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Daily Market Lookup

  • Asian shares vaulted to 10-year highs on Thursday as solid economic data from the United States and Germany reinforced investors’ optimism, while oil prices hovered at a 2-1/2-year high with unrest in Iran stoking supply disruption concerns. The economic data published on Wednesday on both sides of the Atlantic reinforced investors’ expectations that solid global growth will boost demand of goods, including oil, and lift corporate earnings. U.S. factory activity increased more than expected in December, boosted by a surge in new orders growth, in a further sign of strong economic momentum at the end of 2017. In Germany, Europe’s economic power house, the unemployment rate hit a record low of 5.5 percent in December, underpinning a broad-based economic upswing. At the moment, forward contracts are trading cheaper than expected spot prices, a condition known as backwardation, suggesting investors expect any supply shortages to be temporary.
  • U.S. Federal Reserve policymakers showed worry over the fate of currently low inflation and saw recent tax changes as providing a boost to consumer spending, according to the minutes of the U.S. central bank’s last policy meeting on Dec. 12-13 released on Wednesday. The details of the meeting, at which the Fed raised interest rates for the fifth time since the 2008 financial crisis, also showed that officials have a similar lack of certainty over the impact of fiscal stimulus on raising price pressures. They then mulled the dual possibilities that the Trump administration’s tax cuts or easy financial conditions could cause inflation pressures to build unduly, while at the same time also considering that actual or expected inflation may fail to rise to the Fed’s 2 percent target. U.S. stocks were little changed following the publication of the minutes and U.S. Treasury yields were little changed. The U.S. dollar extended gains against a basket of currencies. The inflation shortfall is set to dominate incoming Fed Chair Jerome Powell’s first few months as chief of the central bank with further rate increases more difficult to justify without an upswing. He is set to take over from Janet Yellen by the time of the next rate-setting meeting on Jan. 31-Feb. 1. Jerome Powell testifies before the Senate Banking, Housing and Urban Affairs Committee on his nomination to become chairman of the U.S. Federal Reserve in Washington. At its December meeting, the Fed kept its forecast for three rate rises this year and in 2019 unchanged even as policymakers anticipated a short-term boost in U.S. economic growth from the Trump administration’s sweeping $1.5 trillion tax overhaul signed into law on Dec. 22. The tax changes reduce the corporate rate from 35 percent to 21 percent and temporarily cuts the taxes paid by most individuals as well. In the minutes, many policymakers “expected the proposed cuts in personal taxes to provide some boost to consumer spending” and many characterized the changes in business taxes as likely to provide a modest boost to capital spending. In December, the Fed forecast ultra-low unemployment of below 4 percent in 2018 and 2019, but still predicted inflation would remain below 2 percent at the end of 2018. The mystery of low inflation in such a robust economy has prompted debate at the Fed for the past several months and was the concern of the two policymakers who voted against a rate increase at last month’s meeting. The latest minutes showed that while participants generally viewed inflation rising back to target over the medium term, several said “other persistent factors may be holding down inflation.”
  • Oil prices on Thursday hit their highest in over 2-1/2 years, marking levels not seen since before a slump in commodity markets in 2014/15, boosted by tensions in key producer Iran and by ongoing OPEC-led output cuts. Prices were also buoyed by Asia’s stock markets, which flirted with 10-year highs on Thursday amid strong data from leading economies including the United States, Japan and Germany. Beyond a brief intraday spike in May, 2015, these were the highest crude price levels since December, 2014, at the start of the oil price downturn. Freezing weather in the United States has also spurred short-term demand, especially for heating oil. Iran’s elite Revolutionary Guards have deployed forces to three provinces to put down anti-government unrest that has been ongoing for a week, their commander said on Wednesday. The unrest in Iran has not affected the country’s oil output, however. He added that beyond potential strikes by Iranian oil workers, the risk of supply disruptions was low as ”Iran’s oil resources are not near any of the major population centers or sites where the protests are playing out. In the United States, crude oil inventories fell by 5 million barrels in the week to Dec. 29 to 427.8 million barrels, industry group the American Petroleum Institute said on Wednesday. Potentially undermining the trend toward tighter market conditions is U.S. oil production, which has risen by almost 16 percent since mid-2016, hitting 9.75 million bpd at the end of last year. Official U.S. EIA storage and production data is due on Thursday.

 

 
Intraday RESISTANCE LEVELS
4th 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 62.50-63.00 63.65 64.50
EURO/USD 1.2095-1.2150 1.2230 1.2300
GBP/USD 1.3550-1.3590 1.3650 1.3700-1.3750
USD/JPY 113.20 114.00 114.75-115.50

Intraday SUPPORTS LEVELS
4th 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 61.90-61.00 60.50 59.90-59.00
EURO/USD 1.1990 1.1960 1.1900-1.1850
GBP/USD 1.3500-1.3450 1.3380 1.3320
USD/JPY 112.50 112.00-111.60 111.00

Intra-Day Strategy (4th 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 Wednesday made its intraday high of US$1321.31/oz and low of US$1307.36/oz. Gold was down by 0.349% at US$1312.91/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  

67.959

Buy
20-DMA   1272.27 Sell
50-DMA  

1276.67

Sell
100-DMA   1288.13 Sell
200-DMA   1271.35 Buy
STOCH(5,3)   81.911 Buy
MACD(12,26,9)   9.789 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$17.21/oz and low of US$17.00/oz. Silver settled down by 0.175% at US$17.10/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   63.874 Buy
20-DMA   16.30 Sell
50-DMA   16.64 Sell
100-DMA   16.91 Sell
200-DMA   16.94 Sell
STOCH(5,3)   84.915 Sell
MACD(12,26,9)   -0.136 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$61.94/bbl, intraday low of US$61.89/bbl and settled up by 2.61% to close at US$61.89/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 62.70-64.50 with stop loss at 64.50; targeting and 61.90-61.00-60.50 and 59.90-59.00. Buy above 61.90-59.00 with risk daily closing below 59.00 and targeting 62.50-63.00 and 63.65-64.50.

 
Intraday Support Levels
S1     61.90-61.00
S2     60.50
S3     59.90-59.00

Intraday Resistance Levels
R1     62.50-63.00
R2     63.65
R3     64.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   77.822 Sell
20-DMA   58.46 Buy
50-DMA   57.18 Buy
100-DMA   53.42 Buy
200-DMA   50.73 Buy
STOCH(5,3)   93.685 Sell
MACD(12,26,9)   1.238 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.2000/EUR, high of US$1.205/EUR and settled the day down by 0.364% to close at US$1.2013/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 1.1990-1.1700 with risk below 1.1700 targeting 1.2090-1.2150 and 1.2230-1.2300.

 
Intraday Support Levels
S1     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   78.359 Buy
20-DMA   1.1860 Buy
50-DMA   1.1790 Sell
100-DMA   1.1818 Sell
200-DMA   1.1507 Buy
STOCH(5,3)   78.298 Sell
MACD(12,26,9)   0.0059 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3493/GBP, high of US$1.3612/GBP and settled the day down by 0.537% to close at US$1.3513/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 oversold 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 1.3550-1.3700 with targets at 1.3500-1.3450-1.3400 and 1.3350-1.3300. Buy above 1.3500-1.3320 with stop loss closing below 1.3300 targeting 1.3550-1.3590 and 1.3650-1.3750.

 
Intraday Support Levels
S1     1.3500-1.3450
S2     1.3380
S3     1.3320

Intraday Resistance Levels
R1     1.3550-1.3590
R2     1.3650
R3     1.3700-1.3750

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

59.904

Buy
20-DMA   1.3414 Sell
50-DMA   1.3315 Sell
100-DMA   1.3242 Buy
200-DMA   1.3049 Buy
STOCH(5,3)   71.597 Sell
MACD(12,26,9)   0.0055 Buy

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY112.16/USD and made an intraday high of JPY112.60/USD and settled the day up by 0.204% at JPY112.49/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 113.20-115.50 with risk above 115.50 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   46.973 Buy
20-DMA   112.91 Buy
50-DMA   112.90 Buy
100-DMA   112.02 Buy
200-DMA   111.65 Buy
STOCH(9,6)   29.408 Sell
MACD(12,26,9)   -0.0078 Sell

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