AAFX TRADING

Daily Market Lookup

  • The dollar was flat on Tuesday after China said it would scrap its COVID-19 quarantine rule for inbound travelers - a major step in reopening its borders, even as COVID cases spike. China will stop requiring arriving travelers to go into quarantine starting Jan. 8, the National Health Commission said on Monday. At the same time, Beijing downgraded regulations for managing COVID cases to the lighter Category B from the top-level Category A. Still, investors could be cheered by what some perceive to be "Chinese policymakers' resolve to full reopening", said Christopher Wong, a currency strategist at OCBC. China's gradual dismantling of its economically-damaging zero-COVID policies may give an additional boost to the euro - which has clawed higher thanks to the European Central Bank taking a much harder line on inflation than investors had expected. With UK markets closed for a public holiday, trading in sterling was muted, leaving the pound down against the dollar at around $1.2031. Data released on Friday showed U.S. consumer spending barely rose in November while inflation cooled further, reinforcing expectations that the Federal Reserve could scale back its aggressive monetary policy tightening. Joseph Trevisani, senior analyst at FXStreet.com, noted historical patterns suggest that investors next month will likely take profits from the recent rallies in the euro and the yen, which could prop up the dollar in the short term. The Japanese yen fell 0.35% against the dollar to 133.32, despite a surge in short-term government bond yields to their highest in over seven-and-a-half years, following an auction that attracted relatively weak demand. Still, the yen is heading for its biggest quarterly rally against the dollar since 2008, with a rise of 8.1%, following a surprise decision last week by the Bank of Japan (BOJ) to adjust its monetary policy. BOJ Governor Haruhiko Kuroda on Monday dismissed the chance of a near-term exit from ultra-loose monetary policy, even as markets and policymakers are signaling an increasing focus on what comes after Kuroda's tenure ends in April next year.
  • The dollar slid against most currencies in choppy, thin trading on Friday as data signaled that the U.S. economy is cooling a bit, reinforcing expectations of smaller interest rate increases from the Federal Reserve and improving investors' risk appetite. The personal consumption expenditures (PCE) price index rose 0.1% last month after climbing 0.4% in October. In the 12 months through November, the PCE index increased 5.5% after advancing 6.1% in October. Excluding the volatile food and energy components, the PCE index gained 0.2% after increasing 0.3% in October. The so-called core PCE price index rose 4.7% on a year-on-year basis in November after increasing 5.0% in October. The Fed tracks the PCE price indexes for its monetary policy. Investors also sold safe-haven Treasuries, pushing yields higher. The single European currency is on pace to end the week up 0.4%, its second straight week of gains. The dollar though, was on track for a weekly drop of 2.8% after the Bank of Japan (BOJ) tweaked a key bond market policy earlier this week. A second report on Friday showed new orders for U.S.-made capital goods rose moderately in November while shipments fell, pointing to a slowdown in business spending on equipment this quarter as higher borrowing costs cool demand for goods. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.2% last month, data showed. These so-called core capital goods orders increased 0.3% in October. However, shipments of core capital goods dipped 0.1% after increasing 1.4% in October. Another piece of data showed U.S. consumers expect price pressures to moderate notably in the next year, with a benchmark survey on Friday showing the one-year inflation outlook dropping in December to the lowest in 18 months. This is a key number that Fed Chair Jerome Powell mentioned in one of his press briefings. In what has been a brutal year for global markets, the dollar has surged almost 9% as the Fed has aggressively hiked rates to tame inflation. The dollar index, however, has dropped more than 8% since hitting a 20-year high in September, with a sharp slowdown in U.S. inflation raising hopes that the Fed may soon end its tightening cycle.
  • -Oil prices fell on Wednesday on concerns that rising COVID-19 cases in China, the world's top oil importer, will disrupt its economic recovery as it unwinds its pandemic restrictions, limiting fuel demand growth. Both benchmarks rose to their highest in three weeks on Tuesday on hopes for a fuel demand boost after the country said it will stop requiring inbound travellers to go into quarantine starting from Jan. 8, a major step towards relaxing stringent curbs on its borders. But Chinese hospitals have been under intense pressure due to a surge in COVID-19 infections as the country moves towards treating the virus as endemic. Oil refiners in the U.S. on Tuesday were working to resume operations at a dozen facilities knocked offline by freeze weather across much of the country, a recovery that in some cases will stretch into January. The Arctic blast that sent temperatures well below freezing also disrupted output, cutting oil and gas production from North Dakota and Texas. Prices were buoyed by news that Russia aims to ban oil sales from Feb. 1 to countries that abide by a G7 price cap imposed on Dec. 5, according to a decree by President Vladimir Putin. U.S. crude oil stocks were estimated to have fallen 1.6 million barrels last week with distillate inventories also seen down, a preliminary Reuters poll showed on Tuesday. Industry group the American Petroleum Institute is due to release data on U.S. crude inventories at 4.30 p.m. EDT (2130 GMT) on Wednesday. The Energy Information Administration, the statistical arm of the U.S. Department of Energy, will release its own figures at 10.30 a.m. (1530 GMT) on Thursday.

 

 
Intraday RESISTANCE LEVELS
28th December 2022 R1 R2 R3
GOLD-XAU 1,814-1,826 1,834 1,840-1,849
Silver-XAG 24.00 24.35-24.90 25.50-25.90
Crude Oil 79.90-80.50 81.40-82.35 83.20-84.35
EURO/USD 1.0660-1.0720 1.0790-1.0830 1.0900-1.0940
GBP/USD 1.2120 1.2170-1.2290 1.2350-1.2410
USD/JPY 134.10-134.90 135.40 136.00-138.20

Intraday SUPPORTS LEVELS
28th December 2022 S1 S2 S3
GOLD-XAU 1,800-1,790 1,781-1,774 1,764-1,754
Silver-XAG 23.60-23.00 22.50 22.20-21.90
Crude Oil 78.60 77.00-76.10 74.50-74.10
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 132.90-131.90 131.10-130.40 129.50-129.00

Intra-Day Strategy (28th 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$1833.20/oz and low of $1800.17/oz. Gold is up by 0.706% at US$1813.42/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 1800-1768 with risk below 1750, targeting 1814 and 1826-1834-1847.

 
Intraday Support Levels
S1     1,800-1,790
S2     1,781-1,774
S3     1,764-1,754
Intraday Resistance Levels
R1     1,814-1,826
R2     1,834
R3     1,840-1,849

Technical Indicators

Name   Value Action
14DRSI  

58.329

Buy
20-DMA   1789.80 Buy
50-DMA  

1758.67

Buy
100-DMA   1748.89 Buy
200-DMA   1765.23 Buy
STOCH(5,3)   49.230 Buy
MACD(12,26,9)   17.767 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$24.27/oz and low of US23.78/oz settled up by 0.741% at US$24.03/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 Friday made an intra‐day high of US$81.16/bbl, an intraday low of US$79.16/bbl, and settled down by 0.090% to close at US$79.90/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 80.00-81.40 with stop loss at 81.60; targeting 78.60-77.00-76.10-75.25 and 74.10-73.30-72.60. Buy above 78.60-71.70 with risk daily closing below 71.00; targeting 78.60 and 79.70-80.50-81.40.

 
Intraday Support Levels
S1     78.60
S2     77.00-76.10
S3     74.50-74.10

Intraday Resistance Levels
R1     79.90-80.50
R2     81.40-82.35
R3     83.20-84.35

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.57 Sell
20-DMA   77.79 Sell
50-DMA   80.33 Sell
100-DMA   84.28 Sell
200-DMA   87.23 Sell
STOCH(5,3)   77.443 Sell
MACD(12,26,9)   -0.519 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0611/EUR, a high of US$1.0669/EUR, and settled the day up by 0.0573% to close at US$1.0638/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   65.377 Buy
20-DMA   1.0556 Sell
50-DMA   1.0376 Buy
100-DMA   1.0287 Buy
200-DMA   1.0419 Buy
STOCH(5,3)   73.194 Buy
MACD(12,26,9)   0.0089 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2001/GBP, a high of US$1.2119/GBP, and settled the day down 0.378% to close at US$1.2014/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 1.2120-1.2410 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     1.2120
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 Monday made an intra‐day low of JPY132.62/USD and made an intraday high of JPY133.59/USD and settled the day up by 0.481% at JPY133.47/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 134.10-136.00 with risk above 136.00 targeting 132.90-131.90-131.10 and 130.40-129.50-129.00. 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     132.90-131.90
S2     131.10-130.40
S3     129.50-129.00

INTRADAY RESISTANCE LEVELS
R1     134.10-134.90
R2     135.40
R3     136.00-138.20

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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