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Daily Market Lookup

  • Most Asian share markets followed S&P 500 futures lower on Thursday as speculation of faster hikes in U.S interest rates soured risk appetite globally. The dollar held onto most of its overnight gains courtesy of higher Treasury yields, though the sudden shift to safety also spurred demand for the Japanese yen. The retreat came after minutes of the Federal Reserve’s last policy meeting showed the usual concerns that inflation might disappoint, but also an expectation of faster economic growth due to fiscal stimulus. In particular, members agreed that “the strengthening in the near-term economic outlook increased the likelihood that a gradual upward trajectory of the federal funds rate would be appropriate. ”That led investors to narrow the odds on faster hikes with a host of Fed fund futures hitting contract lows. Three rate rises are now almost fully priced in for this year, compared to two as recently as December. That risk was not welcome in the Treasury market, where yields on 10-year notes touched their highest in four years, and those on two-year paper the highest in nine. The next hurdle will be minutes from the European Central Bank’s last meeting with markets wary in case there is more talk of an eventual winding back on stimulus.
  • The dollar rose to a one-week high against a basket of major currencies on Thursday, after minutes of the Federal Reserve's January meeting showed policymakers were more confident of the need to keep raising interest rates. A more upbeat take on inflation in the minutes of the Fed's Jan. 30-31 policy meeting bolstered expectations for rate hikes. U.S. short-term interest-rate futures continued to reflect firm expectations that the Fed will raise rates three times this year. The minutes also showed that voting members as well as the wider group of policymakers had upgraded their forecasts for the economic outlook since December. The Japanese currency gained broadly as speculation of a faster pace of U.S. rate hikes soured investors' risk appetites and dented equities. The yen, which is supported by Japan's current account surplus, is a traditional safe haven currency and tends to attract demand during times of uncertainty or waning risk appetite. Political uncertainty ahead of Italy's national election on March 4 is likely to weigh on the euro in the near-term, said Roy Teo, investment strategist for LGT Bank in Singapore. A recent widening in the risk reversal spreads for euro/dollar options , as well as moves in yield spreads between Italian and German government bonds, show signs of investor caution ahead of the Italian election, Teo said.
  • Gold prices were trading lower on Thursday, weighed down from fresh gains in the dollar as it traded near a one-week high against a basket of major currencies. The dollar extended its recovery and rose to an over one-week peak on Thursday, as the Federal Reserve’s latest comment solidified expectations of interest rate hike ahead after showing a more upbeat take on inflation and increasing confidence that economic growth would pick up steam. Fed policy makers would next meet on 20 March. Both the dollar and U.S. treasury yields rose after the Fed minutes. In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to interest-bearing assets such as bonds Asian equities traded lower on Thursday following the U.S. stocks’ negative reaction to the Fed minutes, with Shanghai Composite and Shenzhen Component being the exceptions as they came back online from a week-long holiday and both gaining almost 2 percent in mid-morning trade.
  • Oil prices are down again Thursday morning in Asia, driven by a stronger dollar which outweighed the effects of a decrease in U.S. crude oil inventories. The strengthening dollar makes greenback-denominated oil imports more expensive for other countries, thus curbing demand and dragging prices down. This is despite an unexpected drop in U.S. crude oil inventories by 907K barrels to 420.3 mn barrels for the week to Feb 16, according to The American Petroleum Institute on Wednesday The U.S. is still expected to continue increasing its production, as it has done by more than 20% since mid-2016 to more than 10 mn bpd. At this rate of production increase, the U.S. is set to overtake Russia in crude oil output by late 2018, making it the largest global supplier. This also means that the gap in production that the OPEC is trying to create is simply being filled by U.S. shale, making OPEC’s attempt to reduce the global oversupply and control oil price volatility less effective. Current prices have moved quite far from the highs of the beginning of February. WTI started February at $65.80 and Brent started at $69.65. However, a healthy demand-growth in Asia, particularly China, continues to support oil markets.

 

 
Intraday RESISTANCE LEVELS
22nd February 2018 R1 R2 R3
GOLD-XAU 1,331-1,340 1,350 1,359-1,366
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 1.3900-1.3950 1.4050 1.4100-1.4170
USD/JPY 107.50 108.45 109.00-110.10

Intraday SUPPORTS LEVELS
22nd February 2018 S1 S2 S3
GOLD-XAU 1,320-1,310 1,303 1,295
Silver-XAG 16.20-15.90 15.60 15.00
Crude Oil 61.00 60.10 59.00-58.50
EURO/USD 1.2300-1.2250 1.2210 1.2090
GBP/USD 1.3855 1.3765-1.3700 1.3900-1.3950
USD/JPY 106.90 106.00-105.50 104.90

Intra-Day Strategy (22nd 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

Based on the charts and explanations above; sell below 1331-1366 keeping stop loss closing above 1366 and targeting 1320-1310 and 1303-1295. Buy above 1320-1310 with risk below 1310, targeting 1331-1340 and 1350-1358-1366.

 
Intraday Support Levels
S1     1,320-1,310
S2     1,303
S3     1,295
Intraday Resistance Levels
R1     1,331-1,340
R2     1,350
R3     1,359-1,366

Technical Indicators

Name   Value Action
14DRSI  

46.470

Buy
20-DMA   1334.93 Sell
50-DMA  

1317.69

Buy
100-DMA   1297.85 Buy
200-DMA   1285.18 Buy
STOCH(5,3)   13.163 Sell
MACD(12,26,9)   2.668 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$16.75/oz and low of US$16.37/oz. Silver settled up by 0.426% at US$16.48/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   41.998 Buy
20-DMA   16.73 Sell
50-DMA   16.77 Sell
100-DMA   16.78 Sell
200-DMA   16.83 Sell
STOCH(5,3)   15.384 Sell
MACD(12,26,9)   -0.1082 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$61.80/bbl, intraday low of US$60.85/bbl and settled down by 0.471% to close at US$61.25/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     61.00
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   46.273 Sell
20-DMA   62.26 Sell
50-DMA   61.71 Sell
100-DMA   58.31 Buy
200-DMA   53.10 Buy
STOCH(5,3)   58.823 Buy
MACD(12,26,9)   -0.393 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.2280/EUR, high of US$1.2359/EUR and settled the day down by 0.437% to close at US$1.2282/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   47.636 Buy
20-DMA   1.2369 Buy
50-DMA   1.2168 Buy
100-DMA   1.1963 Buy
200-DMA   1.1770 Buy
STOCH(5,3)   8.306 Sell
MACD(12,26,9)   0.0060 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3903/GBP, high of US$1.4007/GBP and settled the day down by 0.557% 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 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 1.3855-1.4170 with targets at 1.3855-1.3765 and 1.3700-1.3650. Buy above 1.3855-1.3650 with stop loss closing below 1.3650 targeting 1.3900-1.3950-1.4050 and 1.4100-1.4170.

 
Intraday Support Levels
S1     1.3855
S2     1.3765-1.3700
S3     1.3900-1.3950

Intraday Resistance Levels
R1     1.3900-1.3950
R2     1.4050
R3     1.4100-1.4170

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

48.030

Buy
20-DMA   1.4001 Sell
50-DMA   1.3769 Buy
100-DMA   1.3506 Buy
200-DMA   1.3258 Buy
STOCH(5,3)   24.385 Sell
MACD(12,26,9)   0.0035 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY107.27/USD and made an intraday high of JPY107.89/USD and settled the day up by 0.419% at JPY107.76/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   39.768 Buy
20-DMA   108.26 Sell
50-DMA   110.48 Sell
100-DMA   111.67 Sell
200-DMA   111.35 Sell
STOCH(9,6)   83.868 Sell
MACD(12,26,9)   -0.975 Sell

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