AAFX TRADING

Daily Market Lookup

  • Asian shares gained on Monday, joining a global recovery for equity markets as sentiment improved gradually from a recent shakeout that stemmed from fears of creeping inflation and higher borrowing costs. Trading is expected to be slower than usual due to market holidays in the United States as well as Greater China. On Wall Street, the S&P 500 rose marginally on Friday to mark its biggest weekly increase in five years, although earlier gains evaporated after a 37-page indictment filed by U.S. Special Counsel Robert Mueller charged 13 Russians and three Russian companies for meddling in the 2016 U.S. presidential election. The rebound came after a two-week rout that wiped off more than 10% of value at one point, triggered by worries a rise in U.S. inflation may boost dollar funding costs. The sell-off came as the corporate earning outlook improved on the back of strong global growth, bringing down equity valuations off their highs hit earlier this year. The two-year U.S. yield hit its highest level since 2008 last week as investors bet the Federal Reserve will raise interest rates at its next policy meeting in March The minutes of the Fed’s last policy meeting, held amid the equities tumble on Jan. 30-31, are due on Wednesday. Besides the outlook on rates, markets will be keen to see what if anything the Fed makes of the gyrations in markets. A fall in the Vix index, a gauge of expected volatilities in U.S. stocks, also helped underpin improving sentiment. The recent sell-off is believed to have been amplified by a jump in the Vix as many players are thought to have adjusted their portfolio in line with the change in volatilities.
  • The dollar found some traction on Monday following last week’s steep fall and managed to hold above a three-year low against a basket of currencies. 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. Confidence in the dollar has also been shaken by mounting worries over the U.S. budget deficit which is projected to balloon to $1 trillion in 2019 amid a government spending splurge and large corporate tax cuts While these negative factors were not expected to go away any time soon, last week’s downturn was so rapid that some buyers were seen to have waded in to pick up the greenback at perceived bargains. Longer term, the U.S. currency’s outlook remained uncertain. The euro’s strength has played a large role in weakening the dollar this year. Focus was on economic indicators due this week, such as Wednesday’s euro zone purchasing managers’ index and Friday’s German gross domestic product numbers, and whether they could propel the common currency higher again.
  • Gold prices eased in Asia on Monday despite some support from a weaker dollar as several key regional markets including China were shut for holidays. Markets in Hong Kong, Taiwan, Vietnam, China, the US and Canada are shut on Monday. In the week ahead, investors will focus on minutes of the Fed’s latest policy meeting with hopes the central bank will give more hints on the pace of future rate hikes this year. Last week, gold prices pulled back from three-week highs on Friday as the dollar rebounded against a currency basket, but losses were held in check as the dollar remained near multi-year lows. A stronger dollar makes gold more expensive for overseas buyers. Expectations for a faster rate of monetary tightening outside the U.S., which would lessen the divergence between the Federal Reserve and other central banks has eroded the dollar’s relative yield attraction for investors. The greenback has also been hit by concerns that recent tax cuts will negatively impact the US fiscal deficit, which is projected to balloon to near $1 trn in 2019. Although gold struggles to compete with yield-bearing assets such as Treasury’s when borrowing costs rise, some analysts said the factors that drove the uptick in inflation were cyclical, meaning growth in inflation is likely to be gradual. Oil prices extended gains to hit their highest level in nearly two weeks on Monday, buoyed as Asian shares joined a global recovery in equity markets and as worries grew over tensions in the Middle East. Prime Minister Benjamin Netanyahu said on Sunday that Israel could act against Iran itself, not just its allies in the Middle East, after border incidents in Syria brought the Middle East foes closer to direct confrontation. Trading is expected to be slower than usual due market holidays in the United States as well as Greater China. The U.S. oil rig count, an indicator of future production, rose by seven to 798, its highest since April 2015, according to a weekly report from General Electric’s Baker Hughes unit. That marked the first time since June that drillers added rigs for four consecutive weeks, and the figure was well up on the 597 rigs that were active a year earlier as energy companies have boosted spending since mid-2016 when crude prices began recovering from a two-year crash. Surging U.S. production is offsetting efforts by the OPE and some other producers including Russia to curb production by 1.8 mn bpd until the end of 2018. Money managers slashed their bullish wagers on ICE Brent crude oil futures by the most in nearly eight months in the week to Feb. 13, data showed, as prices plunged amid concerns of oversupply.

 

 
Intraday RESISTANCE LEVELS
19th February 2018 R1 R2 R3
GOLD-XAU 1,350 1,359 1,366-1,374
Silver-XAG 17.00 17.40-17.70 18.20
Crude Oil 62.80 63.40 64.00-64.70
EURO/USD 1.2450-1.2520 1.2571 1.2600-1.2670
GBP/USD 1.4050-1.4100 1.4170 1.4240-1.4290
USD/JPY 106.90-107.50 108.45 109.00-110.10

Intraday SUPPORTS LEVELS
19th February 2018 S1 S2 S3
GOLD-XAU 1,342 1,331 1,320-1,310
Silver-XAG 16.50 16.20-15.90 15.60
Crude Oil 62.20-61.20 60.10 59.00-58.50
EURO/USD 1.2385 1.2330-1.2290 1.2210
GBP/USD 1.3990 1.3900-1.3840 1.3760
USD/JPY 106.00-105.50 104.90 104.20

Intra-Day Strategy (19th 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$1361.64/oz and low of US$1344.70/oz. Gold was down by 0.495% at US$1347.16/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 1350-1384 keeping stop loss closing above 1384 and targeting 1342-1331 and 1320-1310. Buy above 1342-1310 with risk below 1310, targeting 1358-1366 and 1374-1385.

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

Technical Indicators

Name   Value Action
14DRSI  

59.373

Buy
20-DMA   1338.49 Sell
50-DMA  

1312.86

Buy
100-DMA   1296.32 Buy
200-DMA   1283.77 Buy
STOCH(5,3)   76.990 Sell
MACD(12,26,9)   6.568 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.93/oz and low of US$16.60/oz. Silver settled down by 1.128% at US$16.64/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   46.941 Buy
20-DMA   16.85 Sell
50-DMA   16.73 Sell
100-DMA   16.79 Sell
200-DMA   16.84 Sell
STOCH(5,3)   64.258 Sell
MACD(12,26,9)   -0.076 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$61.97/bbl, intraday low of US$60.86/bbl and settled up by 0.309% to close at US$61.62/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 62.80-64.70 with stop loss at 64.70; targeting 62.20-61.20-60.10 and 59.25-58.50. Buy above 61.20-58.50 with risk daily closing below 58.50 and targeting 62.20-62.80-63.40 and 64.00-64.70.

 
Intraday Support Levels
S1     62.20-61.20
S2     60.10
S3     59.00-58.50

Intraday Resistance Levels
R1     62.80
R2     63.40
R3     64.00-64.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.548 Sell
20-DMA   63.01 Sell
50-DMA   61.59 Sell
100-DMA   58.02 Buy
200-DMA   52.87 Buy
STOCH(5,3)   94.529 Buy
MACD(12,26,9)   -0.699 63.01

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.2392/EUR, high of US$1.2554/EUR and settled the day down by 0.288% to close at US$1.2404/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

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.

 
Intraday Support Levels
S1     1.2385
S2     1.2330-1.2290
S3     1.2210

Intraday  Resistance Levels
R1     1.2450-1.2520
R2     1.2571
R3     1.2600-1.2670

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.944 Buy
20-DMA   1.2379 Buy
50-DMA   1.2136 Buy
100-DMA   1.1947 Buy
200-DMA   1.1750 Buy
STOCH(5,3)   66.769 Sell
MACD(12,26,9)   0.0069 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3995/GBP, high of US$1.4144/GBP and settled the day down by 0.489% to close at US$1.4028/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 1.4050-1.4290 with targets at 1.3990-1.3900 and 1.3810-1.3760. Buy above 1.3990-1.3760 with stop loss closing below 1.3760 targeting 1.4050-1.4100-1.4170 and 1.4240-1.4290.

 
Intraday Support Levels
S1     1.3990
S2     1.3900-1.3840
S3     1.3760

Intraday Resistance Levels
R1     1.4050-1.4100
R2     1.4170
R3     1.4240-1.4290

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.752

Buy
20-DMA   1.4034 Sell
50-DMA   1.3734 Buy
100-DMA   1.3243 Buy
200-DMA   1.3243 Buy
STOCH(5,3)   76.104 Buy
MACD(12,26,9)   0.0060 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY105.54/USD and made an intraday high of JPY106.39/USD and settled the day up by 0.075% at JPY106.19/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 106.90-110.00 with risk above 110.00 targeting 106.00-105.50 and 104.90-104.20. Long positions above 106.00-105.50 with targets of 107.90-108.45-109.00 and 110.10-110.50 with stop below 106.50.

 
Intraday Support Levels
S1     106.00-105.50
S2     104.90
S3     104.20

INTRADAY RESISTANCE LEVELS
R1     106.90-107.50
R2     108.45
R3     109.00-110.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   28.844 Buy
20-DMA   108.57 Sell
50-DMA   110.84 Sell
100-DMA   111.83 Sell
200-DMA   111.44 Buy
STOCH(9,6)   17.0541 Buy
MACD(12,26,9)   -1.177 Sell

AAFX TRADING
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