz settled up by 1.821% at US$22.47/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 22.20-20.50, targeting 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 22.60-24.50 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     22.60-23.10
R2     23.80
R3     24.20-24.90

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 Thursday made an intra‐day high of US$72.69/bbl, intraday low of US$70.83/bbl and settled down by % to close at US$71.69/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 Thursday made an intraday low of US$1.1277/EUR, high of US$1.1359/EUR and settled the day up by 0.458% to close at US$1.1328/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 Thursday made intra‐day low of JPY113.55/USD and made an intraday high of JPY114.24/USD and settled the day down 0.308% 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 113.90-110.50 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     113.50-113.10
S2     112.70
S3     112.10-111.30

INTRADAY RESISTANCE LEVELS
R1     113.90-114.50
R2     115.00
R3     115.90-116.50

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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