AAFX TRADING

Daily Market Lookup

  • Asian share markets took back some of their earlier gains on Wednesday as investors were unnerved by a drop in U.S. stock futures, underscoring lingering anxiety following steep losses in global equities over the past few days. While most analysts believed distressed selling looked to have run its course for the moment, allowing volatility to abate a little, the prospect of monetary tightening across the globe remained a challenge for the long term. Bonds had started to see some buying again, a hint that risk appetite might be returning with the potential to trigger another spasm of selling in stocks. It was a steep spike in yields last Friday that sparked the initial rout on Wall Street, forcing sales by a host of highly leveraged funds which ramped up volatility and drove yet more selling. Many of these were algorithmic funds crowded into similar trades - long stocks and short volatility. The selling then cascaded through their computer systems in a way almost beyond human intervention. In currencies, investors found safe harbor in the Japanese yen while riskier plays such as the Australian and New Zealand dollars declined.
  • Monday’s rout on Wall Street frayed investors’ nerves, but it is not enough to knock the Federal Reserve off course from its intended path to further raise interest rates in 2018 as the economy continues to hum along, analysts say. The worldwide market sell-off in equities wiped out $4 trillion in value from record peaks eight days ago, raising concerns such a swift loss of wealth would hurt corporate investments and consumer spending just when many economies in addition to the United States are on a synchronized growth path. Stocks recovered on Tuesday a fraction of what they lost over the prior two trading sessions, but the price declines and rise in bond yields does relieve a bit of the pressure on the Fed to raise rates. While investors are smarting from the sell-off, financial conditions, or levels of wealth and borrowing costs, remain at their strongest in almost 25 years. They, together with the major tax cuts enacted in December, would support the economy to grow 2.5 to 3.0%, analysts said on Tuesday. Unless the market plunge intensifies and damages the economy, Fed policy-makers will unlikely budge from their plan to lift key short-term interest rates three times this year, analysts said. Still, traders dialed back bets the U.S. central bank would ratchet up the pace on rate increases on Monday to between two to three hikes from three to four hikes, according to interest rates futures. Last Friday, traders added to their positions for a faster pace of rate hikes when a robust payrolls report showed wage pressure grew to 2.9% in January, the fastest annual rate since June 2009. Anxiety that inflation is accelerating due to bigger paychecks propelled benchmark 10-year yields to a four-year high at 2.88%. Concerns that rising wage pressure would eat into corporate profits and the Fed would raise rates more quickly to raise borrowing costs led to a stampede out of stocks. Rates futures suggested traders expected the Fed would raise rates by a quarter point at its March 20-21 meeting. It raised rates back in December to a target range of 1.25-1.50%. The Chicago Federal Reserve’s index on financial conditions, which account for the state of money, debt and stock markets as well as borrowing costs, slipped to -0.94 in the week ended Jan. 26, which was the lowest level since August 1993 and signaling extremely easy market conditions. For now, the Fed will likely monitor whether inflation is indeed accelerating toward its 2-percent goal, or just a specter that induces a short-lived market sell-off.
  • Oil prices rose on Wednesday amid a share market recovery and supported by a report that U.S. crude inventories fell last week, although analysts warned that soaring U.S. output and a seasonal demand drop could soon weigh on crude. The higher oil futures came after stock markets recovered some of their steep losses of previous days. The market was supported by a report by the API saying that U.S. crude inventories fell by 1.1 million barrels in the week to Feb. 2 to 418.4 million barrels, traders said. A group of oil producers around OPEC and Russia have been withholding supplies since last year in order to tighten supplies and prop up prices. The cuts are set to last through 2018. Other analysts, however, warned of the risk of lower oil prices, both from financial markets and because of weaker seasonal demand. In the short-term, demand is expected to slow due to refinery maintenances at the end of the northern hemisphere winter season. Looming over oil markets is rising U.S. crude production, which has already soared by 18 percent to almost 10 million barrels per day (bpd). The U.S EIA expects U.S. output to rise to an average of 10.59 million bpd in 2018, and then 11.18 million bpd by 2019. That would be more than top producer Russia, which pumped on average 10.98 million bpd out of the ground in 2017.

 

 
Intraday RESISTANCE LEVELS
7th February 2018 R1 R2 R3
GOLD-XAU 1,331-1,342 1,350 1,358
Silver-XAG 17.00 17.70-18.20 18.60
Crude Oil 64.20 64.85 65.30-66.00
EURO/USD 1.2450 1.2590-1.2650 1.2590-1.2650
GBP/USD 1.4000-1.4050 1.4100 1.4200-1.4260
USD/JPY 110.10 110.50 111.00-111.60

Intraday SUPPORTS LEVELS
7th February 2018 S1 S2 S3
GOLD-XAU 1,326-1,320 1,310 1,303
Silver-XAG 16.70 16.40-16.00 15.60
Crude Oil 63.50 62.80-62.20 61.50
EURO/USD 1.2370-1.2290 1.2200 1.2160
GBP/USD 1.3920 1.3860-1.3800 1.3730
USD/JPY 109.00 108.45-107.90 107.30

Intra-Day Strategy (7th 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 Tuesday made its intraday high of US$1346.00/oz and low of US$1320.11/oz. Gold was down by 1.154% at US$1324.28/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 1330-1375 keeping stop loss closing above 1375 and targeting 1326-1320 and 1310-1303. Buy above 1326-1303 with risk below 1330, targeting 1331-1342-1350 and 1358-1366.

 
Intraday Support Levels
S1     1,326-1,320
S2     1,310
S3     1,303
Intraday Resistance Levels
R1     1,331-1,342
R2     1,350
R3     1,358

Technical Indicators

Name   Value Action
14DRSI  

51.293

Buy
20-DMA   1337.64 Sell
50-DMA  

1303.06

Buy
100-DMA   1293.32 Buy
200-DMA   1279.60 Buy
STOCH(5,3)   30.368 Sell
MACD(12,26,9)   7.821 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$16.97/oz and low of US$16.56/oz. Silver settled down by 0.598% at US$16.61/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 16.70-15.60 targeting 17.00-17.75-18.20 and 18.60-18.95; stop breakage below 15.60. Sell below 17.00-18.60 with stop loss above 18.60; targeting 16.70-16.40 and 16.00-15.60.

 
Intraday  Support Levels
S1     16.70
S2     16.40-16.00
S3     15.60

Intraday  Resistance Levels
R1     17.00
R2     17.70-18.20
R3     18.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.871 Buy
20-DMA   17.06 Sell
50-DMA   16.68 Sell
100-DMA   16.82 Sell
200-DMA   16.83 Sell
STOCH(5,3)   17.300 Buy
MACD(12,26,9)   0.106 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$64.28/bbl, intraday low of US$63.10/bbl and settled down by 0.788% to close at US$63.90/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 64.10-66.00 with stop loss at 66.00; targeting 63.50-62.80-62.20 and 61.50-61.00. Buy above 63.50-61.50 with risk daily closing below 61.50 and targeting 64.20-64.85 and 65.30-66.00.

 
Intraday Support Levels
S1     63.50
S2     62.80-62.20
S3     61.50

Intraday Resistance Levels
R1     64.20
R2     64.85
R3     65.30-66.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.229 Sell
20-DMA   64.49 Buy
50-DMA   61.11 Buy
100-DMA   57.30 Buy
200-DMA   52.34 Buy
STOCH(5,3)   16.468 Sell
MACD(12,26,9)   0.873 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.2313/EUR, high of US$1.2433/EUR and settled the day up by 0.088% to close at US$1.2376/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 1.2450-1.2650 targeting 1.2400-1.2360-1.2290 and 1.2200-1.2160 with stop-loss at daily closing above 1.2725. Buy above 1.2350-1.2160 with risk below 1.2140 targeting 1.2450-1.2525-1.2590 and 1.2650-1.2725.

 
Intraday Support Levels
S1     1.2370-1.2290
S2     1.2200
S3     1.2160

Intraday  Resistance Levels
R1     1.2450
R2     1.2590-1.2650
R3     1.2590-1.2650

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.150 Buy
20-DMA   1.2322 Buy
50-DMA   1.2055 Buy
100-DMA   1.1908 Buy
200-DMA   1.1693 Buy
STOCH(5,3)   26.968 Sell
MACD(12,26,9)   0.0107 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3835/GBP, high of US$1.3999/GBP and settled the day down by 0.0716% to close at US$1.3943/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 1.4000-1.4260 with targets at 1.3920-1.3860 and 1.3800-1.3730. Buy above 1.3920-1.3730 with stop loss closing below 1.3700 targeting 1.4000-1.4050-1.4100 and 1.4200-1.4260.

 
Intraday Support Levels
S1     1.3920
S2     1.3860-1.3800
S3     1.3730

Intraday Resistance Levels
R1     1.4000-1.4050
R2     1.4100
R3     1.4200-1.4260

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

53.583

Buy
20-DMA   1.3978 Sell
50-DMA   1.3654 Sell
100-DMA   1.3451 Buy
200-DMA   1.3202 Buy
STOCH(5,3)   18.673 Sell
MACD(12,26,9)   0.0122 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY108.44/USD and made an intraday high of JPY109.64/USD and settled the day up by 0.440% at JPY109.54/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     109.00
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   38.522 Buy
20-DMA   110.03 Sell
50-DMA   111.64 Sell
100-DMA   112.22 Sell
200-DMA   111.67 Sell
STOCH(9,6)   50.250 Buy
MACD(12,26,9)   -0.786 Sell

AAFX TRADING
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