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Daily Market Lookup

  • The U.S. dollar clawed back some of the previous day's declines on Thursday as investors weighed the outlook for Federal Reserve policy amid simmering fears that high-interest rates could spur a recession. With Japan's own long-term yields pegged near zero by the central bank, the yen slid as long-term U.S. Treasury yields cclamboff three-month lows. Meanwhile, the yuan hovered close to an almost three-month high after China revealed a loosening of stifling COVID restrictions. While investors have been anticipating the Fed will soon slow its tightening pace, recent upbeat U.S. employment, services and factory data have added to investor uncertainty over the policy outlook. Money markets price 91% odds that the policy-setting Federal Open Market Committee will raise rates by half a point on Dec. 14, with just 9% probability for another 75 basis point increase. Rates are now seen peaking at just below 5% in May. Fed policy makers will have the benefit of seeing the latest consumer inflation data a day before the decision. Long-term Treasury yields plunged to an almost three-month low of 3.402% overnight, but bounced back to around 3.46% in Tokyo. The dollar-yen pair, which is extremely sensitive to U.S. yields, jumped 0.37% to 137.06 following a 0.34% depreciation overnight. More broadly though, the pair continued its consolidation after slumping to the lowest level since mid-August last week at 133.62. On the U.S. political front, the Democrats strengthened their razor-thin majority in the senate after a narrow win for incumbent Raphael Warnock in Georgia over Donald Trump-backed former football star Herschel Walker, although the impact on the dollar was limited. The euro has risen recently on signs that Europe's economic downturn may not be as bad as previously feared. The European Central Bank will review policy on Dec. 15. The Bank of England sets policy the same day.
  • The U.S. dollar weakened slightly against major currencies on Wednesday amid concerns that rising interest rates could push the U.S. economy into recession, while an easing of China's COVID restrictions boosted the yuan. Some investors have been anticipating the Fed will soon slow its rate tightening pace, but recent upbeat U.S. employment, services and factory data has added to investor uncertainty over the Fed's policy outlook. The Fed is expected to raise rates again when it meets next week. One view is that "recessionary worries are going to drive the Fed to pause. This is why the dollar is weakening here," said Edward Moya at OANDA in New York. "Surging interest rates have the primary driver for dollar strength over the last year." The U.S. dollar was down 0.1% against the Canadian dollar. The Bank of Canada hiked its benchmark overnight interest rate by 50 basis points to 4.25%, the highest level in almost 15 years, and signaled the tightening campaign was near an end. In Asia, China's yuan was firmer as the government earlier announced measures that marked a sharp change to its tough zero-COVID policy that has battered its economy and triggered historic protests. China's national health authority said asymptomatic COVID-19 cases and those with mild symptoms can self-treat while in quarantine at home. The announcement was the strongest sign so far that China is preparing its people to live with the disease, though analysts say the path to fully reopening the economy will be long and bumpy.
  • -Oil prices rebounded in Asian trade on Thursday after slumping to their lowest level this year in the previous session, though concerns of economic slowdowns weakening fuel demand continued to cap gains. He added that worries about demand would remain a key overhang for oil prices, while positive catalysts including the supply-demand imbalance and China's reopening hopes have been short-lived. U.S. crude production rose to 12.2 million barrels per day last week, its highest level since August, the Energy Information Administration said on Wednesday. While U.S. crude stocks fell last week, gasoline and distillate inventories surged, adding to concerns about easing demand. Gasoline stocks grew by 5.3 million barrels in the week to 219.1 million barrels, and distillate stockpiles, including diesel and heating oil, swelled by 6.2 million barrels, the EIA said. Helping to lift oil prices was data showing that Japan's economy shrank less than initially estimated in the third quarter. Loosening COVID-19 restrictions in China, among the biggest crude oil consumers in the world, also aided in steadying oil prices. Meanwhile, Western officials are in talks with Turkish counterparts to resolve oil tanker queues off Turkey, a British Treasury official said, after the G7 and European Union rolled out new restrictions on Dec. 5 aimed at Russian oil exports. At least 20 oil tankers continue to face delays to cross from Russia's Black Sea ports to the Mediterranean as operators race to adhere to the Turkish rules. Oil prices rose on Thursday as data showed U.S. inventories shrank at a faster-than-expected rate, although rampant fears of a recession dimmed the outlook for crude markets after causing sharp losses this week. An increasing number of market participants warned that high U.S. inflation and rising interest rates could bring about a recession in 2023, with economic growth expected to cool significantly from current levels. This dulled sentiment towards crude, pushing prices to their weakest levels this year. But markets took some relief from data showing U.S. inventories shrank more than expected in the week to December 2, signaling some near-term tightening in the country’s crude supply.

 

 
Intraday RESISTANCE LEVELS
8th December 2022 R1 R2 R3
GOLD-XAU 1,790 1,800-1,808 1,814-1,826
Silver-XAG 23.00 23.30-23.60 24.00-24.40
Crude Oil 74.10-75.25 76.10-77.00 77.90-78.70
EURO/USD 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
8th December 2022 S1 S2 S3
GOLD-XAU 1,774-1,759 1,750-1,736 1,724-1,716
Silver-XAG 22.50-22.20 21.90-21.10 20.70-20.40
Crude Oil 73.30-72.60 71.90-71.00 69.50-68.30
EURO/USD 1.0490-1.0450 1.0390-1.0320 1.0290-1.0160
GBP/USD 1.2190-1.2120 1.2090 1.2030-1.1950
USD/JPY 136.50-136.00 135.40-134.90 134.10-133.50

Intra-Day Strategy (8th 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$1790.47/oz and low of $1768.62/oz. Gold is up by 0.849% at US$1785.90/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 and 1750-1736-1724. Buy in between 1768-1724 with risk below 1700, targeting 1790-1800 and 1808-1814-1826.

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

Technical Indicators

Name   Value Action
14DRSI  

58.852

Buy
20-DMA   1753.27 Buy
50-DMA  

1727.13

Buy
100-DMA   1732.25 Buy
200-DMA   1759.97 Buy
STOCH(5,3)   34.205 Buy
MACD(12,26,9)   20.928 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$22.80/oz and low of US22.80/oz settled down by 2.488% at US$22.71/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 22.50-20.30, 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     22.50-22.20
S2     21.90-21.10
S3     20.70-20.40

Intraday  Resistance Levels
R1     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 Wednesday made an intra‐day high of US$75.47/bbl, an intraday low of US$71.96/bbl, and settled down by 2.850% to close at US$72.52/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 74.10-81.60 with stop loss at 81.60; targeting 73.10-72.60 and 71.90-71.00. Buy above 73.10-71.00 with risk daily closing below 71.00; targeting 74.10-75.25-76.10-77.00 and 77.90-78.70-79.60.

 
Intraday Support Levels
S1     73.30-72.60
S2     71.90-71.00
S3     69.50-68.30

Intraday Resistance Levels
R1     74.10-75.25
R2     76.10-77.00
R3     77.90-78.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.634 Sell
20-DMA   79.95 Buy
50-DMA   83.20 Buy
100-DMA   86.86 Sell
200-DMA   88.89 Sell
STOCH(5,3)   11.334 Sell
MACD(12,26,9)   -2.419 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.0443/EUR, a high of US$1.0549/EUR, and settled the day up by 0.412% to close at US$1.0504/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     1.0490-1.0450
S2     1.0390-1.0320
S3     1.0290-1.0160

Intraday  Resistance Levels
R1     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 Wednesday made an intra‐day low of US$1.2105/GBP, a high of US$1.2234/GBP, and settled the day down 0.410% to close at US$1.2199/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     1.2190-1.2120
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 Wednesday made an intra‐day low of JPY136.21/USD and made an intraday high of JPY137.85/USD and settled the day up by 0.2366% at JPY136.60/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

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