AAFX TRADING

Daily Market Lookup

  • Asian shares edged up on Monday, with sentiment boosted by expectations U.S. lawmakers will pass a long-awaited tax bill, while Chinese stocks were soggy after the country’s central bank raised interest rates. Global stock markets have surged this year, largely led by expectations of a U.S. tax overhaul. The reform is seen boosting corporate profits, triggering share buybacks and higher dividend payouts - a boon for shareholders. Votes on the legislation are expected this week. China is also in focus after the People’s Bank of China raised interest rates on reverse repurchase agreements, or reverse repos. Investors will also watch for news from a three day Central Economic Work conference starting Monday where Communist Party leaders will discuss economic policy, including growth targets. China could lower its growth target to 6.0 percent from 6.5 percent, Waddington added, as the impact of tighter financial conditions and stricter regulation aimed at reducing leverage worked through the economy.
  • The dollar held modest gains against its peers on Monday, having received a lift after U.S. tax reform efforts moved another step closer to ratification over the weekend. The U.S. currency had edged higher after Republicans on the House-Senate negotiating committee on Friday put the finishing touches on a sweeping tax overhaul that involves large corporate tax cuts. Top Republicans are confident Congress will now pass the tax bill this week, with a Senate vote as early as Tuesday and President Donald Trump aiming to sign the bill by week's end. The dollar's gains, however, were limited as investors adopted a wait-and-see approach until the deal was sealed. Senators Thad Cochran and John McCain have been ill in recent weeks and have missed votes. The dollar also failed to get support from subdued U.S. Treasury yields. The long-term Treasury yield has been confined to a narrow 2.34-2.42 percent range over the past week. "The debt market may need more convincing that three hikes are in the works in 2018," Fukaya said. On Friday, Germany's Social Democrats (SPD) agreed to open exploratory talks on forming a government with Chancellor Angela Merkel, providing a chance to end a rare period of political deadlock in Europe's largest economy. The euro did not draw much support though as the talks between the German parties are not expected to begin in earnest until January. The pound remained on the defensive after sliding about one percent against the dollar on Friday, on profit taking after news Brexit negotiations would move to the second round in January.
  • BOJ Governor Haruhiko Kuroda may signal at his post-meeting news conference that the central bank could raise its yield targets or slow down asset purchases - but only when inflation expectations heighten or the cost of stimulus outweighs the benefits. With inflation still distant from its 2 percent target and the selection of Kuroda’s successor looming, the BOJ is in no rush to remove monetary support from an economy only just emerging from two decades of deflation. At a two-day meeting ending on Thursday, the BOJ is widely expected to keep its short-term interest rate target at minus 0.1% and a pledge to guide 10-year bond yields around zero percent. But the board may discuss whether the BOJ should consider raising its yield targets or slow purchases of ETF next year, analysts say, as some members had recently voiced concern over the demerits of prolonged easing. Another newcomer, former banker Hitoshi Suzuki, has recently said the BOJ may need to raise its yield targets or slow ETF buying in the future. With near-zero interest rates and a lack of demand for funds pushing more regional banks into the red, the BOJ’s stimulus has been under criticism for possibly destabilizing the banking system. Japan’s massive government pension fund has decided to shoulder the fees charged on its deposits under the BOJ’s negative rate policy to ease the strain on financial institutions, the Nikkei reported.
  • Oil edged up on Monday, lifted by an ongoing North Sea pipeline outage and over signs that booming U.S. crude output growth may be slowing, although the outlook for oil markets cites ample supplies despite ongoing production cuts led by OPEC. Traders said the slightly higher prices came on the back of the North Sea Forties pipeline system outage, which provides crude that underpins the Brent price benchmark, as well as indicators that U.S. oil production growth may be slowing down In the United States, energy companies cut rigs drilling for new production for the first time in six weeks, to 747, in the week ended Dec. 15, energy services firm Baker Hughes said on Friday. Despite this dip in drilling, activity is still well above this time last year, when the rig count was below 500, and actual U.S. production has soared by 16 percent since mid-2016 to 9.8 million bpd. This means U.S. output is fast approaching that of top producers Saudi Arabia and Russia, which are pumping 10 million bpd and 11 mn bpd respectively. The rising U.S. output also undermines efforts by the OPEC, which is de-fecto led by Saudi Arabia, and a group of non-OPEC producers including Russia to withhold production to tighten the market and prop up prices. Largely because of rising shale output from the United States, the IEA said global oil markets would show a slight supply surplus of around 200,000 bpd during the first half of 2018. Data from the U.S. EIA showed a similar surplus for that period and still indicate a supply overhang of 167,000 bpd for all of 2018.

 

 
Intraday RESISTANCE LEVELS
18th December 2017 R1 R2 R3
GOLD-XAU 1,260 1,266 1,272-1,280
Silver-XAG 16.35 16.50-16.90 17.20
Crude Oil 58.30-59.00 59.90 61.00
EURO/USD 1.1790-1.1850 1.1900 1.1990-1.2050
GBP/USD 1.3400 1.3450-1.3500 1.3590
USD/JPY 113.00 114.00 114.75-115.50

Intraday SUPPORTS LEVELS
18th December 2017 S1 S2 S3
GOLD-XAU 1,254-1,248 1,239 1,260
Silver-XAG 15.70-15.30 15.00 14.60-14.30
Crude Oil 57.45-57.00 56.00 55.40-54.70
EURO/USD 1.1750 1.1700-1.1650 1.1609
GBP/USD 1.3300 1.3260-1.3190 1.3115
USD/JPY 112.50 112.00-111.60 111.00

Intra-Day Strategy (18th December 2017)
GOLD-XAU Neutral
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Sell
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Friday made its intraday high of US$1261.78/oz and low of US$1252.62/oz. Gold was up by 0.173% at US$1255.07/oz.

Technicals in Focus:

In daily charts, prices are below 200DMA (1267) and breakage above will call for 1280-1290. MACD is below zero line and histograms are decreasing trend and it will bring upward stance in the upcoming sessions. RSI is in oversold region and more downside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1254-1280 keeping stop loss closing above 1280 and targeting 1246-1239 and 1230-1224. Buy above 1246-1224 with risk below 1224, targeting 1254-1266-1274 and 1284-1290-1300.

 
Intraday Support Levels
S1     1,254-1,248
S2     1,239
S3     1,260
Intraday Resistance Levels
R1     1,260
R2     1,266
R3     1,272-1,280

Technical Indicators

Name   Value Action
14DRSI  

42.161

Buy
20-DMA   1269.16 Sell
50-DMA  

1276.34

Sell
100-DMA   1286.17 Sell
200-DMA   1268.17 Buy
STOCH(5,3)   73.335 Buy
MACD(12,26,9)   -8.339 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.07/oz and low of US$15.86/oz. Silver settled down by 1.071% at US$16.03/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 200DMA (17.16), breakage below will lead to 16.70-16.35. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 16.35-15.00 targeting 16.50-16.90-17.20 and 17.50-18.00; stop breakage below 15.00. Sell below 16.50-18.00 with stop loss above 18.00; targeting 16.50-16.00 and 15.60-15.00.

 
Intraday  Support Levels
S1     15.70-15.30
S2     15.00
S3     14.60-14.30

Intraday  Resistance Levels
R1     16.35
R2     16.50-16.90
R3     17.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.377 Buy
20-DMA   16.33 Sell
50-DMA   16.76 Sell
100-DMA   16.93 Sell
200-DMA   16.98 Sell
STOCH(5,3)   63.967 Buy
MACD(12,26,9)   -0.301 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$57.50/bbl, intraday low of US$57.35/bbl and settled up by 0.297% to close at US$57.17/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 49.60 which is a major resistance and breakage above will call for 50.30-51.00. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving negative crossover for confirmation of bearish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 58.00-61.00 with stop loss at 61.00; targeting and 57.40--56.00 and 55.40-54.70. Buy above 57.00-54.50 with risk daily closing below 54.50 and targeting 58.30-59.00 and 59.60-61.00.

 
Intraday Support Levels
S1     57.45-57.00
S2     56.00
S3     55.40-54.70

Intraday Resistance Levels
R1     58.30-59.00
R2     59.90
R3     61.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.43 Sell
20-DMA   57.48 Buy
50-DMA   55.43 Buy
100-DMA   52.23 Buy
200-DMA   50.12 Buy
STOCH(5,3)   51.164 Buy
MACD(12,26,9)   0.452 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1748/EUR, high of US$1.1812/EUR and settled the day down by 0.237% to close at US$1.1748/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1700), which become immediate resistance level, break above will target 1.1750-1.1800. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider buy.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.1790-1.12090 targeting 1.1750-1.1700 and 1.1660-1.1590 with stop-loss at daily closing above 1.2090. Buy above 1.1850-1.1700 with risk below 1.1700 targeting 1.1790-1.1900-1.1990 and 1.2050-1.2090.

 
Intraday Support Levels
S1     1.1750
S2     1.1700-1.1650
S3     1.1609

Intraday  Resistance Levels
R1     1.1790-1.1850
R2     1.1900
R3     1.1990-1.2050

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.945 Buy
20-DMA   1.1819 Buy
50-DMA   1.1761 Sell
100-DMA   1.1803 Sell
200-DMA   32.827 Buy
STOCH(5,3)   32.827 Sell
MACD(12,26,9)   0.0005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3301/GBP, high of US$1.3446/GBP and settled the day down by 0.834% to close at US$1.3317/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.3263) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in neutral territory and giving negative crossover to confirm bearish stance. MACD is below zero line and histograms are decreasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; short positions below 1.3400-1.3660 with targets at 1.3300-1.3260 and 1.3200-1.3115. Buy above 1.3300-1.3115 with stop loss closing below 1.3115 targeting 1.3400-1.3500 and 1.3590-1.3650.

 
Intraday Support Levels
S1     1.3300
S2     1.3260-1.3190
S3     1.3115

Intraday Resistance Levels
R1     1.3400
R2     1.3450-1.3500
R3     1.3590

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.576

Buy
20-DMA   1.3380 Sell
50-DMA   1.3263 Sell
100-DMA   1.3198 Buy
200-DMA   1.2992 Buy
STOCH(5,3)   34.611 Sell
MACD(12,26,9)   -0.0031 Buy

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY112.02/USD and made an intraday high of JPY112.73/USD and settled the day up by 0.195% at JPY112.59/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (111.61), which is major support on the daily chart. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is approaching overbought territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 113.00-115.50 with risk above 115.50 targeting 112.50-112.00-111.60 and 111.00-110.20. Long positions above 112.50-110.00 with targets of 113.00-114.00 and 114.75-115.50 with stop below 110.00.

 
Intraday Support Levels
S1     112.50
S2     112.00-111.60
S3     111.00

INTRADAY RESISTANCE LEVELS
R1     113.00
R2     114.00
R3     114.75-115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.806 Buy
20-DMA   112.32 Buy
50-DMA   112.85 Buy
100-DMA   111.71 Buy
200-DMA   111.61 Buy
STOCH(9,6)   29.217 Sell
MACD(12,26,9)   0.0032 Sell

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