AAFX TRADING

Daily Market Lookup

  • The U.S. dollar rose against most major peers on Thursday after U.S. data pointed to labor market strength that could keep the Federal Reserve hawkish for longer. The number of Americans filing new claims for unemployment benefits increased less than expected last week, pointing to a still-tight labor market, while the economy rebounded faster in the third quarter than previously estimated. Labor market resilience is keeping the U.S. central bank on its aggressive policy-tightening campaign, with the Fed last week projecting at least an additional 75 basis points of increases in borrowing costs by the end of 2023. It has hiked its policy rate by 425 basis points this year from near zero to a 4.25%-to-4.50% range, the highest since late 2007. Meanwhile, the dollar was about flat against the yen at 132.49 yen, not far from the four-month low of 130.58 yen touched on Tuesday after an unexpected tweak to the Bank of Japan's bond-yield controls spurred bullish yen bets. The greenback has so far failed to meaningfully recoup the 3.8% slump that followed Tuesday's news. Sterling fell to a fresh three-week low and was down 0.44% at $1.20315 after data showed the British economy contracted slightly more than expected. The ruble clawed back some of this week's hefty losses after sinking to a near eight-month low in a volatile session, as the prospect of a favorable month-end tax period mitigated concerns about Western sanctions on Russian oil and gas. The dollar was down about 2.9% against the ruble at 68.95. Russia will start buying yuan on the currency market next year if oil and gas revenues meet expectations, two sources said, opening a new front in an accelerating de-dollarization drive designed to reduce its dependency on Western finance.
  • The U.S. dollar weakened Thursday given the risk-on sentiment, while the Japanese yen remained in demand in the wake of the Bank of Japan's shock policy shift. The dollar traded on the back foot Thursday due to a pickup in risk sentiment after upbeat data, released Wednesday, showed U.S. consumer confidence rose to an eight-month high in December. Attention later in the session will turn to the release of third quarter U.S. gross domestic product growth, which is expected to remain the same as the last reading, at 2.9%, and the weekly unemployment claims, which are expected to rise slightly from the prior week. Economic output fell by 0.3% in quarterly terms during the July-September quarter, compared with a previous estimate of 0.2%, the Office for National Statistics said.
  • Gold prices rose on Thursday as fears of a 2023 recession spurred some safe haven plays into the yellow metal, with focus now turning to key readings on U.S. economic growth and inflation due this week. Bullion prices rallied this week against a weaker dollar, which was in part dented by a less dovish than expected stance from the Bank of Japan. The greenback was also dented by growing bets that U.S. inflation has peaked, which could invite a slower pace of rate hikes by the Federal Reserve. Markets are now awaiting revised U.S. GDP data for the third quarter. A preliminary reading showed that the economy grew a better-than-expected 2.9% in the September quarter, with analysts forecasting the figure to remain the same in its first revision due later in the day. Focus this week is squarely on the U.S. Personal Consumption Expenditure price index, which is the Federal Reserve’s preferred inflation gauge. The core index is expected to have eased further in November from the prior month. But the index still remains well above the Fed’s annual target range, indicating that the central bank still needs to tighten policy further to curb inflation. The prospect of rising interest rates in developed markets is likely to keep gold prices subdued in the coming months, with the Bank of Japan, European Central Bank, and the Bank of England also sending hawkish messages. Other precious metals rose on Thursday, although their outlook also remains clouded. Focus this week is also on consumer inflation data from Japan, especially after the BOJ somewhat tightened policy after nearly a decade of accommodative measures. Among industrial metals, copper prices surged on more signs of an economic reopening in China, even as the country grapples with a massive spike in COVID-19 cases. But prices of the red metal are still trading lower for the year, with their outlook remaining uncertain in the face of rising interest rates and a potential recession.
  • Oil prices rose more than $1 on Friday on expectations of a drop in Russian crude supply, which helped offset worries of a hit to U.S. transport fuel demand growth as a looming Arctic storm threatens travel during the holiday season. Russia's Baltic oil exports could fall by 20% in December from the previous month after the European Union and G7 nations imposed sanctions and a price cap on Russian crude from Dec. 5, according to traders and Reuters calculations. Russia may cut oil output by 5%-7% in early 2023 as it responds to price caps on its crude and oil products by halting sales to the countries which support them, the RIA news agency cited Deputy Prime Minister Alexander Novak as saying on Friday. More than 4,400 U.S. flights have been cancelled over a two-day period due to the winter storm, coinciding with a holiday travel season that some predict could be the busiest ever. On Thursday, oil prices on both sides of the Atlantic settled lower as flights were scrapped. The snow storm could also upend motorists' plans to travel during Christmas and New Year, curbing gasoline consumption. However, heating oil demand could be boosted as the extreme weather is expected to cause power outages. U.S. crude stocks fell more than expected in the week to Dec. 16 as imports dropped sharply, the Energy Information Administration said, with inventories falling by 5.9 million barrels to 418.2 million barrels versus forecasts for a 1.7 million-barrel drop. However, surging COVID-19 cases in the world's No.2 oil consumer China, concerns about further rate hikes globally and recession curbing fuel consumption limited oil's price gains.

 

 
Intraday RESISTANCE LEVELS
23rd December 2022 R1 R2 R3
GOLD-XAU 1,800-1,808 1,826-1,834 1,840-1,849
Silver-XAG 24.00 24.35-24.90 25.50-25.90
Crude Oil 78.60-79.70 80.50 81.40-82.00
EURO/USD 1.0660-1.0720 1.0790-1.0830 1.0900-1.0940
GBP/USD 1.2090-1.2120 1.2170-1.2290 1.2350-1.2410
USD/JPY 132.90-134.10 134.90 135.40-136.00

Intraday SUPPORTS LEVELS
23rd December 2022 S1 S2 S3
GOLD-XAU 1,790-1,781 1,774-1,764 1,754-1,745
Silver-XAG 23.60-23.00 22.50 22.20-21.90
Crude Oil 77.00-76.10 74.50-74.10 73.30-71.70
EURO/USD 1.0580 1.0520-1.0490 1.0450-1.0390
GBP/USD 1.2030-1.1990 1.1950-1.1890 1.0850-1.0800
USD/JPY 131.90-131.10 130.40 129.50-129.00

Intra-Day Strategy (23rd 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$1820.33/oz and low of $1784.77/oz. Gold is down by 1.193% at US$1792.38/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 1824-1879 keeping stop loss closing above 1879, targeting 1808-1790-1774 and 1759-1750-1736. Buy in between 1808-1768 with risk below 1750, targeting 1814 and 1826-1834-1847.

 
Intraday Support Levels
S1     1,790-1,781
S2     1,774-1,764
S3     1,754-1,745
Intraday Resistance Levels
R1     1,800-1,808
R2     1,826-1,834
R3     1,840-1,849

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$24.08/oz and low of US23.36/oz settled down by 1.619% at US$23.56/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (21.00), breakage above will lead to 21.60. 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 23.60-20.30, 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 24.00-25.00 with stop loss above 25.00; targeting 22.10-21.70 and 21.30-20.70-20.10.

 
Intraday  Support Levels
S1     23.60-23.00
S2     22.50
S3     22.20-21.90

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.600 Buy
20-DMA   22.93 Buy
50-DMA   21.77 Buy
100-DMA   21.11 Buy
200-DMA   21.31 Buy
STOCH(5,3)   82.973 Sell
MACD(12,26,9)   0.721 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$79.83/bbl, an intraday low of US$77.00/bbl, and settled down by 0.310% to close at US$78.14/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 78.60-81.40 with stop loss at 81.60; targeting 77.00-76.10-75.25 and 74.10-73.30-72.60. Buy above 77.00-71.70 with risk daily closing below 71.00; targeting 78.60 and 79.70-80.50-81.40.

 
Intraday Support Levels
S1     77.00-76.10
S2     74.50-74.10
S3     73.30-71.70

Intraday Resistance Levels
R1     78.60-79.70
R2     80.50
R3     81.40-82.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.227 Sell
20-DMA   77.23 Sell
50-DMA   80.45 Sell
100-DMA   84.59 Sell
200-DMA   87.47 Sell
STOCH(5,3)   84.543 Sell
MACD(12,26,9)   -1.317 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.0593/EUR, a high of US$1.0659/EUR, and settled the day down by 0.0916% to close at US$1.0593/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     1.0580
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 Thursday made an intra‐day low of US$1.1991/GBP, a high of US$1.2146/GBP, and settled the day up 0.282% to close at US$1.2042/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 1.2030-1.0800 with a target of 1.2090-1.2120-1.2170 and 1.2280-1.2350-1.2410 with a stop loss closing below 1.1950. Sell in between 1.2090-1.2410 with targets at 1.2030-1.1950-1.1870 and 1.0850-1.0800 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2030-1.1990
S2     1.1950-1.1890
S3     1.0850-1.0800

Intraday Resistance Levels
R1     1.2090-1.2120
R2     1.2170-1.2290
R3     1.2350-1.2410

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

54.434

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 Thursday made an intra‐day low of JPY131.63/USD and made an intraday high of JPY132.71/USD and settled the day down by 0.107% at JPY132.32/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 132.90-136.00 with risk above 136.00 targeting 131.90-131.10-130.40 and 129.50-129.00. Long positions above 131.90-129.00 with targets of 132.90-134.10-134.90 and 135.40-136.00-137.70 with stops below 129.00.

 
Intraday Support Levels
S1     131.90-131.10
S2     130.40
S3     129.50-129.00

INTRADAY RESISTANCE LEVELS
R1     132.90-134.10
R2     134.90
R3     135.40-136.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   31.0145 Buy
20-DMA   136.69 Buy
50-DMA   139.40 Buy
100-DMA   139.30 Buy
200-DMA   135.08 Buy
STOCH(9,6)   26.40 Buy
MACD(12,26,9)   -1.967 Sell

AAFX TRADING
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