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Daily Market Lookup

  • Asian stocks came off record highs on Friday but were still poised to end the week with strong gains, while the battered dollar won back some ground after President Donald Trump said he wanted a strong U.S. currency. World equity markets have rallied over the past year, buoyed by a synchronized uptick in global economic growth in a boon to corporate profits and stock valuations. Trump said on Thursday he ultimately wants the dollar to be strong, contradicting comments made by Treasury Secretary Steven Mnuchin one day earlier. It had sunk to a three-year low of 88.438 on Thursday after Mnuchin said he welcomed a weaker greenback, which the markets initially took as Washington’s departure from its strong dollar policy. Even if the Trump administration does push for a weaker dollar, the current U.S. monetary policy trend was expected to complicate the agenda. The Fed conducted three rate hikes in 2017 and is expected to tighten as many as three more times in 2018. The common currency had soared to the fresh three-year high on Thursday after European Central Bank President Mario Draghi said economic data pointed to “solid and broad” growth with inflation likely to rise in the medium term from subdued levels. Draghi also said the recent surge in the euro was a source of uncertainty, although this had little impact on the currency as some market participants had expected the ECB chief to use stronger language. The dollar’s bounce weighed on commodity prices, which had risen to multi-year peaks earlier this week. A stronger greenback tends to weigh on commodities as is seen making it more expensive for non-U.S. buyers of dollar-denominated products.
  • The dollar traded above its recent lows against major rivals on Friday, having bounced after U.S. President Donald Trump said he wanted a “strong dollar”, contradicting earlier comments made by Treasury Secretary Steven Mnuchin. The dollar’s bounce pulled the euro away from three-year highs and knocked sterling off its strongest levels since June 2016. The dollar stayed steady against the yen, holding above a four-month low struck on Thursday. Some market participants doubted whether Trump’s comments would be enough to change the recent trend of dollar weakness. Trump is due to address the World Economic Forum in Davos later on Friday. Market participants say the dollar has faced headwinds because its relative yield attraction is seen at risk as the world’s major central banks are seen winding up their stimulus. That would change the interest rate dynamics of the past few years, when the U.S. Federal Reserve was the only central bank raising rates. The dollar has also been hampered by concerns over U.S. protectionism. Trump decided to impose steep import tariffs earlier in the week on washing machines and solar panels, flaming worries about trade protectionism that sent the greenback on the defensive. The euro had reached that peak after European Central Bank President Mario Draghi said economic data pointed to “solid and broad” growth with inflation likely to rise in the medium term Draghi also warned that the surge in the euro was a source of uncertainty and said the ECB might have to review strategy if U.S. comments on the benefits of a weak dollar lead to a change in monetary conditions. Asked about the comments on the dollar by Trump and Mnuchin, Japanese Finance Minister Taro Aso said on Friday that major economies have agreed to avoid targeting currencies for the purpose of trade competitiveness.
  • Oil prices fell on Friday as market fundamentals are expected to weaken with the upcoming end of the peak demand period during the Northern Hemisphere winter. Georgi Slavov, head of research at commodities brokerage Marex Spectron, said despite a generally healthy outlook for oil demand, there were short-term headwinds due to the upcoming end of the peak demand period during the Northern Hemisphere winter season. Many refiners shut down after winter for maintenance, resulting in lower orders for crude, their most important feedstock. On the supply side, U.S. oil production is expected to hit 10 mn bpd soon, after reaching 9.88 million bpd last week. Output has grown by more than 17 percent since mid-2016, and is now on par with top exporter Saudi Arabia‘s. Only Russia produces more, averaging 10.98 million bpd in 2017. Rising U.S. output is threatening to undermine the supply restraint led by the OPEC and Russia aimed at propping up prices. These cuts, coupled with demand growth, have contributed to a near 60 percent rise in oil prices since mid-2017 as excess crude inventories around the world have been drawn down. The U.S. currency has lost almost 13 percent in value against a basket of other leading currencies since the start of 2017. As oil is traded in dollars, swings in the greenback can also impact oil demand as it affects the price of fuel purchases for countries using other currencies. “The weakening of the U.S. dollar against a basket of global currencies... has positioned 2018 to lead off with strong levels of oil demand,” said BMI Research.

 

 
Intraday RESISTANCE LEVELS
26th January 2018 R1 R2 R3
GOLD-XAU 1,358-1,366 1,375 1,382-1,390
Silver-XAG 17.70-18.20 18.60 18.95
Crude Oil 66.00 66.90-68.00 68.80
EURO/USD 1.2500 1.2590-1.2650 1.2725
GBP/USD 1.4260 1.4300-1.4390 1.4450
USD/JPY 110.10-110.50 111.00 111.60-112.00

Intraday SUPPORTS LEVELS
26th January 2018 S1 S2 S3
GOLD-XAU 1,349 1,340 1,330-1,320
Silver-XAG 17.45-17.00 16.70 16.35-15.80
Crude Oil 65.30 64.00 63.50-62.80
EURO/USD 1.2420-1.2360 1.2290 1.2200-1.2160
GBP/USD 1.4200 1.4130 1.4050-1.4000
USD/JPY 109.00-108.45 107.90 107.30

Intra-Day Strategy (26th 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 Thursday made its intraday high of US$1365.96/oz and low of US$1342.36/oz. Gold was down by 0.669% at US$1348.17/oz.

Technicals in Focus:

In daily charts, prices are below 20DMA (1329) 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 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     1,349
S2     1,340
S3     1,330-1,320
Intraday Resistance Levels
R1     1,358-1,366
R2     1,375
R3     1,382-1,390

Technical Indicators

Name   Value Action
14DRSI  

68.997

Buy
20-DMA   1329.08 Buy
50-DMA  

1295.05

Buy
100-DMA   1292.71 Buy
200-DMA   1276.65 Buy
STOCH(5,3)   70.295 Sell
MACD(12,26,9)   16.469 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$17.68/oz and low of US$17.12/oz. Silver settled up by 1.313% at US$17.28/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 17.40-15.80 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   62.208 Buy
20-DMA   17.12 Sell
50-DMA   16.70 Sell
100-DMA   16.89 Sell
200-DMA   16.85 Sell
STOCH(5,3)   74.111 Buy
MACD(12,26,9)   0.178 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$66.65/bbl, intraday low of US$65.08/bbl and settled down by 0.971% to close at US$65.23/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 66.00-69.50 with stop loss at 69.50; targeting and 65.30-64.00 and 63.50-63.00. Buy above 65.30-62.80 with risk daily closing below 62.50 and targeting 66.00-66.90-68.00 and 68.80-69.50.

 
Intraday Support Levels
S1     65.30
S2     64.00
S3     63.50-62.80

Intraday Resistance Levels
R1     66.00
R2     66.90-68.00
R3     68.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.210 Sell
20-DMA   62.35 Buy
50-DMA   59.95 Buy
100-DMA   56.05 Buy
200-DMA   73.0662 Buy
STOCH(5,3)   73.0662 Buy
MACD(12,26,9)   1.618 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.2363/EUR, high of US$1.2537/EUR and settled the day down by 0.120% to close at US$1.2391/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 1.2500-1.2725 targeting 1.2420-1.2360 and 1.2290-1.2200-1.2160 with stop-loss at daily closing above 1.2725. Buy above 1.2420-1.2160 with risk below 1.2150 targeting 1.2500-1.2590 and 1.2650-1.2725.

 
Intraday Support Levels
S1     1.2420-1.2360
S2     1.2290
S3     1.2200-1.2160

Intraday  Resistance Levels
R1     1.2500
R2     1.2590-1.2650
R3     1.2725

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.457 Buy
20-DMA   1.2160 Buy
50-DMA   1.1960 Buy
100-DMA   1.1872 Buy
200-DMA   1.1630 Buy
STOCH(5,3)   72.721 Sell
MACD(12,26,9)   0.0131 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.4081/GBP, high of US$1.4344/GBP and settled the day down by 0.730% to close at US$1.4134/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 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 1.4260-1.4450 with targets at 1.4200-1.4130 and 1.4050-1.4000. Buy above 1.4200-1.4000 with stop loss closing below 1.4000 targeting 1.4300-1.4390 and 1.4450-1.4520.

 
Intraday Support Levels
S1     1.4200
S2     1.4130
S3     1.4050-1.4000

Intraday Resistance Levels
R1     1.4260
R2     1.4300-1.4390
R3     1.4450

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

76.238

Buy
20-DMA   1.3765 Sell
50-DMA   1.3526 Sell
100-DMA   1.3389 Buy
200-DMA   1.3154 Buy
STOCH(5,3)   74.466 Sell
MACD(12,26,9)   0.0189 Buy

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY110.48/USD and made an intraday high of JPY111.12/USD and settled the day up by 0.164% at JPY110.69/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 110.00-113.00 with risk above 113.00 targeting 109.20-108.45 and 107.90-107.30. Long positions above 109.00-107.30 with targets of 110.10-110.50 and 111.00-111.60-112.50 with stop below 107.30.

 
Intraday Support Levels
S1     109.00-108.45
S2     107.90
S3     107.30

INTRADAY RESISTANCE LEVELS
R1     110.10-110.50
R2     111.00
R3     111.60-112.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.024 Buy
20-DMA   111.28 Sell
50-DMA   112.04 Sell
100-DMA   112.25 Sell
200-DMA   111.72 Sell
STOCH(9,6)   23.551 Buy
MACD(12,26,9)   -0.816 Sell

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