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Daily Market Lookup

  • Asian shares scaled a decade peak on Tuesday after a survey of Chinese manufacturing proved surprisingly upbeat, while the euro lurked within striking distance of its 2017 top against an ailing U.S. dollar. Sentiment was also helped by news that North Korea had offered an olive branch to South Korea, with Kim Jong Un saying he was “open to dialogue” with Seoul. Shanghai blue chips climbed 1.2% after the Caixin index of Chinese industry rose to a four-month high of 51.5 in December, confounding forecasts for a decline. The reading pointed to resilience in the world’s second-largest economy even as Beijing cracks down on industrial pollution and engineers a cooling property market. In currency markets, the dollar remained out of favor having hit a three-month low against a basket of its peers on Friday. That brought its losses for 2017 to 9.8 percent, its worst performance since 2003. A major hurdle for the dollar will be Wednesday’s release of minutes from the Federal Reserve’s December meeting when it raised interest rates. Two policymakers voted against the move amid doubts inflation would accelerate as hoped. The skid in the dollar, combined with strength in Chinese demand, has benefited commodities priced into the currency.
  • The dollar languished near a three-month low versus a basket of major currencies on Tuesday as markets reopened at the start of 2018, while Asian currencies such as the Chinese yuan began the year on a high note. The dollar retreated in 2017, partly because economic growth picked up outside the United States, with other countries’ central banks moving towards tighter monetary policy, lessening the perceived divergence between the Federal Reserve and others. In addition to political factors such as the Italian election in March, a key factor for the euro in 2018 is how the ECB proceeds with curtailing its massive monetary stimulus. With the dollar on the defensive, emerging Asian currencies clawed higher. The Chinese yuan rose to as high as 6.4922 yuan per dollar, its highest level since Sept. 8. The greenback’s weak tone helped boost the Singapore dollar, which rose to S$1.3322 per U.S. dollar at one point, its strongest level since June 2016. In addition, data released on Tuesday showed Singapore’s economic growth slowed in the fourth quarter as factories lost steam, but a services sector recovery helped underscore expectations that the city-state’s central bank could tighten its exchange-rate based monetary policy as early as April.
  • Gold eased slightly in Asia on Tuesday in light trade with Tokyo markets shut and the focus ahead on the Fed minutes later this week. Market watchers will also focus on Wednesday’s minutes of the Fed’s December policy meeting for further hints on the future path of monetary policy. Recent weakness in the dollar has supported gold prices by making the dollar-denominated metal cheaper for holders of other currencies. The dollar fell to its lowest levels in more than three months against a basket of the other major currencies on Friday and posted its largest annual percentage decline since 2003 The index started 2017 at a 14-year high, boosted by hopes for U.S. President Donald Trump’s pro-growth economic agenda. But barring a sweeping tax overhaul enacted last week, the Trump administration has struggled to pass legislation. The dollar also lagged despite the Federal Reserve’s rate increases amid increased investor expectations for other central banks to reduce their stimulus. Geopolitical risks also remain a focus for gold buyers, as gold is a haven asset that many investors favor when they think markets might turn rocky.
  • Oil prices posted their strongest opening to a year since 2014 on Tuesday, with crude rising to mid-2015 highs amid large anti-government rallies in Iran and ongoing supply cuts led by OPEC and Russia. Anti-government protesters demonstrated in Iran on Sunday in defiance of a warning by authorities of a crackdown, extending for a fourth day one of the most audacious challenges to the clerical leadership since pro-reform unrest in 2009. Even without the unrest in Iran, which is a major oil exporter, market sentiment was bullish. The 450K bpd capacity Forties pipeline system in the North Sea returned to full operations on Dec. 30 after an unplanned shutdown. Oil markets have been supported by a year of production cuts led by the Middle East-dominated OPEC and Russia. The cuts started in January 2017 and are scheduled to cover all of 2018. U.S. commercial crude oil inventories have fallen by almost 20 percent from their historic highs last March, to 431.9 mn barrels. Strong demand growth, especially from China, has also been supporting crude. U.S. oil production has risen by almost 16 percent since mid-2016, to 9.75 million bpd at the end of last year. However, consultancy Rystad Energy said "U.S. crude oil production capacity has reached 10 mn bpd."

 

 
Intraday RESISTANCE LEVELS
2nd January 2018 R1 R2 R3
GOLD-XAU 1,309-1,320 1,326 1,334
Silver-XAG 17.10-17.50 18.08 18.60
Crude Oil 60.50-61.00 61.90 62.70
EURO/USD 1.2050-1.2095 1.2150 1.2230
GBP/USD 1.3550-1.3590 1.3650 1.3700
USD/JPY 113.20 114.00 114.75-115.50

Intraday SUPPORTS LEVELS
2nd January 2018 S1 S2 S3
GOLD-XAU 1,295-1,300 1,286 1,280-1,272
Silver-XAG 16.70 16.35-15.80 15.00
Crude Oil 59.90-59.00 58.20 57.40-57.00
EURO/USD 1.1990-1.1960 1.1900 1.1850-1.1790
GBP/USD 1.3500-1.3450 1.3400 1.3350-1.3300
USD/JPY 112.50 112.00-111.60 111.00

Intra-Day Strategy (2nd January 2018)
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$1307.48/oz and low of US$1293.73/oz. Gold was up by 0.607% at US$1302.70/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 1309-1334 keeping stop loss closing above 1334 and targeting 1300-1294-1286 and 1280-1274-1260. Buy above 1294-1260 with risk below 1294, targeting 1309-1320 and 1326-1334.

 
Intraday Support Levels
S1     1,295-1,300
S2     1,286
S3     1,280-1,272
Intraday Resistance Levels
R1     1,309-1,320
R2     1,326
R3     1,334

Technical Indicators

Name   Value Action
14DRSI  

69.002

Buy
20-DMA   1266.35 Sell
50-DMA  

1274.64

Sell
100-DMA   1287.14 Sell
200-DMA   1270.37 Buy
STOCH(5,3)   93.246 Buy
MACD(12,26,9)   4.078 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$17.09/oz and low of US$16.80/oz. Silver settled up by 0.535% at US$16.91/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 overbought region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 16.70-14.60 targeting 17.10-17.50 and 18.00-18.30-18.60; stop breakage below 14.60. Sell below 17.10-18.00 with stop loss above 18.00; targeting 16.70-16.35-15.80-15.00.

 
Intraday  Support Levels
S1     16.70
S2     16.35-15.80
S3     15.00

Intraday  Resistance Levels
R1     17.10-17.50
R2     18.08
R3     18.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.910 Buy
20-DMA   16.17 Sell
50-DMA   16.63 Sell
100-DMA   16.91 Sell
200-DMA   16.95 Sell
STOCH(5,3)   89.950 Sell
MACD(12,26,9)   -0.013 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$60.49/bbl, intraday low of US$59.80/bbl and settled down by 0.333% to close at US$60.10/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 60.50-62.70 with stop loss at 62.70; targeting and 59.90-59.00-58.20 and 57.40-56.00. Buy above 59.90-57.00 with risk daily closing below 57.00 and targeting 60.50-61.00 and 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   69.679 Sell
20-DMA   57.91 Buy
50-DMA   56.62 Buy
100-DMA   53.02 Buy
200-DMA   50.53 Buy
STOCH(5,3)   87.862 Sell
MACD(12,26,9)   0.887 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.2000/EUR, high of US$1.2025/EUR and settled the day up by 0.510% to close at US$1.2002/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     1.1990-1.1960
S2     1.1900
S3     1.1850-1.1790

Intraday  Resistance Levels
R1     1.2050-1.2095
R2     1.2150
R3     1.2230

TECHNICAL INDICATORS
Name   Value Action
14DRSI   72.235 Buy
20-DMA   1.1841 Buy
50-DMA   1.1778 Sell
100-DMA   1.1812 Sell
200-DMA   1.1495 Buy
STOCH(5,3)   91.410 Sell
MACD(12,26,9)   0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3426/GBP, high of US$1.3543/GBP and settled the day up by 0.483% to close at US$1.3503/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 positive crossover to confirm bullish 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 1.3550-1.3700 with targets at 1.3500-1.3450-1.3400 and 1.3350-1.3300. Buy above 1.3500-1.3300 with stop loss closing below 1.3300 targeting 1.3550-1.3590 and 1.3650-1.3700.

 
Intraday Support Levels
S1     1.3500-1.3450
S2     1.3400
S3     1.3350-1.3300

Intraday Resistance Levels
R1     1.3550-1.3590
R2     1.3650
R3     1.3700

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

63.203

Buy
20-DMA   1.3405 Sell
50-DMA   1.3299 Sell
100-DMA   1.3229 Buy
200-DMA   1.3039 Buy
STOCH(5,3)   84.768 Buy
MACD(12,26,9)   -0.0039 Buy

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY112.46/USD and made an intraday high of JPY112.96/USD and settled the day down by 0.141% at JPY112.69/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 113.20-116.00 with risk above 116.00 targeting 112.50-112.00 and 111.60-111.00. Long positions above 112.50-111.00 with targets of 113.20-114.00 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   47.657 Buy
20-DMA   112.93 Buy
50-DMA   112.96 Buy
100-DMA   111.97 Buy
200-DMA   111.63 Buy
STOCH(9,6)   22.533 Sell
MACD(12,26,9)   0.0793 Sell

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