AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged higher in early European trade Tuesday, continuing the previous session’s hefty gains after strong U.S. services data, while the euro slipped even as German industrial production numbers impressed. The dollar rallied on Monday as the Institute for Supply Management's non-manufacturing PMI unexpectedly rose, suggesting the country’s dominant services sector remained resilient in November even as the Federal Reserve aggressively hiked interest rates to tackle inflation at historic highs. This followed stronger than expected jobs creation on Friday, and raised concerns that the U.S. central bank will be given license to continue with its interest rate increases of 75 basis points for the fifth consecutive meeting next week. The dollar had slumped 1.3% last week after a speech from Federal Reserve Chair Jerome Powell signaled a downshift in the pace of rate hikes, while risk sentiment was given a boost by signs that the Chinese authorities were loosening their tight COVID mobility restrictions. The U.S. economic data slate is quiet Tuesday and Federal Reserve policymakers are in their traditional blackout period ahead of their final policy meeting for 2022 next week. So trading ranges could be tight until Friday’s U.S. producer price inflation data for clues about how hawkish the central bank may be. The figures still leave orders on course for a decline in quarter-on-quarter terms, albeit a less steep one than feared. The bank warned that Australian inflation was far from cooling, which is likely to necessitate more rate hikes in the coming months. The focus this week will be on Chinese trade data, on Wednesday, to gauge how the economy held up through increased COVID restrictions in the past month.
  • The U.S. dollar held firm against major peers on Tuesday, following its biggest rally in two weeks after strong services data in the United States fuelled bets the Federal Reserve may lift interest rates more than recently projected. However, it later reversed course as the Institute for Supply Management's (ISM) non-manufacturing PMI unexpectedly rose, indicating the services sector, which accounts for more than two-thirds of U.S. economic activity, remained resilient. The Federal Open Market Committee decides policy on Dec. 15. Traders currently expect a half-point hike to a 4.25-4.5% policy band and a terminal rate of just above 5% in May. U.S. long-term Treasury yields climbed the most since Oct. 20 overnight, sending the yield-sensitive dollar-yen pair 1.83% to as high as 136.835. The dollar continued to have an edge on Tuesday, with the yen at 136.94. The Aussie dollar rose 0.6% to $0.6738, clawing back some of a 1.4% overnight tumble after the RBA said it was not on a preset course to tighten policy but that inflation was still high. Investors had been on watch for signs of a pause in tightening after inflation unexpectedly cooled last month. In recent days though, RBA policy has taken a back seat to optimism about an easing of strangling COVID-19 restrictions in China, a top trading partner.
  • Oil rebounded on Tuesday after plunging by more than 3% in the previous session, as the implementation of sanctions on Russian seaborne crude oil eased concerns about oversupply while the relaxing of China's COVID curbs bolstered the demand outlook. Crude futures on Monday recorded their biggest daily drop in two weeks, after U.S. service sector data raised worries that the Federal Reserve could continue its aggressive policy tightening path. The Group of Seven set a top price of $60 a barrel on Russian crude, aiming to limit Moscow's ability to finance its war in Ukraine, but Russia has said it will not abide by the measure even if it has to cut production. The price cap, to be enforced by the G7 nations, the European Union and Australia, comes on top of the EU's embargo on imports of Russian crude by sea and similar pledges by the United States, Canada, Japan and Britain. While the market weighs the impact of sanctions on Russian supply, it was also watching a traffic jam of oil tankers off the coast of Turkey on Monday, with Ankara insisting on new proof of insurance for all vessels. In China, more cities are easing COVID-19-related curbs, prompting optimism for increased demand in the world's top oil importer. The country is set to announce a further relaxation of some of the world's toughest COVID curbs as early as Wednesday, sources said. Business and manufacturing activity in China, the world's second-largest economy, have been hit this year by strict measures to rein in the spread of the coronavirus. But the oil price gains could prove fragile, as it would take time to confirm a sustained recovery in Chinese consumption, as well as the supply impact of Russian sanctions. Saudi Arabia, the world's top oil exporter, cut the January official selling price for its flagship Arab Light crude for Asian buyers to a 10-month low.

 

 
Intraday RESISTANCE LEVELS
6th December 2022 R1 R2 R3
GOLD-XAU 1,774-1,790 1,800-1,808 1,814-1,826
Silver-XAG 22.50-23.00 23.30-23.60 24.00-24.40
Crude Oil 77.90-78.70 79.60-80.50 81.10-81.60
EURO/USD 1.0490--1.0520 1.0570-1.0610 1.0650-1.0720
GBP/USD 1.2280-1.2350 1.2410-1.2490 1.2550-1.2630
USD/JPY 137.00 137.70-138.10 139.00-140.20

Intraday SUPPORTS LEVELS
6th December 2022 S1 S2 S3
GOLD-XAU 1,759-1,750 1,736 1,724-1,716
Silver-XAG 22.20-21.90 21.10 20.70-20.40
Crude Oil 77.00- 76.10 75.25 74.50-73.70
EURO/USD 1.0450-1.0390 1.0320-1.0290 1.0160
GBP/USD 1.2200-1.2120 1.2090 1.2030-1.1950
USD/JPY 136.50-136.00 135.40-134.90 134.10-133.50

Intra-Day Strategy (6th 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 Monday made its intraday high of US$1809.87/oz and low of $1765.73/oz. Gold is down by 1.57% at US$1768.52/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 1774-1826 keeping stop loss closing above 1826, targeting 1759 and 1750-1736-1724. Buy in between 1757-1724 with risk below 1700, targeting 1774-1790-1800 and 1808-1814-1826.

 
Intraday Support Levels
S1     1,759-1,750
S2     1,736
S3     1,724-1,716
Intraday Resistance Levels
R1     1,774-1,790
R2     1,800-1,808
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 made its intraday high of US$23.50/oz and low of US22.15/oz settled up by 1.84% at US$22.24/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 22.20-20.30, targeting 22.50-23.30-23.60 and 24.00-24.40-25.00 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 22.10-21.70 and 21.30-20.70-20.10.

 
Intraday  Support Levels
S1     22.20-21.90
S2     21.10
S3     20.70-20.40

Intraday  Resistance Levels
R1     22.50-23.00
R2     23.30-23.60
R3     24.00-24.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.367 Buy
20-DMA   21.55 Buy
50-DMA   20.72 Buy
100-DMA   20.48 Buy
200-DMA   21.04 Buy
STOCH(5,3)   64.901 Sell
MACD(12,26,9)   0.671 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$82.72/bbl, an intraday low of US$76.84/bbl, and settled down by 3.28% to close at US$77.42/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 77.90-81.60 with stop loss at 81.60; targeting 77.00-76.10-75.25 and 74.50-73.70. Buy above 77.00-73.00 with risk daily closing below 73.00; targeting 77.90-78.70-79.60 and 80.50-81.10-81.80.

 
Intraday Support Levels
S1     77.00- 76.10
S2     75.25
S3     74.50-73.70

Intraday Resistance Levels
R1     77.90-78.70
R2     79.60-80.50
R3     81.10-81.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.296 Sell
20-DMA   80.84 Buy
50-DMA   83.68 Buy
100-DMA   87.17 Sell
200-DMA   89.06 Sell
STOCH(5,3)   37.053 Sell
MACD(12,26,9)   0.501 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0476/EUR, a high of US$1.0594/EUR, and settled the day up by 0.397% to close at US$1.0487/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 1.0490-1.0720, targeting 1.0450 and 1.0390-1.0290-1.0210 with stop-loss at daily closing above 1.0545. Buy above 1.0450-1.0290 with risk below 1.0290 targeting 1.0490-1.0570-1.0610-1.0650 and 1.0720-1.0770.

 
Intraday Support Levels
S1     1.0450-1.0390
S2     1.0320-1.0290
S3     1.0160

Intraday  Resistance Levels
R1     1.0490--1.0520
R2     1.0570-1.0610
R3     1.0650-1.0720

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.432 Buy
20-DMA   1.0319 Sell
50-DMA   1.0159 Buy
100-DMA   1.0163 Buy
200-DMA   1.0387 Buy
STOCH(5,3)   83.42 Buy
MACD(12,26,9)   0.0126 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2161/GBP, a high of US$1.2343/GBP, and settled the day down 0.671% to close at US$1.2182/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 1.2200-1.1950 with a target of 1.2280-1.2350-1.2410 and 1.2490-1.2250-1.2630 with a stop loss closing below 1.1950. Sell in between 1.2280-1.2630 with targets at 1.2200-1.2190-1.2090 and 1.2030-1.1950-1.1870 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2200-1.2120
S2     1.2090
S3     1.2030-1.1950

Intraday Resistance Levels
R1     1.2280-1.2350
R2     1.2410-1.2490
R3     1.2550-1.2630

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

63.457

Buy
20-DMA   1.1957 Buy
50-DMA   1.1740 Buy
100-DMA   1.1778 Buy
200-DMA   1.2103 Buy
STOCH(5,3)   74.467 Buy
MACD(12,26,9)   0.0014 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made an intra‐day low of JPY134.12/USD and made an intraday high of JPY135.98/USD and settled the day up by 0.706% at JPY136.70/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 137.00-144.50 with risk above 144.50 targeting 136.60-136.00-135.40-134.90. Long positions above 136.50-133.60 with targets of 137.00-137.70 and 138.10-139.00-140.20 with stops below 143.00.

 
Intraday Support Levels
S1     136.50-136.00
S2     135.40-134.90
S3     134.10-133.50

INTRADAY RESISTANCE LEVELS
R1     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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