AAFX TRADING

Daily Market Lookup

  • Asian shares rose for a fifth straight day on Friday as investor confidence slowly returns after a sharp sell-off earlier in the month, but the dollar continued its descent, hitting a three-year low against a basket of major currencies. Japan’s Nikkei rose 1.1 percent, with investors relieved to see the government appoint Bank of Japan Governor Haruhiko Kuroda for another term, in a sign the central bank will be in no rush to dial back its massive stimulus program. The U.S. dollar, on the other hand, slipped below its January low against a basket of major currencies to reach its lowest since late 2014. There is no strong consensus yet on what is driving the dollar’s persistent weakness, especially in light of rising yields. Some say it simply reflects a return of risk appetite and a shift to higher-yielding currencies, including many emerging market ones. But others cite concerns that Washington might pursue a weak dollar strategy as well as talk that foreign central banks may be reallocating their reserves out of the dollar. There are also worries President Donald Trump’s tax cuts and fiscal spending could stoke inflation and erode the value of the dollar. Shorter-dated yields also rose as investors grew convinced that the correction in stock prices in recent weeks would not prevent the Fed from raising interest rates in March and twice more this year. Cleveland Fed president Loretta Mester said on Tuesday the recent stock market sell-off and jump in volatility will not damage the economy’s overall strong prospects. Mester is being considered a leading candidate for the Fed’s Vice Chair.
  • The dollar slipped to a three-year low against a basket of currencies on Friday, headed for its biggest weekly loss in two years, as bearish factors offset support the U.S. currency could take from rising Treasury yields. The U.S. currency has been weighed down by a variety of factors this year, including concerns that Washington might pursue a weak dollar strategy and the perceived erosion of its yield advantage as other countries start to scale back easy monetary policy. Traders also suspect that confidence in the dollar has been eroded by mounting worries over the U.S. budget deficit which is projected to balloon to near $1 trillion in 2019 amid a government spending splurge and large corporate tax cuts. Indeed, the dollar failed to gain momentum after data on Wednesday showed U.S. inflation was stronger than expected in January, sending Treasury yields to four-year highs, as investors bet the Federal Reserve could increase interest rates as many as four times this year. The reappointment of Haruhiko Kuroda as Bank of Japan governor and the nomination of BOJ executive director Masayoshi Amamiya and Waseda University professor Masazumi Wakatabe as deputy governors had little impact on the yen, although the proposed leadership trio were seen certain to keep the central bank on an ultra-loose policy path.
  • Gold prices rose in Asia on Friday as a continued weaker dollar aided sentiment even in a holiday-thinned market. Today marks the start of the Year of the Dog, the latest turn in the 12-year lunar zodiac cycle with China, Hong Kong, South Korea, Taiwan, Indonesia, Singapore, Malaysia, Philippines and Vietnam markets shut Overnight, gold prices were mostly flat on Thursday with trading restricted to a narrow range as traders mulled over recent data pointing to growing inflationary pressure which could strengthen the Federal Reserve’s case for a faster pace of monetary policy tightening. In what was mostly a range bound session gold prices struggled to capitalise on dollar weakness as traders grew wary of adding to recent bullish bets on the yellow metal after upbeat wholesale inflation reaffirmed the narrative of improving US inflation. The Labor Department said Thursday its producer price index for final demand increased 0.4% last month after slipping 0.1% in December. In the 12 months through January, the PPI rose 2.2%. Also supporting gold prices was buying ahead of as the Chinese New Year got underway which usually ushers in gift buying in the form of gold jewellery. 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. Oil prices edged higher on Friday as the dollar stood near a three-year low in subdued Asian trade, with many markets closed for the Lunar New Year holiday. The dollar languished near a three-year low against a basket of currencies on Friday, headed for its biggest weekly loss in two years. A weaker dollar often boosts prices for oil and other dollar-denominated commodities. Oil producers led by Saudi Arabia and Russia aim to draft an agreement on a long-term alliance by the end of this year, United Arab Emirates energy minister Suhail al-Mazroui said on Thursday. OPEC and non-OPEC producers including Russia have been restraining production by a total 1.8 million barrels per day in a bid to prop up prices under a deal that is to expire at the end of 2018. The move comes at a time when Asian demand is on the rise. India imported a record 4.93 million bpd in January to feed its expanded refining capacity and meet rising demand, data showed. Oil won support earlier in the week after Saudi Energy Minister Khalid al-Falih said OPEC hopes to keep limiting crude output to leave the market tight. However, surging U.S. production is offsetting OPEC's efforts to curb supplies. U.S. crude output hit a record 10.27 million barrels per day last week, the Energy Information Administration (EIA) said on Wednesday, making it a bigger producer than Saudi Arabia.

 

 
Intraday RESISTANCE LEVELS
16th February 2018 R1 R2 R3
GOLD-XAU 1,359 1,366-1,374 1,385
Silver-XAG 17.00 17.40-17.70 18.20
Crude Oil 62.20-62.80 63.40 64.00-64.70
EURO/USD 1.2571-1.2600 1.2850 1.2850
GBP/USD 1.4170-1.4240 1.4290 1.4350
USD/JPY 107.20-106.50 110.10-110.50 110.10-110.50

Intraday SUPPORTS LEVELS
16th February 2018 S1 S2 S3
GOLD-XAU 1,350-1,342 1,331 1,320-1,310
Silver-XAG 16.50 16.20-15.90 15.60
Crude Oil 60.10 60.10 59.00-58.50
EURO/USD 1.2520-1.2450 1.2385 1.2330-1.2290
GBP/USD 1.4100-1.4050 1.3990 1.3900-1.3840
USD/JPY 107.20-106.50 106.00 105.50

Intra-Day Strategy (16th 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$1357.15/oz and low of US$1348.66/oz. Gold was up by 0.007% at US$1353.91/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 1358-1384 keeping stop loss closing above 1384 and targeting 1350-1342-1331 and 1320-1310. Buy above 1350-1310 with risk below 1310, targeting 1358-1366 and 1374-1385.

 
Intraday Support Levels
S1     1,350-1,342
S2     1,331
S3     1,320-1,310
Intraday Resistance Levels
R1     1,359
R2     1,366-1,374
R3     1,385

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 Thursday made its intraday high of US$16.98/oz and low of US$16.64/oz. Silver settled down by 0.236% at US$16.86/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 17.00-18.20 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     17.00
R2     17.40-17.70
R3     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 Thursday made an intra‐day high of US$61.63/bbl, intraday low of US$59.73/bbl and settled up by 1.068% to close at US$60.83/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

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.

 
Intraday Support Levels
S1     60.10
S2     60.10
S3     59.00-58.50

Intraday Resistance Levels
R1     62.20-62.80
R2     63.40
R3     64.00-64.70

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 Thursday made an intraday low of US$1.2448/EUR, high of US$1.2467/EUR and settled the day up by 0.288% to close at US$1.2503/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     1.2520-1.2450
S2     1.2385
S3     1.2330-1.2290

Intraday  Resistance Levels
R1     1.2571-1.2600
R2     1.2850
R3     1.2850

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 Thursday made an intra‐day low of US$1.4098/GBP, high of US$1.4145/GBP and settled the day up by 0.212% to close at US$1.4134/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 1.4170-1.4350 with targets at 1.4100-1.4050 and 1.3990-1.3900-1.3810. Buy above 1.4100-1.3840 with stop loss closing below 1.3840 targeting 1.4170-1.4240 and 1.4290-1.4350.

 
Intraday Support Levels
S1     1.4100-1.4050
S2     1.3990
S3     1.3900-1.3840

Intraday Resistance Levels
R1     1.4170-1.4240
R2     1.4290
R3     1.4350

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 Thursday made intra‐day low of JPY106.02/USD and made an intraday high of JPY106.89/USD and settled the day down by 0.431% at JPY106.10/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     107.20-106.50
R2     110.10-110.50
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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