AAFX TRADING

Daily Market Lookup

  • Asian shares sank on Friday, with Chinese equities on track for their worst day in two years, as fears of higher U.S. interest rates shredded global investor confidence. There was limited immediate market reaction to the U.S. government staggering into another shutdown after Congress missed a Thursday midnight deadline to renew funding. On top of pressure from the drop in global shares, Chinese equities were weighed down as investors sought to stay liquid ahead of the Lunar New Year holidays and pressure was felt to meet rising margin calls. Frank Benzimra, head of Asia equity strategy at Societe Generale in Hong Kong, said Chinese shares slid mostly because of the U.S. correction but he had some China-specific worries. Higher yields are seen hurting equities as they increase borrowing costs for companies and reduce their risk appetite. They also present a fresh alternative to investors who may reallocate some funds to bonds from equities. Treasury yields have been shoved up by the prospect of increased debt issuance to fund fiscal spending under U.S. President Donald Trump, inflation worries, and expectations of the Federal Reserve raising rates sooner and more frequently than was expected. It could be up to new Fed Chair Jerome Powell to restore calm in the financial markets, he said.
  • The U.S. dollar slipped lower against other major currencies on Friday, as the U.S. government was pushed into a second shutdown since the beginning of the year after a vote on a budget deal was delayed by Congress. The midnight deadline to pass the budget deal was missed on Thursday night due to a prolonged speech by Senator Rand Paul, who objected to $300 billion in deficit spending in the bill saying that it would “loot the Treasury.” U.S. congressional leaders had reached a two-year budget deal on Wednesday to raise government spending by almost $300 billion.
  • Gold prices rose in Asia on Friday with the Chinese New Year next week expected to stoke some physical demand as the People's Bank of China released nearly CNY 2 trillion in extra liquidity on a day when prices data came in stable and other key gold buyer India witnessing a pickup on a lower tax rate for the yellow metal. As well in China, consumer prices rose 0.6%, compared with a 0.7% gain seen on month for January and at a 1.5% rise as expected on year. Producer prices rose 4.3% on year as expected. The Aussie's fortunes are closely ties to economic conditions in top trade partner China. Overnight, gold prices edged lower on Thursday, reaching their lowest level in around a month as the dollar firmed amid expectations of more U.S. interest rate hikes this year. Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. The move higher in the yields also came amid news that U.S. Senate leaders reached a two-year budget deal to raise government spending by almost $300 bn.
  • Oil prices fell for a sixth day on Friday after Iran announced plans to boost production and U.S. crude output hit record highs, adding to concerns about a sharp rise in global supplies. The falls come amid a rout in global share markets as inflation fears grip investors. OPEC member Iran on Thursday announced plans to increase production within the next four years by at least 700,000 barrels a day. Meanwhile, the U.S. EIA this week said crude production last week rose to a record high of 10.25 mn bpd. At that level, U.S. production would overtake current output in Saudi Arabia, the biggest producer in the OPEC. OPEC and other producers, including Russia, have cut production since January 2017 to force down global inventories, but these cuts have been offset by rising U.S. oil production. The Baker Hughes US oil rig count stood at 765 last week, with the markets focused on the response of smaller producers to recent prices. Inventories of U.S. crude rose 1.895 million barrels for the week ended Feb. 2, below expectations for for a rise of 3.189 million barrels, the Energy Information Administration said Wednesday. The build in crude 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. EIA's preliminary figures on Wednesday also showed weekly U.S. production hit 10.25 million barrels a day. That level brings the US closer to world's top producers Saudi Arabia and Russia. Also weighing on sentiment on oil prices was the restart of the Forties pipeline in the North Sea, following an outage Wednesday. Some investors have, so far, appeared reluctant to abandon their bullish bets on oil, increasing their net long positions in oil for the fourth-straight week. peculative net long position in crude oil rose by about 8,000 contracts to a net long 734,600contracts, according to the most recent Commitment of Traders (COT) report.

 

 
Intraday RESISTANCE LEVELS
9th February 2018 R1 R2 R3
GOLD-XAU 1,320-1,326 1,331 1,342-1,350
Silver-XAG 16.50-16.70 17.00 17.70-18.20
Crude Oil 61.20 62.20-62.80 63.50
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
9th 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 60.10 59.25-58.50 57.80
EURO/USD 1.2250-1.2200 1.2160 1.2100
GBP/USD 1.3900 1.3860-1.3800 1.3730
USD/JPY 109.00 107.30108.45-107.90 107.30

Intra-Day Strategy (9th 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$1322.08/oz and low of US$1306.97/oz. Gold was down by 0.0432% at US$1318.75/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 Thursday made its intraday high of US$16.45/oz and low of US$16.23/oz. Silver settled down by 0.244% at US$16.40/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (16.82), breakage above will lead to 17.25-17.70. 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     16.50-16.70
R2     17.00
R3     17.70-18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.901 Buy
20-DMA   16.97 Sell
50-DMA   16.66 Sell
100-DMA   16.80 Sell
200-DMA   16.82 Sell
STOCH(5,3)   15.615 Buy
MACD(12,26,9)   -0.101 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$62.07/bbl, intraday low of US$60.26/bbl and settled down by 2.05% to close at US$60.42/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 61.15 which is a major resistance and breakage above will call for 62.20-62.80. 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 61.20-64.20 with stop loss at 64.50; targeting 60.10-59.25 and 58.50-57.80. Buy above 60.10-57.80 with risk daily closing below 57.80 and targeting 61.20-62.20-62.80 and 63.50-64.20.

 
Intraday Support Levels
S1     60.10
S2     59.25-58.50
S3     57.80

Intraday Resistance Levels
R1     61.20
R2     62.20-62.80
R3     63.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.680 Sell
20-DMA   64.29 Sell
50-DMA   61.15 Sell
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 Thursday made an intraday low of US$1.2211/EUR, high of US$1.2294/EUR and settled the day down by 0.130% to close at US$1.2242/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 Thursday made an intra‐day low of US$1.3844/GBP, high of US$1.4065/GBP and settled the day down by 0.230% to close at US$1.3911/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  

54.139

Buy
20-DMA   1.4004 Sell
50-DMA   1.3675 Buy
100-DMA   1.3459 Buy
200-DMA   1.3212 Buy
STOCH(5,3)   20.552 Buy
MACD(12,26,9)   0.0100 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY108.48/USD and made an intraday high of JPY109.18/USD and settled the day down by 0.539% at JPY108.72/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     107.30108.45-107.90
S3     107.30

INTRADAY RESISTANCE LEVELS
R1     110.10
R2     110.50
R3     111.00-111.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.201 Buy
20-DMA   109.73 Sell
50-DMA   111.50 Sell
100-DMA   112.14 Sell
200-DMA   111.63 Sell
STOCH(9,6)   30.964 Sell
MACD(12,26,9)   -0.716 Sell

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