AAFX TRADING

Daily Market Lookup

  • The U.S. dollar struggled to gain a foothold on Wednesday after a sharp dive overnight on cooler-than-expected inflation data, which fuelled expectations that the Federal Reserve will chart a slower rate hike path later in the day. After delivering four consecutive 75 basis points hikes, the U.S. central bank is widely expected to increase interest rates by 50 basis points as it concludes its two-day meeting on Wednesday. The euro was flat against the dollar at $1.0627, not far off a six-month high of $1.0673 it touched in the previous session. The dollar index, which measures the greenback versus six major currencies, was flat at 104.05, having made a six-month low of 103.57 in the wake of the inflation data. It is down 9% since hitting a 20-year high in September as the expectations of high and rising U.S. interest rates which fuelled dollar gains have started to ease off. U.S. consumer prices rose less than expected for a second straight month in November, with underlying consumer prices advancing by the least in 15 months, the report from the Labor Department on Tuesday showed. The deceleration in CPI inflation supports the case for the FOMC to taper the increase in the Funds rate to 50 basis points, said Carol Kong, a currency strategist at Commonwealth Bank of Australia. Fed funds futures have priced in a lower terminal rate, where the Fed stops hiking just below 5% by March. Traders are now betting on 25-basis-point increases at each of the Fed's first two meetings of 2023 and no more, with some chance the last hike could come in May instead of March.
  • The dollar nosedived across the board on Tuesday after data showed U.S. consumer price inflation rose less than expected last month, reinforcing expectations the Federal Reserve will slow the pace of rate increases after its two-day meeting on Wednesday. Data showed that headline U.S consumer prices rose modestly in November on an annual basis as gasoline and used cars cost less, leading to the smallest annual inflation increase in nearly a year. In the 12 months through November, the CPI climbed 7.1%, the smallest gain since December 2021, following a 7.7% rise in October. Excluding volatile food and energy components, the CPI increased 0.2% last month after rising 0.3% in October. In the 12 months through November, the so-called core CPI advanced 6.0% after increasing 6.3% in October. The report supported widely held expectations for a smaller Fed rate hike of 50 basis points when the central bank announces its decision on Wednesday. Fed funds futures have also priced in a lower terminal rate, where the Fed stops hiking, of 4.8%, expected to hit in May. That was down from about 5.1% seen late last month. Traders are also betting on 25-basis-point increases at each of the Fed's first two meetings of 2023 and no more, with some chance the last hike could come in May instead of March. The dollar also posted steep losses against commodity currencies.
  • Oil prices fell on Wednesday after industry data showed a surprise build in U.S. crude inventories against analysts' forecast of a decline, reinforcing fears about weakening demand even as supply tightens. Market players are also taking profits as risks persist ahead of a U.S. Federal Open Market Committee meeting, said Tina Teng, a CMC Markets analyst. U.S. Federal Reserve policymakers are expected to raise interest rates by 50 basis points on Wednesday, slowing from the 75-basis-point pace they had stuck to in meetings since June as they grapple with inflation. The U.S. consumer price index rose 0.1% in November after advancing 0.4% the previous month. U.S. crude inventories rose by about 7.8 million barrels in the week to Dec. 9, according to market sources citing data from the American Petroleum Institute, while analysts polled by Reuters had expected a 3.6 million barrel drop in stocks. The inventory data dampened bullish sentiment that sent the market up 3% in the previous session, on hopes for a revival in Chinese demand with the easing of COVID-19 restrictions and for a weakening dollar after data showed U.S. inflation subsiding. Road and air traffic in China has rebounded sharply, according to data from the transport ministry, travel analytics firms and energy consultancies, boosting the outlook for fuel demand. OPEC said in its latest monthly report that it is expecting to see robust global oil demand growth in 2023, with potential economic upside coming from a relaxation of China's COVID-related policies. Oil prices have also been supported this week by the outage of TC Eenrgy Corp's Keystone Pipeline, which ships 620,000 barrels per day of Canadian crude to the United States. The pipeline had shut following a 14,000-barrel spill, with local officials saying on Tuesday that the cleanup will take at least several weeks more.

 

 
Intraday RESISTANCE LEVELS
14th December 2022 R1 R2 R3
GOLD-XAU 1,814-1,826 1,834-1,847 1,860-1879
Silver-XAG 24.00-24.35 24.90-25.50 25.90-26.20
Crude Oil 76.10-77.00 78.60-79.70 80.50-81.40
EURO/USD 1.0650-1.0720 1.0790-1.0830 1.0900-1.0940
GBP/USD 1.2350 1.2410-1.2490 1.2550-1.2630
USD/JPY 136.00-136.50 137.00 137.70-138.10

Intraday SUPPORTS LEVELS
14th December 2022 S1 S2 S3
GOLD-XAU 1,808-1,800 1,781-1,774 1,759-1,750
Silver-XAG 23.60-23.30 23.00-22.50 22.20-21.90
Crude Oil 75.25-74.50 74.10-73.30 71.70-71.00
EURO/USD 1.0610-1.0580 1.0520-1.0490 1.0450-1.0390
GBP/USD 1.2280-1.2190 1.2120-1.2090 1.2030-1.1950
USD/JPY 135.40-134.90 134.10 133.60-133.00

Intra-Day Strategy (14th 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 Tuesday made its intraday high of US$1824.40/oz and low of $1780.78/oz. Gold is up by 1.646% at US$1810.41/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 1826-1879 keeping stop loss closing above 1879, targeting 1800-1790-1774 and 1759-1750-1736. Buy in between 1800-1768 with risk below 1750, targeting 1814-1826-1834 and 1847-1860-1879.

 
Intraday Support Levels
S1     1,808-1,800
S2     1,781-1,774
S3     1,759-1,750
Intraday Resistance Levels
R1     1,814-1,826
R2     1,834-1,847
R3     1,860-1879

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 Tuesday made its intraday high of US$24.12/oz and low of US23.28/oz settled up by 1.72% at US$23.72/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     23.60-23.30
S2     23.00-22.50
S3     22.20-21.90

Intraday  Resistance Levels
R1     24.00-24.35
R2     24.90-25.50
R3     25.90-26.20

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 Tuesday made an intra‐day high of US$76.28/bbl, an intraday low of US$73.28/bbl, and settled up by 2.528% to close at US$75.25/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 76.10-81.40 with stop loss at 81.60; targeting 74.10-73.30-72.60 and 71.90-71.00. Buy above 75.25-71.00 with risk daily closing below 66.00; targeting 76.10-77.00-78.60 and 79.70-80.50-81.40.

 
Intraday Support Levels
S1     75.25-74.50
S2     74.10-73.30
S3     71.70-71.00

Intraday Resistance Levels
R1     76.10-77.00
R2     78.60-79.70
R3     80.50-81.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.70 Sell
20-DMA   77.51 Sell
50-DMA   81.60 Sell
100-DMA   85.74 Sell
200-DMA   88.24 Sell
STOCH(5,3)   33.505 Sell
MACD(12,26,9)   -3.009 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.0527/EUR, a high of US$1.0672/EUR, and settled the day up by 0.951% to close at US$1.0631/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 1.0650-1.0930, targeting 1.0610-1.0580-1.0520 and 1.0490-1.0450-1.0390 with stop-loss at daily closing above 1.0940. Buy above 1.0610-1.0390 with risk below 1.0390 targeting 1.0650-1.0720-1.0790 and 1.0830-1.0900-1.0940.

 
Intraday Support Levels
S1     1.0610-1.0580
S2     1.0520-1.0490
S3     1.0450-1.0390

Intraday  Resistance Levels
R1     1.0650-1.0720
R2     1.0790-1.0830
R3     1.0900-1.0940

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 Tuesday made an intra‐day low of US$1.2247/GBP, a high of US$1.2443/GBP, and settled the day up 0.802% to close at US$1.2363/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     1.2280-1.2190
S2     1.2120-1.2090
S3     1.2030-1.1950

Intraday Resistance Levels
R1     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 Tuesday made an intra‐day low of JPY134.65/USD and made an intraday high of JPY137.96/USD and settled the day down by 0.021% at JPY135.53/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     135.40-134.90
S2     134.10
S3     133.60-133.00

INTRADAY RESISTANCE LEVELS
R1     136.00-136.50
R2     137.00
R3     137.70-138.10

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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