AAFX TRADING

Daily Market Lookup

  • The dollar tumbled to a three-month low against the yen on Thursday as traders focussed on comments by Federal Reserve Chair Jerome Powell that interest rate hikes could be scaled back "as soon as December". Powell said on Wednesday that "slowing down at this point is a good way to balance the risks" but added that controlling inflation "will require holding policy at a restrictive level for some time". The dollar-yen pair is extremely sensitive to changes in long-term U.S. Treasury yields, which fell after Powell's comments to a near two-month low overnight of 3.6%. They last stood at 3.6163% in Tokyo. However, the market reaction "is somewhat surprising", Catril said. "The Fed chair really just reiterated the view of late, which is a smaller hike should be expected (at the next meeting on Dec. 14), but he re-emphasized they're not done yet and we should be expecting a much higher terminal rate." Markets are pricing in a 91% probability that the Fed increases rates by 50 basis points at the next meeting, versus a 9% chance of another 75-basis-point hike. The peak is seen below 5% around May. In November, the dollar dropped 7.15% versus the yen, its worst month in 14 years, as investors positioned for a Fed pivot. The dollar index - which measures the currency against six major peers, including the yen and euro - extended Wednesday's more than 1% drop into Thursday, dipping a further 0.28% to 105.48. It tumbled 5.2% in November, its worst monthly showing since September 2010. The common currency's gains came even as a European survey on Wednesday showed euro zone inflation easing far more than expected in November, raising expectations that inflation is past its peak and bolstering the case for slower tightening by the European Central Bank. Giant cities Guangzhou and Chongqing announced easings of COVID curbs on Wednesday, while officials in Zhengzhou, the site of a Foxconn factory that is the world's biggest maker of Apple (NASDAQ:AAPL) iPhones, which has been the scene of worker unrest over COVID, also announced the "orderly" resumption of businesses.
  • Gold prices raced to a three-month high on Thursday after a forecast of smaller interest rate hikes by Federal Reserve Chair Jerome Powell sparked a rally in metal markets, while easing COVID-19 lockdowns in China saw copper prices surge to a two-week peak. The Fed chair said in an address at Washington that the central bank will likely moderate its pace of rate hikes in the coming months, as it steps back to observe the effects of sharp interest rate hikes on the economy this year. But Powell warned that U.S. interest rates will peak at much higher levels than previously expected, largely due to inflation remaining stubbornly high. The personal consumption expenditures price index, the Fed’s preferred inflation gauge, read around 5% in October, well above the Fed’s 2% target. But Powell’s comments still sparked a broad-based rally in metal markets, as the prospect of slower rate hikes offered some near-term relief to markets battered by rising interest rates this year. Gold prices also logged strong gains in November as several Fed officials flagged smaller rate hikes in the coming months. Still, the outlook for the yellow metal is clouded by uncertainty over where U.S. interest rates will peak, given that the Fed’s terminal rate will be largely determined by the path of U.S. inflation. Among industrial metals, copper prices surged to an over two-week high on positive signals of a potential reopening in China. China scaled back COVID-related restrictions in two major cities this week amid growing public opposition to the country’s strict zero-COVID policy, which saw unprecedented protests rock several parts of the country. China’s zero-COVID policy caused widespread economic disruption in the country this year, denting business activities and also weighing on its appetite for commodities. But a potential reopening in the world’s largest copper importer is largely expected to trigger a recovery in demand, benefiting copper prices.
  • Oil prices dipped in Asia trade on Thursday as uncertainty lingered ahead of Sunday's OPEC+ meeting, though easing COVID curbs at the world's top crude importer China capped price declines. The benchmark oil contracts settled higher by over $2 on Wednesday amid a weaker dollar and optimism over Chinese demand recovery. The market is also bracing itself for the impact of European sanctions on Russian oil, the analysts added. The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, is scheduled to meet virtually on Dec. 4. The decision to hold its meeting virtually signals little likelihood of a policy change, sources told Reuters on Wednesday, as the group assesses the impact of the looming Russian oil-price cap on the market. Generally, the mood was lifted by the shift in China's zero-COVID strategy, which raises optimism over Chinese oil demand recovery. The Chinese cities of Guangzhou and Chongqing announced an easing of COVID curbs on Wednesday, a day after demonstrators in southern Guangzhou clashed with police amid a string of protests against the world's toughest coronavirus restrictions. While fresh outbreaks in China could weigh on activity in the near term, the International Monetary Fund said on Wednesday that there was scope for a safe recalibration of COVID policies that could allow economic growth to pick up in 2023. However, Chinese business activity shrank further in November, official PMI data showed on Wednesday, raising fears about next year. Crude inventories fell by 12.6 million barrels in the week to Nov. 25, higher compared with earlier analysts' expectations for a 2.8 million-barrel drop, according to the Energy Information Administration. Nonetheless, gasoline and distillate inventories rose more than expected, an indicator of easing demand. U.S. crude oil output also surpassed 12 million barrels a day, the highest since before the onset of the coronavirus pandemic, the EIA said.

 

 
Intraday RESISTANCE LEVELS
1st December 2022 R1 R2 R3
GOLD-XAU 1,790-1,800 1,808 1,814-1,826
Silver-XAG 22.50-23.00 23.30 23.60-24.00
Crude Oil 80.50-81.10 81.60-82.50 83.40-84.30
EURO/USD 1.0490-1.0520 1.0550 1.0610-1.0650
GBP/USD 1.2090 1.2120-1.2200 1.2280-1.2350
USD/JPY 136.50-137.00 137.70-138.10 139.20-140.20

Intraday SUPPORTS LEVELS
1st December 2022 S1 S2 S3
GOLD-XAU 1,774-1,759 1,750-1,736 1,724-1,716
Silver-XAG 22.20-21.90 21.10-20.70 20.06-19.80
Crude Oil 79.60-78.70 77.90-77.00 76.10-75.25
EURO/USD 1.0450 1.0320-1.0290 1.0210-1.0150
GBP/USD 1.2030-1.1950 1.1870-1.1790 1.1750-1.1650
USD/JPY 136.00-135.40 134.90 134.10-133.50

Intra-Day Strategy (1st December 2022)
GOLD-XAU Sell on Strength
Silver-XAG Buy on Dips
Crude Oil Neutral to Sell
EUR/USD Neutral to Sell
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Wednesday made its intraday high of US$1769.88/oz and low of $1744.83/oz. Gold is down by 1.169% at US$1768.41/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above the zero line and histograms are a2lso increasing trend and it will bring an upward stance in the upcoming sessions. RSI is in the overbought region and more upside is expected before it gets stretched. The Stochastic Oscillator is in neutral territory and giving a negative crossover to a bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1790-1826 keeping stop loss closing above 1826, targeting 1774-1759-1750 and 1736-1724-1716. Buy in between 1771-1700 with risk below 1700, targeting 1790-1800-1808 and 1814-1826.

 
Intraday Support Levels
S1     1,774-1,759
S2     1,750-1,736
S3     1,724-1,716
Intraday Resistance Levels
R1     1,790-1,800
R2     1,808
R3     1,814-1,826

Technical Indicators

Name   Value Action
14DRSI  

66.554

Buy
20-DMA   1739.98 Buy
50-DMA  

1717.70

Buy
100-DMA   1728.12 Buy
200-DMA   1759.07 Buy
STOCH(5,3)   85.762 Buy
MACD(12,26,9)   22.464 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$22.19/oz and low of US21.19/oz settled up by 4.48% at US$22.18/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. MACD is below the zero line and histograms are decreasing trend and it will bring a bearish stance in the upcoming sessions. RSI is approaching the neutral region, indicating a buy signal for now. The Stochastic Oscillator is in the oversold region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 22.10-18.30, targeting 22.50-23.00 and 23.30-23.70 with stop loss should be placed on the breakage below 18.00. Sell in between 22.50-23.40 with stop loss above 23.40; targeting 22.10-21.70-21.30 and 20.70-20.10-19.80.

 
Intraday  Support Levels
S1     22.20-21.90
S2     21.10-20.70
S3     20.06-19.80

Intraday  Resistance Levels
R1     22.50-23.00
R2     23.30
R3     23.60-24.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.00 Buy
20-DMA   21.05 Buy
50-DMA   20.40 Buy
100-DMA   20.30 Buy
200-DMA   20.97 Buy
STOCH(5,3)   60.735 Sell
MACD(12,26,9)   0.4775 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$81.38/bbl, an intraday low of US$78.41/bbl, and settled up by 1.929% to close at US$80.50/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 the zero line and histograms are in increasing mode will bring a bullish stance in the upcoming sessions. The Stochastic Oscillator is in the neutral region, giving a positive crossover for confirmation of a bullish stance; while the RSI is in the 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 78.70-82.50 with stop loss at 82.50; targeting 77.90-77.00-76.10 and 75.25-74.20-73.00. Buy above 77.90-73.00 with risk daily closing below 73.00; targeting 78.70-79.60-80.50 and 81.80-82.50.

 
Intraday Support Levels
S1     79.60-78.70
S2     77.90-77.00
S3     76.10-75.25

Intraday Resistance Levels
R1     80.50-81.10
R2     81.60-82.50
R3     83.40-84.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.105 Sell
20-DMA   82.95 Buy
50-DMA   85.28 Buy
100-DMA   88.44 Sell
200-DMA   89.82 Sell
STOCH(5,3)   35.053 Sell
MACD(12,26,9)   0.501 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.0289/EUR, a high of US$1.0428/EUR, and settled the day up by 0.755% to close at US$1.0404/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which becomes immediate support, a break below will target 1.0647. MACD is above the zero line and histograms are increasing mode which will bring a bullish view. Stochastic is in overbought territory and giving positive crossovers to the bullish outlook for intraday. 14D RSI is currently in a neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Sell

Sell below 1.0450-1.0650, targeting 1.0390-1.0290-1.0210 and 1.0150-1.0105-1.0099 with stop-loss at daily closing above 1.0545. Buy above 1.0350-1.0050 with risk below 1.0050 targeting 1.0450-1.0490-1.0520 and 1.0550-1.0610-1.0650.

 
Intraday Support Levels
S1     1.0450
S2     1.0320-1.0290
S3     1.0210-1.0150

Intraday  Resistance Levels
R1     1.0490-1.0520
R2     1.0550
R3     1.0610-1.0650

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.349 Buy
20-DMA   1.0270 Sell
50-DMA   1.0127 Buy
100-DMA   1.0147 Buy
200-DMA   1.0384 Buy
STOCH(5,3)   49.478 Buy
MACD(12,26,9)   0.0131 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.1899/GBP, a high of US$1.2086/GBP, and settled the day up 0.892% to close at US$1.2055/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2113) is becoming a resistance level. 14-D RSI is currently in a neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and gives a positive crossover to confirm bullish a stance. MACD is above the zero line but histograms are increasing leading to movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.2030-1.1680 with a target of 1.2090-1.2120-1.2200 and 1.2280-1.2350 with a stop loss closing below 1.1680. Sell in between 1.2120-1.2350 with targets at 1.2030-1.1950-1.1870 and 1.1790-1.1750-1.1680 with stop loss should be 1.2350.

 
Intraday Support Levels
S1     1.2030-1.1950
S2     1.1870-1.1790
S3     1.1750-1.1650

Intraday Resistance Levels
R1     1.2090
R2     1.2120-1.2200
R3     1.2280-1.2350

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

66.416

Buy
20-DMA   1.1770 Buy
50-DMA   1.1614 Buy
100-DMA   1.1725 Buy
200-DMA   1.2102 Sell
STOCH(5,3)   89.467 Sell
MACD(12,26,9)   0.0014 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made an intra‐day low of JPY137.88/USD and made an intraday high of JPY139.89/USD and settled the day down by 0.357% at JPY138.01/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 the overbought region and chances of downward are expected based on RSI. MACD is above the 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 a negative crossover to confirm a bearish stance.

Trading Strategy: Neutral to Sell

Sell below 139.20-144.50 with risk above 144.50 targeting 138.10-137.80 and 137.00-136.60-136.00. Long positions above 138.20-136.00 with targets of 139.20-140.20-141.20 and 142.10-143.00-143.80 with stops below 143.00.

 
Intraday Support Levels
S1     136.00-135.40
S2     134.90
S3     134.10-133.50

INTRADAY RESISTANCE LEVELS
R1     136.50-137.00
R2     137.70-138.10
R3     139.20-140.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.408 Buy
20-DMA   141.65 Buy
50-DMA   142.80 Buy
100-DMA   140.63 Buy
200-DMA   134.90 Buy
STOCH(9,6)   14.057 Buy
MACD(12,26,9)   -1.290 Sell

AAFX TRADING
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