AAFX TRADING

Daily Market Lookup

  • Asian stocks gained on Wednesday, while the dollar advanced as traders near-term focus shifted to the minutes of the Federal Reserve’s last policy meeting for hints on the future pace of U.S. monetary tightening. Trading in Chinese financial markets will resume on Thursday after being shut for the past week for the Lunar New Year. Increased government borrowing has applied steady upward pressure on Treasury yields. The Treasury Department has issued more debt in anticipation of a higher deficit from last year’s major tax overhaul and a budget deal that will increase federal spending over the next two years. The dollar benefited from the higher yields, with its index against a basket of six major currencies edging up to a one-week high of 89.904. 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 their easy money strategies. Confidence in the dollar has also been shaken by mounting worries over the U.S. budget deficit. But the greenback managed to find bids once the dust began to settle after last week’s tumble. Later on Wednesday, investors will turn their attention to the minutes of Fed’s last policy meeting in late January. Analysts said a hawkish tone to the minutes could prompt markets to price in the risk of a faster U.S. interest rate hikes and help lift the dollar further.
  • The dollar inched higher on Wednesday as the near-term focus shifted to the minutes of the Federal Reserve’s last policy meeting for hints on the future pace of U.S. monetary tightening. Market participants attributed the dollar’s bounce over the past few sessions to short-covering after speculative trades helped push it down to a 15-month low of 105.545 yen last week. Some market players were recently buying dollar/yen put options to position for dollar weakness, and the market now appears “well covered” against downside risks in the U.S. currency, he said. The yen showed a muted reaction to comments from Masatsugu Asakawa, Japan’s top currency diplomat, who was quoted as saying that yen’s recent moves were “one-sided”. The U.S. currency has weakened against the yen and other major currencies in recent months, with the positive impetus from rising U.S. interest rates offset by bearish factors, including worries that the United States could pursue a weaker dollar policy. Mounting worries about the U.S. budget deficit, which some say could balloon to more than $1 trn in 2019 on heavy government spending and large corporate tax cuts, have also undermined the greenback. Against this backdrop, doubts for the sustainability of the dollar’s bounce persist. Later on Wednesday, investors will turn their attention to the minutes of the U.S. Federal Reserve’s last policy meeting in late January. Traders are also watching this week’s large U.S. government debt auctions for clues to international investors’ appetite for U.S. assets. Some of the U.S. government’s short-term borrowing costs rose to their highest level in more than nine years on Tuesday as it raised $179 billion in the Treasury securities market to fund spending and make debt payments.
  • Oil prices fell on Wednesday, weighed down by a rebound in the U.S. dollar from three-year lows hit last week and an expected rise in U.S. oil production. Wang Tao, Reuters technical commodity analyst, said Brent could fall into a range of $63.92 to $64.41 per barrel, as suggested by its wave pattern and a projection analysis. Traders said the declines were driven by a recovery in the dollar, which potentially hits fuel demand as it makes greenback-denominated oil imports more expensive for countries using other currencies. The dollar index, which measures the greenback against a basket of six major currencies, rose for a second day on Wednesday, moving further away from the three-year lows reached last week. Also pressuring prices is surging U.S. production, now the world’s second-largest oil stream at more than 10 mn bpd, only slightly behind Russia and ahead of top exporter Saudi Arabia. The next set of weekly U.S. oil production data is due to be published by the EIA on Thursday after a one-day delay because of the President’s Day holiday on Monday. That data will also include U.S. inventory figures that are expected to show crude oil stockpiles rose 1.3 million barrels in the week to Feb. 16, according to a Reuters poll. Oil product stockpiles, including gasoline and distillate fuels, are all expected to decline. Despite the rising U.S. output, overall oil markets remain well supported due to healthy demand growth and supply restraint by the OPEC that started last year to draw down excess global inventories.

 

 
Intraday RESISTANCE LEVELS
21st 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 62.20-62.80 63.40 64.00-64.70
EURO/USD 1.2390-1.2450 1.2520 1.2571-1.2600
GBP/USD 1.4050-1.4100 1.4170 1.4240-1.4290
USD/JPY 107.50 108.45 109.00-110.10

Intraday SUPPORTS LEVELS
21st February 2018 S1 S2 S3
GOLD-XAU 1,340 1,331 1,320-1,310
Silver-XAG 16.20-15.90 15.60 15.00
Crude Oil 61.20 60.10 59.00-58.50
EURO/USD 1.2300-1.2250 1.2210 1.2090
GBP/USD 1.3900-1.3840 1.3900-1.3840 1.3760
USD/JPY 106.90 106.00-105.50 104.90

Intra-Day Strategy (21st 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$1348.08/oz and low of US$1328.37/oz. Gold was down by 1.253% at US$1329.34/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 oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Sell on Strength

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 oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

 
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  

48.090

Buy
20-DMA   1336.29 Sell
50-DMA  

1316.16

Buy
100-DMA   1297.36 Buy
200-DMA   1284.76 Buy
STOCH(5,3)   34.979 Sell
MACD(12,26,9)   6.568 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$16.68/oz and low of US$16.41/oz. Silver settled down by 1.20% at US$16.43/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 16.00-15.00 targeting 17.00-17.75 and 18.20-18.60; stop breakage below 15.00. Sell below 17.00-18.20 with stop loss above 18.20; targeting 16.20-15.60 and 15.00-14.50.

 
Intraday  Support Levels
S1     16.20-15.90
S2     15.60
S3     15.00

Intraday  Resistance Levels
R1     17.00
R2     17.40-17.70
R3     18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.785 Buy
20-DMA   16.77 Sell
50-DMA   16.75 Sell
100-DMA   16.79 Sell
200-DMA   16.83 Sell
STOCH(5,3)   22.449 Sell
MACD(12,26,9)   -0.1066 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$61.68/bbl, intraday low of US$61.01/bbl and settled down by 0.746% to close at US$61.15/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 62.20-64.70 with stop loss at 64.70; targeting 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     61.20
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   48.858 Sell
20-DMA   62.87 Sell
50-DMA   61.68 Sell
100-DMA   58.12 Buy
200-DMA   52.94 Buy
STOCH(5,3)   88.993 Buy
MACD(12,26,9)   -0.360 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.2319/EUR, high of US$1.2411/EUR and settled the day down by 0.564% to close at US$1.2336/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 1.2390-1.2600 targeting 1.2310-1.2250 and 1.2210-1.2090 with stop-loss at daily closing above 1.2600. Buy above 1.2300-1.2090 with risk below 1.2090 targeting 1.2390-1.2450-1.2520 and 1.2571-1.2600.

 
Intraday Support Levels
S1     1.2300-1.2250
S2     1.2210
S3     1.2090

Intraday  Resistance Levels
R1     1.2390-1.2450
R2     1.2520
R3     1.2571-1.2600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.581 Buy
20-DMA   1.2377 Buy
50-DMA   1.2158 Buy
100-DMA   1.1958 Buy
200-DMA   1.1764 Buy
STOCH(5,3)   25.695 Sell
MACD(12,26,9)   0.0052 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3930/GBP, high of US$1.4023/GBP and settled the day down by 0.014% to close at US$1.3992/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 1.4000-1.4290 with targets at 1.3950-1.3900 and 1.3810-1.3760. Buy above 1.3950-1.3760 with stop loss closing below 1.3760 targeting 1.4050-1.4100-1.4170 and 1.4240-1.4290.

 
Intraday Support Levels
S1     1.3900-1.3840
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  

53.596

Buy
20-DMA   1.4019 Sell
50-DMA   1.3758 Buy
100-DMA   1.3500 Buy
200-DMA   1.3254 Buy
STOCH(5,3)   48.584 Sell
MACD(12,26,9)   0.0051 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY106.55/USD and made an intraday high of JPY107.37/USD and settled the day up by 0.694% at JPY107.31/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 107.50-110.00 with risk above 110.00 targeting 106.90-106.00-105.50 and 104.90-104.20. Long positions above 106.90-104.90 with targets of 107.50-107.90-108.45 and 109.00-110.10 with stop below 104.90.

 
Intraday Support Levels
S1     106.90
S2     106.00-105.50
S3     104.90

INTRADAY RESISTANCE LEVELS
R1     107.50
R2     108.45
R3     109.00-110.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.460 Buy
20-DMA   108.35 Sell
50-DMA   110.60 Sell
100-DMA   111.72 Sell
200-DMA   111.38 Sell
STOCH(9,6)   63.328 Sell
MACD(12,26,9)   -1.031 Sell

AAFX TRADING
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING