AAFX TRADING

Daily Market Lookup

  • Wall Street stock futures and the dollar pulled back slightly on Monday after the U.S. government was forced to shut down amid a dispute between President Donald Trump and Democrats over immigration. A U.S. government shutdown will enter its third day on Monday as Senate negotiators failed to reach an agreement late on Sunday to restore federal spending authority and deal with demands from Democrats that young “Dreamers” be protected from deportation. The Senate set a vote for 12 p.m. (1700 GMT) on Monday on advancing a measure to provide temporary government funding through Feb. 8, end the shutdown and allow hundreds of thousands of federal employees to return to work. But it was unclear whether there would be enough Democratic votes on Monday to advance a temporary spending bill. While many see minimal impact on the economy from a short-term government shutdown, analysts say a prolonged stalemate in Washington could dampen investors’ confidence in U.S. assets. But so far U.S. Treasuries yields have risen despite the government shutdown, extending their uptrend since September. The common currency was also helped after Germany’s Social Democrats (SPD) voted on Sunday to begin formal coalition talks with Chancellor Angela Merkel’s conservatives, moving Europe’s economic powerhouse closer to a stable government after months of political deadlock. The dollar regained some footing on Monday after slipping earlier on a U.S. government shutdown, supported by higher Treasury yields, while investors took a relatively calm view of the Washington wrangling. Friday's disappointing UK retail sales data efore Friday's fall sterling had gained against the dollar for seven straight sessions, with traders welcoming positive noises from the European Union about Brexit negotiations.
  • Gold prices edged lower to start the week on Monday, as investors took a relatively calm view of the partial shutdown of the U.S. federal government. The U.S. government shutdown entered a third day after the Senate failed to reach a deal Sunday night to fund government operations. Looking to the week ahead, global financial markets will focus on the European Central Bank's meeting for further details on when the central bank plans to end its massive economic stimulus program. Staying on the central bank front, traders will pay close attention to a monetary policy decision from the Bank of Japan after a small tweak in its bond purchases earlier this month triggered talk that it would cut back on QE. Mounting chatter that the world's leading central banks will start tightening monetary policy has sparked a global bond market selloff this month, with yields in the U.S., Europe and Asia all spiking higher. Meanwhile, investors will keep an eye on a preliminary reading of fourth-quarter U.S. growth to gauge if the world's largest economy is strong enough to withstand multiple rate hikes in 2018. Gold is highly sensitive to rising rates, which increase the opportunity cost of holding nonyielding bullion. Another headliner this week will be the World Economic Forum in Davos, Switzerland, taking place Tuesday-to-Friday, where U.S. President Donald Trump, German Chancellor Angela Merkel, French President Emmanuel Macron and British Prime Minister Theresa May are all expected to be in attendance
  • Crude prices started the week in positive territory on Monday, pushed higher by comments from Saudi Arabia that cooperation between oil producers who are currently withholding supplies in an effort to prop up the market would continue beyond 2018. OPEC and non-OPEC oil producers have a consensus that they should continue cooperating on production after the end of 2018, when their current agreement on production cuts expires, Saudi Arabian energy minister Khalid al-Falih said on Sunday. Falih added that this might mean a new form of deal rather than continuing the same supply cuts that have boosted prices in recent months He spoke at a news conference after a meeting of the joint ministerial committee which oversees implementation of the cuts. Oil prices have added around 10% since early December, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018. The deal to cut oil output by 1.8 mn bpd was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once. Oil prices posted their first weekly loss in five weeks last week as traders fretted over a sharp rebound in U.S. production. The IEA, in its monthly report Friday, warned that rapidly increasing production in the United States would offset a raft of positive factors supporting oil prices including ongoing OPEC output cuts. The IEA said it expects U.S. output levels to soon exceed 10 million bpd, overtaking OPEC behemoth Saudi Arabia and rivaling Russia. U.S. crude production stood at 9.75 n bpd on Jan. 12, data from the Energy Information Administration showed Analysts and traders have recently warned that U.S. shale oil producers could ramp up production in the coming weeks as they look to take advantage of higher prices, potentially derailing an OPEC-led effort to curb excess supply.

 

 
Intraday RESISTANCE LEVELS
22nd 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 64.00 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
22nd 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 63.50-62.80 61.50 60.90
EURO/USD 1.2200 1.2160-1.2095 1.1990
GBP/USD 1.3850 1.3750 1.3700-1.3650
USD/JPY 110.50 110.10 109.20-108.50

Intra-Day Strategy (22nd 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$1337.96/oz and low of US$1326.22/oz. Gold was up by 0.390% at US$1331.65/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 Friday made its intraday high of US$17.11/oz and low of US$16.93/oz. Silver settled down by 0.413 % at US$17.00/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 Friday made an intra‐day high of US$63.76/bbl, intraday low of US$62.82/bbl and settled up by 0.266% to close at US$63.55/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 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     63.50-62.80
S2     61.50
S3     60.90

Intraday Resistance Levels
R1     64.00
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 Friday made an intraday low of US$1.2214/EUR, high of US$1.2295/EUR and settled the day down by 0.114% to close at US$1.2222/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 neutral 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   67.451 Buy
20-DMA   1.2060 Buy
50-DMA   1.1907 Sell
100-DMA   1.1852 Sell
200-DMA   1.1596 Buy
STOCH(5,3)   56.433 Sell
MACD(12,26,9)   0.0104 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3838/GBP, high of US$1.3944/GBP and settled the day up by 0.244% to close at US$1.3857/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 1.3850-1.3750 and 1.3700-1.3650. Buy above 1.3850-1.3650 with stop loss closing below 1.3650 targeting 1.3950-1.4000 and 1.4050-1.4130.

 
Intraday Support Levels
S1     1.3850
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  

73.863

Buy
20-DMA   1.3610 Sell
50-DMA   1.3445 Sell
100-DMA   1.3342 Buy
200-DMA   1.3124 Buy
STOCH(5,3)   77.658 Sell
MACD(12,26,9)   0.0126 Buy

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY110.48/USD and made an intraday high of JPY111.12/USD and settled the day down by 0.244% at JPY111.69/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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