AAFX TRADING

Daily Market Lookup

  • The U.S. dollar traded largely unchanged in limited European trade Wednesday, but posted gains against the Japanese yen after latest minutes from the Bank of Japan suggested its accommodative monetary stance is likely to remain in place. USD/JPY rose 0.3% to 133.86, bouncing back after dropping as low as 130.58 just over a week ago when the BOJ announced the loosening of the 10-year Japanese government bond yield policy band. That had prompted speculation that the central bank was set to tighten its ultra-loose monetary policy. However, the BOJ’s change in stance was aimed at the smooth functioning of the Japanese government bond market, not at changing the trajectory of policy, according to the views of policymakers in the minutes of the December meeting. This has hit the Japanese yen, particularly against the dollar, as it suggests a continuation of ultra-accommodative policy. However, losses have been limited given the holiday conditions as well as a lack of belief that the BOJ can maintain this stance long-term, especially as Japan's consumer inflation hit a four-decade high of 3.7% in November. There are a number of U.S. economic releases due Wednesday, including pending home sales, the Richmond manufacturing index, and the Redbook. Elsewhere, EUR/USD rose 0.1% to 1.0650, staying in a limited trading range with no major data releases due in the next two weeks for the euro, at least until the German CPI figures for December in early January and with no European Central Bank speakers scheduled. However, surging COVID cases are hurting confidence, as they point towards more disruption to the economy through the first quarter.
  • 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. 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.
  • Oil prices dipped on Thursday as surging COVID-19 cases in China dimmed hopes of a recovery in fuel demand for the world's largest crude oil importer. The scale of the latest outbreak and doubts over official data prompted some countries to enact new travel rules on Chinese visitors, even as China began dismantling the world's strictest COVID regime of lockdowns and testing. Oil markets were also buffeted by expectations of another U.S. interest rate increase in the United States, as the Federal Reserve tries to limit price rises in a tight labour market. U.S. crude oil inventories fell less than expected, by about 1.3 million barrels, in the week ended Dec. 23, according to market sources citing American Petroleum Institute figures That compared with estimates for a draw of 1.5 million barrels, according to analysts' estimates. The U.S. government will release its weekly figures at 10:30 a.m. EST on Thursday. Also weighing on prices, pipeline operator TC Energy (NYSE:TRP) said it was working to restart the portion of the Keystone pipeline that was shut down after a leak this month. However, that comes as an Arctic freeze has forced some oil refining facilities offline, backing up crude supplies. Oil refiners continued to ramp up operations, but some of that recovery is expected to extend to January. Markets, however, drew some support from Russian President Vladimir Putin's ban on exports of crude oil and oil products from Feb. 1 for five months to nations that abide by a Western price cap. Germany said the ban has "no practical significance" as the country has been working since spring to replace Russian oil supplies and ensure security of supply. U.S. crcrude oil inventories fell last week while gasoline and distillate stocks rose surprisingly, according to market sources citing American Petroleum Institute figures on Wednesday.

 

 
Intraday RESISTANCE LEVELS
29th 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
29th 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 78.10-77.00 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 (29th 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 Wednesday made its intraday high of US$1814.46/oz and low of $1796.90/oz. Gold is down by 0.514% at US$1804.08/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  

57.518

Buy
20-DMA   1791.09 Buy
50-DMA  

1760.41

Buy
100-DMA   1749.96 Buy
200-DMA   1765.61 Buy
STOCH(5,3)   49.179 Buy
MACD(12,26,9)   16.330 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$24.06/oz and low of US23.43/oz settled down by 2.00% at US$23.53/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     24.00-24.35
R2     24.90
R3     25.50-25.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.463 Buy
20-DMA   23.18 Buy
50-DMA   22.05 Buy
100-DMA   21.31 Buy
200-DMA   21.40 Buy
STOCH(5,3)   51.249 Sell
MACD(12,26,9)   0.604 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$79.89/bbl, an intraday low of US$77.34/bbl, and settled down by 1.25% to close at US$78.85/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 78.10-71.70 with risk daily closing below 71.00; targeting 78.60 and 79.70-80.50-81.40.

 
Intraday Support Levels
S1     78.10-77.00
S2     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   50.258 Sell
20-DMA   77.81 Sell
50-DMA   80.24 Sell
100-DMA   84.16 Sell
200-DMA   87.14 Sell
STOCH(5,3)   60.848 Sell
MACD(12,26,9)   -0.519 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.0606/EUR, a high of US$1.0674/EUR, and settled the day down by 0.256% to close at US$1.0611/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   61.310 Buy
20-DMA   1.0558 Sell
50-DMA   1.0384 Buy
100-DMA   1.0293 Buy
200-DMA   1.0421 Buy
STOCH(5,3)   46.295 Buy
MACD(12,26,9)   0.0081 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2001/GBP, a high of US$1.2119/GBP, and settled the day down 0.256% 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  

48.122

Buy
20-DMA   1.2087 Buy
50-DMA   1.1931 Buy
100-DMA   1.1880 Buy
200-DMA   1.211 Buy
STOCH(5,3)   18.944 Buy
MACD(12,26,9)   0.0035 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made an intra‐day low of JPY133.29/USD and made an intraday high of JPY133.29/USD and settled the day up by 0.738% at JPY134.46/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   40.943 Buy
20-DMA   135.22 Buy
50-DMA   138.12 Buy
100-DMA   138.63 Buy
200-DMA   134.98 Buy
STOCH(9,6)   88.583 Buy
MACD(12,26,9)   -1.746 Sell

AAFX TRADING
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