AAFX TRADING

Daily Market Lookup

  • Asian stocks struck a range of new peaks on Wednesday as risk appetites were whetted by a feast of upbeat manufacturing surveys that confirmed a synchronised upturn in the world economy was well under way. Activity was especially strong in Europe, lifting bond yields there and driving the euro to within a whisker of its highest in three years against a beleaguered U.S. dollar. The gains in riskier assets came as industry surveys from India to Germany to Canada showed quickening activity. Indeed, with euro zone factories expanding at their fastest pace in more than two decades, speculation is rampant that the European Central Bank will start to wind down its asset buying programme later this year. The prospect that other major central banks could play catch up with the Federal Reserve on tightening undermined the dollar, which sank to a three-month trough against its peers.
  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.07% to 91.62. In his tweet, Trump said: "North Korean Leader Kim Jong Un just stated that the “Nuclear Button is on his desk at all times.” Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!" The greenback made a subdued to start to the trading year, falling to more than three month lows amid a lack of top-tier economic data and lower trading volumes. The minutes of the Federal Reserve December meeting and non-farm payrolls data slated for later this week, however, are expected to get the trading year underway in earnest as traders look for clues on monetary policy and the progress of the labor market, respectively. The euro eased on Wednesday to take a breather from a rally prompted by optimism over the euro zone’s economy and expectations the European Central Bank will wind down its bond-buying stimulus in 2018. It was boosted by data showing euro zone manufacturers ended 2017 by ramping up activity at the fastest pace in more than two decades as rising demand suggested they will start the new year on a high. The euro was also supported by expectations for a shift in ECB monetary policy this year. The ECB board member in charge of the central bank’s market operations, Benoit Coeure, said at the weekend that he saw a “reasonable chance” bond purchases would not be extended beyond September. ECB rate-setter Ewald Nowotny told a German newspaper in an interview that the ECB may end its stimulus programme this year if the euro zone economy continued to grow strongly. Later on Wednesday, investors will turn their attention to the minutes of the Federal Reserve’s December policy meeting, when it raised interest rates for the third time in 2017.
  • Gold prices gained in Asia on Wednesday as a Twitter taunt by President Donald Trump to North Korean leader Kim Jong-un raised the stakes on nuclear weapons policy. In his tweet, Trump said: "North Korean Leader Kim Jong Un just stated that the “Nuclear Button is on his desk at all times.” Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!" Overnight, gold prices edged higher on Tuesday amid ongoing dollar weakness, while rising geopolitical uncertainties supported sentiment, including continued protests in Iran. Gold prices rose to three-month highs and remained on track to notch their longest winning streak since the end of the gold standard in 1971 supported largely by a dollar slump to three-month lows. The uptick in gold prices come as data showed traders continued to raise their bullish bets on the yellow metal. U.S. CFTC on Friday reported that hedge funds and money managers had increased their net long stance in gold in the week ended Dec. 29 to 135,900, up 22,200.
  • Oil prices were stable on Wednesday, not far off mid-2015 highs reached the previous session, as strong demand and ongoing efforts led by OPEC and Russia to curb production tightened the market. Despite this, there were indicators that markets had overshot in the last days of 2017 and trading this year, as U.S. production is set to rise further and doubts are emerging about whether demand growth can continue at current levels. U.S. oil production has risen by almost 16 percent since mid-2016, hitting 9.75 mn bpd at the end of last year. There was also some concern that output by Russia, the world’s biggest oil producer and one of the key drivers together with the OPEC in cutting supplies, was in fact not falling. As part of the supply cut deal, Russia pledged to reduce its output by 300K bpd from the 30-year monthly high of 11.247 million bpd hit in October 2016, which it achieved by the second quarter of 2017, according to Russian energy ministry data. For the whole of 2017, however, Russian output rose to an average output of 10.98 mn bpd, compared with 10.96 mn bpd in 2016 and 10.72 mn bpd in 2015.

 

 
Intraday RESISTANCE LEVELS
3rd January 2018 R1 R2 R3
GOLD-XAU 1,320-1,326 1,334 1,340
Silver-XAG 17.10-17.50 18.08 18.60
Crude Oil 60.50-61.00 61.90 62.70
EURO/USD 1.2095-1.2150 1.2230 1.2300
GBP/USD 1.3650-1.3700 1.3750 1.3810
USD/JPY 112.50-113.20 114.00 114.75-115.50

Intraday SUPPORTS LEVELS
3rd January 2018 S1 S2 S3
GOLD-XAU 1,309 1,295-1,300 1,286
Silver-XAG 16.70 16.35-15.80 15.00
Crude Oil 59.90-59.00 58.20 57.40-57.00
EURO/USD 1.2050-1.1990 1.1960 1.1900-1.1850
GBP/USD 1.3590-1.3550 1.3500 1.3400
USD/JPY 112.00-111.60 111.00 110.12

Intra-Day Strategy (3rd 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 Tuesday made its intraday high of US$1318.81/oz and low of US$1302.16/oz. Gold was up by 1.136% at US$1317.38/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 1320-1340 keeping stop loss closing above 1340 and targeting 1309-1300-1294 and 1286-1280. Buy above 1309-1280 with risk below 1280, targeting 1320-1326 and 1334-1340.

 
Intraday Support Levels
S1     1,309
S2     1,295-1,300
S3     1,286
Intraday Resistance Levels
R1     1,320-1,326
R2     1,334
R3     1,340

Technical Indicators

Name   Value Action
14DRSI  

71.430

Buy
20-DMA   1270.13 Sell
50-DMA  

1276.03

Sell
100-DMA   1287.76 Sell
200-DMA   1271.08 Buy
STOCH(5,3)   89.401 Buy
MACD(12,26,9)   8.823 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$17.18/oz and low of US$16.91/oz. Silver settled up by 1.239% at US$17.15/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 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   64.779 Buy
20-DMA   16.25 Sell
50-DMA   16.64 Sell
100-DMA   16.91 Sell
200-DMA   16.94 Sell
STOCH(5,3)   86.748 Sell
MACD(12,26,9)   -0.109 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$60.72/bbl, intraday low of US$60.09/bbl and settled up by 0.249% to close at US$60.33/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 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   71.028 Sell
20-DMA   58.16 Buy
50-DMA   56.96 Buy
100-DMA   53.26 Buy
200-DMA   50.65 Buy
STOCH(5,3)   82.662 Sell
MACD(12,26,9)   0.990 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.2000/EUR, high of US$1.2080/EUR and settled the day up by 0.408% to close at US$1.2057/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 1.12095-1.12300 targeting 1.2050-1.1990 and 1.1900-1.1850-1.1790 with stop-loss at daily closing above 1.2090. Buy above 1.1890-1.1700 with risk below 1.1700 targeting 1.2090-1.2150 and 1.2230-1.2300.

 
Intraday Support Levels
S1     1.2050-1.1990
S2     1.1960
S3     1.1900-1.1850

Intraday  Resistance Levels
R1     1.2095-1.2150
R2     1.2230
R3     1.2300

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.995 Buy
20-DMA   1.1852 Buy
50-DMA   1.1785 Sell
100-DMA   1.1815 Sell
200-DMA   1.1501 Buy
STOCH(5,3)   89.825 Sell
MACD(12,26,9)   0.0058 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3488/GBP, high of US$1.3599/GBP and settled the day up by 0.483% to close at US$1.3588/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     1.3590-1.3550
S2     1.3500
S3     1.3400

Intraday Resistance Levels
R1     1.3650-1.3700
R2     1.3750
R3     1.3810

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

68.310

Buy
20-DMA   1.3415 Sell
50-DMA   1.3309 Sell
100-DMA   1.3236 Buy
200-DMA   1.3044 Buy
STOCH(5,3)   92.224 Buy
MACD(12,26,9)   0.0055 Buy

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY112.04/USD and made an intraday high of JPY112.78/USD and settled the day down by 0.257% at JPY112.20/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     112.00-111.60
S2     111.00
S3     110.12

INTRADAY RESISTANCE LEVELS
R1     112.50-113.20
R2     114.00
R3     114.75-115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.916 Buy
20-DMA   112.90 Buy
50-DMA   112.92 Buy
100-DMA   112.00 Buy
200-DMA   111.64 Buy
STOCH(9,6)   17.898 Sell
MACD(12,26,9)   0.0057 Sell

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