AAFX TRADING

Daily Market Lookup

  • Asian stocks held near a record high on Thursday though concerns about the Trump administration’s protectionist stance cast a shadow on financial markets, while the dollar struggled after U.S. Treasury Secretary Steven Mnuchin welcomed a weaker currency. The upbeat mood, however, has come up against renewed fears of protectionism after U.S. President Donald Trump’s decision to impose steep import tariffs on washing machines and solar panels earlier in the week. U.S. Commerce Secretary Wilbur Ross, who attended the World Economic Forum in Davos, hinted at action against China, saying U.S. trade authorities were investigating whether there is a case for taking action over China’s infringements of intellectual property. Trump is scheduled to speak in Davos on Thursday. Also in the Swiss Alpine town, Mnuchin made a major departure from traditional U.S. currency policy on Wednesday, saying “obviously a weaker dollar is good for us as it relates to trade and opportunities. The meeting comes against a backdrop of heightened speculation over when it will end its vast stimulus and signal a rise in interest rates from record lows.
  • The dollar skidded to a three-year low against its peers on Thursday after caving on comments by U.S. Treasury secretary Steven Mnuchin that he welcomed a weaker currency, while the euro was firm ahead of the European Central Bank's policy decision. The dollar slumped after Mnuchin told the World Economic Forum in Davos on Wednesday that "obviously a weaker dollar is good for us as it relates to trade and opportunities." His comments were seen by markets as a departure from traditional U.S. currency policy. The greenback had already been on the defensive on trade protectionism worries fanned by U.S. President Donald Trump's decision to impose steep import tariffs on washing machines and solar panels earlier in the week. The immediate focus was on the ECB's policy setting meeting later in the global day as markets look for any signs that the central bank is worried about the rapidly appreciating euro. The euro zone economy may be roaring ahead though the expectation is that a rapidly strengthening euro may see ECB President Mario Draghi pour cold water on the view the bank is speeding towards an interest rate hike. The BOJ kept monetary settings unchanged as expected on Tuesday and Governor Haruhiko Kuroda hosed down market speculation of a shift away from ultra-easy policy later this year. Kuroda's comments, however, did little to arrest the yen's appreciation against a beleaguered dollar.
  • Gold prices gained in Asia on Thursday after an initial small gain in the dollar index was reversed and favored physical buying of the greenback-denominated commodity with investors still pondering an apparent switch in the US strong dollar policy by the US Treasury Secretary Steven Mnuchin overnight. Mnuchin will have the chance Thursday to offer any clarification on a change from a long-standing strong dollar policy as part of a panel at 11 a.m. CET at Davos that includes IMF Managing Director Christine Lagarde. Overnight, gold prices rose sharply on Wednesday supported by a slump in the dollar while growing fears of a US-China trade war fuelled a modest uptick in safe-haven demand. The dollar came under heavy selling pressure falling nearly 1%, boosting demand for the gold, after Treasury Secretary Steven Mnuchin signalled his endorsement of a low dollar. Dollar-denominated assets such as gold are sensitive to moves in the dollar – a decline in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand. Meanwhile, renewed geopolitical uncertainty triggered modest safe-haven demand, which further supported upside momentum in the yellow meta. Commerce Secretary Wilbur Ross claimed that China’s tech ambitions under its 2025 were a “direct threat” that is being implement “by disrespect for intellectual property rights” among other “very bad things.” Ross’s comments come amid growing investor expectations that President Trump will impose a bevy of steeper tariffs on steel, aluminium and intellectual property.
  • Brent oil prices hit $71/barrel on Thursday for the first time since 2014 as the dollar continued to weaken and crude inventories in the United States fell for a 10th straight week amid ongoing supply cutbacks by OPEC and top producer Russia. Brent crude futures, the international benchmark for oil prices, hit a session high of $71.05 per barrel - the highest since early December 2014 - before dipping back to $70.99 by 0440 GMT. That was still up 46 cents, or 0.7 percent from the last close. Price have been supported by supply restrictions led by the OPEC and Russia, the world's biggest oil producer, which started last year and are set to last throughout 2018. U.S. crude inventories fell 1.1 million barrels in the week to Jan. 19, to 411.58 million barrels, the EIA said on Wednesday. That is the lowest seasonal level since 2015 and below the five-year average of about 420 million barrels. In foreign exchange markets, the U.S. dollar hit its lowest level since December 2014 against a basket of other leading currencies. Looming over the generally bullish oil market has been U.S. oil production, which is edging ever more closely towards 10 million bpd, rising to 9.88 million bpd last week. U.S. output has grown by more than 17 percent since mid-2016, and is now on par with that of top exporter Saudi Arabia. Only Russia produces more, averaging 10.98 million bpd in 2017.

 

 
Intraday RESISTANCE LEVELS
25th January 2018 R1 R2 R3
GOLD-XAU 1,366 1,375-1,382 1,390
Silver-XAG 17.70-18.20 18.60 18.95
Crude Oil 66.90-68.00 68.80 69.50
EURO/USD 1.2360-1.2420 1.2500 1.2590
GBP/USD 1.4300-1.4390 1.4450 1.4520
USD/JPY 111.00-111.60 112.00 112.50-113.20

Intraday SUPPORTS LEVELS
25th January 2018 S1 S2 S3
GOLD-XAU 1,358-1,349 1,340 1,330-1,320
Silver-XAG 17.45-17.00 16.70 16.35-15.80
Crude Oil 66.00-65.30 64.00 63.50-62.80
EURO/USD 1.2290 1.2200 1.2160-1.2095
GBP/USD 1.4260-1.4200 1.4130 1.4050-1.4000
USD/JPY 110.50 110.10 109.20-108.50

Intra-Day Strategy (25th January 2018)
GOLD-XAU Sell on Strength
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$1344.64/oz and low of US$1324.15/oz. Gold was down by 0.347% 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: Sell on Strength

Based on the charts and explanations above; sell below 1366-1390 keeping stop loss closing above 1390 and targeting 1358-1359 and 1340-1330-1326. Buy above 1358-1326 with risk below 1326, targeting 1366-1375 and 1382-1390.

 
Intraday Support Levels
S1     1,358-1,349
S2     1,340
S3     1,330-1,320
Intraday Resistance Levels
R1     1,366
R2     1,375-1,382
R3     1,390

Technical Indicators

Name   Value Action
14DRSI  

76.824

Buy
20-DMA   1326.95 Sell
50-DMA  

1293.87

Sell
100-DMA   1292.68 Sell
200-DMA   1276.65 Buy
STOCH(5,3)   92.249 Buy
MACD(12,26,9)   17.455 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$17.60/oz and low of US$16.97/oz. Silver settled up by 3.11% at US$17.53/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 17.45-15.80 targeting 17.75-18.20 and 18.60-18.95; stop breakage below 15.80. Sell below 17.70-18.60 with stop loss above 18.60; targeting 17.45-17.00-16.70 and 16.35-15.80.

 
Intraday  Support Levels
S1     17.45-17.00
S2     16.70
S3     16.35-15.80

Intraday  Resistance Levels
R1     17.70-18.20
R2     18.60
R3     18.95

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.389 Buy
20-DMA   17.11 Sell
50-DMA   16.70 Sell
100-DMA   16.90 Sell
200-DMA   16.86 Sell
STOCH(5,3)   85.653 Buy
MACD(12,26,9)   0.193 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$66.04/bbl, intraday low of US$64.32/bbl and settled up by 0.939% to close at US$65.87/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 66.90-69.50 with stop loss at 69.50; targeting and 66.00-65.30 and 64.00-63.50-63.00. Buy above 66.00-62.80 with risk daily closing below 62.50 and targeting 66.90-68.00 and 68.80-69.50.

 
Intraday Support Levels
S1     66.00-65.30
S2     64.00
S3     63.50-62.80

Intraday Resistance Levels
R1     66.90-68.00
R2     68.80
R3     69.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   77.124 Sell
20-DMA   62.80 Buy
50-DMA   59.55 Buy
100-DMA   55.72 Buy
200-DMA   51.59 Buy
STOCH(5,3)   81.095 Buy
MACD(12,26,9)   1.635 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.2292/EUR, high of US$1.2414/EUR and settled the day up by 0.886% to close at US$1.2406/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 1.2290-1.2095 with risk below 1.2095 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 Wednesday made an intra‐day low of US$1.3996/GBP, high of US$1.4262/GBP and settled the day up by 1.714% to close at US$1.4238/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 1.4300-1.4520 with targets at 1.4260-1.400-1.4130 and 1.4050-1.4000. Buy above 1.4260-1.4000 with stop loss closing below 1.4000 targeting 1.4300-1.4390 and 1.4450-1.4520.

 
Intraday Support Levels
S1     1.4260-1.4200
S2     1.4130
S3     1.4050-1.4000

Intraday Resistance Levels
R1     1.4300-1.4390
R2     1.4450
R3     1.4520

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

75.0415

Buy
20-DMA   1.3422 Sell
50-DMA   1.3481 Sell
100-DMA   1.3379 Buy
200-DMA   1.3147 Buy
STOCH(5,3)   91.131 Buy
MACD(12,26,9)   0.0189 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

AAFX TRADING
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