AAFX TRADING

Daily Market Lookup

  • The dollar was down on Friday morning in Asia, with investors towards riskier assets as fears of the omicron COVID-19 variant’s virulence continue to fade. The USD/JPY pair inched down 0.03% to 114.35, with Japan’s cabinet approving a record initial budget for the year starting in April 2022. According to the country’s Finance Ministry, Japan plans JPY107.6 trillion yen ($941.26 billion) in overall spending for the year ending March 2023, a 0.9% increase from the current year’s initial budget. Meanwhile, data released earlier in the day showed that Japan’s national core consumer price index grew 0.5% year-on-year in November. The USD/CNY pair inched up 0.01% to 6.3702, with the People’s Bank of China setting a weaker-than-forecast yuan fixing, at 6.3692 per dollar, for a record 15th day on Friday. This is the longest period of lower-than-expected yuan fixings since surveys began in 2018, based on instances when the rate is even a fraction below the estimate. Volumes were thin ahead of the holidays, with U.S. markets closed and other markets, such as Hong Kong, ending the trading day early. Investors cheered the U.S. Food and Drug Administration’s emergency use approval for Molnupiravir, Merck & Co . Inc.'s (NYSE:MRK) COVID-19 pill, on Thursday A U.K. study that said omicron infections are less likely to lead to hospitalization also boosted sentiment. However, the study added that the variant may still produce a substantial number of serious cases due to its infectiousness. Meanwhile, a laboratory study showed that two doses and a booster of Sinovac Biotech Ltd.’s vaccine did not produce sufficient levels of neutralizing antibodies to protect against omicron. Elsewhere in Asia Pacific, authorities locked down the western Chinese city of Xi’an, the biggest such move since the pandemic started in early 2020. The city’s 13 million residents were told to remain in their homes and to designate one person to go out every other day for necessities, in a bid to curb China’s latest COVID-19 outbreak.
  • The dollar edged higher against a basket of currencies on Thursday, but its gains were capped as easing fears of fallout from the Omicron coronavirus variant supported higher risk currencies such as the Australian dollar and British pound. Ahead of the holidays and extended long weekend in the United States, most major currency pairs clung to narrow ranges. Upbeat news on the vaccines and omicron-related hospitalizations helped boost investors' appetite for risk, lifting stocks and pushing U.S. Treasury yields higher. Two vaccine makers said their shots protected against Omicron as UK data suggested it may cause proportionally fewer hospital cases than the Delta coronavirus variant, though public health experts warned the battle against COVID-19 was far from over. Separately, data on Thursday showed the number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week, while consumer spending increased solidly, putting the economy on track for a strong finish to 2021. But price pressures continued to build up, with a measure of underlying inflation recording its largest annual increase since 1989 in November.
  • Gold was up on Friday morning in Asia, with the dollar weakening as Santa gifted a “risk-on” rally ahead of the holidays. Receding fears of the omicron COVID-19 variant’s impact on the economic recovery boosted investors’ risk appetites, capping gains for the yellow metal. A U.K. study also showed that omicron infections are less likely to lead to hospitalization, but added that the variant may still produce a significant number of serious cases due to its infectiousness. In Asia Pacific, however, a laboratory study showed that two doses and a booster of Sinovac Biotech Ltd.’s vaccine did not produce sufficient levels of neutralizing antibodies to protect against omicron. China also locked down Xi'an on Thursday to curb the latest COVID-19 outbreak in the western city. With the city’s 13 million residents told to remain in their homes and to designate one person to go out every other day for necessities, it is the biggest lockdown since the pandemic’s start in early 2020. Elsewhere in the region, data released earlier in the day showed that Japan’s national core consumer price index grew 0.5% year-on-year in November. The country’s cabinet also approved a record initial budget for the year starting in April 2022. For the year ending March 2023, Japan plans JPY107.6 trillion yen ($941.26 billion) in overall spending, a 0.9% increase from the current year’s initial budget, according to the finance ministry.
  • Brent crude futures snapped a three-day rally on Friday in light trade, with many investors away for the holidays, but the benchmark was still headed for a weekly gain, with the market focusing on the next step by OPEC+ and the impact of the Omicron variant. U.S. markets are closed on Friday for the Christmas holiday. Oil prices have recovered this week as fears over the impact of the highly infectious Omicron variant on the global economy receded, with early data suggesting it causes a milder level of illness. The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, will likely stick to its decision to raise oil production by 400,000 barrels per day (bpd) each month at its next meeting as long as oil prices stay above $70 a barrel, Chen added. The group is scheduled to meet next on Jan. 4. Still, some investors remained cautious amid surging infection cases. Omicron advanced across the world on Thursday, with health experts warning the battle against the COVID-19 variant was far from over despite two drugmakers saying their vaccines protected against it and despite signs it carried a lower risk of hospitalisation. Coronavirus infections have soared wherever the variant has spread, triggering new restrictions in many countries, including Italy and Greece, and record numbers of new cases. A higher U.S. rig count also added to pressure on the oil market. Operating U.S. oil and gas rigs rose to their highest levels since April 2020 in the most recent week, according to energy services firm Baker Hughes. Overall counts are now at 586, portending a boost in output in coming months. Asian liquefied natural gas (LNG) prices jumped this week, despite tepid Asian demand, as upside risk in the European gas market remains a key driver directing price movement. Global oil demand roared back in 2021 as the world began to recover from the coronavirus pandemic, and overall world consumption potentially could hit a new record in 2022 - despite efforts to bring down fossil fuel consumption to mitigate climate change.

 

 
Intraday RESISTANCE LEVELS
24th 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 73.70-74.00 74.60 75.20-76.00
EURO/USD 1.1340-1.1385 1.1420 1.1485-1.1510
GBP/USD 1.3440-1.3490 1.3550 1.3610-1.3700
USD/JPY 114.50-115.00 115.90 116.50-116.90

Intraday SUPPORTS LEVELS
24th December 2021 S1 S2 S3
GOLD-XAU 1,800-1,785 1,778 1,769-1,758
Silver-XAG 21.40 21.40 21.00-20.50
Crude Oil 73.30-72.50 71.60 71.00-70.10
EURO/USD 1.1240-1.1170 1.1120 1.1050-1.1100
GBP/USD 1.3390¬-1.3300 1.3200 1.3150-1.3100
USD/JPY 113.90-113.50 113.10 114.50-115.00

Intra-Day Strategy (24th 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$1804.97/oz and low of US$1785.75/oz. Gold up 0.796% 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 Thursday made its intraday high of US$22.92/oz and low of US$22.64/oz settled up by 0.337% at US$22.85/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     21.40
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 Thursday made an intra‐day high of US73.82/bbl, intraday low of US$72.11/bbl and settled up by 0.903% to close at US$73.59/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 73.30-72.50-71.60 and 71.00-70.10. Buy above 72.90-69.90 with risk daily closing below 69.90 and targeting 73.70-74.00-74.60.

 
Intraday Support Levels
S1     73.30-72.50
S2     71.60
S3     71.00-70.10

Intraday Resistance Levels
R1     73.70-74.00
R2     74.60
R3     75.20-76.00

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$1.1289/EUR, high of US$1.1341/EUR and settled the day up by 0.0406% to close at US$1.1319/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 Thursday made an intra‐day low of US$1.3338/GBP, high of US$1.3435/GBP and settled the day up by 0.422% to close at US$1.3403/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 1.3390-1.3050 with target 1.3420 and 1.3490-1.3540 with stop loss closing below 1.3050. Sell in between 1.3440-1.3610 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     1.3390¬-1.3300
S2     1.3200
S3     1.3150-1.3100

Intraday Resistance Levels
R1     1.3440-1.3490
R2     1.3550
R3     1.3610-1.3700

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 JPY114.04/USD and made an intraday high of JPY114.46/USD and settled the day up 0.280% at JPY114.37/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     114.50-115.00

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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