AAFX TRADING

Daily Market Lookup

  • Asian shares extended their bull run on Monday amid upbeat corporate earnings and strong global economic growth, while the dollar tried to bounce even as the White House continued to complain of “unfair” trade practices by competitors. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.4 percent, aiming for a 12th straight session of gains. It is up 8 percent for the year so far. The rush to equities combined with the risk of faster global inflation, has been a major negative for sovereign bonds with yields rising across much of the developed world. The Fed holds its next meeting on Wednesday, the last for Chair Janet Yellen, and analysts suspect the statement will only cement expectations for a March move. The inexorable increase in Treasury yields has not, however, been enough to rescue the U.S. dollar which sank to three-year lows last week as U.S. officials welcomed a weaker currency. President Donald Trump did try and walk some of that back late in the week but by then the damage had been done. Indeed, in an interview shown on Sunday, Trump threatened to confront the European Union over what he calls “very unfair” trade policy toward the U.S. This was happening while the sum of trade and investment flows into the United States was shrinking. The opposite was happening in the euro zone, where the German export engine was powering an ever-expanding current account surplus. The dollar faces a bevy of U.S. economic reports this week including releases on inflation, manufacturing and payrolls.
  • The dollar crawled up from lows on Monday but struggled to pull ahead from six straight weeks of losses on its evaporating yield advantage and doubts about Washington’s commitment to a strong currency. The currency was marginally helped by U.S. GDP data on Friday, which showed strong domestic consumption and capital spending even though the headline figure was weaker than expected due to a rise in imports. Yet traders expect more headwinds for the dollar, which has been pummeled by renewed worries that President Donald Trump may use currency policy as a tool to press other countries to get better “deals” on trade. Treasury Secretary Steven Mnuchin gave U.S. currency bears a major boost last week with a tacit endorsement of a weak dollar. While Trump tried to row back from those comments, the damage had already been done and the dollar’s downturn since November showed little sign of abating. The greenback is also losing its relative yield attraction for investors. Short-term interest rates are expected to rise in other countries as the European Central Bank and many others start to scale back their easy monetary policy. U.S. equities have one of the most expensive valuations in the world, prompting investors to look for better bargains elsewhere. Comments from Bank of Japan Governor Haruhiko Kuroda in Davos on Friday that the central bank is finally close to the inflation target sparked expectation of an exit from its massive stimulus. The yen later pared gains after a BOJ spokesman said Kuroda was merely repeating the central bank’s official view. Yet, it showed how sensitive the market is to any slightest hint that the BOJ is on the cusp of unwinding its stimulus. Data from U.S. financial watchdog Commodity Futures Trading Commission showed speculators’ net long position in the euro/dollar futures traded in Chicago rose to a record high, suggesting that profit-taking could be on the cards.
  • Crude oil prices opened slightly higher in Asia on Monday with the tailwind from a weaker dollar aiding sentiment. The US dollar index rose on 0.10% tyo 88.96, but has trended sharply lower over the past two weeks on comments from US policymakers nd concerns the US tax cuts will balloon the deficit. Last week, oil prices ended Friday's session close to their strongest level since late 2014, amid ongoing optimism that OPEC-led output cuts would continue to drain the market of excess supplies. Prices also drew support from a weakening US dollar, which on Friday hit new three-year lows against a basket of other leading currencies. Oil prices typically strengthen when the US currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies. Oil prices have risen almost 60% from around $43 a barrel in June, 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 million barrels a day (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. Analysts and traders have recently warned that U.S. shale oil producers could ramp up production as they look to take advantage of higher prices, potentially derailing an OPEC-led effort to curb excess supply. The number of oil drilling rigs climbed by 12 to 759 in the week to Jan. 19, That marked the biggest weekly increase in the rig count since March. Bullish bets by hedge funds and money managers on crude oil futures and options position in New York and London rose by 7,612 contracts to 549,602 in the week to Jan. 23, the CFTC said on Friday. Domestic U.S. output has rebounded by 17% since the most recent low in mid-2016, and increasing drilling activity for new production means output is expected to grow further, as producers are attracted by climbing prices U.S. oil production rose to 9.87 million bpd last week, according to government data released during the week, the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia.

 

 
Intraday RESISTANCE LEVELS
29th 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 66.90-68.00 68.80 69.50
EURO/USD 1.2500 1.2590-1.2650 1.2725
GBP/USD 1.4200 1.4260 1.4300-1.4390
USD/JPY 109.20-110.10 110.50 111.00-111.60

Intraday SUPPORTS LEVELS
29th January 2018 S1 S2 S3
GOLD-XAU 1,342 1,336 1,330-1,320
Silver-XAG 17.00 16.70 16.35-15.80
Crude Oil 66.00-65.30 64.00 63.50-62.80
EURO/USD 1.2400-1.2360 1.2290 1.2200-1.2160
GBP/USD 1.4100 1.4050-1.4000 1.3860
USD/JPY 108.45-107.90 107.30 106.50

Intra-Day Strategy (29th 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 Friday made its intraday high of US$1356.99/oz and low of US$1344.51/oz. Gold was up by 0.187% at US$1349.90/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 1355-1375 keeping stop loss closing above 1375 and targeting 1342-1336 and 1326-1318. Buy above 1358-1326 with risk below 1326, targeting 1355-1366-1375 and 1382-1390.

 
Intraday Support Levels
S1     1,342
S2     1,336
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  

67.020

Buy
20-DMA   1331.22 Buy
50-DMA  

1296.39

Buy
100-DMA   1292.68 Buy
200-DMA   1277.26 Buy
STOCH(5,3)   54.395 Sell
MACD(12,26,9)   15.950 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$17.52/oz and low of US$17.23/oz. Silver settled up by 0.694% at US$17.39/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 17.00-15.80 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     17.00
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   61.027 Buy
20-DMA   17.14 Sell
50-DMA   16.71 Sell
100-DMA   16.88 Sell
200-DMA   16.85 Sell
STOCH(5,3)   65.026 Buy
MACD(12,26,9)   0.179 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 66.90-69.50 with stop loss at 69.50; targeting and 66.00-65.30-64.00 and 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   74.654 Sell
20-DMA   63.71 Buy
50-DMA   60.18 Buy
100-DMA   56.23 Buy
200-DMA   51.81 Buy
STOCH(5,3)   74.654 Buy
MACD(12,26,9)   1.720 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.2365/EUR, high of US$1.2493/EUR and settled the day down by 0.266% to close at US$1.2426/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     1.2400-1.2360
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   72.785 Buy
20-DMA   1.2180 Buy
50-DMA   1.1973 Buy
100-DMA   1.1876 Buy
200-DMA   1.1639 Buy
STOCH(5,3)   72.867 Sell
MACD(12,26,9)   0.0123 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.4107/GBP, high of US$1.4285/GBP and settled the day up by 0.183% to close at US$1.4131/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 1.4200-1.4400 with targets at 1.4130-1.4050 and 1.4000-1.3860. 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     1.4100
S2     1.4050-1.4000
S3     1.3860

Intraday Resistance Levels
R1     1.4200
R2     1.4260
R3     1.4300-1.4390

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

72.615

Buy
20-DMA   1.3795 Sell
50-DMA   1.3543 Sell
100-DMA   1.3399 Buy
200-DMA   1.3160 Buy
STOCH(5,3)   57.410 Sell
MACD(12,26,9)   0.0187 Buy

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY108.27/USD and made an intraday high of JPY109.76/USD and settled the day down by 0.767% at JPY108.58/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 109.20-111.60 with risk above 111.60 targeting 108.45-107.90 and 107.30-106.50. Long positions above 108.45-106.50 with targets of 109.20-110.10-110.50 and 111.00-111.60 with stop below 107.30.

 
Intraday Support Levels
S1     108.45-107.90
S2     107.30
S3     106.50

INTRADAY RESISTANCE LEVELS
R1     109.20-110.10
R2     110.50
R3     111.00-111.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.278 Buy
20-DMA   111.06 Sell
50-DMA   111.94 Sell
100-DMA   112.25 Sell
200-DMA   111.71 Sell
STOCH(9,6)   20.252 Buy
MACD(12,26,9)   -0.923 Sell

AAFX TRADING
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