AAFX TRADING

Daily Market Lookup

  • Asian markets were ending 2017 in a party mood on Friday after a year in which a concerted pick-up in global growth boosted corporate profits and commodity prices, while benign inflation kept central banks from snatching away the monetary punch bowl. Yet there are reasons to suspect that times this good cannot last. An index from State Street that gauges investor risk appetite by what they actually buy and sell, suffered its six straight monthly fall in December. U.S. dollar bulls have not been nearly so fortunate this year. The widely held assumption at the start of the year was that, with the Federal Reserve set to raise interest rates further, the only way for the dollar was up. Yet even though the Fed delivered on its three promised hikes, the currency has failed to benefit. The dollar even backtracked on the yen despite the Bank of Japan staying doggedly committed to its super-easy monetary policy. The dollar’s loss has been a boon for commodities priced in the currency, which have also benefited from a synchronized pick up in global trade and surprisingly strong demand from China. Everything from coal to iron ore has reaped gains, with copper a stand-out performer in part due to expectations of rising demand for the mass production of electric vehicles. Gold prices hit a one-month high on Thursday, in holiday-thinned trading as weakness in the dollar supported the precious metal. Gold has benefitted from recent weakness in the dollar in what many observers are suggesting is a case of selling off on the official announcement that U.S. President Donald Trump signed off on the tax overhaul. On Thursday’s economic calendar, investors will focus on weekly jobless claims at 8:30AM ET (13:30GMT). Also on the docket, markets will digest the November trade balance, wholesale inventories and the Chicago PMI for December.
  • Thursday’s declines in the Dollar were telling through the Asian session this morning, with the Yen up 0.1% to ¥112.76 against the Dollar, and the Kiwi Dollar up 0.21% to $0.7099, continuing its recovery following the surprise election result. Economic data out of the Eurozone this morning includes Spain and Germany’s inflation figures. Based on forecasts, the numbers are expected to be EUR positive, with the markets eager to see whether ECB President Draghi’s views on inflation become a reality. With the tapering to the asset purchasing program scheduled to begin, the next step will be for the ECB to begin to move on deposit and interest rates. Dollar weakness will certainly hit the brakes on any such moves in the early part of next year, but should inflation begin to accelerate, it will be hard for the ECB to ignore the numbers. For the Pound, there are no material stats scheduled for release this morning, though that has not stopped a 0.11% rise through the Asian session to $1.3458. The lack of Brexit chatter through the holidays has eased some of the tension in the Pound, though we will likely see things change rapidly going into the New Year. The good news for the BoE is that the rising Pound should ease some of the inflationary pressure that has weighed on consumer spending, with the BoE’s rate hike having had limited impact on the Pound, overshadowed by Brexit noise from Brussels. With Jerome Powell moving into the FED’s top spot in February, few are expecting the FED to take a more aggressive rate path through the year, with the tax reform bill leaving the markets with mixed feelings on the possible effects on the U.S economy. An infrastructure spending plan next year would be an altogether different proposition however and any chatter on such a plan could be the Dollar’s saviour next year. There are unlikely to be any major moves in the Dollar through the European and U.S session, while the Dow mini futures is pointing to a 34 point rise at the open, signalling investor confidence going into 2018.
  • U.S. oil prices hit their highest levels since mid-2015 on the final trading day of the year as an unexpected fall in American production and a fall in commercial crude inventories stoked buying. In international markets, Brent crude oil futures also rose, supported by ongoing supply cuts by top producers OPEC and Russia as well as strong demand from China. Friday's WTI price rises were driven by a surprise drop in U.S. oil production, which last week dipped to 9.754 million barrels per day (bpd), down from 9.789 million bpd the previous week, according to data from the Energy Information Administration (EIA) released late on Thursday. U.S. output is still up by almost 16 percent since mid-2016, but most analysts had expected production to break through 10 mn bpd by the end of this year - a level only surpassed by top exporter Saudi Arabia and top producer Russia. Inventories are now down by almost 20 percent from their historic highs last March, and well below this time last year or in 2015. In international markets, China has issued crude oil import quotas totaling 121.32 mn tonnes for 44 companies in its first batch of allowances for 2018. Based on total expected quotas, China's imports - which at around 8.5 million bpd are already the world's biggest - are expected to hit another record in 2018 as new refining capacity is brought online and Beijing allows more independent refiners to import crude. On the supply side, Brent prices have been supported by a year of production cuts led by the OPEC and Russia. The cuts started last January and are scheduled to cover all of 2018. Pipeline outages in Libya and the North Sea have also been supporting oil prices, although both these disruptions are expected to be resolved by early January.

 

 
Intraday RESISTANCE LEVELS
29th December 2017 R1 R2 R3
GOLD-XAU 1,295 1,300-1,309 1,320
Silver-XAG 16.90-17.30 17.50 18.05
Crude Oil 60.50-61.00 61.90 62.70
EURO/USD 1.1960-1.1990 1.2050 1.2090
GBP/USD 1.3500-1.3590 1.3650 1.3700
USD/JPY 114.00 114.75-115.50 116.00

Intraday SUPPORTS LEVELS
29th December 2017 S1 S2 S3
GOLD-XAU 1,286 1,280-1,272 1,266
Silver-XAG 16.70 16.35-15.80 15.00
Crude Oil 59.90-59.00 58.20 57.40-57.00
EURO/USD 1.1900-1.1850 1.1790 1.1750-1.1700
GBP/USD 1.3450-1.3400 1.3350 1.3300-1.3260
USD/JPY 113.20 112.50 112.00-111.60

Intra-Day Strategy (29th 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 Thursday made its intraday high of US$1295.10/oz and low of US$1286.90/oz. Gold was up by 0.547% at US$1294.77/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 1296-1320 keeping stop loss closing above 1320 and targeting 1286-1280-1274 and 1260-1246. Buy above 1286-1260 with risk below 1260, targeting 1294-1300 and 1309-1320.

 
Intraday Support Levels
S1     1,286
S2     1,280-1,272
S3     1,266
Intraday Resistance Levels
R1     1,295
R2     1,300-1,309
R3     1,320

Technical Indicators

Name   Value Action
14DRSI  

64.350

Buy
20-DMA   1264.80 Sell
50-DMA  

1274.32

Sell
100-DMA   1286.95 Sell
200-DMA   1270.08 Buy
STOCH(5,3)   95.528 Buy
MACD(12,26,9)   1.646 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$16.87/oz and low of US$16.63/oz. Silver settled up by 1.20% at US$16.84/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 16.50-14.60 targeting 16.90-17.30 and 17.50-18.00; stop breakage below 14.60. Sell below 16.90-18.00 with stop loss above 18.00; targeting 15.60-15.00 and 14.60-14.00.

 
Intraday  Support Levels
S1     16.70
S2     16.35-15.80
S3     15.00

Intraday  Resistance Levels
R1     16.90-17.30
R2     17.50
R3     18.05

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.411 Buy
20-DMA   16.17 Sell
50-DMA   16.63 Sell
100-DMA   16.91 Sell
200-DMA   16.95 Sell
STOCH(5,3)   95.561 Buy
MACD(12,26,9)   -0.013 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$59.91/bbl, intraday low of US$59.32/bbl and settled down by 0.234% to close at US$59.57/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 59.90-61.90 with stop loss at 61.90; targeting and 59.00-58.20 and 57.40-56.00. Buy above 59.00-56.00 with risk daily closing below 56.00 and targeting 59.90-60.50 and 61.00-61.90.

 
Intraday Support Levels
S1     59.90-59.00
S2     58.20
S3     57.40-57.00

Intraday Resistance Levels
R1     60.50-61.00
R2     61.90
R3     62.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.474 Sell
20-DMA   57.91 Buy
50-DMA   56.62 Buy
100-DMA   53.02 Buy
200-DMA   50.41 Buy
STOCH(5,3)   92.867 Sell
MACD(12,26,9)   0.900 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1885/EUR, high of US$1.1958/EUR and settled the day up by 0.440% to close at US$1.1941/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 1.1960-1.12090 targeting 1.1900-1.1850-1.1790 and 1.1750-1.1700 with stop-loss at daily closing above 1.2090. Buy above 1.1890-1.1700 with risk below 1.1700 targeting 1.1960-1.1990 and 1.2050-1.2090.

 
Intraday Support Levels
S1     1.1900-1.1850
S2     1.1790
S3     1.1750-1.1700

Intraday  Resistance Levels
R1     1.1960-1.1990
R2     1.2050
R3     1.2090

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.703 Buy
20-DMA   1.1832 Buy
50-DMA   1.1773 Sell
100-DMA   1.1810 Sell
200-DMA   1.1489 Buy
STOCH(5,3)   87.288 Sell
MACD(12,26,9)   0.0034 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3389/GBP, high of US$1.3455/GBP and settled the day up by 0.358% to close at US$1.3438/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 1.3500-1.3700 with targets at 1.3450-1.3400-1.3350 and 1.3300-1.3260. Buy above 1.3400-1.3190 with stop loss closing below 1.3115 targeting 1.3400-1.3500 and 1.3590-1.3650.

 
Intraday Support Levels
S1     1.3450-1.3400
S2     1.3350
S3     1.3300-1.3260

Intraday Resistance Levels
R1     1.3500-1.3590
R2     1.3650
R3     1.3700

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

59.323

Buy
20-DMA   1.3401 Sell
50-DMA   1.3292 Sell
100-DMA   1.3224 Buy
200-DMA   1.3033 Buy
STOCH(5,3)   84.173 Buy
MACD(12,26,9)   -0.0029 Buy

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY113.11/USD and made an intraday high of JPY113.32/USD and settled the day down by 0.044% at JPY113.22/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   56.752 Buy
20-DMA   112.65 Buy
50-DMA   112.93 Buy
100-DMA   111.82 Buy
200-DMA   111.60 Buy
STOCH(9,6)   84.951 Buy
MACD(12,26,9)   0.152 Sell

AAFX TRADING
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