AAFX TRADING

Daily Market Lookup

  • Asian stocks slipped their recent recovery stalling after European equities broke a winning streak, while the dollar edged up to pull further away from three-year lows U.S. markets were closed on Monday for a holiday, and the focus will be on whether Wall Street can maintain its recovery once trading resumes. The VIX index - Wall Street’s “fear gauge” measure of market volatility has slipped below 20, less than half the 50-point peak touched earlier in February. The reappointment of Bank of Japan Governor Haruhiko Kuroda for another five-year term means the central bank will continue to gradually edge away from crisis-mode stimulus, former BOJ board member Takahide Kiuchi said Premier Shinzo Abe’s decision to reappoint Kuroda, whose massive easing efforts failed to accelerate inflation to his 2 percent target since becoming governor in 2013, is a sign the government is no longer insisting that the BOJ meet its price goal quickly, he said. Since abandoning a policy targeting the pace of money printing in 2016, the BOJ is already whittling down its sweeping stimulus program by slowing its bond purchases, Kiuchi said. The government reappointed Kuroda for another five-year term on Friday, signaling its hope the BOJ will keep up efforts to reflate the economy. He retains deep insight into the workings of BOJ policy. While the BOJ will continue to slow its bond buying, abandoning negative rates may take some time as it would require watering down its price target.
  • The dollar steadied on Tuesday after pulling ahead from a three-year low against a currency basket the previous day, though it was dogged by growing concerns a ballooning fiscal deficit in the United States could disrupt the economy. The U.S. currency has been weakening in recent months, with the positive impetus from rising U.S. interest rates offset by a barrage of bearish factors. Initially, the view that other central banks will catch up with the Federal Reserve in tightening policy this year was cited as a reason for the dollar’s underperformance. Then came comments from U.S. Treasury Secretary Steven Mnuchin, which stoked concerns the United States could pursue a weaker dollar policy as its trade deficit rose to highest level in almost a decade. Mounting worries about the U.S. budget deficit, which is projected to balloon to more than $1 trillion in 2019 amid a government spending splurge and large corporate tax cuts, have also undermined the greenback. Economists say U.S. President Donald Trump’s tax cuts and spending plans could backfire by overheating an already strong economy and causing an unwanted pick-up in inflation. Euro zone finance ministers on Monday chose Spanish Economy Minister Luis de Guindos to succeed European Central Bank Vice President Vitor Constancio in May. The move is likely to boost the chances of German Bundesbank Governor Jens Weidmann becoming head of the ECB next year to succeed Mario Draghi in 2019, possibly giving the ECB’s policy a more hawkish tilt. Expectations that the ECB will roll back its stimulus have been the major driving force behind the euro’s rally since last year. Still, in the near term, investors may be cautious about buying the common currency amid political uncertainty in the continent. German Social Democrats start voting in a postal ballot on Tuesday on whether the center-left party should go ahead with the agreement its leaders clinched last week to renew their power-sharing alliance with the chancellor’ Angela Merkel’s conservatives. The results of the vote, which took place as the SPD’s support fell behind that of the right-wing Alternative for Germany is due on March 4 Italy will also hold a general election on March 4, which is expected to lead to a hung parliament.
  • Oil markets were split on Tuesday, with U.S. crude was pushed up by reduced flows from Canada while international Brent prices eased. Traders said the higher WTI prices were a result of reduced flows from Canada’s Keystone pipeline, which has been operating below capacity since late last year due to a leak, cutting Canadian supplies into the United States. Outside North America, Brent crude eased on the back of a dip in Asian stocks and a stronger dollar, which potentially curbs demand as it makes fuel more expensive for countries using other currencies domestically. Despite this, oil markets remain well supported due to supply restraint by the OPEC, which started last year in order to draw down excess global inventories. OPEC Secretary-General Mohammad Barkindo said on Monday the organization registered 133 percent compliance with agreed output reduction targets in January Barkindo said compliance last year stood at 107%. Global oil demand for 2018 is estimated to grow 1.6 million barrels per day due to an “encouraging environment”, Barkindo added. While most of OPEC, especially its de-facto leader Saudi Arabia, is showing strong support for the production restraint, non-OPEC producer Russia has shown signs it may at some stage gradually start to increase output again. Saudi Arabia - not least in an attempt to give the planned listing of its state-owned oil giant Saudi Aramco - a boost, is keen for Russia and other producers to keep withholding supplies to prop up prices. But soaring U.S. production is threatening to erode OPEC’s efforts. Last week, the amount of U.S. oil rigs drilling for new production rose for a fourth straight week to 798, in an indication that U.S. crude output, already at a record 10.27 million bpd, may rise further. The United States late last year became the world’s second biggest oil producers, only slightly behind Russia and ahead of top exporter Saudi Arabia.

 

 
Intraday RESISTANCE LEVELS
20th 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
20th February 2018 S1 S2 S3
GOLD-XAU 1,340 1,331 1,320-1,310
Silver-XAG 16.50 17.0016.20-15.90 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 1.3950 1.3900-1.3840 1.3760
USD/JPY 106.00-105.50 104.90 104.20

Intra-Day Strategy (20th 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$1351.27/oz and low of US$1345.72/oz. Gold was down by 0.0675% at US$1346.53/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     1,340
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 Monday made its intraday high of US$16.71/oz and low of US$16.59/oz. Silver settled up by 0.180% 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     17.0016.20-15.90
S3     15.60

Intraday  Resistance Levels
R1     17.00
R2     17.40-17.70
R3     18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.130 Buy
20-DMA   16.83 Sell
50-DMA   16.74 Sell
100-DMA   16.79 Sell
200-DMA   16.84 Sell
STOCH(5,3)   44.367 Sell
MACD(12,26,9)   -0.076 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$62.55/bbl, intraday low of US$61.60/bbl and settled up by 1.412% to close at US$62.47/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 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.2368/EUR, high of US$1.2434/EUR and settled the day up by 0.403% to close at US$1.2406/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 1.2450-1.2670 targeting 1.2385-1.2330-1.2290 and 1.2250-1.2200 with stop-loss at daily closing above 1.2600. Buy above 1.2385-1.2200 with risk below 1.2200 targeting 1.2450-1.2525 and 1.2571-1.2600-1.2670.

 
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 Monday made an intra‐day low of US$1.3957/GBP, high of US$1.4048/GBP and settled the day down by 0.128% to close at US$1.3994/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 neutral 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     1.3950
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  

Buy

Buy
20-DMA   1.4031 Sell
50-DMA   1.3745
100-DMA   1.3493 Buy
200-DMA   1.3248 Buy
STOCH(5,3)   58.141 Sell
MACD(12,26,9)   0.0060 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY106.08/USD and made an intraday high of JPY106.72/USD and settled the day up by 0.235% at JPY106.57/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   32.142 Buy
20-DMA   108.40 Sell
50-DMA   110.70 Sell
100-DMA   111.77 Sell
200-DMA   111.40 Sell
STOCH(9,6)   32.814 Buy
MACD(12,26,9)   -1.162 Sell

AAFX TRADING
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