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Daily Market Lookup

  • Asian shares flirted with six-week lows on Thursday as U.S. bond yields crept up towards four-year highs as investors fretted that low borrowing costs enjoyed by companies for many years may be endangered by the threat of rising inflation. U.S. congressional leaders reached a two-year budget deal to raise government spending by almost $300 billion, a rare display of bipartisanship that should stave off a government shutdown but also widen the federal deficit sharply. Combined with an expected economic boost from President Donald Trump’s planned tax cuts, the increased deficit spending could overheat already strong U.S. growth and accelerate inflation to levels not seen over a decade. The Senate and the House were both expected to vote on the proposed deal on Thursday, amid some opposition on both sides of the aisle. Share markets remained on edge after a big selloff in equities in the past few days on worries about the prospects of rising interest rates around the world, which would shut off the liquidity spigot that has underpinned an exuberant rally in riskier asset. China’s trade data showed the country’s exports and imports beat market expectations in January, rising 11.1 percent and 36.9 percent from a year earlier respectively, underscoring the strength of the global economy. The dollar was supported after the budget deal in Washington, rising against a broad range of currencies. Southern European government bond yields tumbled on Wednesday, after Germany’s pro-European, pro-spending Social Democratic party took the finance ministry in a coalition government.
  • Gold prices gained in Asia on Thursday as investors noted January trade data on China showed a narrower than expected surplus even as imports soared. China reported trade balance data with a $20.34 billion surplus, compared to a $54.10 billion surplus seen for January, data released on Thursday showed. Exports rose 11.1%, compared to a 9.6% gain seen and up from 10.9% in December, while imports soared 36.9%, compared to a 9.8% rise expected, and a jump from 4.5% in December. Overnight, gold prices fell to five-week lows as the dollar continued to advance amid a sharp uptick in Treasury yields. The United States 10-Year rose to four-year highs sparking a move higher in the dollar, pressuring gold to five-week lows following news that the Senate agreed a budget deal. Senate leaders reached a major budget agreement that would increase spending caps, Majority Leader Mitch McConnell said Wednesday. Dollar-denominated assets such as gold are sensitive to moves in the dollar – A rise in the dollar makes gold more expensive for holders of foreign currency and thus, reduces demand. Also weighing on the yellow metal was a tick lower in safe-haven demand amid easing geopolitical uncertainty following reports that German Chancellor Angela Merkel's Christian alliance and the Social Democrats (SPD) agreed a coalition deal, paving the way for a new government.
  • Bank of Japan Governor Haruhiko Kuroda said on Thursday he intended to stick with the central bank’s strong quantitative easing program to achieve price stability. Haruhiko Kuroda, Governor of the Bank of Japan, looks on as he attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 26, 2018. Kuroda, speaking in the lower house of parliament, also said it was too early to discuss when or how to exit from quantitative easing because consumer prices were still distant from the central bank’s 2 percent inflation target.
  • Crude oil shrugged off record imports by top buyer China in January reported on Thursday and stayed with a negative trend overnight in the US where fresh levels of shale output continues to come to the market as a counterweight to OPEC-led curbs. Ahead, China reports trade balance data with a $54.10 billion surplus seen for January and exports up 9.6%, a dip from 10.9% in December, and imports expected up 9.8%, a jump from 4.5% in December. China's China's crude oil imports in January jumped 20% to a record 40.64 million metric tons, equivalent to 9.57 mn bpd, up from around 7.94 mn bpd in December and the previous high of 9.17 mn bpd in March of 2017. Overnight, crude oil prices settled sharply lower after data showed US domestic oil supplies rose for the second straight week while domestic production rose further above 10 million barrels per day. Inventories of U.S. crude fell by rose 1.895 mn barrels for the week ended Feb. 2, below expectations for for a rise of 3.189 mn barrels. Gasoline inventories – one of the products that crude is refined into – rose by 3.414 mn barrels, well above the expectations for a build of 459K barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – unexpectedly rose by 3.926 mn barrels, confounding expectations for a decline of 1.419 mn barrels expected. The sharp build in product inventories such as gasoline and distillate comes amid a slowdown in refinery activity as refiners enter a period of maintenance. Subdued refinery activity lessened demand for crude oil, contributing to the recent build in inventories. Rising US output continued to weigh on sentiment after the EIA's preliminary figures on Wednesday showed weekly U.S. production hit 10.25 million bpd. That level brings the US closer to world's top producers Saudi Arabia and Russia. The ongoing uptick in US production is widely viewed as one of the biggest headwinds for oil prices as it threatens to dampen major oil producers’ efforts to rid the market of excess supplies as part of the OPEC-led production cut agreement.

 

 
Intraday RESISTANCE LEVELS
8th February 2018 R1 R2 R3
GOLD-XAU 1,320-1,326 1,331 1,342-1,350
Silver-XAG 16.40-16.70 17.00 17.70-18.20
Crude Oil 62.20-62.80 63.50 64.20
EURO/USD 1.2290-1.2370 1.2450 1.2525
GBP/USD 1.3990-1.4050 1.4100 1.4200-1.4260
USD/JPY 110.10 110.50 111.00-111.60

Intraday SUPPORTS LEVELS
8th February 2018 S1 S2 S3
GOLD-XAU 1,310 1,303-1,294 1,285
Silver-XAG 16.20-15.90 15.60 15.30
Crude Oil 61.20-60.70 60.10 59.25
EURO/USD 1.2250-1.2200 1.2160 1.2100
GBP/USD 1.3900 1.3860-1.3800 1.3730
USD/JPY 109.00 108.45-107.90 107.30

Intra-Day Strategy (8th 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 Wednesday made its intraday high of US$1332.21/oz and low of US$1311.31/oz. Gold was down by 0.379% at US$1318.33/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 1320-1350 keeping stop loss closing above 1350 and targeting 1310-1303 and 1294-1285. Buy above 1310-1285 with risk below 1285, targeting 1320-1326-1331 and 1342-1350.

 
Intraday Support Levels
S1     1,310
S2     1,303-1,294
S3     1,285
Intraday Resistance Levels
R1     1,320-1,326
R2     1,331
R3     1,342-1,350

Technical Indicators

Name   Value Action
14DRSI  

42.564

Buy
20-DMA   1336.52 Sell
50-DMA  

1303.19

Buy
100-DMA   1293.21 Buy
200-DMA   1279.82 Buy
STOCH(5,3)   11.658 Sell
MACD(12,26,9)   4.591 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$16.76/oz and low of US$16.25/oz. Silver settled down by 1.445% at US$16.36/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 16.20-15.30 targeting 16.40-17.00-17.75 and 18.20-18.60; stop breakage below 15.30. Sell below 16.40-18.20 with stop loss above 18.0; targeting 16.20-15.90-15.60 and 15.30.

 
Intraday  Support Levels
S1     16.20-15.90
S2     15.60
S3     15.30

Intraday  Resistance Levels
R1     16.40-16.70
R2     17.00
R3     17.70-18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.477 Buy
20-DMA   17.01 Sell
50-DMA   16.66 Sell
100-DMA   16.81 Sell
200-DMA   16.82 Sell
STOCH(5,3)   8.344 Buy
MACD(12,26,9)   0.083 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$66.23/bbl, intraday low of US$64.61/bbl and settled down by 3.365% to close at US$65.97/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 62.20-64.20 with stop loss at 64.50; targeting 61.20-60.70 and 60.10-59.25. Buy above 61.20-59.25 with risk daily closing below 59.25 and targeting 62.20-62.80 and 63.50-64.20.

 
Intraday Support Levels
S1     61.20-60.70
S2     60.10
S3     59.25

Intraday Resistance Levels
R1     62.20-62.80
R2     63.50
R3     64.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.680 Sell
20-DMA   64.29 Buy
50-DMA   61.15 Buy
100-DMA   57.39 Buy
200-DMA   52.39 Buy
STOCH(5,3)   12.572 Sell
MACD(12,26,9)   0.461 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.2245/EUR, high of US$1.2405/EUR and settled the day down by 0.921% to close at US$1.2262/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 1.2290-1.2525 targeting 1.2250-1.2200 and 1.2160-1.2100 with stop-loss at daily closing above 1.2725. Buy above 1.2150-1.2100 with risk below 1.2100 targeting 1.2290-1.2370-1.2450 and 1.2525-1.2590.

 
Intraday Support Levels
S1     1.2250-1.2200
S2     1.2160
S3     1.2100

Intraday  Resistance Levels
R1     1.2290-1.2370
R2     1.2450
R3     1.2525

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.960 Buy
20-DMA   1.2329 Buy
50-DMA   1.2061 Buy
100-DMA   1.1910 Buy
200-DMA   1.1699 Buy
STOCH(5,3)   14.163 Sell
MACD(12,26,9)   0.0084 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3847/GBP, high of US$1.3993/GBP and settled the day down by 0.451% to close at US$1.3879/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 1.3990-1.4260 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     1.3900
S2     1.3860-1.3800
S3     1.3730

Intraday Resistance Levels
R1     1.3990-1.4050
R2     1.4100
R3     1.4200-1.4260

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

51.228

Buy
20-DMA   1.3992 Sell
50-DMA   1.3664 Sell
100-DMA   1.3454 Buy
200-DMA   1.3207 Buy
STOCH(5,3)   16.929 Sell
MACD(12,26,9)   0.0100 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY108.91/USD and made an intraday high of JPY109.76/USD and settled the day down by 0.209% at JPY109.31/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   44.00 Buy
20-DMA   109.87 Sell
50-DMA   111.57 Sell
100-DMA   112.18 Sell
200-DMA   111.65 Sell
STOCH(9,6)   51.715 Buy
MACD(12,26,9)   -0.672 Sell

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