AAFX TRADING

Daily Market Lookup

  • The dollar slid across the board on Monday as traders piled into riskier assets after more Chinese cities eased some of their COVID related restrictions, stoking hopes of an eventual reopening of the world's second biggest economy. Financial hub Shanghai and Urumqi in the far west were among the cities that announced an easing of coronavirus curbs over the weekend following recent, unprecedented protests against the government's uncompromising "dynamic zero-COVID" strategy. China is soon set to announce a nationwide easing of testing requirements as well as allowing positive cases and close contacts to isolate at home under certain conditions, people familiar with the matter told Reuters last week. The recent bearishness toward the dollar had largely stemmed from expectations that the Federal Reserve is set to dial down the pace of its interest rate hikes after four consecutive 75 basis points increases. Investors' focus will be on U.S. consumer price inflation data due out on Dec. 13, one day before the Fed concludes its two-day policy meeting. The U.S. central bank is expected to increase policy rates by an additional 50 basis points at the meeting. Fed funds futures traders are now pricing for the Fed's benchmark rate to peak at 4.92% in May. The yen's ascent comes at a time when the spotlight has been on the drawbacks of prolonged monetary easing policy and ahead of a Bank of Japan leadership transition when governor Haruhiko Kuroda, regarded as a policty dove, ends his second term. The BOJ should conduct a review of monetary policy framework and tweak its massive stimulus programme depending on the outcome, its board member Naoki Tamura told the Asahi daily.
  • Most Asian currencies rose sharply on Monday as more Chinese cities relaxed some anti-COVID measures, while improving risk appetite and expectations of smaller rate hikes saw the dollar sink to an over five-month low. Several Chinese cities relaxed movement curbs and testing mandates over the weekend, drumming up hopes for a broader scaling back of the government’s strict zero-COVID policy. A wave of unprecedented anti-government protests put an increasing amount of pressure on the Chinese government to relax COVID-related restrictions, amid growing public ire over the zero-COVID policy. Slowing economic growth is also expected to force the government’s hand. Data on Monday showed Chinese business activity shrank for a third straight month in November. China is still facing a record-high daily increase in COVID infections, which may see the government hesitate in scaling back all anti-COVID measures. Analysts said that infections will likely rise as the country relaxes curbs, which could fuel some near-term volatility in markets. Still, the currencies of countries with high trade exposure to China all rallied on Monday. The South Korean won and the Singapore dollar surged 0.8% and 0.5%, respectively, while the Australian dollar jumped 0.9% despite data showing that local business conditions worsened in the third quarter. Also benefiting Asian currencies, the U.S. dollar extended its declines into a fifth straight session, taking little support from data that showed the country’s labor market remained robust in November. The dollar index and dollar futures sank 0.4% each, and traded at their weakest level since late-June, with investors sticking to the Federal Reserve’s forecast of smaller interest rate hikes in the coming months. The central bank is expected to hike rates by a relatively smaller 50 basis points when it meets next week in its last meeting for 2022. Dovish signals from the Fed helped several beaten-down currencies stage a strong recovery in recent weeks. The Japanese yen traded around 134 on Monday - a near four-month high, after recovering over 13% from a 32-year low hit in October. The prospect of smaller interest rate hikes by the Fed has dampened the outlook for the dollar, with the greenback now set to dip below the 100 mark in the coming months. This scenario is positive for Asian currencies, although uncertainty over the path of U.S. inflation is likely to keep gains limited.
  • Oil prices edged up on Monday after OPEC+ nations held their output targets steady ahead of a European Union ban and a price cap kicking in on Russian crude. At the same time, in a positive sign for fuel demand, more Chinese cities eased COVID-19 curbs over the weekend, though the partial easing in policies sowed confusion across the country on Monday. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together called OPEC+, agreed on Sunday to stick to their October plan to cut output by 2 million barrels per day (bpd) from November through 2023. Analysts said the OPEC+ decision was expected as major producers wait to see the impact of the EU import ban and Group of Seven (G7) $60-a-barrel price cap on seaborne Russian oil, with Russia threatening to cut supply to any country adhering to the cap. The OPEC+ decision to keep production unchanged, along with weak economic data out of China, however, could reverse oil's price gains, said Leon Li, a Shanghai-based analyst at CMC Markets. Business and manufacturing activity in China, the world's second largest economy and top crude oil importer, have been hit this year amid strict zero-tolerance measures to curb the spread of the coronavirus.

 

 
Intraday RESISTANCE LEVELS
5th December 2022 R1 R2 R3
GOLD-XAU 1,790-1,800 1,808 1,814-1,826
Silver-XAG 23.30-23.60 24.00 24.40-25.00
Crude Oil 80.50-81.10 81.60-82.50 83.40-84.30
EURO/USD 1.0570-1.0610 1.0650-1.0720 1.0770-1.0830
GBP/USD 1.2350-1.2410 1.2490-1.2550 1.2630-1.2700
USD/JPY 136.50-137.00 137.70-138.10 +139.00-140.20

Intraday SUPPORTS LEVELS
5th December 2022 S1 S2 S3
GOLD-XAU 1,774-1,759 1,750-1,736 1,724-1,716
Silver-XAG 23.00-22.50 22.20-21.90 21.10-20.70
Crude Oil 79.60-78.70 77.90-77.00 76.10-75.25
EURO/USD 1.0490-1.0520 1.0450 1.0320-1.0290
GBP/USD 1.2280-1.2200 1.2120-1.2090 1.2030-1.1950
USD/JPY 136.00-135.40 134.90 134.10-133.50

Intra-Day Strategy (5th 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 Friday made its intraday high of US$1804.38/oz and low of $1778.46/oz. Gold is down by 0.277% at US$1797.63/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 1805-1826 keeping stop loss closing above 1826, targeting 1790-1774-1759 and 1750-1736-1724. Buy in between 1794-1724 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 Friday made its intraday high of US$23.22/oz and low of US22.26/oz settled up by 1.84% at US$23.13/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 23.00-20.30, targeting 23.30-23.60-24.00 and 24.40-25.00 with stop loss should be placed on the breakage below 20.00. Sell in between 23.40-25.00 with stop loss above 25.00; targeting 23.00-22.10-21.70 and 21.30-20.70-20.10.

 
Intraday  Support Levels
S1     23.00-22.50
S2     22.20-21.90
S3     21.10-20.70

Intraday  Resistance Levels
R1     23.30-23.60
R2     24.00
R3     24.40-25.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.044 Buy
20-DMA   21.55 Buy
50-DMA   20.69 Buy
100-DMA   20.46 Buy
200-DMA   21.03 Buy
STOCH(5,3)   70.699 Sell
MACD(12,26,9)   0.671 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$82.12/bbl, an intraday low of US$79.66/bbl, and settled down by 1.294% to close at US$80.32/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 79.60-82.50 with stop loss at 82.50; targeting 78.70-77.90-77.00 and 76.10-75.25-74.20. Buy above 79.60-73.00 with risk daily closing below 73.00; targeting 80.50-81.10-81.80 and 82.50-83.40-84.30.

 
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 Friday made an intraday low of US$1.0427/EUR, a high of US$1.0544/EUR, and settled the day up by 0.275% to close at US$1.0427/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 1.0570-1.0830, targeting 1.0490-1.0520-1.0450 and 1.0390-1.0290-1.0210 with stop-loss at daily closing above 1.0545. Buy above 1.0490-1.0290 with risk below 1.0290 targeting 1.0570-1.0610-1.0650 and 1.0720-1.0770.

 
Intraday Support Levels
S1     1.0490-1.0520
S2     1.0450
S3     1.0320-1.0290

Intraday  Resistance Levels
R1     1.0570-1.0610
R2     1.0650-1.0720
R3     1.0770-1.0830

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.432 Buy
20-DMA   1.0325 Sell
50-DMA   1.0161 Buy
100-DMA   1.0164 Buy
200-DMA   1.0387 Buy
STOCH(5,3)   92.671 Buy
MACD(12,26,9)   0.0131 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2133/GBP, a high of US$1.2299/GBP, and settled the day up 0.3715% to close at US$1.2290/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     1.2280-1.2200
S2     1.2120-1.2090
S3     1.2030-1.1950

Intraday Resistance Levels
R1     1.2350-1.2410
R2     1.2490-1.2550
R3     1.2630-1.2700

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

68.456

Buy
20-DMA   1.1942 Buy
50-DMA   1.1725 Buy
100-DMA   1.17771 Buy
200-DMA   1.2103 Buy
STOCH(5,3)   88.467 Buy
MACD(12,26,9)   0.0014 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made an intra‐day low of JPY134.28/USD and made an intraday high of JPY135.98/USD and settled the day down by 0.706% at JPY134.28/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     +139.00-140.20

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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