AAFX TRADING

Daily Market Lookup

  • Asian stocks advanced on Tuesday after a record-setting session on Wall Street on bets that U.S. lawmakers would pass sweeping tax legislation, while the dollar was tentative as traders were circumspect about the bill’s economic impact. Global markets have been buffeted in recent weeks by shifting expectations about President Donald Trump’s ability to push through his signature policy. The bill would cut U.S. corporate tax rates to 21% from 35%, which investors are betting will boost profits as well as trigger share buybacks and higher dividend payouts. The dollar index against a basket of six major currencies was effectively flat at 93.656 after losing 0.25 percent overnight, as some traders questioned the overall economic impact of the tax overhaul. The dollar was also capped by doubts the tax reforms will be able to drive sizable repatriation of funds back into the United States as expected. Moreover, while Federal Reserve policymakers expect the U.S. economy to get a short-term lift from the tax reform, they project growth will then ease back to about 2% by 2020 and not rise to around 3 percent as Trump and his administration predict. South Africa’s rand retained a bulk of its gains after rallying on South African Deputy President Cyril Ramaphosa’s election as the new leader of the ruling ANC party.
  • Japan’s government revised up its growth projections for the current and next fiscal years, forecasting the economy to expand 1.9% and 1.8% respectively on the back of steady improvement in domestic demand, the Cabinet Office said on Tuesday. Consumer inflation is estimated at 0.7% for this fiscal year and 1.1 percent next, underscoring the challenge for the central bank to accelerate inflation to its 2 percent target as prices continued to lag an economy growing at a steady pace. The gross domestic product projections compared with earlier estimates by the Cabinet Office of 1.5% and 1.4% growth respectively in the current and next fiscal years. Japan’s economy has expanded at a steady pace this year, lifted by surging exports growth that has kept the manufacturing sector humming. A key conundrum for policymakers remains persistently low inflation that is complicating the Bank of Japan’s efforts to exit its massive stimulus. The government’s growth estimates were higher than those seen by the central bank and most private-sector economists, while the inflation projections are more subdued than the central bank’s rosy forecasts. The Cabinet Office also forecast nominal economic growth of 2.0 percent for the current fiscal year and 2.5 percent for the next fiscal year from April 1, they said. Higher nominal growth estimates point to government expectations for greater tax revenue. The growth projections will be used to estimate tax revenue and compile next year’s budget draft, expected to be endorsed by the cabinet on Dec. 22.
  • The dollar held steady against other majors currencies on Tuesday, as investors remained cautious regarding progress on the U.S. tax reform front and as they awaited the release of U.S. housing sector data due later in the day. Trading volumes were expected to become more and more thin throughout the week, ahead of the Christmas holiday. The greenback was initially boosted after Republicans on Friday put the finishing touches on a sweeping tax overhaul bill. They are confident Congress will now pass the tax bill this week, with a Senate vote planned as early as Tuesday. Market participants were looking ahead to reports on U.S. building permits and housing starts, due later Tuesday for further indications on the strength of the housing maket. The euro remained support after Germany's Social Democrats agreed on Friday to open coalition talks with Chancellor Angela Merkel, providing a chance to end the country's political deadlock. However, the talks are not expected to begin until January. Later Tuesday, German was slated to release its Ifo business climate report.
  • Oil markets edged up on Tuesday as the Forties pipeline outage in the North Sea and voluntary production restraint led by OPEC supported prices, although soaring output in the United States put a cap on gains. Some upward pressure was taken off after an oil worker strike was called off in Nigeria, traders said. Despite this, crude has been generally supported by the ongoing Forties pipeline system outage in the North Sea, which provides crude underpinning Brent futures. Further price support has been coming from voluntary supply cuts by the OPEC and a group of non-OPEC producers including Russia. Threatening to undermine the OPEC-led efforts to tighten markets is U.S. crude production EIA, which has soared by 16 percent since mid-2016 to 9.8 million bpd, fast approaching that of top producers Russia and Saudi Arabia, which are currently pumping around 11 and 10 mn bpd respectively. U.S. shale production alone is expected to rise by 94,000 bpd in January, marking a 13th consecutive month of increases, the U.S. Energy Information Administration said late on Monday. Overall, the EIA said it expected U.S. production to hit a record 10.02 million bpd in 2018, on par with Saudi Arabia and not far off top producer Russia, which pumps around 11 million bpd.

 

 
Intraday RESISTANCE LEVELS
19th December 2017 R1 R2 R3
GOLD-XAU 1,266 1,272-1,280 1,295
Silver-XAG 16.35 16.50-16.90 17.20
Crude Oil 58.30-59.00 59.90 61.00
EURO/USD 1.1990-1.20501.1790-1.1850 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
19th December 2017 S1 S2 S3
GOLD-XAU 1,260 1,254-1,248 1,239
Silver-XAG 15.70-15.30 15.00 16.35
Crude Oil 57.40-57.00 56.00 55.40-54.70
EURO/USD 1.1750 1.1700-1.1650 1.1609
GBP/USD 1.3350 1.3300 1.3260-1.3190
USD/JPY 112.50 112.00-111.60 111.00

Intra-Day Strategy (19th 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 Monday made its intraday high of US$1263.90/oz and low of US$1252.65/oz. Gold was up by 0.536% at US$1261.88/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     1,260
S2     1,254-1,248
S3     1,239
Intraday Resistance Levels
R1     1,266
R2     1,272-1,280
R3     1,295

Technical Indicators

Name   Value Action
14DRSI  

47.314

Buy
20-DMA   1268.62 Sell
50-DMA  

1275.98

Sell
100-DMA   1286.18 Sell
200-DMA   1268.51 Buy
STOCH(5,3)   87.143 Buy
MACD(12,26,9)   -6.943 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$16.16/oz and low of US$15.99/oz. Silver settled up by 0.749% at US$16.13/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     16.35

Intraday  Resistance Levels
R1     16.35
R2     16.50-16.90
R3     17.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.977 Buy
20-DMA   16.30 Sell
50-DMA   16.73 Sell
100-DMA   16.92 Sell
200-DMA   16.98 Sell
STOCH(5,3)   89.967 Buy
MACD(12,26,9)   -0.241 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$57.78/bbl, intraday low of US$56.86/bbl and settled down by 0.087% to close at US$57.33/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     57.40-57.00
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   55.448 Sell
20-DMA   57.48 Buy
50-DMA   55.46 Buy
100-DMA   52.32 Buy
200-DMA   50.17 Buy
STOCH(5,3)   57.379 Buy
MACD(12,26,9)   0.452 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1737/EUR, high of US$1.1833/EUR and settled the day up by 0.323% to close at US$1.1781/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     1.1990-1.20501.1790-1.1850
R2     1.1900
R3     1.1990-1.2050

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.095 Buy
20-DMA   1.1761 Buy
50-DMA   1.1761 Sell
100-DMA   1.1803 Sell
200-DMA   1.1438 Buy
STOCH(5,3)   32.827 Sell
MACD(12,26,9)   0.0005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3307/GBP, high of US$1.3417/GBP and settled the day up by 0.548% to close at US$1.3381/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     1.3350
S2     1.3300
S3     1.3260-1.3190

Intraday Resistance Levels
R1     1.3400
R2     1.3450-1.3500
R3     1.3590

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

53.454

Buy
20-DMA   1.3389 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 Monday made intra‐day low of JPY112.30/USD and made an intraday high of JPY112.82/USD and settled the day down by 0.159% at JPY112.53/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

AAFX TRADING
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