AAFX TRADING

Daily Market Lookup

  • Global shares held firm near three-week highs on Tuesday as U.S. borrowing costs eased ahead of Federal Reserve Chairman Jerome Powell’s awaited first congressional testimony later in the day. Powell’s debut appearance is seen as critical for financial markets at a time when many investors are nervous about the Fed’s policy normalization following years of stimulus after the financial crisis almost a decade ago. Many investors expect the Fed to raise interest rates three times this year, with some pundits predicting four, if U.S. inflation starts to take off, especially as growth is set to get another boost from the Trump administration’s tax cuts and spending plans. Yet, there are worries higher dollar bond yields could prompt investors to shift funds to bonds from riskier assets, especially when the valuation of the world’s stocks are quite expensive even after their sell-off earlier this month. A rise in dollar interest rates could also bode ill for potential borrowers, including U.S. home buyers and many companies that have expanded borrowing for years to take advantage of low dollar funding costs. He said that while corporate earnings will likely remain strong for some time longer, underpinning stocks, market volatility will be higher.
  • Gold prices remained mildly supported on Tuesday, as sentiment on the greenback was vulnerable ahead of Federal Reserve Chairman Jerome Powell's first congressional testimony scheduled later in the week. 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. Gold is sensitive to moves in the dollar. A weaker dollar makes gold less expensive for holders of foreign currency. 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.
  • The dollar eased on Tuesday as investors awaited a slew of economic data this week and Federal Reserve Chairman Jerome Powell’s testimony, which could determine whether the U.S. currency’s recovery from a three-year low has more room to run. The focus this week is Powell’s first congressional testimony, at a time when investors are nervous over the pace of U.S. monetary tightening as it unwinds years of stimulus. Powell will 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. Powell will probably sound optimistic on the economic outlook, but stress patience in assessing whether inflation will head higher, said Roy Teo, investment strategist for LGT Bank in Singapore. Teo added that this is especially the case given the prevailing market expectations for the Fed’s preferred inflation measure, the core PCE price index, due on Thursday. If that turns out to be the case, the hurdle for the Fed to upgrade its projections for the number of interest rate hikes this year at its policy meeting in March will be relatively high, LGT Bank’s Teo said. This week is crammed with U.S. economic data on consumer confidence, revised fourth-quarter growth, manufacturing and personal income and spending. Italians vote in a national election on Sunday, while the leading political parties in Germany will decide on a coalition deal that could secure Angela Merkel a fourth term as chancellor. Euro zone inflation data due later this week further added to a nervous outlook for euro trading. On Monday, ECB President Mario Draghi spoke before the European Parliament and struck an optimistic tone about the euro zone economy. He said, however, that inflation has yet to show more convincing signs of a sustained upward adjustment.
  • Oil prices on Tuesday erased earlier gains as investor concerns about rising U.S. oil output offset signs of stronger demand and faith in the ability of OPEC production curbs to curtail supply Soaring U.S. production is upending global oil markets, coming at a time when other major producers - including Russia and members of the Middle East-dominated OPEC have been withholding output to prop up prices. The United States will overtake Russia as the world’s biggest oil producer by 2019 at the latest, the IEA Executive Director Fatih Birol said on Tuesday. U.S. output was 10.27 mn day bpd, according to weekly government data released last Thursday, higher than the latest figures for Saudi Arabia, the world’s largest exporter, and just below Russia. Earlier on Tuesday prices gained, extending multi-day rises for both crude futures. Last week, the U.S. EIA said there was a surprise draw on oil stockpiles amid a drop in imports and a surge in exports. He was referring to Libya’s National Oil Corp’s declaration of force majeure on Saturday for the 70K bpd El Feel oilfield after it was closed by a protest by guards. U.S. crude inventories are forecast to have risen by 2.7 mn barrels last week, a preliminary Reuters poll showed on Monday Gasoline stocks are expected to fall by 600K barrels, while distillate inventories, which include heating oil and diesel fuel, may decline by 700K barrels. The API is scheduled to release its weekly data later on Tuesday, followed by the EIA on Wednesday.

 

 
Intraday RESISTANCE LEVELS
27th 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
27th February 2018 S1 S2 S3
GOLD-XAU 1,331-1324 1,320 1,310-1,303
Silver-XAG 16.20-15.90 15.60 15.00
Crude Oil 63.40-62.80 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 (27th 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$1340.94/oz and low of US$1326.57/oz. Gold was down by 0.382% at US$1333.16/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 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 1340-1366 keeping stop loss closing above 1366 and targeting 1331-1320-1310 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  

51.034

Buy
20-DMA   1333.63 Sell
50-DMA  

1322.48

Buy
100-DMA   1299.69 Buy
200-DMA   1286.38 Buy
STOCH(5,3)   41.014 Buy
MACD(12,26,9)   2.107 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$16.75/oz and low of US$16.44/oz. Silver settled up by 1.155% 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 16.00-15.00 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   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 Monday made an intra‐day high of US$64.16/bbl, intraday low of US$62.97/bbl and settled up by 0.582% to close at US$63.88/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     63.40-62.80
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   57.413 Sell
20-DMA   62.12 Sell
50-DMA   62.13 Sell
100-DMA   58.73 Buy
200-DMA   53.31 Buy
STOCH(5,3)   91.313 Buy
MACD(12,26,9)   -0.169 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.2277/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   51.509 Buy
20-DMA   1.2358 Buy
50-DMA   1.2201 Buy
100-DMA   1.1980 Buy
200-DMA   1.1787 Buy
STOCH(5,3)   37.146 Sell
MACD(12,26,9)   0.0027 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3927/GBP, high of US$1.4069/GBP and settled the day up by 0.150% to close at US$1.3966/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  

53.563

Buy
20-DMA   1.3983 Sell
50-DMA   1.3805 Buy
100-DMA   1.3532 Buy
200-DMA   1.3273 Buy
STOCH(5,3)   55.073 Buy
MACD(12,26,9)   0.0032 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY106.36/USD and made an intraday high of JPY107.18/USD and settled the day down by 0.270% at JPY106.89/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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