AAFX TRADING

Daily Market Lookup

  • Asian shares edged up slightly on Wednesday, shrugging off Wall Street’s losses as the long-awaited U.S. tax reform bill wound its way through Congress, while higher Treasury yields underpinned the dollar. The U.S. House of Representatives initially passed the tax legislation in a Tuesday afternoon vote, but the bill included provisions that did not comply with Senate rules. The Senate was expected to vote on a revised version of the bill, with the offending provisions removed. If the Senate approves the bill as expected, the House will vote again on Wednesday. The bill slashes the corporate income tax rate to 21 percent from 35 percent. That would boost overall earnings for S&P 500 companies by 9.1 percent, according to UBS equity strategists, though some investors said those expectations are already reflected in recent stock market gains to record highs. The European currency got a lift from higher eurozone rates, gaining 0.5% on Tuesday, when central bank governors of Estonia, Slovakia and Germany all discussed the need to shift the debate from bond purchases to other tools such as interest rates.
  • Bank of Japan’s holdings of government debt rose to a record in July-September under its quantitative easing program, which could deepen concerns its policy framework is unsustainable. The BOJ held a record 445 trillion yen ($3.94 trillion) in government debt at the end of September, up 7.6 percent from the same period a year earlier, central bank data showed on Wednesday. The central bank held 40.9 percent of all government debt at the end of September, also the highest on record. Insurance companies and pensions were the second-largest holders, accounting for 21.6 percent of all bonds outstanding. The BOJ has slowed the pace of government debt purchases since it switched its policy benchmark last year in September to targeting interest rates from the size of the monetary base. However, some economists would argue that data for the third quarter shows government debt holdings are still rising at an alarming rate, which will make it more difficult for the BOJ to unwind its massive stimulus policy. Central bank data showed that assets held by Japanese households rose 4.7 percent in the third quarter from a year earlier to a record 1,845 trillion yen due to gains in stocks and investment trusts. Prime Minister Shinzo Abe has repeatedly urged Japanese companies to use their large cash reserves to raise capital expenditure and wages to help boost consumption, but the data shows that companies have so far resisted these pleas.
  • Gold prices gained in Asia on Wednesday after snag in passage of US tax cuts linked to a procedural issue in the Senate kept markets on edge even as most analysts say the bill will still pass this week. Overnight, gold prices edged lower on Tuesday weighed by a rally in Treasuries on growing optimism surrounding the outcome of the tax bill vote, and solid housing data pointing to underlying economic strength. The Commerce Department said on Tuesday that single-family homebuilding, which accounts for the largest share of the housing market, rose 5.3% to a rate of 930K units. That was the highest level since September 2007. Gold prices have added to recent gains after notching a two-week winning streak last week despite data showing traders continued to abandon their bullish bets on the yellow metal.
  • Oil prices inched up on Wednesday, supported by expectations of a fall in U.S. crude inventories and by the ongoing outage of the North Sea Forties pipeline system. The American Petroleum Institute said on Tuesday that U.S. crude inventories fell by 5.2 million barrels in the week to Dec. 15 to 438.7 million. Official U.S. government data from the Energy Information Administration (EIA) is due on Wednesday. Oil prices have also been supported by the continuing outage of the Forties pipeline in the North Sea, which delivers crude underpinning Brent futures. Operator Ineos hopes to be able to fix a crack in the pipeline, which can pump around 450,000 barrels per day of crude, within two to four weeks from Dec. 11. Despite the North Sea outage and falling U.S. crude inventories, oil prices have remained some way off their $65.63 and $59.05 per barrel recent highs for Brent and WTI respectively. Traders said rising U.S. crude production, which has soared by 16 percent since mid-2016 to 9.8 million bpd, was capping prices. Most analysts expect U.S. output to break through 10 million bpd soon, which would be a new record and take it to levels on par with top exporter Saudi Arabia and close to top producer Russia, which pumps around 11 million bpd.

 

 
Intraday RESISTANCE LEVELS
20th 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 58.20-59.00 59.90 61.00
EURO/USD 1.1850 1.1990-1.2050 1.1990-1.2050
GBP/USD 1.3400 1.3450-1.3500 1.3590
USD/JPY 113.20 114.00 114.75-115.50

Intraday SUPPORTS LEVELS
20th December 2017 S1 S2 S3
GOLD-XAU 1,260 1,254-1,248 1,239
Silver-XAG 15.70-15.30 15.00 14.60-14.30
Crude Oil 57.40-57.00 56.00 55.40-54.70
EURO/USD 1.1790 1.1750 1.1700-1.1650
GBP/USD 1.3350 1.3300 1.3260-1.3190
USD/JPY 112.50 112.00-111.60 111.00

Intra-Day Strategy (20th 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 Tuesday made its intraday high of US$1265.19/oz and low of US$1259.15/oz. Gold was up by 0.0182% at US$1261.42/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 Tuesday made its intraday high of US$16.21/oz and low of US$16.04/oz. Silver settled up by 0.062% at US$16.12/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   43.246 Buy
20-DMA   16.71 Sell
50-DMA   16.71 Sell
100-DMA   16.91 Sell
200-DMA   16.97 Sell
STOCH(5,3)   84.967 Buy
MACD(12,26,9)   -0.241 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$57.77/bbl, intraday low of US$57.18/bbl and settled up by 0.628% to close at US$57.68/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     58.20-59.00
R2     59.90
R3     61.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.48 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 Tuesday made an intraday low of US$1.1775/EUR, high of US$1.1848/EUR and settled the day up by 0.492% to close at US$1.1838/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 1.1850-1.12050 targeting 1.1790-1.1750-1.1700 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     1.1790
S2     1.1750
S3     1.1700-1.1650

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.945 Buy
20-DMA   1.1825 Buy
50-DMA   1.1761 Sell
100-DMA   1.1803 Sell
200-DMA   1.1455 Buy
STOCH(5,3)   65.897 Sell
MACD(12,26,9)   0.0075 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3330/GBP, high of US$1.3401/GBP and settled the day up by 0.0419% to close at US$1.3383/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   1.3263 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 Tuesday made intra‐day low of JPY112.50/USD and made an intraday high of JPY113.07/USD and settled the day up by 0.302% at JPY112.87/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     113.20
R2     114.00
R3     114.75-115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.874 Buy Sell
20-DMA   112.43 Buy
50-DMA   112.87 Buy
100-DMA   111.76 Buy
200-DMA   111.59 Buy
STOCH(9,6)   54.217 Buy
MACD(12,26,9)   0.0245 Sell

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