AAFX TRADING

Daily Market Lookup

  • Asian share markets turned mixed on Wednesday as investor nerves were strained ahead of a U.S. inflation report that could soothe, or inflame, fears of faster rate hikes globally. BofA Merrill Lynch’s February Fund Manager Survey found a record one-month jump in the net percentage of investors taking out protection against a sharp fall in equity markets Funds were rotating into cash and out of equities, reducing their stock allocation to a net 43% overweight, from 55%, the largest one-month decline in two years Headline consumer price inflation is forecast to slow to an annual 1.9 percent and core inflation to 1.7%, an outcome that could help calm nerves. The concern is the figures could surprise on the high side as wages did a couple of weeks ago. It was aided by expectations German GDP data later on Wednesday would show strong growth. Analysts said investors were becoming nervous about the prospect of swelling U.S. budget and trade deficits given the passage of huge tax cuts and spending plans. The dollar had enjoyed a brief respite against its Japanese peer overnight as U.S. shares managed to gain for the third successive session on Tuesday following last week's sharp downturn. But it began to wobble again as Japan's Nikkei surrendered early gains and fell to four-month lows on Wednesday. Japan's Chief Cabinet Secretary Yoshihide Suga warned on Wednesday that stable currency market moves were "extremely important", signaling concern over recent yen gains that could undermine a strengthening economic recovery. Lingering expectations the Bank of Japan would follow the Federal Reserve and the ECB in eventually normalizing monetary policy have helped the yen appreciate, even though the Japanese central bank has reiterated that it intends to stick to its ultra-easy stance.
  • The dollar slid to a 15-month low against the yen on Wednesday, as investors remained on edge ahead of key U.S. inflation numbers later in the day, underscoring fragile risk sentiment following the recent shakeout in equity markets. U.S. consumer prices likely increased solidly in January, boosted by rising gasoline and rents, but annual inflation growth is expected to have slowed as the large price gains from last year drop out of the calculation. Despite the anticipated moderation in the annual inflation rates, Wednesday’s report from the Labor Department will probably not change expectations for acceleration in price pressures this year. A surge in annual wage growth in January ignited inflation concerns, sparking a sell-off on Wall Street and lifting benchmark U.S. Treasury yields to a four-year high. There are fears that inflation, which is seen driven by a tightening labor market and increased government spending, could force the Federal Reserve to be a bit more aggressive in raising interest rates this year than is currently anticipated. The U.S. central bank has forecast three rate hikes this year, with the first increase expected in March. The Consumer Price Index probably increased 0.3% in January after gaining 0.2% in December, according to a Reuters survey of economists. The year-on-year increase in the CPI is seen slowing to 1.9% from 2.1% in December because of less favorable base effects. While average hourly earnings shot up 2.9% in January, the largest rise since June 2009, from 2.7% in December, some economists do not expect the relatively strong wage gains to translate into higher inflation. They argue that the link between faster wage growth and consumer prices is weak.
  • Oil prices were stable on Wednesday, supported by healthy economic growth and expectations that a weaker dollar could spur fuel demand. Despite this, crude prices remain well below recent highs due to signs of lingering oversupply, including rising U.S. inventories and ample physical flows globally. Ongoing weakness in the U.S. dollar, which potentially stokes demand from countries using other currencies at home, as well as healthy economic growth were supporting oil markets, traders said. The American Petroleum Institute said on Tuesday that U.S. crude inventories rose by 3.9 million barrels in the week to Feb. 9, to 422.4 mn. That was largely due to soaring U.S. crude production, which has jumped by over 20 percent since mid-2016 to over 10 million bpd, surpassing output of top exporter Saudi Arabia and coming within reach of Russia, the world’s biggest producer. U.S. crude is increasingly appearing on global markets. More is set to come as the Louisiana Offshore Oil Port in the Gulf of Mexico starts testing supertankers for exports. The surge in U.S. production and exports means oil may be in oversupply again soon, flipping a deficit from 2017 induced by supply restraint led by the OPEC and Russia. The International Energy Agency said on Tuesday oil demand would grow by 1.4 mn bpd in 2018, but added output growth could outpace demand. The physical market is already reacting, with prices for regional crudes from the North Sea, Russia, the United States, and Middle East becoming cheaper as producers struggle to remain competitive amid ample supplies. Despite the warning lights from within oil markets, economic fundamentals remain healthy. High consumer spending drove Japan’s economy to eight straight quarters of growth in October-December, its longest continuous expansion since the 1980s bubble economy, Cabinet Office data showed on Wednesday.

 

 
Intraday RESISTANCE LEVELS
14th February 2018 R1 R2 R3
GOLD-XAU 1,342-1,350 1,358 1,367
Silver-XAG 16.70 17.00 17.70-18.20
Crude Oil 60.10 61.20 62.20-62.80
EURO/USD 1.2385-1.2450 1.2520 1.2600
GBP/USD 1.3900 1.3990-1.4050 1.4100
USD/JPY 107.90-108.45 109.00 110.10-110.50

Intraday SUPPORTS LEVELS
14th February 2018 S1 S2 S3
GOLD-XAU 1,331-1,320 1,310 1,303-1,294
Silver-XAG 16.50 16.20-15.90 15.60
Crude Oil 59.00-58.50 57.80 57.00
EURO/USD 1.2330-1.2290 1.2250 1.2200-1.2160
GBP/USD 1.3860-1.3800 1.3730 1.3650-1.3600
USD/JPY 107.20-106.50 106.00 105.50

Intra-Day Strategy (14th 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$1330.95/oz and low of US$1321.51/oz. Gold was up by 0.531% at US$1329.27/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 1342-1367 keeping stop loss closing above 1367 and targeting 1331-1320-1310 and 1303-1294. Buy above 1331-1294 with risk below 1294, targeting 1342-1350 and 1358-1367.

 
Intraday Support Levels
S1     1,331-1,320
S2     1,310
S3     1,303-1,294
Intraday Resistance Levels
R1     1,342-1,350
R2     1,358
R3     1,367

Technical Indicators

Name   Value Action
14DRSI  

55.198

Buy
20-DMA   1334.91 Sell
50-DMA  

1307.10

Buy
100-DMA   1294.31 Buy
200-DMA   1281.77 Buy
STOCH(5,3)   69.594 Sell
MACD(12,26,9)   2.930 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$16.67/oz and low of US$16.44/oz. Silver settled up by 0.181% at US$16.55/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 positive crossover to show upside 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   45.636 Buy
20-DMA   16.86 Sell
50-DMA   16.67 Sell
100-DMA   16.79 Sell
200-DMA   16.83 Sell
STOCH(5,3)   62.822 Buy
MACD(12,26,9)   -0.114 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$59.72/bbl, intraday low of US$58.38/bbl and settled down by 0.623% to close at US$58.96/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     59.00-58.50
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   36.079 Sell
20-DMA   63.21 Sell
50-DMA   61.25 Sell
100-DMA   57.70 Buy
200-DMA   52.64 Buy
STOCH(5,3)   20.232 Sell
MACD(12,26,9)   -0.699 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.2283/EUR, high of US$1.23370/EUR and settled the day up by 0.480% to close at US$1.2349/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 1.2385-1.2600 targeting 1.2330-1.2290-1.2250 and 1.2200-1.2160 with stop-loss at daily closing above 1.2600. Buy above 1.2330-1.2160 with risk below 1.2100 targeting 1.2330-1.2370-1.2450 and 1.2525-1.2590.

 
Intraday Support Levels
S1     1.2330-1.2290
S2     1.2250
S3     1.2200-1.2160

Intraday  Resistance Levels
R1     1.2385-1.2450
R2     1.2520
R3     1.2600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.507 Buy
20-DMA   1.2345 Buy
50-DMA   1.2096 Buy
100-DMA   1.1926 Buy
200-DMA   1.1726 Buy
STOCH(5,3)   65.390 Sell
MACD(12,26,9)   0.0060 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3831/GBP, high of US$1.3923/GBP and settled the day up by 0.390% to close at US$1.3889/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 1.3860-1.3600 with stop loss closing below 1.3600 targeting 1.3900-1.3990-1.4050 and 1.4100-1.4200.

 
Intraday Support Levels
S1     1.3860-1.3800
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  

51.191

Buy
20-DMA   1.4008 Sell
50-DMA   1.3695 Buy
100-DMA   1.3468 Buy
200-DMA   1.3225 Buy
STOCH(5,3)   36.784 Buy
MACD(12,26,9)   0.0046 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY107.40/USD and made an intraday high of JPY108.77/USD and settled the day down by 0.763% at JPY107.81/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 107.90-110.50 with risk above 111.50 targeting 107.20-106.50 and 106.00-105.50. Long positions above 107.20-105.50 with targets of 107.90-108.45-109.00 and 110.10-110.50 with stop below 106.50.

 
Intraday Support Levels
S1     107.20-106.50
S2     106.00
S3     105.50

INTRADAY RESISTANCE LEVELS
R1     107.90-108.45
R2     109.00
R3     110.10-110.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.027 Buy
20-DMA   109.28 Sell
50-DMA   111.22 Sell
100-DMA   112.01 Sell
200-DMA   111.55 Sell
STOCH(9,6)   20.189 Sell
MACD(12,26,9)   -0.889 Sell

AAFX TRADING
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