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Daily Market Lookup

  • The U.S. dollar stabilized in early European trade Thursday, as traders sought out this safe haven amid uncertainty over the global economic outlook. Investors are focusing on the U.S. Federal Reserve's policy-setting meeting next week amid expectations that the U.S. central bank will soon slow its tightening pace, likely hiking by 50 basis points after four consecutive increases of 75 basis points. However, recent upbeat U.S. employment, services and factory data have added to investor uncertainty over the policy outlook, ahead of Friday's PPI number and then the all-important CPI release next week. The heads of several big banks have pointed this week to the growing threat of recession, primarily in the U.S., with interest rates likely peaking at higher-than-expected levels if inflation remains sticky. EUR/USD rose 0.2% to 1.0526, with the European Central Bank also widely expected to continue hiking interest rates next week, even after Eurozone inflation fell for the first time in 18 months. GBP/USD rose 0.1% to 1.2214, with the Bank of England set to lift its benchmark interest rate by another 50 basis points next week, despite the economy falling into recession as it battles inflation running at more than five times its target. USD/JPY rose 0.1% to 136.68, with the yen weakening after data showed that Japan registered an unexpected current account deficit in the third quarter, with the currency's weakness making imports more expensive. Japan's third quarter GDP was also revised a shade higher, but the economy still contracted, as citizens struggled with inflation running at 40-year highs.
  • The dollar edged lower on Thursday against the euro as investors weighed the outlook for U.S. Federal Reserve policy against the chances that higher interest rates could lead to a recession. The Fed, the European Central Bank and the Bank of England are all set to announce interest rate decisions next week as policy makers continue to tap the brakes on economic growth through higher rates to thwart stubbornly high inflation. Traders and investors will be on the watch for any signs that the Fed is getting ready to pause its hikes. U.S. monthly consumer inflation is also due next week, one day before the Fed's policy meeting on Dec. 14, and could be pivotal in setting longer-term expectations for monetary policy. Meanwhile, oil prices have fallen below $80 a barrel for the first time since Russia invaded Ukraine in late February, as concern has mounted about how much a slowing economy will impact global energy demand. With energy prices having receded, market-based expectations for inflation have relaxed as well. The 10-year breakeven inflation spread, which subtracts the yield on an inflation-linked Treasury from that on a nominal 10-year note, is at just 2.27%, having peaked above 3% in April. These two forces, together with diminishing expectations for the Fed to keep raising interest rates at the same aggressive pace, have knocked 6.2% off the value of the dollar so far this quarter. This has put the greenback on course for its worst quarterly performance since the third quarter of 2010, when it dropped 8.5%, but for its worst fourth-quarter performance since 2004, according to Refinitiv data.
  • Oil prices bounced on Friday as closure of a major Canada-to-U.S. crude pipeline disrupted supplies, but both benchmarks were headed for a weekly loss on worries over slowing global demand growth. News of an accident closing Canada's TC Energy (NYSE:TRP)'s Keystone pipeline in the United States prompted a brief rally on Thursday, but prices finally eased as the market took a view that the closure would be brief. More than 14,000 barrels of crude oil spilled into a creek in Kansas, making it one of the largest crude spills in the United States in nearly a decade. Previous spill-induced outages are typically rectified in about two weeks, RBC Capital analyst Robert Kwan said, although the latest outage may prove longer given that it involves a spill into a creek. Oil prices are set to post their biggest weekly drop in months, since traders expect it will be months before the benefits of China easing COVID controls feeds through to demand. Surging infections will likely depress China's economic growth in the next few months, bringing a rebound only later in 2023, economists said Thursday's price slump despite two major crude supply disruptions is a bit bewildering and suggests growing cluelessness, she further said. Also on the downside, the U.S. economy is heading into a short and shallow recession over the coming year, according to economists polled by Reuters who unanimously expected the U.S. Federal Reserve to go for a smaller 50 basis point interest rate hike on Dec. 14. The European Central Bank will take its deposit rate up by 50 basis points next week to 2.00%, despite the euro zone economy almost certainly being in recession, as it battles inflation running at five times its target, another Reuters poll found. Focus now turns to U.S. producer inflation data for November, due later on Friday. While the reading is expected to show that inflation eased slightly from October, markets are wary of any signs indicating stickier-than-expected price pressures. The reading will also set the tone for the more closely watched consumer price index, which is due next week. Hotter-than-expected U.S. economic data over the past week ramped up concerns that price pressures will take longer than expected to cool. The country’s labor market remains tight, while business activity is also showing signs of resilience despite rising interest rates. Such a scenario could push the Fed into raising borrowing costs to higher-than-expected levels, which is expected to apply more pressure on crude demand. The central bank is set to hike rates by 50 basis points next week. While recent data showed U.S. oil inventories shrank more than expected, a sustained build in gasoline and distillate inventories signaled that on-the-ground demand remains subdued in the world’s largest oil consumer.

 

 
Intraday RESISTANCE LEVELS
9th December 2022 R1 R2 R3
GOLD-XAU 1,800-1,808 1,814-1,826 1,834-1,847
Silver-XAG 23.30-23.60 24.00-24.35 24.90-25.50
Crude Oil 72.60-73.30 74.10-75.25 76.10-77.00
EURO/USD 1.0580-1.0610 1.0650-1.0720 1.0790-1.0830
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
9th December 2022 S1 S2 S3
GOLD-XAU 1,790-1,781 1,774-1,759 1,750-1,736
Silver-XAG 23.00-22.50 22.20-21.90 21.10-20.70
Crude Oil 71.90-71.00 69.50-68.30 67.00-66.00
EURO/USD 1.0520-1.0490 1.0450-1.0390 1.0320-1.0290
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 (9th 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 Thursday made its intraday high of US$1794.76/oz and low of $1781.38/oz. Gold is up by 0.166% at US$1788.91/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     1,790-1,781
S2     1,774-1,759
S3     1,750-1,736
Intraday Resistance Levels
R1     1,800-1,808
R2     1,814-1,826
R3     1,834-1,847

Technical Indicators

Name   Value Action
14DRSI  

63.914

Buy
20-DMA   1761.41 Buy
50-DMA  

1732.62

Buy
100-DMA   1734.86 Buy
200-DMA   1760.75 Buy
STOCH(5,3)   55.1200 Buy
MACD(12,26,9)   20.928 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$23.21/oz and low of US22.53/oz settled down by 1.48% at US$23.05/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 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     23.00-22.50
S2     22.20-21.90
S3     21.10-20.70

Intraday  Resistance Levels
R1     23.30-23.60
R2     24.00-24.35
R3     24.90-25.50

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 Thursday made an intra‐day high of US$75.22/bbl, an intraday low of US$71.20/bbl, and settled down by 0.940% to close at US$71.84/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 72.60-77.60 with stop loss at 81.60; targeting 73.10-72.60 and 71.90-71.00. Buy above 71.90-66.00 with risk daily closing below 66.00; targeting 72.60-73.30-74.10 and 75.25-76.10-77.00.

 
Intraday Support Levels
S1     71.90-71.00
S2     69.50-68.30
S3     67.00-66.00

Intraday Resistance Levels
R1     72.60-73.30
R2     74.10-75.25
R3     76.10-77.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   31.700 Sell
20-DMA   78.35 Sell
50-DMA   82.26 Sell
100-DMA   86.24 Sell
200-DMA   88.53 Sell
STOCH(5,3)   5.669 Sell
MACD(12,26,9)   -3.081 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.0489/EUR, a high of US$1.0564/EUR, and settled the day up by 0.476% to close at US$1.0554/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 1.0520-1.0830, targeting 1.0520-1.0490-1.0450 and 1.0390-1.0290-1.0210 with stop-loss at daily closing above 1.0545. Buy above 1.0520-1.0290 with risk below 1.0290 targeting 1.0570-1.0610-1.0650 and 1.0720-1.0770.

 
Intraday Support Levels
S1     1.0520-1.0490
S2     1.0450-1.0390
S3     1.0320-1.0290

Intraday  Resistance Levels
R1     1.0580-1.0610
R2     1.0650-1.0720
R3     1.0790-1.0830

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.654 Buy
20-DMA   1.0388 Sell
50-DMA   1.0213 Buy
100-DMA   1.0190 Buy
200-DMA   1.0392 Buy
STOCH(5,3)   70.532 Buy
MACD(12,26,9)   0.0123 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2154/GBP, a high of US$1.2246/GBP, and settled the day down 0.234% to close at US$1.2227/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 Thursday made an intra‐day low of JPY136.23/USD and made an intraday high of JPY137.24/USD and settled the day up by 0.0021% at JPY136.61/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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