AAFX TRADING

Daily Market Lookup

  • The dollar traded marginally lower early in the European session Thursday, near a one-week low, amid growing optimism for the global economic outlook despite the surge of Omicron-variant Covid cases. The growth projection was raised to 3.2% for fiscal 2022 from a forecast 2.2% real GDP growth seen at a mid-year review in July. This would be the fastest growth since fiscal 2010. Risk sentiment has improved as the week has progressed, helped by a couple of studies suggesting that patients with the Omicron variant face a lower risk of hospitalization and severe disease compared with the Delta variant, the previously dominant strain. Also helping was the release of positive U.S. economic data on Wednesday, with GDP growing 2.3% quarter-on-quarter in the third quarter and existing home sales rising 1.9% in November. However, it was U.S. consumer confidence improving more than expected in December despite the resurgence in Covid-19 infections which had the biggest impact. The economic data slate is packed Thursday, including initial jobless claims, new home sales, durable goods orders, and the PCE price index. It also includes personal income and spending, as well as the University of Michigan consumer sentiment and expectations indexes. Elsewhere, USD/TRY dropped 1.8% to 11.8270, with the lira continuing to rebound after President Recep Tayyip Erdogan said Wednesday that measures to protect the Turkish lira bank deposits from depreciation amid a currency crisis have achieved their goal. Elsewhere, the Russian ruble rose to its highest level in over a month ahead of President Vladimir Putin's annual press conference, against a backdrop of continued tension on the Ukrainian border, where over 100,000 Russian troops have massed. Analysts will want to see whether Putin repeats to a more general audience the hawkish comments that he made to his defense chiefs earlier in the week.
  • The safe-haven dollar languished near an almost one-week low against its major peers on Thursday as investors adopted a more optimistic stance about the global economic outlook, despite the rapid spread of the Omicron coronavirus variant. Risk appetite has improved since Monday, when markets were rattled by government restrictions relating to the spread of Omicron. However, data on Wednesday showed U.S. consumer confidence improving more than expected in December, suggesting the economy would continue to expand in 2022 despite a resurgence in COVID-19 infections and reduced stimulus spending. There was also encouraging news from a South African study, which suggested reduced risks of hospitalisation and severe disease in people infected with Omicron compared with the Delta strain. Many analysts expect the dollar to strengthen in coming months after a hawkish tilt this month at the Federal Reserve put an interest-rate increase in March on the table, setting the U.S. central bank apart from more dovish peers in Europe, Japan, Australia and elsewhere. Money markets price better than 50-50 odds for an increase by the March policy meeting.
  • Gold was up on Thursday morning in Asia, holding steady in holiday-thinned trade. A weaker dollar offset investors’ renewed risk appetite, attributable to an encouraging study about the omicron COVID-19 variant that increased optimism around the global economic recovery. A South African study, which is yet to be peer-reviewed, said reduced risks of hospitalization and severe disease in people infected omicron variant versus the delta variant. The U.S. on Wednesday also gave emergency use authorization for Paxlovid, Pfizer Inc.'s (NYSE:PFE) antiviral COVID-19 pill. Meanwhile, U.S. data released on Wednesday showed that the GDP grew 2.3% quarter-on-quarter in the third quarter of 2021. Existing home sales were at 6.46 million for November and the Conference Board Consumer Confidence index was at 115.8 for December. Further data due later in the day include initial jobless claims, new home sales, durable goods orders, the PCE price index, personal income and spending, as well as the University of Michigan consumer sentiment and Michigan Consumer Expectations indexes.
  • Oil prices shrugged off early gains on Thursday as countries imposed new travel curbs to combat surging cases, though the downside remained capped over positive developments around COVID-19. The big gains on Wednesday were partly spurred by a larger-than-expected drawdown in U.S. crude stockpiles last week. The United States authorized Pfizer Inc (NYSE:PFE)'s antiviral COVID-19 pill for people ages 12 and older, the first oral and at-home treatment as well as a new tool against the fast-spreading Omicron variant. Meanwhile, AstraZeneca (NASDAQ:AZN) said a three-dose course of its COVID-19 vaccine is effective against the Omicron coronavirus variant, citing data from an Oxford University lab study. On the flip side, governments reimposed a range of restrictions to slow the spread of Omicron. The Chinese city of Xian on Wednesday ordered its 13 million residents to stay home, while Scotland imposed gathering limits from Dec. 26 for up to three weeks, and two Australian states reimposed mask mandates as cases surged. However, fears over the potential impact of mobility restrictions on fuel demand have receded because the Organization of the Petroleum Exporting Countries (OPEC), Russia and allies, together called OPEC+, has left the door open to reviewing their plan to add 400,000 barrels per day of supply in January.

 

 
Intraday RESISTANCE LEVELS
23rd December 2021 R1 R2 R3
GOLD-XAU 1,808-1,818 1,824 1,834-1,845
Silver-XAG 23.15-23.80 24.50 24.90-25.50
Crude Oil 72.50-73.30 73.70 74.00-74.60
EURO/USD 1.1340-1.1385 1.1420 1.1485-1.1510
GBP/USD 1.3390¬-1.3440 1.3490 1.3550-1.3610
USD/JPY 114.50-115.00 115.90 116.50-116.90

Intraday SUPPORTS LEVELS
23rd December 2021 S1 S2 S3
GOLD-XAU 1,800-1,785 1,778 1,769-1,758
Silver-XAG 22.60-22.10 21.40 21.00-20.50
Crude Oil 71.60-71.00 70.10 69.50-68.50
EURO/USD 1.1240-1.1170 1.1120 1.1050-1.1100
GBP/USD 1.3300-1.3200 1.3150 1.3100-1.3050
USD/JPY 113.90-113.50 113.10 112.70-112.10

Intra-Day Strategy (23rd 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$1804.97/oz and low of US$1785.75/oz. Gold down 0.088% at US$1803.38/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 1808-1831 keeping stop loss closing above 1820, targeting 1783-1774-1769 and 1758-1750.

 
Intraday Support Levels
S1     1,800-1,785
S2     1,778
S3     1,769-1,758
Intraday Resistance Levels
R1     1,808-1,818
R2     1,824
R3     1,834-1,845

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 Wednesday made its intraday high of US$22.82/oz and low of US$22.43/oz settled up by 1.365% at US$22.79/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 22.60-20.50, 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 22.90-24.50 with stop loss above 24.50; targeting 21.40-21.00-20.50 and 19.90-19.50.

 
Intraday  Support Levels
S1     22.60-22.10
S2     21.40
S3     21.00-20.50

Intraday  Resistance Levels
R1     23.15-23.80
R2     24.50
R3     24.90-25.50

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 US72.98/bbl, intraday low of US$70.72/bbl and settled up by 2.305% to close at US$72.86/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 72.50-74.60 with stop loss at 74.50; targeting 71.60-71.00-70.10 and 69.50-68.50-67.90. 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     71.60-71.00
S2     70.10
S3     69.50-68.50

Intraday Resistance Levels
R1     72.50-73.30
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 Wednesday made an intraday low of US$1.1263/EUR, high of US$1.1341/EUR and settled the day up by 0.440% to close at US$1.1324/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$1.3239/GBP, high of US$1.3362/GBP and settled the day up by 0.767% to close at US$1.3347/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 1.3300-1.3050 with targets 1.3390-1.3420 and 1.3490-1.3540 with stop loss closing below 1.3050. Sell in between 1.3390-1.3610 with targets at 1.3300-1.3265-1.3200 and 1.3150-1.3100-1.3050 with stop loss should be 1.3790.

 
Intraday Support Levels
S1     1.3300-1.3200
S2     1.3150
S3     1.3100-1.3050

Intraday Resistance Levels
R1     1.3390¬-1.3440
R2     1.3490
R3     1.3550-1.3610

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 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     113.90-113.50
S2     113.10
S3     112.70-112.10

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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