AAFX TRADING

Daily Market Lookup

  • Asian stocks pulled further away from two-month lows on Tuesday, lifted by Wall Street’s extended rebound from last week’s steep fall, but investors remained cautious ahead of U.S. inflation data later in the week. An affiliate of China’s securities regulator on Monday encouraged major shareholders of domestically-listed firms to increase their holdings after last week’s global selloff mauled Chinese stocks. Still, caution lingered in the broader markets following the U.S.-led tumble in riskier assets last week and ahead of U.S. inflation data on Wednesday. A stronger-than-expected reading on price pressures could trigger a fresh wave of selling. The index edged back from a two-week high of 90.567 scaled late last week, when it had benefited as a safe haven in the wake of the global market selloff. The South African rand dipped 0.5% on the day to 11.97 per dollar after news that the country’s ruling party African National Congress had opted to remove President Jacob Zuma as head of state. The rand had risen 2 percent over the past two days, helped by hopes that Zuma would step down, but it gave back some of those gains as the latest news was seen prolonging the political standoff.
  • The dollar retreated on Tuesday as global equity markets showed some signs of stability after their recent rout, reviving risk appetite that has fueled bets against the U.S. currency on prospects of its narrowing interest rate advantage. Still, many market players are not convinced the worst is over, with U.S. bond yields stuck at elevated levels ahead of Wednesday's U.S. consumer price data that could rekindle worries about inflation. Buying the euro was one of the popular trades earlier this year on the view that the European Central Bank will scale back its stimulus later this year on the back of a strong recovery in the euro zone economy. Although many market players remain bullish on the euro in the long term, the currency lacks fresh catalysts for further gains amid headwinds from uncertainties ahead of Italy's election in early March. In Germany, Chancellor Angela Merkel and the leader of the Social Democrats (SPD) face criticism from within their own parties over a new coalition deal that must still be approved by disgruntled SPD rank-and-file members. The risk reversal spreads for euro/dollar options have widened in favor of euro puts, suggesting investors have grown more cautious about the chances the single currency will fall. Despite uncertainties around Brexit, the pound has been propped up by rising expectations the Bank of England will raise interest rates to curb inflation. Global stock markets staged a strong rebound since a brutal sell-off that began late January on worries about rising inflationary pressure. Higher inflation could prompt the Federal Reserve to tighten its policy faster than expected. Alternatively, if the Fed doesn't act fast enough and falls behind the curve on policy, it could end up pushing up long-term bond.
  • Gold dipped in Asia on Tuesday with a slightly stronger dollar noted, but support seen from physical demand in China ahead of the Lunar New Year holidays. In Japan, producer prices showed a 0.3% gain on month, beating the 0.2% rise seen and a 2.7% rise on year as expected. The US dollar index rose 0.03% to 90.04. Overnight, gold prices rose sharply on dollar weakness. Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand for the precious metal. The biggest demand for gold is for use in gold jewellery which accounts for roughly 50% of total demand, according to the World Gold Council. The rebound in gold prices comes in the wake of a second straight week of losses, however, market participants expect upward momentum to be short lived somewhat as strong US consumer inflation data due Wednesday could stoke expectations for a faster pace of Federal Reserve rate increases.
  • Oil prices continued to recover in morning trade in Asia, supported by expectations of higher global demand and higher imports from China. The mild increases followed comments from the OPEC. The group said on Monday that it expects oil demand to grow faster than originally anticipated this year due to a health global economy. OPEC now expects demand to rise by 1.59 million bpd, an increase of 60K bpd. Balancing out OPEC's optimistic outlook was an increase in the output now expected from non-OPEC countries. This non-OPEC production is now expected to rise by 320K bpd more than expected to 59.26 mn bpd this year. Analysts expect data from the American Petroleum Institute and the US EIA on Wednesday will show that crude stockpiles in the US increased by 2.6 million barrels but distillates are expected to fall by 1.625 million barrels and gasoline stocks are forecast to increase by 1.367 mn barrels. After a bad beginning of February, oil prices got a boost last week from China export data. Chinese export growth beat expectations in January growing 11.1% year on year, according to the General Administration of Customs. The final data easily beat median forecasts. Imports jumped an even more impressive 36.9%, far above the expected 9.8% increase. A big portion of the increase may have been due to increase imports of oil. China imported some 40 mn tons of oil in January, up 7 mn tons from December. Sharply higher demand from China, if continued, is likely to support global oil prices

 

 
Intraday RESISTANCE LEVELS
13th February 2018 R1 R2 R3
GOLD-XAU 1,331 1,342-1,350 1,358
Silver-XAG 16.70 17.00 17.70-18.20
Crude Oil 60.10 61.20 62.20-62.80
EURO/USD 1.2330-1.2370 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
13th February 2018 S1 S2 S3
GOLD-XAU 1,320 1,310 1,303-1,294
Silver-XAG 16.50 16.20-15.90 15.60
Crude Oil 59.25-58.50 57.80 57.00
EURO/USD 1.2290 1.2250-1.2200 1.2160
GBP/USD 1.3810 1.3730 1.3650-1.3600
USD/JPY 108.45-107.90 107.30 106.50

Intra-Day Strategy (13th 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 Monday made its intraday high of US$1326.70/oz and low of US$1314.09/oz. Gold was down by 0.575% at US$1322.41/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 1331-1358 keeping stop loss closing above 1358 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     1,331
R2     1,342-1,350
R3     1,358

Technical Indicators

Name   Value Action
14DRSI  

50.589

Buy
20-DMA   1334.32 Sell
50-DMA  

1305.86

Buy
100-DMA   1294.04 Buy
200-DMA   1281.21 Buy
STOCH(5,3)   42.071 Sell
MACD(12,26,9)   2.352 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$16.60/oz and low of US$16.17/oz. Silver settled up by 1.286% at US$16.53/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 16.50-15.30 targeting 16.70-17.00-17.75 and 18.20-18.60; stop breakage below 15.30. Sell below 16.70-18.20 with stop loss above 18.20; targeting 16.50-15.90-15.60-15.30.

 
Intraday  Support Levels
S1     16.50
S2     16.20-15.90
S3     15.60

Intraday  Resistance Levels
R1     16.70
R2     17.00
R3     17.70-18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.701 Buy
20-DMA   16.90 Sell
50-DMA   16.67 Sell
100-DMA   16.80 Sell
200-DMA   16.83 Sell
STOCH(5,3)   43.533 Buy
MACD(12,26,9)   -0.114 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$60.80/bbl, intraday low of US$59.08/bbl and settled up by 0.423% to close at US$59.35/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 Monday made an intraday low of US$1.2234/EUR, high of US$1.2296/EUR and settled the day up by 0.032% to close at US$1.2290/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 1.2330-1.2525 targeting 1.2290-1.2250-1.2200 and 1.2160-1.2100 with stop-loss at daily closing above 1.2725. Buy above 1.2290-1.2100 with risk below 1.2100 targeting 1.2330-1.2370-1.2450 and 1.2525-1.2590.

 
Intraday Support Levels
S1     1.2290
S2     1.2250-1.2200
S3     1.2160

Intraday  Resistance Levels
R1     1.2330-1.2370
R2     1.2450
R3     1.2525

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.822 Buy
20-DMA   1.2334 Buy
50-DMA   1.2085 Buy
100-DMA   1.1719 Buy
200-DMA   1.1719 Buy
STOCH(5,3)   33.840 Sell
MACD(12,26,9)   0.0057 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3795/GBP, high of US$1.3875/GBP and settled the day up by 0.173% to close at US$1.3835/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 1.3810-1.3730 and 1.3650-1.3600. Buy above 1.3810-1.3600 with stop loss closing below 1.3600 targeting 1.3900-1.3990-1.4050 and 1.4100-1.4200.

 
Intraday Support Levels
S1     1.3810
S2     1.3730
S3     1.3650-1.3600

Intraday Resistance Levels
R1     1.3900
R2     1.3990-1.4050
R3     1.4100

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

48.412

Buy
20-DMA   1.4003 Sell
50-DMA   1.3686 Buy
100-DMA   1.3463 Buy
200-DMA   1.3220 Buy
STOCH(5,3)   22.134 Buy
MACD(12,26,9)   0.0050 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY108.43/USD and made an intraday high of JPY108.88/USD and settled the day up by 0.174% at JPY108.64/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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