AAFX TRADING

Daily Market Lookup

  • Asia stocks shook off losses on Wall Street and edged up to record highs on Friday following China’s announcement of faster-than-expected fourth quarter growth, while worries over a possible U.S. government shutdown weighed on the dollar. Optimism over the global economic growth outlook and improved corporate earnings have helped share markets rally at the start of 2018. Supporting economic confidence was data on Thursday that showed China’s growth in 2017 accelerated for the first time in seven years. Against the yen, the dollar was 0.25 percent lower at 110.840 JPY=. It rose to 111.480 on Thursday before slipping on concerns over a possible U.S. government shutdown as lawmakers struggled to cobble a federal budget deal. The focus was on whether lawmakers can reach at least a temporary agreement to fund government operations by a deadline on Friday. The U.S. House of Representatives on Thursday passed a bill to fund government operations through Feb. 16 and avoid agency shutdowns this weekend when existing funding expires. However, a bitter fight broke out in the Senate after the House passage, leaving the legislation hanging in the balance The common currency advanced to a three-year peak above $1.2300 earlier this week on expectations that the European Central Bank would take steps towards winding back on stimulus measures to normalize monetary policy. The euro’s rally was tempered later as some ECB officials voiced worries about the currency’s strength.
  • Gold prices gained in Asia on Friday as a weaker dollar brought physical demand into the market. The US dollar index fell 0.04% to 90.27 as the US House of Representatives passed a stopgap funding bill for the government, but the Senate may be harder to reach a deal and President Trump has how own concerns. Gold prices eased from four-month highs as US yields rose sharply after strong growth data from China and amid expectations that inflation would soon gather pace. Yields on United States 10-Year reached a ten-month high amid strong China economic growth data and rising expectations for faster inflation growth, which pressured gold prices to retreat from four-month highs. Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. The fall in gold futures come amid comments from Macquarie warning that risk of a reversal in gold prices is rising, as it is “harder for gold to ignore the impressive snapback in real yields” since the turn of the year. Despite the bank’s warning, traders remain bullish on the yellow metal as data last week showed they increased their bullish bets on gold for the fourth-straight week.
  • Renewed USD weakness, with the key US Dollar Index struggling near three-year lows, was seen as one of the key factors driving the pair higher. Thursday’s greenback weakness came on the back of growing concerns of a looming government shutdown and remained unabated following the release of mixed US economic data. The US House of Representatives did pass a bill to fund government operations through Feb. 16 but the bill still needs to be approved by the Senate, where it faces an uncertain future. Meanwhile, the shared currency shrugged off the recent jawboning by several ECB officials and in absence of any fresh fundamental, the USD price dynamics might continue to act as an exclusive driver of the pair's momentum on the last trading day of the week. However, the key focus would be on next week's ECB monetary policy meeting. With the pair holding near multi-year lows, investors are likely to turn cautious heading into the key event risk and might eventually lead to some range-bound trading action in the near-term.
  • Oil prices dropped more than 1 percent on Friday as a bounce-back in U.S. production outweighed ongoing declines in crude inventories. Traders said the lower prices were prompted by a recovery in U.S. oil production after a recent drop, as well as by an expected fall in demand when winter ends in the northern hemisphere. U.S. crude oil production C-OUT-T-EIA stood at 9.75 mn bpd on Jan. 12, data from the EIA showed. Output had fallen to 9.49 million barrels at the start of the year, due largely to a cold snap that shut down some production. Most analysts expect U.S. output to break through 10 mn bpd soon. Analysts also pointed to excessive long positions in financial oil markets as a likely brake on any upward momentum in prices, with many traders soon likely to cash in on recent price rises, which have seen crude jump by around 14 percent since early December. Overall, however, oil prices remain well supported, and most analysts do not expect steep declines. The main price driver has been a production cut by a group of major oil producers around the OPEC and Russia, who started to withhold output in January last year. The supply cuts by OPEC and its allies, which are scheduled to last throughout 2018, were aimed at tightening the market to prop up prices. In the United States, crude inventories fell 6.9 mn barrels in the week to Jan. 12, to 412.65 mn barrels. That’s their lowest seasonal level in three years and below the five-year average marker around 420 million barrels.

 

 
Intraday RESISTANCE LEVELS
19th January 2018 R1 R2 R3
GOLD-XAU 1,335-1,340 1,349 1,358-1366
Silver-XAG 17.45-17.70 18.08 18.60
Crude Oil 63.50-64.20 64.75 65.30-66.00
EURO/USD 1.2290-1.2360 1.2420 1.2500
GBP/USD 1.3950-1.4000 1.4050 1.4130
USD/JPY 111.00-111.60 112.00 112.50-113.20

Intraday SUPPORTS LEVELS
19th January 2018 S1 S2 S3
GOLD-XAU 1,326-1,320 1,309 1,300
Silver-XAG 17.00 16.70 16.35-15.80
Crude Oil 63.00-62.50 61.50 60.90
EURO/USD 1.2200 1.2160-1.2095 1.1990
GBP/USD 1.3900-1.3820 1.3750 1.3700-1.3650
USD/JPY 110.50 110.10 109.20-108.50

Intra-Day Strategy (19th 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 Thursday made its intraday high of US$1332.99/oz and low of US$1326.70/oz. Gold was up by 0.029% at US$1326.70/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 neutral territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1334-1375 keeping stop loss closing above 1375 and targeting 1326-1320 and 1309-1300. Buy above 1326-1300 with risk below 1300, targeting 1334-1340-1349 and 1357 1366.

 
Intraday Support Levels
S1     1,326-1,320
S2     1,309
S3     1,300
Intraday Resistance Levels
R1     1,335-1,340
R2     1,349
R3     1,358-1366

Technical Indicators

Name   Value Action
14DRSI  

65.506

Buy
20-DMA   1312.63 Sell
50-DMA  

1288.29

Sell
100-DMA   1291.90 Sell
200-DMA   1275.40 Buy
STOCH(5,3)   31.912 Sell
MACD(12,26,9)   14.749 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$17.11/oz and low of US$16.89/oz. Silver settled down by 0.176% at US$16.92/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 neutral 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 17.00-14.60 targeting 17.45-17.75 and 18.00-18.30-18.60; stop breakage below 14.60. Sell below 17.45-18.60 with stop loss above 18.60; targeting 17.10-16.70-16.35 and 15.80-15.00.

 
Intraday  Support Levels
S1     17.00
S2     16.70
S3     16.35-15.80

Intraday  Resistance Levels
R1     17.45-17.70
R2     18.08
R3     18.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.150 Buy
20-DMA   16.93 Sell
50-DMA   16.67 Sell
100-DMA   16.92 Sell
200-DMA   16.88 Sell
STOCH(5,3)   30.298 Sell
MACD(12,26,9)   0.148 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$64.32/bbl, intraday low of US$63.45/bbl and settled up by 0.515% to close at US$63.72/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 63.50-66.90 with stop loss at 67.00; targeting and 63.00-62.50 and 61.90-61.50-60.90. Buy above 63.00-60.90 with risk daily closing below 60.90 and targeting 63.50-64.20-64.75 and 65.30-66.00.

 
Intraday Support Levels
S1     63.00-62.50
S2     61.50
S3     60.90

Intraday Resistance Levels
R1     63.50-64.20
R2     64.75
R3     65.30-66.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.191 Sell
20-DMA   61.90 Buy
50-DMA   59.06 Buy
100-DMA   55.19 Buy
200-DMA   51.41 Buy
STOCH(5,3)   64.284 Sell
MACD(12,26,9)   1.606 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.2164/EUR, high of US$1.2264/EUR and settled the day up by 0.435% to close at US$1.2236/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 1.2290-1.2420 targeting 1.2200-1.2160 and 1.2095-1.1990-1.1900 with stop-loss at daily closing above 1.2420. Buy above 1.2200-1.1990 with risk below 1.1990 targeting 1.2230-1.2300 and 1.2360-1.2420.

 
Intraday Support Levels
S1     1.2200
S2     1.2160-1.2095
S3     1.1990

Intraday  Resistance Levels
R1     1.2290-1.2360
R2     1.2420
R3     1.2500

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.921 Buy
20-DMA   1.2043 Buy
50-DMA   1.1896 Sell
100-DMA   1.1849 Sell
200-DMA   1.1588 Buy
STOCH(5,3)   66.093 Buy
MACD(12,26,9)   0.0104 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3803/GBP, high of US$1.3912/GBP and settled the day up by 0.477% to close at US$1.3892/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.3431) 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 overbought 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 1.3950-1.4130 with targets at 1.3900-1.3820 and 1.3750-1.3700-1.3650. Buy above 1.3900-1.3650 with stop loss closing below 1.3650 targeting 1.3950-1.4000 and 1.4050-1.4130.

 
Intraday Support Levels
S1     1.3900-1.3820
S2     1.3750
S3     1.3700-1.3650

Intraday Resistance Levels
R1     1.3950-1.4000
R2     1.4050
R3     1.4130

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

77.096

Buy
20-DMA   1.3588 Sell
50-DMA   1.3431 Sell
100-DMA   1.3332 Buy
200-DMA   1.3117 Buy
STOCH(5,3)   82.460 Sell
MACD(12,26,9)   0.0125 Buy

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY110.68/USD and made an intraday high of JPY111.47/USD and settled the day down by 0.161% at JPY111.09/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (111.69), 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 111.00-114.00 with risk above 114.00 targeting 111.00-110.10 and 109.20-108.0. Long positions above 111.00-108.50 with targets of 111.60-112.50 and 113.20-114.00-114.75 with stop below 110.00.

 
Intraday Support Levels
S1     110.50
S2     110.10
S3     109.20-108.50

INTRADAY RESISTANCE LEVELS
R1     111.00-111.60
R2     112.00
R3     112.50-113.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.281 Buy
20-DMA   112.14 Sell
50-DMA   112.40 Sell
100-DMA   112.24 Sell
200-DMA   111.69 Sell
STOCH(9,6)   59.749 Buy
MACD(12,26,9)   -0.514 Sell

AAFX TRADING
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