AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trade Wednesday, but ranges are tight as traders continue to assess the impact of the Omicron Covid variant as the year-end approaches. Still, looking at the bigger picture, Omicron infections are multiplying across Europe, the United States and Asia, causing many countries to consider new restrictions on movement to the likely detriment to risk sentiment, thus benefiting the safe-haven dollar. Additionally, the U.S. Federal Reserve announced the speeding up of the withdrawal of its bond-buying program last week, potentially bringing forward interest rate hikes to the first half of 2022. This contrasts with the still very accommodative stance of the Bank of Japan, while the European Central Bank only slightly reined in stimulus last week, still ruling out any interest rate hikes next year. Another factor that could support the dollar near term is the growing tension on the border between Russia and the Ukraine, following reports Russia is massing troops in preparation for invasion. President Vladimir Putin took a hardline stance in a speech Tuesday, saying Russia had no room to retreat in a standoff with the United States over Ukraine and would be forced into a "military-technical" response unless the West backed down. In response, a Biden administration official stated U.S. officials are considering tough export control measures to disrupt Russia's economy should invade Ukraine.
  • The dollar was down on Wednesday morning in Asia, but moves were small as investors continued assessing the impact of the omicron COVID-19 variant on the global economic recovery. Investors are struggling to explain the "risk-on" mood, with some saying markets were struggling to assess omicron's consequences, leading to unseasonable volatility. Typically, currencies' volatility is low in the weeks ahead and after Christmas, but “this year some seasonal tendencies will be mixed with the Omicron variant threatening to force new restrictions and markets still processing a week full of key central bank decisions,” ING analysts told Reuters. With omicron spreading across Europe, the U.S., and Asia, some countries are considering re-imposing restrictive measures. British Prime Minister Boris Johnson urged people to be cautious but ruled out tighter restrictions ahead of the holidays. In Germany, gatherings will likely be limited to 10 people and France will limit New Year’s Eve celebrations. However, news that U.S. Food and Drug Administration could authorize COVID-19 treatment pills from Pfizer Inc. (NYSE:PFE) and Merck & Co . Inc. (NYSE:MRK) as early as this week boosted investor sentiment. Also contributing to improving sentiment, U.S. President Joe Biden is optimistic about reaching a deal with Senator Joe Manchin to push the $1.75 trillion Build Back Better bill through Congress.
  • Gold was up on Wednesday morning in Asia as investors turned to safe-haven assets over the fears of the omicron COVID-19 variant. However, higher U.S. Treasury yields and a somewhat improved investor risk appetite countered these concerns and capped the yellow metal’s gains. Shares were mostly up in Asia on Wednesday but cooled a recent global rally. The omicron variant continues to spread in Europe, the U.S., and Asia and some countries are re-imposing stricter measures. U.K. Prime Minister Boris Johnson urged people to be cautious, but will not impose tighter restrictions ahead of the holidays. France will limit the New Year Eve’s celebrations while Germany will limit gatherings to 10 people. Across the Atlantic, U.S. President Joe Biden urged Americans to get vaccinated before Christmas.
  • Oil prices were steady on Wednesday, with market players on the lookout for fuel demand pointers amid COVID-19 concerns after Singapore suspended quarantine-free travel and Australia renewed its vaccination push due to a surge in Omicron variant cases. Moderna Chief Executive Stephane Bancel said on Tuesday that the vaccine manufacturer does not expect any problems in developing a booster shot to protect against the Omicron variant and could begin work in a few weeks. In another bullish indicator, industry data showed that U.S. crude inventories last week registered a larger-than-expected decline. American Petroleum Institute data showed U.S. crude stocks fell 3.7 million barrels for the week ended Dec. 17, according to market sources, compared with a 2.8 million barrel drop that eight analysts polled by Reuters had expected. Weekly data from the U.S. Energy Information Administration is due later on Wednesday. On the flipside, the Singapore government said it will freeze all new ticket sales for flights and buses from Dec. 23 to Jan. 20 into the city-state, citing Omicron risks. Mobility curbs across the globe once again stoked fears of a decline in fuel demand. Germany, Ireland, the Netherlands and South Korea are among countries that have reimposed partial or full lockdowns or other social distancing measures in recent days. On the supply side, investors are looking ahead to a meeting of the OPEC+ producers group - comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - set for Jan. 4. With the growing production issues in Russia and various others in the Atlantic Basin, it is likely that Middle Eastern producers could push for a continuation of monthly quota increases, consultancy JBC Energy said in a note.

 

 
Intraday RESISTANCE LEVELS
22nd December 2021 R1 R2 R3
GOLD-XAU 1,800-1,808 1,818 1,824-1,831
Silver-XAG 22.60-23.10 23.80 24.20-24.90
Crude Oil 71.60-73.30 73.70 74.00-74.60
EURO/USD 1.1340-1.1385 1.1420 1.1485-1.1510
GBP/USD 1.3300 1.3390 1.3420-1.3490
USD/JPY 114.50-115.00 115.90 116.50-116.90

Intraday SUPPORTS LEVELS
22nd December 2021 S1 S2 S3
GOLD-XAU 1,785-1,778 1,769 1,758-1,758
Silver-XAG 22.10-21.40 21.00 20.50-19.90
Crude Oil 71.00-70.10 69.50 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 115.90 113.10 113.10

Intra-Day Strategy (22nd 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$1800.33/oz and low of US$1784.76/oz. Gold down 0.088% at US$1789.07/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 1785-1758 with risk below 1758, targeting 1808-1818-1824 and 1831-1840. Sell in between 1800-1831 keeping stop loss closing above 1820, targeting 1783-1774-1769 and 1758-1750.

 
Intraday Support Levels
S1     1,785-1,778
S2     1,769
S3     1,758-1,758
Intraday Resistance Levels
R1     1,800-1,808
R2     1,818
R3     1,824-1,831

Technical Indicators

Name   Value Action
14DRSI  

48.253

Buy
20-DMA   1789.95 Buy
50-DMA  

1793.06

Buy
100-DMA   1794.81 Buy
200-DMA   1796.27 Buy
STOCH(5,3)   53.940 Buy
MACD(12,26,9)   -3.816 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$22.77/oz and low of US$22.16/oz settled up by 1.087% at US$22.50/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 Tuesday made an intra‐day high of US71.45/bbl, intraday low of US$68.48/bbl and settled up by 2.965% to close at US$71.17/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 71.60-74.60 with stop loss at 74.50; targeting 71.00-70.10-69.50 and 68.50-67.90-67.10. Buy above 71.00-67.90 with risk daily closing below 67.90 and targeting 71.60-72.50-73.30 and 73.70-74.00-74.60.

 
Intraday Support Levels
S1     71.00-70.10
S2     69.50
S3     68.50-67.90

Intraday Resistance Levels
R1     71.60-73.30
R2     73.70
R3     74.00-74.60

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 Tuesday made an intraday low of US$1.1260/EUR, high of US$1.1302/EUR and settled the day up by 0.008% to close at US$1.1276/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$1.3196/GBP, high of US$1.3270/GBP and settled the day up by 0.323% to close at US$1.3246/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     1.3300
R2     1.3390
R3     1.3420-1.3490

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

32.480

Buy
20-DMA   1.34043 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 JPY113.49/USD and made an intraday high of JPY114.21/USD and settled the day up 0.493% at JPY114.05/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     115.90
S2     113.10
S3     113.10

INTRADAY RESISTANCE LEVELS
R1     114.50-115.00
R2     115.90
R3     116.50-116.90

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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