AAFX TRADING

Daily Market Lookup

  • The dollar traded largely unchanged early in the European session Wednesday, struggling for direction in holiday-thinned volumes, but looks set for a strong 2022. The safe-haven dollar has been on the backfoot of late with the recent rally in risk assets based on a view the Omicron strain would be less dangerous than the Delta variety, the previous dominant strain, and would thus not derail the global economic recovery too much. That said, the dollar index has enjoyed its best year since 2015 and many expect further advances for the greenback in 2022, as the U.S. Federal Reserve recently indicated it will start hiking interest rates next year, before other major central banks and the European Central Bank and the Bank of Japan, in particular. Elsewhere, USD/TRY rose 2.3% to 12.0812, with the lira weakening amid persisting investor concern over Turkey's monetary policy, having surged more than 50% last week after President Recep Tayyip Erdogan announced a scheme to protect lira deposits against currency volatility. The Turkish lira had recently fallen to record lows on the back of the central bank slashing its policy rate by 500 basis points since September even though inflation soared. The next iteration of the country’s inflation rate is due in early January, and is expected to have climbed above 30% in December for the first time since 2003, according to a Reuters poll. The dollar inched up on Wednesday as a recent rally in shares showed signs of petering out, but holiday-thinned trading meant markets were showing little real direction. But with many traders having taken time off for Christmas or the end of the year, analysts said it was hard to read too much into the moves. He said longer term, however, he was bullish on the greenback due to approaching rate hikes by the Federal Reserve and the apparent reduced chance of future lockdowns in the United States. The Fed is widely expected to begin hiking rates before several other major central banks such as the European Central Bank, and this has helped the dollar index to have its best year in 2021 since 2015. Markets have been largely trading based on changing assessments of the impact of the Omicron variant of COVID-19, with the recent rally in risk assets like equities based on a view the new strain would not derail the global economic recovery too much. U.S. health authorities on Monday shortened the recommended isolation time for Americans with asymptomatic cases of COVID-19 to five days from the previous guidance of 10.
  • Gold was down on Wednesday morning in Asia, with falling U.S. Treasury yields countering the impact from slightly improved risk sentiment, and giving the yellow metal a boost. Asia Pacific shares were mostly lower on Wednesday, even as concerns over travel disruptions and store closures due to the omicron COVID-19 variant diminished. For its part, gold continued on a downward trend over increasing evidence that omicron does not pose a major threat to the global economic recovery and investors retreated from the safe-haven asset. Omicron isn’t “the same disease we were seeing a year ago,” and even patients who do end up in the hospital spend less time there, according to University of Oxford immunologist John Bell, reinforcing reports about the variant’s overall milder nature. However, daily COVID-19 cases exceeded 1 million for a second consecutive day with the pressure mounting on healthcare systems. Gold is set for its first annual loss in three years, after hitting an all-time high in 2020, with central banks beginning to withdraw COVID-19 stimulus packages to curb rising inflation. Although the remaining uncertainty over omicron has somewhat boosted demand for safe-haven assets, concerns over the threat to economic activity and reopening are beginning to die down. With volumes thin on Wednesday, investors expect this trend to continue and a tight range throughout the remaining trading days of 2021.
  • U.S. oil rose for a sixth consecutive session on Wednesday. A number of asset classes ranging from oil to equities have won back losses from late November when the Omicron variant of COVID-19 sent investors into a spiral. But now a delay in Britain and France on imposing more COVID curbs before the end of the year have given investors new hope. As fears of its impact eased, investors have returned to risk assets. However, Omicron has led to staff shortages that caused thousands of flight cancellations over the Christmas weekend in the United States. Oil prices were also propped by three oil producers slowing down their oil production due to maintenance issues and oilfield shutdowns. Tuesday’s U.S. crude oil supply data from the American Petroleum Institute showed a draw of 3.1 million barrels the week ended Dec. 24. Forecasts prepared by Investing.com had predicted a 3.23-million-barrel draw, while a 3.67-million-barrel draw was recorded during the previous week. Investors now also await U.S. crude oil supply data from the U.S. Energy Information Administration, due later in the day. While Russia is not likely to hit its May target of pre-pandemic oil output levels due to lacking spare production capacity, it could do so later in the year, according to analysts and company sources. Russia's Deputy Prime Minister Alexander Novak had stated that output by May is expected to hit pre-pandemic levels of approximately 11.33 million barrels per day (bpd) of oil and gas condensate, as seen in April 2020. Investors now await the OPEC+ meeting on Jan. 4, where the group will decide whether to go ahead with a planned production increase of 400,000 barrels per day in February. At the last meeting, OPEC+ went ahead with boosting output for January despite Omicron The development of Iran's largest oilfield, Azadegan, is to be completed by mid-2023, according to the Iranian Oil Ministry. It is capable of total production of 320,000 barrels per day (bpd).

 

 
Intraday RESISTANCE LEVELS
29th December 2021 R1 R2 R3
GOLD-XAU 1,818-1,824 1,834 1,840-1,848
Silver-XAG 23.15-23.80 24.50 24.90-25.50
Crude Oil 76.00-76.50 77.55 78.20-79.00
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 115.00 115.90 116.50-116.90

Intraday SUPPORTS LEVELS
29th December 2021 S1 S2 S3
GOLD-XAU 1,808-1,800 1,785 1,778-1,769
Silver-XAG 22.60-22.10 21.40 21.00-20.50
Crude Oil 75.20-74.60 74.00 73.30-72.50
EURO/USD 1.1120 1.1120 1.1050-1.1100
GBP/USD 1.3390¬-1.3300 1.3200 1.3150-1.3100
USD/JPY 114.50-113.90 113.10-112.70 113.10-112.70

Intra-Day Strategy (29th 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$1820.15/oz and low of US$1804.93/oz. Gold down 0.461% at US$1806.05/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 1808-1758 with risk below 1758, targeting 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     1,808-1,800
S2     1,785
S3     1,778-1,769
Intraday Resistance Levels
R1     1,818-1,824
R2     1,834
R3     1,840-1,848

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$23.42/oz and low of US$22.95/oz settled up by % at US$23.00/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 Tuesday made an intra‐day high of US76.73/bbl, intraday low of US$75.35/bbl and settled up by 0.0158% to close at US$75.80/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 76.00-79.00 with stop loss at 79.00; targeting 75.20-74.60-74.00 and 73.30-72.50-71.60. Buy above 75.20-72.90 with risk daily closing below 72.90 and targeting 76.00-76.50-77.55 and 78.20-79.00.

 
Intraday Support Levels
S1     75.20-74.60
S2     74.00
S3     73.30-72.50

Intraday Resistance Levels
R1     76.00-76.50
R2     77.55
R3     78.20-79.00

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 Tuesday made an intraday low of US$1.1288/EUR, high of US$1.1332/EUR and settled the day down by 0.1686% to close at US$1.1307/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     1.1120
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$1.3414/GBP, high of US$1.3461/GBP and settled the day down by 0.132% to close at US$1.3421/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 Tuesday made intra‐day low of JPY114.69/USD and made an intraday high of JPY114.94/USD and settled the day up 0.0235% at JPY114.80/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     114.50-113.90
S2     113.10-112.70
S3     113.10-112.70

INTRADAY RESISTANCE LEVELS
R1     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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