AAFX TRADING

Daily Market Lookup

  • The euro neared multi-year peaks on Friday as talk of policy tightening in Europe and expectations that inflation is set to gear higher drove up borrowing costs globally, a move that sparked a sell-off in Asian equities. Global central banks have recently struck a more hawkish tone with impressive economic data and buoyant oil prices driving up long-term inflation expectations. The European Central Bank, for one, is widely expected to end its asset-purchase program as early as September. That has pushed five-year German Bund yields above zero for the first time since 2015. UK gilt prices also cheapened significantly. The United States is witnessing deep partisan political divisions and intra-party squabbles with lawmakers unable to find common ground on most issues. The federal government shut down last month for three days when Republicans and Democrats failed to strike a deal to fund public operations. The Bank of Japan did its best to stem the rise in borrowing costs, stepping into the market on Friday with a promise to buy as many bonds as it would take to keep yields low. Investors now await the U.S. nonfarm payrolls report for January, for clues on the strength of the labor market. Nonfarm payrolls probably rose by 180,000 jobs in January after increasing 148,000 in December, according to a Reuters survey of economists. The unemployment rate is forecast to be unchanged at a 17-year low of 4.1 percent. EUR/USD to the 1.2500 neighbourhood ahead of the opening bell in Euroland. The persistent sell off around the greenback has allowed the pair to recover from lows in the 1.2330 region seen on Monday, all amidst a sharp pick up in yields of the key US 10-year benchmark and despite the hawkish twist from the Federal Reserve at Yellen’s last meeting on Wednesday and the positive surprise from January’s ISM manufacturing published on Thursday. In the data space, it’s non-farm payrolls day and markets are likely to consolidate ahead of the release. Consensus expects the US economy to have added 180K jobs during last month, while the jobless rate is seen at 4.1% and the average hourly earnings is expected at 2.6% YoY
  • Gold prices gained in Asia on Friday with the market awaiting nonfarm payroll figures for further clues on the likely path of Fed rate hikes this year Overnight, gold prices traded close to session highs supported by ongoing dollar weakness despite the Federal Reserve suggesting that the inflation could be set to move higher this year. The Federal Reserve kept interest rates unchanged on Wednesday but stoked expectations for a more aggressive pace on monetary policy tightening after adopting a slightly more hawkish outlook on inflation. That said, however, the dollar has struggled to find its footing as traders continue to pile into rival currencies amid expectations that major central banks are poised to remove loose monetary measures which could boost their respective currencies. Dollar-denominated assets such as gold are sensitive to moves in the dollar – A dip in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand.
  • Oil rose for a third day on Friday after a survey showed strong compliance with output cuts by OPEC and others including Russia, offsetting concerns about surging U.S. production. Production by the OPEC rose in January from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in Venezuela and strong compliance with a supply reduction pact, a Reuters survey showed. OPEC pumped 32.4 million bpd in January, the survey found, up 100,000 bpd from December. Last month's total was revised down by 110,000 bpd to the lowest since April 2017. Even so, adherence by producers included in the deal to curb supply rose to 138 percent from 137 percent in December, the survey found, suggesting commitment is not wavering even as oil prices hit their highest level since 2014. That is drawing investors' focus away from the rise in U.S. production. U.S. crude output surpassed 10 million bpd in November for the first time since 1970, the Energy Information Administration said this week.

 

 
Intraday RESISTANCE LEVELS
2nd February 2018 R1 R2 R3
GOLD-XAU 1,350 1,358 1,366-1,375
Silver-XAG 17.70-18.20 18.60 18.95
Crude Oil 66.60-68.00 68.70 69.50
EURO/USD 1.2525 1.2590-1.2650 1.2700
GBP/USD 1.4300-1.4340 1.4390 1.4500
USD/JPY 110.10 110.50 111.00-111.60

Intraday SUPPORTS LEVELS
2nd February 2018 S1 S2 S3
GOLD-XAU 1,342 1,331 1,326-1,320
Silver-XAG 17.00 16.70 16.35-15.80
Crude Oil 66.00-65.30 64.85 64.10-63.50
EURO/USD 1.2450-1.2370 1.2290 1.2200
GBP/USD 1.4260-1.4200 1.4100 1.4050-1.4000
USD/JPY 108.45-107.90 108.45-107.90 107.30

Intra-Day Strategy (2nd February 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$1350.90/oz and low of US$1348.70/oz. Gold was up by 0.299% at US$1348.70/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     1,331
S3     1,326-1,320
Intraday Resistance Levels
R1     1,350
R2     1,358
R3     1,366-1,375

Technical Indicators

Name   Value Action
14DRSI  

63.122

Buy
20-DMA   1336.16 Buy
50-DMA  

1300.95

Buy
100-DMA   1293.10 Buy
200-DMA   1278.65 Buy
STOCH(5,3)   55.627 Buy
MACD(12,26,9)   13.068 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$17.38/oz and low of US$17.08/oz. Silver settled down by 0.520% at US$17.20/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   54.158 Buy
20-DMA   17.14 Sell
50-DMA   16.71 Sell
100-DMA   16.87 Sell
200-DMA   16.84 Sell
STOCH(5,3)   35.885 Sell
MACD(12,26,9)   0.139 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$66.23/bbl, intraday low of US$64.61/bbl and settled down by 1.899% to close at US$65.76/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 66.60-69.50 with stop loss at 69.50; targeting and 66.00-65.30 and 64.85-64.00-63.50. Buy above 66.00-63.50 with risk daily closing below 63.50 and targeting 66.90-68.00 and 68.70-69.50.

 
Intraday Support Levels
S1     66.00-65.30
S2     64.85
S3     64.10-63.50

Intraday Resistance Levels
R1     66.60-68.00
R2     68.70
R3     69.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.559 Sell
20-DMA   64.42 Buy
50-DMA   60.82 Buy
100-DMA   56.90 Buy
200-DMA   52.12 Buy
STOCH(5,3)   68.097 Buy
MACD(12,26,9)   1.423 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.2384/EUR, high of US$1.2521/EUR and settled the day up by 0.765% to close at US$1.2507/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     1.2450-1.2370
S2     1.2290
S3     1.2200

Intraday  Resistance Levels
R1     1.2525
R2     1.2590-1.2650
R3     1.2700

TECHNICAL INDICATORS
Name   Value Action
14DRSI   73.593 Buy
20-DMA   1.2261 Buy
50-DMA   1.2027 Buy
100-DMA   1.1895 Buy
200-DMA   1.1671 Buy
STOCH(5,3)   71.324 Buy
MACD(12,26,9)   0.01360 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.4158/GBP, high of US$1.4277/GBP and settled the day up by 0.521% to close at US$1.4261/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 1.4300-1.4500 with targets at 1.4260-1.4200 and 1.4100-1.4050-1.4000. Buy above 1.4260-1.4000 with stop loss closing below 1.4000 targeting 1.4300-1.4340 and 1.4390-1.4500.

 
Intraday Support Levels
S1     1.4260-1.4200
S2     1.4100
S3     1.4050-1.4000

Intraday Resistance Levels
R1     1.4300-1.4340
R2     1.4390
R3     1.4500

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

73.894

Buy
20-DMA   1.3923 Sell
50-DMA   1.3619 Sell
100-DMA   1.3438 Buy
200-DMA   1.3187 Buy
STOCH(5,3)   79.517 Sell
MACD(12,26,9)   0.0193 Buy

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY109.08/USD and made an intraday high of JPY109.74/USD and settled the day up by 0.183% at JPY109.37/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 110.10-111.60 with risk above 111.60 targeting 109.20-108.45-107.90 and 107.30-106.50. Long positions above 109.20-106.50 with targets of 110.10-110.50 and 111.00-111.60 with stop below 107.30.

 
Intraday Support Levels
S1     108.45-107.90
S2     108.45-107.90
S3     107.30

INTRADAY RESISTANCE LEVELS
R1     110.10
R2     110.50
R3     111.00-111.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.541 Buy
20-DMA   110.39 Sell
50-DMA   111.72 Sell
100-DMA   112.24 Sell
200-DMA   76.826 Sell
STOCH(9,6)   76.826 Buy
MACD(12,26,9)   -0.825 Sell

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