AAFX TRADING

Daily Market Lookup

  • Asian shares crept toward all-time peaks on Monday after Wall Street boasted its best start to a year in over a decade, with brisk economic growth and benign inflation proving a potent cocktail for risk appetites. Friday’s U.S. jobs report did nothing to challenge that outlook. While payrolls missed forecasts, the report was perfect for equities given unemployment stayed low but with little sign of the inflationary pressures that would make the Federal Reserve more aggressive in tightening policy. The quarterly U.S. earnings season kicks off this week with the Street expecting solid growth of around 10 percent, though many companies are also likely to be announcing one-off charges to account for recent tax changes. The next major data hurdles will be U.S. consumer prices and retail sales on Friday. In Asia, China reports December inflation on Wednesday and international trade numbers on Friday. In currency markets, the dollar has steadied for the moment after a rocky couple of weeks. On Friday, surprisingly strong Canadian jobs data stoked speculation that interest rates there could rise as early as next week and sent the local currency to a three-month peak. Upbeat euro zone data has likewise underpinned the, though it has so far failed to clear major chart resistance at the September. The dollar has fared better on the yen, thanks in part to expectations the Bank of Japan will stick with its super-easy policies. Japanese Prime Minister Shinzo Abe on Sunday called on central bank governor Haruhiko Kuroda to keep up efforts to reflate the economy, but added he was undecided on whether to reappoint Kuroda for another five-year term.
  • Gold prices fell in Asia on Monday on profit-taking and as investors keep an eye on the dollar for potential further weakness linked to a more gentle than expected rate hike path by the Fed in 2018 after disappointing jobs data last week. Last week, gold prices edged lower in choppy trade on Friday as investors took profits after the metal’s rally to three-and-a-half month highs earlier in the week and as the dollar pushed higher despite a weaker-than-expected U.S. jobs report for December. For the week, the precious metal was still up 0.99%, its fourth consecutive weekly gain. The U.S. economy added 148,000 jobs in December, the Labor Department reported, well below the 190,000 forecast by economists, while the unemployment rate held steady at 4.1%. Employment data for October and November data were revised to show 9,000 fewer jobs created than previously reported. Earnings rose by an annualized 2.5% in December, as expected, but November’s wage growth was revised down to 2.4% from 2.5%. While the report was disappointing given the miss in jobs growth the rise in wage growth was a bright spot. The jobs data was seen as unlikely to alter investor expectations for a rate hike by the Federal Reserve at its March meeting.
  • The dollar briefly slid to the day’s lows following the report before regaining ground. While the report was disappointing given the miss in jobs growth the rise in wage growth was a bright spot. The jobs data was seen as unlikely to alter investor expectations for a rate hike by the Federal Reserve at its March meeting Fed officials have penciled in three rate increases this year and two in 2019. Higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors. Another report showing that U.S. service sector activity cooled slightly in December had little impact on the dollar. The dollar had fallen earlier in the week as expectations for faster monetary tightening outside the U.S., which would lessen the divergence between the Fed and other central banks, weighed. In the week ahead, investors will be turning their attention to U.S. inflation data and comments by a number of Fed speakers for further clues on the timing of the next rate hike.
  • Oil prices firmed on Monday on the back of a slight decline in the number of U.S. rigs drilling for new production, with crude holding just below near three-year highs reached last week. Traders said the gains were due to a slight decline in the number of U.S. rigs drilling for new production, which eased by five in the week to January 5, to 742, according to data from oil services firm Baker Hughes. Despite this, U.S. production is expected to break through 10 mn bpd very soon, largely thanks to soaring output from shale drillers. Only top producers Russia and Saudi Arabia produce more. Rising U.S. production is the main factor countering production cuts led by the Middle East dominated OPEC and by Russia, which began in January last year and are set to last through 2018. However, Innes added that Middle East turmoil would remain a key focus for oil markets, which he warned had the potential to "send oil prices rocketing higher

 

 
Intraday RESISTANCE LEVELS
8th 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 61.90 62.50-63.00 63.65
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
8th 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 61.00 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 (8th 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 Friday made its intraday high of US$1323.28/oz and low of US$1313.53/oz. Gold was down by 0.246% at US$1319.23/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  

69.814

Buy
20-DMA   1279.26 Sell
50-DMA  

1278.79

Sell
100-DMA   1288.62 Sell
200-DMA   1271.75 Buy
STOCH(5,3)   81.444 Buy
MACD(12,26,9)   12.773 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$17.26/oz and low of US$17.07/oz. Silver settled down by 0.174% at US$17.20/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   64.982 Buy
20-DMA   16.44 Sell
50-DMA   16.66 Sell
100-DMA   16.92 Sell
200-DMA   16.93 Sell
STOCH(5,3)   82.992 Sell
MACD(12,26,9)   0.189 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$62.03/bbl, intraday low of US$61.08/bbl and settled down by 0.485% to close at US$61.55/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 61.90-64.50 with stop loss at 64.50; targeting and 61.00-60.50 and 59.90-59.00. Buy above 61.00-59.00 with risk daily closing below 59.00 and targeting 61.90-62.50-63.00 and 63.65-64.50.

 
Intraday Support Levels
S1     61.00
S2     60.50
S3     59.90-59.00

Intraday Resistance Levels
R1     61.90
R2     62.50-63.00
R3     63.65

TECHNICAL INDICATORS
Name   Value Action
14DRSI   72.987 Sell
20-DMA   58.98 Buy
50-DMA   57.54 Buy
100-DMA   53.57 Buy
200-DMA   50.85 Buy
STOCH(5,3)   78.344 Sell
MACD(12,26,9)   1.296 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.2019/EUR, high of US$1.2082/EUR and settled the day down by 0.323% to close at US$1.2027/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   62.132 Buy
20-DMA   1.1886 Buy
50-DMA   1.1802 Sell
100-DMA   1.1824 Sell
200-DMA   1.1520 Buy
STOCH(5,3)   64.720 Sell
MACD(12,26,9)   0.0064 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3522/GBP, high of US$1.3581/GBP and settled the day up by 0.184% to close at US$1.3572/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 1.3550-1.3750 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  

60.767

Buy
20-DMA   1.3428 Sell
50-DMA   1.3329 Sell
100-DMA   1.3256 Buy
200-DMA   1.3060 Buy
STOCH(5,3)   68.174 Sell
MACD(12,26,9)   0.0058 Buy

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY112.71/USD and made an intraday high of JPY113.29/USD and settled the day up by 0.292% at JPY113.05/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   52.841 Buy
20-DMA   112.95 Buy
50-DMA   112.89 Buy
100-DMA   112.05 Buy
200-DMA   111.66 Buy
STOCH(9,6)   58.061 Sell
MACD(12,26,9)   0.024 Sell

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