AAFX TRADING

Daily Market Lookup

  • Asian shares made guarded gains on Monday as investors braced for an event-packed week headlined by U.S. inflation data and the first House testimony by the new head of the Federal Reserve. China’s ruling Communist Party on Sunday set the stage for President Xi Jinping to stay in office indefinitely, with a proposal to remove a constitutional clause limiting presidential service to just two terms in office The mood has calmed partly thanks to expectations the Federal Reserve will stay gradual in its tightening, a measured outlook underlined by the central bank in a governors’ report released on Friday. Investors also seem to be wagering that Fed Chairman Jerome Powell will stick to that script at his first appearance before the House on Tuesday, followed by testimony to the Senate on Thursday. An added wrinkle is that the Fed’s favored measure of inflation, the core PCE index, is out early on Thursday. Markets will be hyper-sensitive to any hint of a pick-up in core inflation given the surprising strength of wages in January and Powell is certain to be questioned on the risks by Senators. Dealers were also looking ahead to the outcome of the Italian general election on March 4. A German Social Democrats’ poll of its members on joining another coalition government with Chancellor Angela Merkel’s conservatives is also due that day, two big political risk events for markets.
  • The U.S. dollar pushed lower against other major currencies on Monday, as caution dominated ahead of Federal Reserve Chairman Jerome Powell's first congressional testimony scheduled later in the week. The greenback had strengthened broadly after the minutes of the Fed's January policy meeting showed last week that central bank officials see increased economic growth and rising inflation as justification to continue to raise interest rates gradually. But traders became more cautious as Powell was set to testify on the central bank's semi-annual report on monetary policy and the economy on Tuesday before the U.S. House of Representatives' Financial Services Committee. The pound remained supported after the Bank of England’s deputy governor said over the weekend that interest rates might need to rise sooner than expected if wages grow as fast the central bank expects in the early part of 2018.
  • The euro gained on Monday as a fall in U.S. Treasury yields dragged down the dollar, but trading was relatively quiet ahead of several speeches by central bankers and key political developments in Germany and Italy. But the euro remains 2 cents off its recent highs of more than $1.25 - the currency has rallied this year on the back of dollar weakness - and analysts said investors were cautious about taking big positions this week due to political risks. Italians vote in a national election on Sunday, while the leading political parties in Germany, Europe's biggest economy, will decide on a coalition deal that could secure Angela Merkel a fourth term as chancellor. Analysts pointed to weekly futures data that showed net long positions in the euro had fallen for a third consecutive week. European Central Bank President Mario Draghi's appearance in the European Parliament on Monday and euro zone inflation data due later this week also add to a nervous outlook for euro trading. A view that the dollar's sell-off had been overdone, plus minutes from the Fed's January rate-setting meeting that offered a relatively upbeat tone, helped give the dollar a lift last week. The focus this week is Federal Reserve Chairman Jerome Powell's first congressional testimony on monetary policy and the economy.
  • Oil prices steadied on Monday after hitting their highest level in nearly three weeks, supported by comments from top oil exporter Saudi Arabia that it would continue to curb shipments in line with the OPEC-led effort to cut global supplies. Prices were supported after Saudi Arabian oil minister Khalid al-Falih on Saturday said the country’s crude production in January-March would be well below output caps, with exports averaging below 7 million barrels per day. Saudi Arabia hopes OPEC and its allies will be able to relax production curbs next year and create a permanent framework to stabilize oil markets after the current supply cut deal ends this year, Falih added. U.S. energy companies last week added one oil rig, the fifth weekly increase in a row, bringing the total count up to 799, the highest level since April 2015, Baker Hughes energy services firm said on Friday. Hedge funds and money managers upped their bullish wagers on U.S. crude oil for the first time in four weeks, data showed on Friday. A powerful 7.5-magnitude earthquake struck Papua New Guinea’s Southern Highlands province early on Monday, the U.S. Geological Survey (USGS) said, prompting oil and gas companies to immediately suspend operations in the energy-rich interior Meanwhile, Libya’s National Oil Corp said on Saturday it had declared force majeure on the 70,000 bpd El Feel oilfield after a protest by guards closed the field.

 

 
Intraday RESISTANCE LEVELS
26th February 2018 R1 R2 R3
GOLD-XAU 1,340 1,350 1,359-1,366
Silver-XAG 17.00 17.40-17.70 18.20
Crude Oil 64.00-64.70 65.50 66.50
EURO/USD 1.2390-1.2450 1.2520 1.2571-1.2600
GBP/USD 1.4050 1.4100-1.4170 1.4250
USD/JPY 107.50 108.45 109.00-110.10

Intraday SUPPORTS LEVELS
26th February 2018 S1 S2 S3
GOLD-XAU 1,331-1324 1,320 1,310-1,303
Silver-XAG 16.20-15.902.807 15.60 15.00
Crude Oil 62.2063.40-62.80 62.20 61.50-61.00
EURO/USD 1.2300-1.2250 1.2210 1.2090
GBP/USD 1.3950 1.3900-1.3855 1.3765
USD/JPY 106.90 106.00-105.50 104.90

Intra-Day Strategy (26th 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$1332.06/oz and low of US$1325.71/oz. Gold was down by 0.1863% at US$1328.68/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     1,331-1324
S2     1,320
S3     1,310-1,303
Intraday Resistance Levels
R1     1,340
R2     1,350
R3     1,359-1,366

Technical Indicators

Name   Value Action
14DRSI  

53.949

Buy
20-DMA   1334.18 Sell
50-DMA  

1321.04

Buy
100-DMA   1299.18 Buy
200-DMA   1286.01 Buy
STOCH(5,3)   37.375 Sell
MACD(12,26,9)   2.807 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.62/oz and low of US$16.48/oz. Silver settled up by 0.422% at US$16.51/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     16.20-15.902.807
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   50.058 Buy
20-DMA   16.67 Sell
50-DMA   16.80 Sell
100-DMA   16.79 Sell
200-DMA   16.83 Sell
STOCH(5,3)   53.338 Sell
MACD(12,26,9)   -0.0825 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$63.65/bbl, intraday low of US$62.26/bbl and settled up by 1.566% to close at US$63.53/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 64.00-66.50 with stop loss at 66.50; targeting 63.40-62.80 and 62.20-61.50-61.00. Buy above 63.40-61.00 with risk daily closing below 61.00 and targeting 64.00-64.70 and 65.50-66.50.

 
Intraday Support Levels
S1     62.2063.40-62.80
S2     62.20
S3     61.50-61.00

Intraday Resistance Levels
R1     64.00-64.70
R2     65.50
R3     66.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.739 Sell
20-DMA   62.11 Sell
50-DMA   62.00 Sell
100-DMA   58.58 Buy
200-DMA   53.24 Buy
STOCH(5,3)   88.928 Buy
MACD(12,26,9)   -0.024 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.2279/EUR, high of US$1.2336/EUR and settled the day down by 0.283% to close at US$1.2379/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   49.755 Buy
20-DMA   1.2365 Buy
50-DMA   1.2178 Buy
100-DMA   1.1969 Buy
200-DMA   1.1776 Buy
STOCH(5,3)   15.765 Sell
MACD(12,26,9)   0.0035 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3903/GBP, high of US$1.4004/GBP and settled the day up by 0.086% to close at US$1.3961/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 1.4050-1.4250 with targets at 1.3950-1.3900-1.3855 and 1.3765- 1.3700. Buy above 1.3950-1.3650 with stop loss closing below 1.3650 targeting 1.4050-1.4100 and 1.4170-1.4250.

 
Intraday Support Levels
S1     1.3950
S2     1.3900-1.3855
S3     1.3765

Intraday Resistance Levels
R1     1.4050
R2     1.4100-1.4170
R3     1.4250

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

57.059

Buy
20-DMA   1.3996 Sell
50-DMA   1.3793 Buy
100-DMA   1.3523 Buy
200-DMA   1.3269 Buy
STOCH(5,3)   57.765 Buy
MACD(12,26,9)   0.0018 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY106.50/USD and made an intraday high of JPY107.12/USD and settled the day up by 0.131% at JPY106.87/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   35.550 Buy
20-DMA   108.02 Sell
50-DMA   110.23 Sell
100-DMA   111.54 Sell
200-DMA   111.30 Sell
STOCH(9,6)   38.957 Sell
MACD(12,26,9)   -1.006 Sell

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