AAFX TRADING

Daily Market Lookup

  • SYDNEY (Reuters) - Asian share markets found a semblance of calm on Monday as S&P futures extended their bounce, though global investors were still fretting about the risks from looming U.S. inflation data after last week’s sharp sell-off. Particularly challenging will be U.S. consumer price data on Wednesday given that it was fears of faster inflation, and thus more aggressive rate rises, that triggered the global rout in the first place. Median forecasts are for consumer price inflation to slow a little to 1.9 percent in January from a year earlier, mainly due to the base effect of a high reading in January 2017, while the core measure is seen ticking down to 1.7 percent A result in line with or below expectations would likely be a big relief, while anything higher could well spook investors, lift bond yields and batter stocks. Aziz Sunderji, an economist at Barclays, suspects the inflation scare will prove to be transitory. The ascent of yields had offered some support to the U.S. dollar last week, but was proving of limited help on Monday as speculators returned to short the currency.
  • The yen edged higher versus the dollar on Monday, but traded below a five-month high as a bounce in U.S. equities late last week dampened demand for traditional safe haven currencies. The yen tends to attract demand in times of market stress as the currency is backed by Japan's current account surplus, which offers it more resilience than currencies of deficit-running countries. Reports late last week that the Japanese government had decided to nominate Haruhiko Kuroda for a rare second term as Bank of Japan governor when his current one expires in April, signaling the BOJ's ultra-loose monetary policy will remain in place, were seen as a factor that could potentially weigh on the yen and temper its gains. Prime Minister Shinzo Abe's government is to present Kuroda's nomination to parliament later this month, a person briefed on the matter said on Saturday. The yen had risen last week as global equity markets tumbled and volatility soared - moves that came after U.S. bond yields jumped on heightened worries about inflation. Given the focus on inflation, investors may be taking a wait-and-see stance ahead of data on U.S. consumer price index due on Wednesday, said Teppei Ino, an analyst for Bank of Tokyo-Mitsubishi UFJ in Singapore. If the U.S. CPI data for January comes in strong and triggers a renewed rise in bond yields, that could dent equities and spur demand for the yen, Ino added. Last week was the greenback's strongest against the currency basket in nearly 15 months as some traders closed out dollar-bearish bets, while others favored the dollar in a safe-haven move to exit other higher-returning but riskier currencies. The euro was susceptible to such position-squaring because a popular trade before the recent market upheaval had been to buy the euro on expectations of the European Central Bank unwinding monetary stimulus.
  • Gold prices gained in Asia on Monday with financial markets in Japan will be closed for a holiday and demand eyed in greater China watched with the Lunar New Year holidays set to kick off this week. Last week, gold prices edged lower on Friday in what was a fifth day of declines in the last six sessions as the stronger dollar weighed on the precious metal, making it more expensive for holders of other currencies. The dollar was supported by increased safe haven demand from investors amid dramatic moves in the equities and bond markets. U.S. stocks ended higher on Friday, but still suffered their steepest weekly losses in more than two years. Market turbulence has been triggered by speculation that the Federal Reserve may raise interest rates at a faster rate than had been expected amid signs of a pickup in inflation. Expectations for higher interest rates are typically negative for gold as the precious metal struggles to compete with yield-bearing assets like Treasury’s when borrowing costs rise.
  • Oil prices rose by 1 percent on Monday, recovering at least some of last week's steep losses as Asian stock markets found their footing after days of chaotic trading. Looming over oil markets, however, was rising production in the United States which is undermining efforts led by the OPEC and Russia to tighten markets and prop up prices The firmer prices came after crude registered its biggest loss in two years last week as stock markets slumped. But with U.S. stock markets rebounding on Friday and Asian markets seemingly steadying on Monday, analysts said crude was also supported. McKenna said markets on Monday were quiet as "the incentive for traders in Australia or Asia to do anything without the lead of the U.S. is likely to be lacking," referring to recent U.S. stock market volatility. It is also a holiday in Japan But oil markets still face soaring U.S. oil production, which has risen above 10 million barrels per day (bpd), overtaking top exporter Saudi Arabia and coming within reach of top producer Russia. There is a strong indication that output will rise further. U.S. energy companies added 26 oil rigs looking for new production this week, boosting the count to 791, the highest since April 2015, General Electric's Hughes energy services said on Friday. The soaring U.S. output is undermining efforts led by OPEC and Russia to withhold production in order to push up prices.

 

 
Intraday RESISTANCE LEVELS
12th February 2018 R1 R2 R3
GOLD-XAU 1,326 1,331 1,342-1,350
Silver-XAG 16.50-16.70 17.00 17.70-18.20
Crude Oil 60.10 61.20 62.20-62.80
EURO/USD 1.2290-1.2370 1.2450 1.2525
GBP/USD 1.3900 1.3990-1.4050 1.4100
USD/JPY 109.00-110.10 110.50 111.00-111.60

Intraday SUPPORTS LEVELS
12th February 2018 S1 S2 S3
GOLD-XAU 1,320 1,310 1,303-1,294
Silver-XAG 16.20-15.90 15.60 15.30
Crude Oil 59.25-58.50 57.80 57.00
EURO/USD 1.2250-1.2200 1.2160 1.2100
GBP/USD 1.3850-1.3800 1.3730 1.3650
USD/JPY 108.45-107.90 107.30 106.50

Intra-Day Strategy (12th 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 Friday made its intraday high of US$1322.59/oz and low of US$1310.99/oz. Gold was down by 0.175% at US$1316.01/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 1326-1350 keeping stop loss closing above 1350 and targeting 1320-1310-1303 and 1294-1285. Buy above 1320-1285 with risk below 1285, targeting 1326-1331 and 1342-1350.

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

Technical Indicators

Name   Value Action
14DRSI  

9.046

Buy
20-DMA   1334.99 Sell
50-DMA  

1304.96

Buy
100-DMA   1293.76 Buy
200-DMA   1280.73 Buy
STOCH(5,3)   22.896 Sell
MACD(12,26,9)   3.544 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.43/oz and low of US$16.17/oz. Silver settled down by 0.109% at US$16.34/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   37.729 Buy
20-DMA   16.97 Sell
50-DMA   16.66 Sell
100-DMA   16.80 Sell
200-DMA   16.82 Sell
STOCH(5,3)   15.484 Buy
MACD(12,26,9)   -0.105 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$60.75/bbl, intraday low of US$60.42/bbl and settled down by 2.234% to close at US$50.07/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 60.10-62.80 with stop loss at 62.80; targeting 59.25-58.50 and 57.80-57.00. Buy above 60.10-57.00 with risk daily closing below 57.00 and targeting 60.10-61.20-62.20 and 62.80-63.50.

 
Intraday Support Levels
S1     59.25-58.50
S2     57.80
S3     57.00

Intraday Resistance Levels
R1     60.10
R2     61.20
R3     62.20-62.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.980 Sell
20-DMA   63.72 Sell
50-DMA   61.21 Sell
100-DMA   57.56 Buy
200-DMA   52.52 Buy
STOCH(5,3)   15.628 Sell
MACD(12,26,9)   -0.241 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.2204/EUR, high of US$1.2204/EUR and settled the day up by 0.032% to close at US$1.2249/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   53.788 Buy
20-DMA   1.2332 Buy
50-DMA   1.2076 Buy
100-DMA   1.1917 Buy
200-DMA   1.1712 Buy
STOCH(5,3)   21.036 Sell
MACD(12,26,9)   0.0062 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3763/GBP, high of US$1.3986/GBP and settled the day down by 0.632% to close at US$1.3823/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 1.3900-1.4200 with targets at 1.3860-1.3800 and 1.3730-1.3650. Buy above 1.3850-1.3650 with stop loss closing below 1.3650 targeting 1.3900-1.3990-1.4050 and 1.4100-1.4200.

 
Intraday Support Levels
S1     1.3850-1.3800
S2     1.3730
S3     1.3650

Intraday Resistance Levels
R1     1.3900
R2     1.3990-1.4050
R3     1.4100

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

48.534

Buy
20-DMA   1.4001 Sell
50-DMA   1.3679 Buy
100-DMA   1.3460 Buy
200-DMA   1.3216 Buy
STOCH(5,3)   19.938 Buy
MACD(12,26,9)   0.0100 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY108.03/USD and made an intraday high of JPY109.30/USD and settled the day up by 0.055% at JPY108.78/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     107.30
S3     106.50

INTRADAY RESISTANCE LEVELS
R1     109.00-110.10
R2     110.50
R3     111.00-111.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.851 Buy
20-DMA   109.61 Sell
50-DMA   111.42 Sell
100-DMA   112.10 Sell
200-DMA   111.61 Sell
STOCH(9,6)   27.018 Sell
MACD(12,26,9)   -0.716 Sell

AAFX TRADING
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