AAFX TRADING

Daily Market Lookup

  • The dollar climbed on Monday after data on Friday showed U.S. producer prices had risen more than expected last month, pointing to persistent inflationary pressures and a chance the Federal Reserve would keep interest rates higher for longer. The U.S. producer price index for final demand in November was up 0.3% from the previous month and 7.4% from a year earlier, data released on Friday showed, a slight upside surprise from forecasts of a 0.2% and 7.2% increase, respectively. Traders were also kept on edge in the run up to key risk events this week, including U.S. inflation data and a slew of major central bank meetings. The Federal Reserve once again takes centre stage, and is widely expected to raise interest rates by 50 basis points, though focus will be on the central bank's updated economic projections and Fed Chair Jerome Powell's press conference. The Bank of England and the European Central Bank (ECB) will also meet this week, and each is likewise expected to deliver a 50 bp rate hike. Ahead of the FOMC meeting, November's U.S. inflation figures are due on Tuesday, with economists expecting core annual inflation of 6.1%. Most Asian currencies fell on Monday, while the dollar rose as markets hunkered down ahead of highly awaited signals on U.S. monetary policy from a Federal Reserve meeting and a reading on U.S. consumer inflation. Most regional units were also nursing losses from last week, amid growing concerns over a potential recession in 2023, which dented demand for risk-driven assets. Optimism over the withdrawal of anti-COVID measures in China was largely offset by fears that a big jump in local infections will delay a broader reopening. Analysts also forecast increased market volatility in the country as it re-emerges from nearly three years of COVID lockdowns. Still, a Chinese reopening stands to benefit the Asian economies that depend on the country as a trading partner. The yen has also benefited in recent weeks from speculation that high inflation will force the Bank of Japan into eventually changing its ultra-loose stance on monetary policy. The dollar strengthened on Monday, as investors positioned for a potentially stronger-than-expected consumer price index (CPI) reading on Tuesday. Data released last week showed that producer price inflation eased less than expected in November, heralding a similar trend in the CPI. A stronger-than-expected inflation reading could invite more hawkish signals from the Federal Reserve, at the conclusion of its two-day meeting on Wednesday. While the central bank is expected to hike rates by a relatively smaller 50 basis points this week, stronger-than-expected inflation could push it into keeping rates higher for longer than expected. Strong U.S. data for November ramped up concerns that inflation could remain sticky in the near-term. This invited warnings over a potential U.S. recession in 2023, which dented Asian currencies in recent sessions.
  • Gold prices fell slightly below key levels on Monday, with caution kicking in ahead of key U.S. inflation data and a Federal Reserve meeting this week, while uncertainty over rising COVID-19 cases in China weighed on copper prices. Bullion prices had reacted somewhat positively to last week’s data that showed U.S. producer price inflation eased further in November, albeit at a slower-than-expected pace. The reading could herald a similar trend in the consumer price index, which is due on Tuesday. Rising U.S. inflation spurred a series of sharp interest rate hikes by the Fed this year, which weighed heavily on metal markets by driving up the opportunity cost of holding non-yielding assets. The central bank is also set to conclude a two-day meeting on Wednesday, where it is expected to raise rates by a relatively smaller 50 basis points. But the scale of future rate hikes will be largely driven by the path of U.S. inflation. Markets are wary of any signs that U.S. inflation remained stickier than expected in November, which could point to more rate increases by the Fed. The central bank has warned that U.S. interest rates could peak at higher-than-expected levels if inflation proves to be stubborn. The dollar strengthened slightly on Monday in anticipation of the U.S. economic indicators, having also taken some support from the higher-than-expected PPI inflation data. Among industrial metals, copper prices fell on Monday after two straight weeks of gains, amid growing uncertainty over COVID in China. China scaled back several nationwide anti-COVID restrictions last week, a move that is expected to eventually spark a recovery in the world’s second-largest economy. But analysts warned that the relaxing of COVID restrictions is likely to cause a near-term jump in infections, which could delay the further withdrawal of curbs. This has cast doubts over the timeline of an economic recovery in the world’s largest copper importer.
  • Oil prices rose more than 1% on Monday as a key pipeline supplying the United States remained shut while Russian President Vladimir Putin threatened to cut production in retaliation for a Western price cap on its exports. The price gains on Monday for Brent and WTI follow declines in both grades last week to their lowest since December 2021 amid concerns that a possible global recession will impact oil demand. The 622,000 barrel-per-day Keystone line is a critical artery shipping heavy Canadian crude from Alberta to refiners in the U.S. Midwest and the Gulf Coast. China, the world's biggest crude oil importer, continued to loosen its strict zero-COVID policy, though streets in the capital Beijing remained quiet and many businesses stayed shut over the weekend, with residents saying a return to normal was a long way off. Putin said on Friday that Russia, the world's biggest exporter of energy, could cut production and would refuse to sell oil to any country that imposes a "stupid" price cap on Russian exports agreed by G7 nations. While the uncertainty surrounding European Union sanctions on Russian oil and the related price cap kept volatility high on prices, the sanctions have had a limited impact on global markets so far, ANZ analysts said in a note. Saudi Arabia's energy minister also said on Sunday that the impact of the European sanctions and price cap measures had had no clear results yet, and that its implementation was still unclear In the U.S., Treasury Secretary Janet Yellen forecast a substantial reduction in U.S. inflation in 2023, barring an unexpected shock.

 

 
Intraday RESISTANCE LEVELS
12th 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
12th December 2022 S1 S2 S3
GOLD-XAU 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 71.70-71.00 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 (12th 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$1806.00/oz and low of $1788.40/oz. Gold is up by 0.166% at US$1797.09/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     1,781
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  

64.277

Buy
20-DMA   1761.57 Buy
50-DMA  

1732.69

Buy
100-DMA   1734.90 Buy
200-DMA   1760.76 Buy
STOCH(5,3)   22.505 Buy
MACD(12,26,9)   20.928 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$23.67/oz and low of US22.94/oz settled up by 1.738% at US$23.46/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 Friday made an intra‐day high of US$72.95/bbl, an intraday low of US$70.24/bbl, and settled down by 0.940% to close at US$71.64/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     71.70-71.00
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 Friday made an intraday low of US$1.0502/EUR, a high of US$1.0587/EUR, and settled the day down by 0.226% to close at US$1.0530/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 Friday made an intra‐day low of US$1.2203/GBP, a high of US$1.2322/GBP, and settled the day up 0.323% to close at US$1.2265/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 Friday made an intra‐day low of JPY135.59/USD and made an intraday high of JPY136.90/USD and settled the day down by 0.0344% at JPY136.57/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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING