AAFX TRADING

Daily Market Lookup

  • The dollar rose on Friday in choppy trading, extending sharp gains in the previous session as risk appetite soured and investors grappled with the prospect that borrowing costs still have a long way to climb. The greenback briefly fell after data showed U.S. business activity shrank further in December as new orders slumped to their lowest in more than 2-1/2 years, while softening demand helped to significantly cool inflation. S&P Global (NYSE:SPGI) said on Friday its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 44.6 this month from a final reading of 46.4 in November. It was the sixth straight month that the index remained below the 50 mark, which indicates contraction in the private sector In afternoon trading, the greenback fell 0.8% against the yen to 136.67, after hitting a two-week high in the previous session. Net short positioning on the yen continued to decrease in the week ended Dec. 13. Net shorts on the yen hit 53,188 contracts, the smallest since Aug. 30. On Thursday, the euro fell as well after the ECB raised interest rates and signaled it was far from finished, stirring fears about the potential damage to the global economy and sending investors toward the safe-haven greenback A day earlier, Fed Chair Jerome Powell said policymakers expected U.S. rates to rise further and stay elevated for longer. New York Fed President John Williams upped the hawkish rhetoric on Friday, saying it remains possible the U.S. central bank raises interest rates more than it currently expects next year. The Fed has projected the peak fed funds rate at 5.1%. That said, financial markets do not seem to be buying the hawkish Fed stance. The fed funds futures markets have priced in rate cuts by the end of 2023. The dollar index, which gauges the currency against six major peers, rose 0.2% to 104.74, after rallying more than 0.9% on Thursday. The index has surged around 9% this year as the Fed has hiked interest rates hard, sucking money back toward dollar-denominated bonds. Yet it has dropped roughly 8% since hitting a 20-year high in September, as a slowdown in U.S. inflation has raised hopes the Fed's rate-hiking cycle might soon end. In Asia, the Bank of Japan decides policy on Tuesday, and while no change is expected at that meeting, some market participants have begun betting on some tweaks to stimulus as Governor Haruhiko Kuroda prepares to depart in April.
  • The yen climbed on Monday on news that the Japanese government could soon revise a joint statement with the Bank of Japan (BOJ) over the latter's inflation target, potentially paving the way for a tweak in the BOJ's ultra-loose monetary policy. The Japanese government will consider revising next year a joint statement it signed with the BOJ in 2013 that commits the central bank to meeting a 2% inflation target as soon as possible, sources told Reuters. The revision, if made, would be done after a new BOJ governor is appointed in April, a move that may heighten the chance of a tweak to incumbent Governor Haruhiko Kuroda's ultra-loose monetary policy. That policy stance and the resulting interest rate differentials with the rest of the world have caused the yen to plunge more than 15% this year. Elsewhere, the dollar edged lower on Monday, with sterling last 0.28% higher at $1.21735, after falling 1% last week as investors bet that the Bank of England (BoE) might be getting close to the end of its rate-hike cycle. A slew of central bank meetings last week saw the BoE, the U.S. Federal Reserve and the European Central Bank (ECB) each raising rates by 50 basis points, with the Fed and the ECB delivering hawkish messages and pledging more hikes ahead, even at the risk of hurting growth. U.S. business activity contracted further in December as new orders slumped to the lowest level in just over 2-1/2 years, S&P Global (NYSE:SPGI) said on Friday in its flash U.S. Composite PMI Output Index. In China, President Xi Jinping and his senior officials pledged to shore up the battered economy next year, as it grapples with a worsening spread of COVID-19 infections after abruptly ending many key elements of its zero-COVID policy.
  • Oil rose on Monday as the prospect of demand recovery, led by China's loosening of COVID-19 curbs and the United States' decision to buy back oil for its state reserves, gained the upper hand over global recession fears. Both benchmarks plunged more than $2 a barrel last Friday, following hawkish remarks from U.S. and European central banks on interest rate hikes that sparked worries of possible recession. China, the world's top crude oil importer and No. 2 oil consumer, is experiencing its first of three expected waves of COVID-19 cases after Beijing relaxed mobility restrictions. China's abrupt end to its "dynamic zero" COVID policy is breathing new life into its ailing aviation sector, with average jet fuel demand jumping by 75%, or nearly 170,000 barrels per day, in two weeks, according to satellite data firm Kayrros.
  • On Friday, news outlet Caixin reported that China plans to increase flights with a goal to restore the country's average daily passenger flight volumes to 70% of 2019 levels by Jan. 6. China also pledged to focus on stabilising its $17-trillion economy in 2023 and step up policy adjustments to ensure key targets are hit, said its top leaders and policymakers at a closed-door two-day meeting for charting the economy's course next year. Analysts from Morgan Stanley (NYSE:MS) believe a faster and sharper rise in mobility implies a stronger rebound in GDP growth starting in the early second quarter of 2023. An announcement by the U.S. Energy Department on Friday that it will begin repurchasing crude oil for the Strategic Petroleum Reserve for delivery in February next year also supported the outlook for stronger prices. This will be the United States' first purchase since this year's record 180 million barrel release from the stockpile.

 

 
Intraday RESISTANCE LEVELS
19th December 2022 R1 R2 R3
GOLD-XAU 1,800-1,808 1,814 1,826-1,834
Silver-XAG 23.60-24.00 24.35-24.90 25.50-25.90
Crude Oil 76.10-77.00 78.60-79.70 80.50-81.40
EURO/USD 1.0660-1.0720 1.0790-1.0830 1.0900-1.0940
GBP/USD 1.2290-1.2350 1.2410-1.2490 1.2550-1.2630
USD/JPY 136.00-136.50 137.00-137.70 138.10 -138.70

Intraday SUPPORTS LEVELS
19th December 2022 S1 S2 S3
GOLD-XAU 1,790-1,781 1,774-1,759 1,750-1,740
Silver-XAG 23.30-23.00 22.50 22.20-21.90
Crude Oil 74.50-74.10 73.30-71.70 70.90-70.10
EURO/USD 1.0610-1.0580 1.0520-1.0490 1.0450-1.0390
GBP/USD 1.2170-1.2120 1.2090 1.2030-1.1950
USD/JPY 135.40 134.90-134.10

Intra-Day Strategy (19th 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$1794.19/oz and low of $1774.22/oz. Gold is up by 0.917% at US$1793.06/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 1800-1879 keeping stop loss closing above 1879, targeting 1790-1774 and 1759-1750-1736. Buy in between 1781-1768 with risk below 1750, targeting 1790-1800-1814 and 1826-1834-1847.

 
Intraday Support Levels
S1     1,790-1,781
S2     1,774-1,759
S3     1,750-1,740
Intraday Resistance Levels
R1     1,800-1,808
R2     1,814
R3     1,826-1,834

Technical Indicators

Name   Value Action
14DRSI  

55.000

Buy
20-DMA   1772.99 Buy
50-DMA  

1743.27

Buy
100-DMA   1740.25 Buy
200-DMA   1762.25 Buy
STOCH(5,3)   26.992 Buy
MACD(12,26,9)   18.767 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$23.24/oz and low of US22.54/oz settled up by 0.606% at US$23.21/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     23.30-23.00
S2     22.50
S3     22.20-21.90

Intraday  Resistance Levels
R1     23.60-24.00
R2     24.35-24.90
R3     25.50-25.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.026 Buy
20-DMA   22.48 Buy
50-DMA   21.37 Buy
100-DMA   20.85 Buy
200-DMA   21.19 Buy
STOCH(5,3)   70.609 Sell
MACD(12,26,9)   0.776 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$76.55/bbl, an intraday low of US$73.39/bbl, and settled down by 2.30% to close at US$74.58/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 76.00-81.40 with stop loss at 81.60; targeting 76.10-75.25-74.10 and 73.30-72.60-71.90. Buy above 74.50-71.00 with risk daily closing below 71.00; targeting 76.10-77.00-78.60 and 79.70-80.50-81.40.

 
Intraday Support Levels
S1     74.50-74.10
S2     73.30-71.70
S3     70.90-70.10

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.072 Sell
20-DMA   76.97 Sell
50-DMA   80.77 Sell
100-DMA   85.00 Sell
200-DMA   87.76 Sell
STOCH(5,3)   61.158 Sell
MACD(12,26,9)   -2.201 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.0583/EUR, a high of US$1.0662/EUR, and settled the day down by 0.518% to close at US$1.0584/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     1.0660-1.0720
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 Friday made an intra‐day low of US$1.2119/GBP, a high of US$1.2222/GBP, and settled the day down 0.313% to close at US$1.2138/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     1.2170-1.2120
S2     1.2090
S3     1.2030-1.1950

Intraday Resistance Levels
R1     1.2290-1.2350
R2     1.2410-1.2490
R3     1.2550-1.2630

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

56.516

Buy
20-DMA   1.2123 Buy
50-DMA   1.1882 Buy
100-DMA   1.1848 Buy
200-DMA   1.2115 Buy
STOCH(5,3)   37.651 Buy
MACD(12,26,9)   0.0015 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made an intra‐day low of JPY136.28/USD and made an intraday high of JPY137.85/USD and settled the day down by 0.797% at JPY136.66/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 137.70-144.50 with risk above 144.50 targeting 136.60-136.00-135.40-134.90-134.10. Long positions above 136.50-133.60 with targets of 137.70-138.10-138.90-140.20-142.00 with stops below 133.00.

 
Intraday Support Levels
S1     135.40
S2     134.90-134.10
S3    

INTRADAY RESISTANCE LEVELS
R1     136.00-136.50
R2     137.00-137.70
R3     138.10 -138.70

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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