AAFX TRADING

Daily Market Lookup

  • Asian markets offered a muted reception on Thursday to the passage of U.S. tax cuts as benefits to company bottom lines were already baked into stock prices, while bonds were spooked by the blowout in government debt needed to fund the giveaways. In U.S. President Donald Trump’s first major policy win, Republicans steamrolled opposition from Democrats to pass a bill that slashes taxes for corporations and the wealthy while giving mixed, temporary relief to middle-class Americans. Bond investors are concerned that adding fiscal stimulus at a time when the economy is already at full employment would only reinforce the Federal Reserve’s determination to raise interest rates, thus pushing up short term yields. At the same time, many assume the unfunded tax cuts will lead to an explosion in government borrowing, increasing the supply of new bonds and pressuring prices across the curve. The impact is all the greater as the Fed has begun to unwind its massive bond holdings, as have central banks elsewhere. One institution that has long been committed to aggressive stimulus is the Bank of Japan, and it showed no inclination to re-think the policy at its board meeting on Thursday Currency investors are assuming the BOJ will keep Japanese bond yields super-low for a long time to come and have been nudging the yen lower in response. The common currency faces a hurdle later in the day when an election in Catalonia is expected to produce no clear majority for either the separatist or unionist parties, leading to weeks of political wrangling.
  • U.S. home sales increased more than expected in November, hitting their highest level in nearly 11 years, the latest indication that housing was regaining momentum after almost stalling this year. The report on Wednesday from the National Association of Realtors also added to data ranging from the labor market to retail sales that have suggested the economy was ending 2017 on a strong note. Existing home sales surged 5.6 percent to a seasonally adjusted annual rate of 5.81 million units last month amid continued recovery in areas in the South ravaged by Hurricanes Harvey and Irma, and solid gains in other parts of the country. That was the highest level since December 2006 and marked the third straight monthly rise. Economists had forecast home sales rising only 0.9% to a 5.52 mn-unit rate in November. Existing home sales make up about 90 percent of U.S. home sales. They rose 3.8 percent on a year-on-year basis in November. Sales in the South, which accounts for almost half of the existing homes sales market, increased 8.3 percent last month. Sales rose 6.7 percent in the Northeast and jumped 8.4 percent in the Midwest. They, however, fell 2.3 percent in the West, which has seen an acceleration in house price increases. While the housing market is expected to continue growing next year, there are concerns that a Republican overhaul of the U.S. tax code could hurt sales at the high end of the market. The biggest overhaul of the tax system in more than 30 years, which could be signed into law by President Donald Trump soon, will cap the deduction for mortgage interest at $750K in home loan value for residences bought from Jan. 1, 2018, through Dec. 31, 2025. The report came on the heels of data this week showing homebuilder confidence vaulting to a near 18-1/2-year high in December and single-family homebuilding and permits rising in November to levels last seen in the third quarter of 2007. Housing is expected to contribute to economic growth in the fourth quarter after being a drag for two straight quarters.
  • Oil prices dipped on Thursday as soaring U.S. output, fast approaching 10 million barrels per day (bpd), outweighed a drop in American crude inventories. Both crude benchmarks gained around 1 percent during their previous sessions, lifted by official data showing a 6.5 million-barrel fall in U.S. crude inventories in the week to Dec. 15 to 436 million barrels, the lowest level since October 2015. Outweighing this on Thursday was another increase in American crude oil production, while a rise in gasoline stocks pointed to a slowdown in demand. The energy minister of Saudi Arabia, the world's top crude exporter and OPEC's de-facto leader, said it would take more time to rein in a global supply overhang, which was created by strong global production increases in the years up to 2015. U.S. oil output is close to breaking through 10 million bpd, undermining efforts led by the OPEC and Russia to tighten the market through withholding supply this year and next. U.S. crude production hit 9.79 million bpd last week, its highest since the early 1970s, the only time American output breached 10 million bpd This brings U.S. output close to that of top producers Saudi Arabia and Russia, which pump around 10 million and 11 million bpd, respectively. Oil traders this week also eyed with interest the passing of a U.S. tax bill, which is seen to weigh on crude prices in the longer term.

 

 
Intraday RESISTANCE LEVELS
21st 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 1.1900-1.1960 1.2050 1.2050
GBP/USD 1.3450-1.3500 1.3450-1.3500 1.3590
USD/JPY 114.00 114.75-115.50 116.00

Intraday SUPPORTS LEVELS
21st December 2017 S1 S2 S3
GOLD-XAU 1,260 1,254-1,248 1,239
Silver-XAG 15.80-15.30 15.00 14.60-14.30
Crude Oil 57.40-57.00 56.00 55.40-54.70
EURO/USD 1.1850-1.1790 1.1750 1.1700-1.1650
GBP/USD 1.3350 1.3300 1.3450-1.3500
USD/JPY 113.20 112.50 112.00-111.60

Intra-Day Strategy (21st 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 Wednesday made its intraday high of US$1267.80/oz and low of US$1261.21/oz. Gold was up by 0.298% at US$1265.28/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 1266-1295 keeping stop loss closing above 1295 and targeting 1260-1254-1246 and 1236-1230 Buy above 1260-1230 with risk below 1230, targeting 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  

49.287

Buy
20-DMA   1265.94 Sell
50-DMA  

1274.87

Sell
100-DMA   1286.12 Sell
200-DMA   1269.07 Buy
STOCH(5,3)   85.143 Buy
MACD(12,26,9)   -5.227 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$16.25/oz and low of US$16.08/oz. Silver settled up by 0.931% at US$16.15/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 15.00-14.30 targeting 16.35-16.90-17.20 and 17.50-18.00; stop breakage below 15.00. Sell below 16.3-18.00 with stop loss above 18.00; targeting 16.50-16.00 and 15.60-15.00.

 
Intraday  Support Levels
S1     15.80-15.30
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   45.220 Buy
20-DMA   16.20 Sell
50-DMA   16.69 Sell
100-DMA   16.91 Sell
200-DMA   16.97 Sell
STOCH(5,3)   80.718 Buy
MACD(12,26,9)   -0.197 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$58.10/bbl, intraday low of US$57.42/bbl and settled up by 0.711% to close at US$5.04/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 approaching oversold 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 58.20-61.00 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   54.912 Sell
20-DMA   57.42 Buy
50-DMA   55.27 Buy
100-DMA   52.16 Buy
200-DMA   50.08 Buy
STOCH(5,3)   41.806 Sell
MACD(12,26,9)   0.452 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1828/EUR, high of US$1.1901/EUR and settled the day up by 0.270% to close at US$1.1870/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 1.1900-1.12050 targeting 1.1850-1.1790-1.1750 and 1.1700-1.1660 with stop-loss at daily closing above 1.2050. Buy above 1.1850-1.1650 with risk below 1.1650 targeting 1.1900-1.1960-1.1990 and 1.2050-1.2090.

 
Intraday Support Levels
S1     1.1850-1.1790
S2     1.1750
S3     1.1700-1.1650

Intraday  Resistance Levels
R1     1.1900-1.1960
R2     1.2050
R3     1.2050

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.228 Buy
20-DMA   1.1828 Buy
50-DMA   1.1763 Sell
100-DMA   1.1803 Sell
200-DMA   80.533 Buy
STOCH(5,3)   80.533 Sell
MACD(12,26,9)   0.0014 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3371/GBP, high of US$1.3419/GBP and settled the day down by 0.0672% to close at US$1.3374/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     1.3450-1.3500

Intraday Resistance Levels
R1     1.3450-1.3500
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 Wednesday made intra‐day low of JPY112.83/USD and made an intraday high of JPY113.45/USD and settled the day up by 0.460% at JPY113.39/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 114.00-116.00 with risk above 116.00 targeting 113.20-112.50-112.00 and 111.60-111.00. Long positions above 113.20-111.60 with targets of 113.00-114.00 and 114.75-115.50 with stop below 110.00.

 
Intraday Support Levels
S1     113.20
S2     112.50
S3     112.00-111.60

INTRADAY RESISTANCE LEVELS
R1     114.00
R2     114.75-115.50
R3     116.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.138 Buy
20-DMA   112.56 Buy
50-DMA   112.90 Buy
100-DMA   111.80 Buy
200-DMA   111.60 Buy
STOCH(9,6)   80.217 Buy
MACD(12,26,9)   0.129 Sell

AAFX TRADING
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