AAFX TRADING

Daily Market Lookup

  • Asia stocks pulled further back from record highs on Wednesday as the recent rise in global bond yields weighed on equities, while the dollar steadied ahead of the Federal Reserve’s policy decision. In his first State of the Union address since becoming U.S. President, Donald Trump urged Republicans and Democrats to work toward compromises on immigration and infrastructure and implement legislation that generates at least $1.5 trillion for new infrastructure investment. Market reaction to the address was limited. Wall Street, which has recently hit a succession of record peaks, has led a global equities rally over the past year thanks to strong world growth fuelling higher corporate earnings and stock valuations. U.S. stocks fell for a second straight day on Tuesday, with the Dow registering its biggest two-day drop since September 2016, pressured by healthcare stocks and rising bond yields. Higher yields are seen hurting equities as they increase borrowing costs by companies and reduce their risk appetite. Higher yields also present a fresh alternative to investors, who may choose to allocate some of their money from equities to bonds. Yields rose after the start of the Federal Reserve’s two-day meeting on Tuesday, which could offer more clues on the central bank’s economic and rate hike outlook.
  • The Japanese Yen continues to add to its strength as global equities drift lower in active trading, even as representatives fro mthe Bank of Japan, such as BoJ Governor reaffirming the central bank's dedication to easy monetary policy on the back of increased Japanese Government Bond (JGB) 3-5 year purchases by the BoJ. Markets shrugged off the increase in fiscal easing to continue buying up the Yen, even as BoJ Deputy Governor Kikuo Iwata stated that the Yen is strengthening "more than expected", and observing that there is "misunderstanding in markets" that the BoJ will exit easy policy soon. Iwata also made the observation that the BoJ will not begin to raise rates just because the European Central Bank and the Federal Reserve are keen to exit easy monetary policy stances. Iwata, who's term is slated to expire March 19th, doesn't believe he'll be reappointed for a nother term as Deputy Governor, but stressed the importance of whomever does take over the position must still chase easy monetary policy as aggressively as possible.
  • The Federal Reserve is expected to leave interest rates unchanged on Wednesday while signaling a gradual tightening of monetary policy later this year as the U.S. economy continues to expand and job gains remain solid. Investors will focus on the U.S. central bank’s gauge of inflation, which remains stubbornly below its 2 percent target, the risks it sees to its economic outlook, and any assessment of the impact of the Trump administration’s tax overhaul on growth. The Fed is due to release a statement at the end of its latest two-day policy meeting at 2 p.m. EST. The policy meeting is Fed Chair Janet Yellen’s last as head of the central bank. The economy has added about 10 million jobs and unemployment has fallen to a 17-year low of 4.1 percent during Yellen’s four-year tenure while interest rates have slowly risen from the near-zero levels put in place to fight the 2007-2009 recession. Incoming Fed chief Jerome Powell has worked closely with Yellen and embraces her view that keeping rates on a slow upward path will allow unemployment to fall further, coaxing workers back into the labor force and fostering stronger wage growth. With the outset of the Powell era only days away, analysts do not expect a dramatic shift from the Fed on Wednesday. The Fed raised rates three times last year and currently projects another three hikes in 2018. But that forecast, which has been largely accepted on Wall Street, will hinge on a continued pickup in inflation. Even a small upgrade in the central bank’s description of inflation or its view of the balance of risks to the economic outlook could suggest a slightly faster pace of rate hikes than currently anticipated. The economy grew 2.3 percent last year. Several Fed policymakers have said that President Donald Trump’s restructuring of the U.S. tax code, including an estimated $1.5 trillion in corporate and individual tax cuts, could spur growth this year.
  • Oil prices fell for a third day on Wednesday after data from an industry body showed crude stocks rose more than expected last week, while a selloff in other commodities, stocks and bonds added to investors' bearish mood. But the report from the American Petroleum Institute late on Tuesday showing crude stocks rose by 3.2 million barrels last week cast a further bearish pall over the market. It came after data showed that U.S. energy companies added 12 oil rigs last week, the biggest weekly increase since March. U.S. Energy Department data on Wednesday is likely to show an increase in increase in inventories for the first time 11 weeks. Analysts polled by Reuters forecast an average 100,000-barrel build in crude stocks. The date is due out at 10:30 a.m. EST (1530 GMT) on Wednesday.

 

 
Intraday RESISTANCE LEVELS
31st January 2018 R1 R2 R3
GOLD-XAU 1,342-1,350 1,358 1,366-1,375
Silver-XAG 17.70-18.20 18.60 18.95
Crude Oil 65.30 66.00 66.90-68.00
EURO/USD 1.2500 1.2590-1.2650 1.2700
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
31st January 2018 S1 S2 S3
GOLD-XAU 1,331 1,326-1,320 1,311
Silver-XAG 17.00 16.70 16.35-15.80
Crude Oil 64.00 63.50-62.80 61.90
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 (31st 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 tuesday made its intraday high of US$1348.82/oz and low of US$1334.33/oz. Gold was down by 0.146% at US$1338.42/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     1,331
S2     1,326-1,320
S3     1,311
Intraday Resistance Levels
R1     1,342-1,350
R2     1,358
R3     1,366-1,375

Technical Indicators

Name   Value Action
14DRSI  

57.959

Buy
20-DMA   1331.72 Buy
50-DMA  

1297.06

Buy
100-DMA   1292.49 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 Tuesday made its intraday high of US$17.32/oz and low of US$17.06/oz. Silver settled down by 0.175% at US$17.14/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   55.556 Buy
20-DMA   17.13 Sell
50-DMA   16.71 Sell
100-DMA   16.87 Sell
200-DMA   16.84 Sell
STOCH(5,3)   30.745 Buy
MACD(12,26,9)   0.139 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$65.54/bbl, intraday low of US$63.88/bbl and settled down by 2.39% to close at US$63.95/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 64.90-68.00 with stop loss at 68.00; targeting and 64.00-63.50 and 62.80-61.90. Buy above 64.00-61.90 with risk daily closing below 61.90 and targeting 65.30-66.00-66.90 and 68.00-68.80.

 
Intraday Support Levels
S1     64.00
S2     63.50-62.80
S3     61.90

Intraday Resistance Levels
R1     65.30
R2     66.00
R3     66.90-68.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.096 Sell
20-DMA   63.95 Buy
50-DMA   60.46 Buy
100-DMA   56.54 Buy
200-DMA   51.95 Buy
STOCH(5,3)   26.345 Buy
MACD(12,26,9)   1.347 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.2334/EUR, high of US$1.2453/EUR and settled the day up by 0.161% to close at US$1.2401/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 1.2400-1.2360-1.2290 and 1.2200-1.2160 with stop-loss at daily closing above 1.2725. Buy above 1.2400-1.2160 with risk below 1.2140 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     1.2700

TECHNICAL INDICATORS
Name   Value Action
14DRSI   72.259 Buy
20-DMA   1.2217 Buy
50-DMA   1.1998 Buy
100-DMA   1.1884 Buy
200-DMA   1.1655 Buy
STOCH(5,3)   49.330 Sell
MACD(12,26,9)   0.01311 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3979/GBP, high of US$1.4165/GBP and settled the day up by 0.497% to close at US$1.4142/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 1.4100-1.4050-1.4000 and 1.3860-1.3800. Buy above 1.4100-1.3800 with stop loss closing below 1.3800 targeting 1.4200-1.4260 and 1.4300-1.4390.

 
Intraday Support Levels
S1     1.4100
S2     1.4050-1.4000
S3     1.3860

Intraday Resistance Levels
R1     1.4200-1.4260
R2     1.4300
R3     1.4390

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

64.921

Buy
20-DMA   1.3814 Sell
50-DMA   1.3559 Sell
100-DMA   1.3407 Buy
200-DMA   1.3166 Buy
STOCH(5,3)   39.404 Sell
MACD(12,26,9)   0.0175 Buy

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY108.40/USD and made an intraday high of JPY109.19/USD and settled the day down by 0.165% at JPY108.76/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   29.327 Buy
20-DMA   111.70 Sell
50-DMA   111.80 Sell
100-DMA   112.25 Sell
200-DMA   111.71 Sell
STOCH(9,6)   24.817 Buy
MACD(12,26,9)   -0.97 Sell

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