AAFX TRADING

Daily Market Lookup

  • The dollar was up on Monday morning in Asia the U.S. Federal Reserve signaled an earlier interest rate hike of March 2022, while Europe grapples with surging Omicron. Key central banks handed down their policy decisions last week, with the Fed turning hawkish in its latest policy decision. The central bank will accelerate its asset tapering program to end in March 2022 and project three quarter-point rate increases in the same year. The Bank of England hiked interest rates to 0.25% as it handed down its policy decision, a surprise move as it handed down its policy decision last Thursday. The European Central Bank also announced plans of asset tapering over the upcoming quarters on the same day. On Friday, Fed Governor Chris Waller said the central bank might raise interest rates “shortly after” the completion of bond purchases in March 2022. On the COVID-19 front, U.S. President Joe Biden’s top medical adviser Anthony Fauci said a shutdown will not be necessary despite COVID-19 surges again. However, European countries are imposing more restrictions over the surging Omicron cases. The U.K. is warning that new curbs could be imposed by Christmas, as the country detected 12,000 cases on Sunday. The Netherlands has already gone into lockdown.
  • The dollar rose in early European trade Monday, climbing close to its recent high, as the Federal Reserve pointed to early rate hikes while Europe struggles with surging Omicron cases. The U.S. central bank took a hawkish turn last week after its two-day policy meeting, with Fed policymakers agreeing to speed up the removal of its bond-buying program, potentially also bringing forward the first interest rate increase of the post-pandemic period. This new stance was confirmed by a couple of policymakers late last week, with Fed Governor Chris Waller stating that a rate increase in March would be "very likely", while Mary Daly, president of the San Francisco Fed, said she would support two or three rate hikes next year. The Bank of England also turned hawkish last week, becoming the first G-7 central bank to lift interest rates since the start of the pandemic. However, any benefit to sterling from this move has quickly dissipated as Omicron cases soared, and Britain's health minister declined to rule out tightening restrictions on economic and social activity before Christmas.
  • Gold was down on Monday morning in Asia as the Fed signaled an earlier interest rate hike, while fears over the Omicron COVID-19 variant spreading continues. The dollar, which normally moves inversely to gold, inched up on Monday after Fed Governor Chris Waller said on Friday the central bank is likely to raise interest rates “shortly after” the end of bond purchases in March 2022. The rapid transmission of the Omicron variant is also on the radar of investors. The World Health Organization said on Saturday that the number of Omicron cases is doubling in 1.5 to 3 days in areas with local infections, but the severity of the variant remained unclear Americans are urged by U.S. health officials to take booster shots, wear masks. Several European countries may tighten restrictions over surging Omicron cases ahead of Christmas and New Year holidays. The U.K. is warning that it may impose new restrictions ahead of Christmas, as the country detected 12,000 cases on Sunday. The Netherlands has gone into lockdown over the weekend.
  • Oil prices slumped 3% on Monday as surging cases of the Omicron coronavirus variant in Europe and the United States stoked investor worries that new restrictions on businesses to combat its spread may hit fuel demand.The Netherlands went into lockdown on Sunday and the possibility of more COVID-19 restrictions being imposed ahead of the Christmas and New Year holidays loomed over several European countries. U.S. health officials urged Americans on Sunday to get booster shots, wear masks and be careful if they travel over the winter holidays, as the Omicron variant raged across the world and was set to take over as the dominant strain in the United States. Meanwhile, U.S. energy firms this week added oil and natural gas rigs for a second week in a row. The oil and gas rig count, an early indicator of future output, rose by three to 579 in the week to Dec. 17, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday. Still, lower exports are expected from Russia with exports and transit of oil from the country planned at 56.05 million tonnes in the first quarter of 2022 versus 58.3 million tonnes in the fourth quarter of 2021, a quarterly export schedule seen by Reuters showed on Friday. China's diesel exports in November plunged 69% from a year ago as refineries prioritised domestic supply to ease a fuel crunch with state-backed refineries having raised oil processing rates.

 

 
Intraday RESISTANCE LEVELS
20th 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 68.50-69.30 70.10 70.60-71.50
EURO/USD 1.1340-1.1385 1.1485-1.1510 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
20th 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 67.90-67.10 66.60 66.10-65.30
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 112.70 112.70 112.10-111.30

Intra-Day Strategy (20th 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 Friday made its intraday high of US$1814.16/oz and low of US$1795.69/oz. Gold down 0.0689% at US$1798.02/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 Friday made its intraday high of US$22.66/oz and low of US$21.89/oz settled up by 1.821% at US$22.33/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 67.90-67.10 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$71.98/bbl, intraday low of US$69.66/bbl and settled down by 2.348% 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 68.50-71.50 with stop loss at 71.50; targeting 67.90-67.10 and 66.20-65.30. Buy above 67.90-65.30 with risk daily closing below 65.30 and targeting 68.50-69.30-70.10 and 70.60-71.50-72.30.

 
Intraday Support Levels
S1     67.90-67.10
S2     66.60
S3     66.10-65.30

Intraday Resistance Levels
R1     68.50-69.30
R2     70.10
R3     70.60-71.50

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 Friday made an intraday low of US$1.1233/EUR, high of US$1.1348/EUR and settled the day down by 0.783% to close at US$1.1239/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     1.1485-1.1510
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 Friday made an intra‐day low of US$1.3228/GBP, high of US$1.3338/GBP and settled the day down by 0.593% to close at US$1.3239/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 Friday 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 JPY113.66/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     112.70
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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