AAFX TRADING

Daily Market Lookup

  • Asian share markets took a time out on Wednesday as investors were left breathless at the breakneck pace of recent gains, while a fresh burst of speculative selling took the U.S. dollar to three-year lows. Figures out of Japan showed exports growing for a 13th straight month, led by record demand from China and Asia as a whole, while manufacturing activity expanded at the fastest pace in almost four years. Investors seemed to have largely shaken off worries about a trade war, sparked when U.S. President Donald Trump’s slapped steep import tariffs on washing machines and solar panels in a move condemned by China and South Korea. In currency markets, the dollar remained under fire as investors wagered the Federal Reserve would be far from the only central bank to tighten this year as growth spread more widely. The sea change has been greatest in Europe where a survey of consumers overnight showed confidence jumped to a 17-year high in January. The upbeat data only reinforced speculation the European Central Bank might take a step toward an eventual tightening at its policy meeting on Thursday. It also ran into selling against the yen even though the Bank of Japan tried hard on Tuesday to quash talk it might curb its massive asset buying campaign anytime soon.
  • The dollar fell further in Asia on Wednesday on growing concerns of a global trade spat following trade action by the US against China and South Korea and concerns over the what kind of trade message the Trump administration will give at Davos. Japan reported trade figures for December with the trade balance at a surplus of ¥359 billion, narrower than the ¥530 billion surplus seen. Imports. Overnight, the dollar rose from lows but remained under pressure as the yen made strong gains shrugging off less hawkish than expected comments from the Bank of Japan following its decision to keep monetary policy unchanged. In what was a quiet day on the calendar for the top-tier US economic data, the dollar struggled to find its footing after falling to fresh three-and-a-half month lows before paring some of its losses. The euro continued its trend higher against the greenback as data indicating underlying strength in the US economy, added to the growing speculation that bullish Eurozone growth would force the ECB to consider plans to end its quantitative easing program. The ECB is slated to meet on Thursday, when many expect the central bank to keep rates unchanged while ECB president Mario Draghi is likely to downplay any investor expectations that the central bank will soon announce plans to adopt a less dovish stance on monetary policy.
  • Gold prices gains in Asia on Wednesday with a weaker dollar aiding buying for the greenback-denominated commodity with a backdrop of rising concerns about growing US protectionism in global trade ahead of a speech at the end of the week by president Trump in Davos. Overnight, gold prices remained higher on Tuesday, as sentiment on the U.S. dollar remained fragile even after the U.S. government shutdown ended. The dollar only mildly recovered after Congress approved a measure on Monday to fund the government for around three weeks and President Donald Trump signed the bill, ending the three-day government shutdown. Gold is sensitive to moves in the dollar. A weaker dollar makes gold less expensive for holders of foreign currency.
  • Oil prices rose on Tuesday, lifted by healthy economic growth as well as the ongoing supply Oil prices fell on Wednesday, weighed down by data that showed an increase in U.S. crude oil and gasoline inventories. Traders said prices had been pressured by U.S. data showing an increase in crude and gasoline stocks. The American Petroleum Institute said on Tuesday that crude inventories rose by 4.8 million barrels in the week to Jan. 19 to 416.2 million, after nine weeks of drawdowns. Gasoline stocks climbed by 4.1 million barrels, while refinery crude runs fell by 420,000 barrels per day. In Asia, oversupply of gasoline has pulled down refinery profits for the product to their lowest level since 2015. Amid these weakening indicators, traders are taking measures to protect themselves from a potential fall in crude prices. Overall, there is now far more demand for options to sell Brent than there is for call options, which are the right to buy Brent at a certain price. Sukrit Vijayakar, director of energy consultancy Trifecta, said the rising options to sell were a result of huge amounts of long positions that have been built up in the market over the past months of rising crude prices. Despite this, traders said oil prices were unlikely to tumble far as markets remain supported by healthy economic growth, as well as from supply restrictions led by the OPEC and Russia. In the latest sign of robust global economic growth, Japanese manufacturing activity expanded at the fastest pace in almost four years in January, a survey showed on Wednesday. Economic growth is translating into healthy oil demand growth, which comes at a time that OPEC and Russia lead production cuts aimed at tightening the market and propping up prices. The deal to withhold output started in January last year and is currently set to last through 2018.

 

 
Intraday RESISTANCE LEVELS
24th January 2018 R1 R2 R3
GOLD-XAU 1,349 1,358-1366 1,375
Silver-XAG 17.45-17.70 18.08 18.60
Crude Oil 64.75 65.30-66.00 66.90
EURO/USD 1.2360-1.2420 1.2500 1.2590
GBP/USD 1.4050 1.4130 1.4200-1.4260
USD/JPY 111.00-111.60 112.00 112.50-113.20

Intraday SUPPORTS LEVELS
24th January 2018 S1 S2 S3
GOLD-XAU 1,340 1,330-1,320 1,309
Silver-XAG 17.00 16.70 16.35-15.80
Crude Oil 64.00 63.50-62.80 61.50
EURO/USD 1.2290 1.2200 1.2160-1.2095
GBP/USD 1.4000-1.3950 1.3850 1.3750-1.3700
USD/JPY 110.50 110.10 109.20-108.50

Intra-Day Strategy (24th 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$1341.70/oz and low of US$1331.27/oz. Gold was up by 0.519% at US$1341.22/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 1340-1375 keeping stop loss closing above 1375 and targeting 1340-1330 and 1326-1320-1309. Buy above 1340-1309 with risk below 1309, targeting 1349-1357 and 1366-1375.

 
Intraday Support Levels
S1     1,340
S2     1,330-1,320
S3     1,309
Intraday Resistance Levels
R1     1,349
R2     1,358-1366
R3     1,375

Technical Indicators

Name   Value Action
14DRSI  

69.853

Buy
20-DMA   1322.28 Sell
50-DMA  

1291.86

Sell
100-DMA   1291.86 Sell
200-DMA   1276.19 Buy
STOCH(5,3)   77.262 Buy
MACD(12,26,9)   14.795 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$17.08/oz and low of US$16.73/oz. Silver settled down by 0.353% at US$17.03/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)   42.298 Buy
MACD(12,26,9)   0.128 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$64.87/bbl, intraday low of US$63.69/bbl and settled up by 0.939% to close at US$64.46/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 in neutral region and giving positive crossover for confirmation of bullish 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     64.00
S2     63.50-62.80
S3     61.50

Intraday Resistance Levels
R1     64.75
R2     65.30-66.00
R3     66.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.018 Sell
20-DMA   62.73 Buy
50-DMA   59.52 Buy
100-DMA   55.53 Buy
200-DMA   51.53 Buy
STOCH(5,3)   57.931 Buy
MACD(12,26,9)   1.552 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.2222/EUR, high of US$1.2305/EUR and settled the day down by 0.301% to close at US$1.2297/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 1.2360-1.2590 targeting 1.2290-1.2200-1.2160 and 1.2095-1.1990 with stop-loss at daily closing above 1.2590. Buy above 1.2290-1.1200 with risk below 1.1200 targeting 1.2360-1.2420 and 1.2500-1.2590.

 
Intraday Support Levels
S1     1.2290
S2     1.2200
S3     1.2160-1.2095

Intraday  Resistance Levels
R1     1.2360-1.2420
R2     1.2500
R3     1.2590

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.485 Buy
20-DMA   1.2105 Buy
50-DMA   1.1933 Sell
100-DMA   1.1861 Sell
200-DMA   1.1613 Buy
STOCH(5,3)   76.647 Sell
MACD(12,26,9)   0.0110 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3915/GBP, high of US$1.4026/GBP and settled the day up by 0.683% to close at US$1.3998/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     1.4000-1.3950
S2     1.3850
S3     1.3750-1.3700

Intraday Resistance Levels
R1     1.4050
R2     1.4130
R3     1.4200-1.4260

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

78.650

Buy
20-DMA   1.3680 Sell
50-DMA   1.3481 Sell
100-DMA   1.3364 Buy
200-DMA   1.3139 Buy
STOCH(5,3)   93.921 Buy
MACD(12,26,9)   0.0159 Buy

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY110.24/USD and made an intraday high of JPY111.16/USD and settled the day up by 0.550% at JPY110.29/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   31.863 Buy
20-DMA   111.70 Sell
50-DMA   112.21 Sell
100-DMA   112.25 Sell
200-DMA   111.71 Sell
STOCH(9,6)   23.416 Sell
MACD(12,26,9)   -0.629 Sell

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