AAFX TRADING

Daily Market Lookup

  • Asian shares extended losses on Wednesday and bonds were sold off as weak factory data from China revived worries about global economic growth amid fears of faster rate rises in the United States. It is down more than 4.5 percent in February after global equity markets were mauled at the start of the month by worries U.S. inflation is picking up. Asian markets had opened mildly lower but selling intensified after data showed growth in China’s manufacturing sector in February slowed more than expected to the weakest in over 1-1/2 years as the Lunar New Year holidays disrupted business activity and tougher pollution rules curtailed factory output. Growth in China’s services industry also slowed, suggesting the key sector was starting to display signs of fatigue. The services sector accounts for over half of China’s economy. However, analysts cautioned the timing of the long holiday may have skewed the activity readings, and a clearer picture of conditions in China may not emerge for another month Sentiment was already sour after Fed’s Jerome Powell gave an upbeat view of the U.S. economy on Tuesday and said recent data had strengthened his confidence on inflation. When asked about likely catalysts for more than three rate hikes in 2018, he said each member would write a new “dot plot” rate path ahead of the March meeting and that he wouldn’t want to prejudge that outcome. Rate futures fell following Powell’s remarks as traders began pricing in about a one-in-three chance of a fourth hike this year. Fears of faster U.S. rate hikes have caused anxiety that other central banks will start to tighten policy and raise borrowing costs. That would in turn hurt corporate earnings, clouding the outlook for what had been expected to be another solid year of global economic growth. The Fed moved three times in 2017 and is seen as certain to do the same or more this year, with the first move expected as early as March. The dollar held on to gains after rallying against most major currencies overnight. Dollar bulls were wrongfooted after the Bank of Japan announced it would trim the amount of super long Japanese government bonds it offered to purchase at its regular debt-buying operation.
  • Testifying before the U.S. House of Representatives’ Financial Services Committee, Powell acknowledged the economy had strengthened recently, a remark that prompted investors to increase bets on four rate increases in 2018 The Fed’s last round of economic projections in December pointed to three rate increases this year Powell’s overall tone, however, was one of continuity, as he told lawmakers the Fed would balance the need to guard against excessive inflation with the benefits of allowing the economy to enjoy the “tailwinds” of tax cuts and strong global growth. He said the Fed was in a “process of discovering” how low unemployment could fall before inflation took hold. The U.S. unemployment rate is at a 17-year low of 4.1%. The testimony was Powell’s first signal as Fed chief that the Trump administration’s massive tax overhaul and spending plans will not prompt any dramatic shifts in Fed policy. “Gradual” has been the operative word used by the central bank since it began raising rates under Powell’s predecessor, Janet Yellen, in late 2015. The Fed is expected to push through its first rate increase of 2018 at its next policy meeting in March, when it will also provide fresh economic projections and Powell will hold his first press conference. Pressed by some Democratic lawmakers about the impact of inequality on the economy, the gap in unemployment rates between whites and blacks, and on the economic implications of stricter immigration, Powell largely recited the Fed’s commitment to its goal of maximizing employment with stable prices. Fed officials, particularly at the regional level, have lately focused their research on parts of the economy left behind during the recovery from the crisis, and some macroeconomic research has suggested rising inequality could impair overall growth.
  • Oil prices fell on Wednesday as weak Chinese and Japanese industrial data triggered concerns of an economic slowdown that could lower oil demand, and as an industry data report showed an increase in U.S. crude stockpiles amid soaring output. Traders said oil prices declined on concerns of a slowdown in the global economy after China reported on Wednesday that factory growth in February was at its lowest since July 2016. China is the world's second-biggest economy and the biggest importer of oil after overtaking the Unites States last year. Crude oil demand is highly correlated to economic growth. While China's week-long Lunar New Year holiday this month disrupted business activity, traders also pointed to tougher pollution rules that curtailed factory output. In Japan, the world's third-largest economy, industrial output in January took its biggest tumble since a devastating earthquake in March 2011, highlighting a weakening in demand and a build up of inventory. Data on Tuesday from the API showed that crude inventories rose by 933K barrels in the week to Feb. 23, to 421.2 mn barrels. Refinery crude runs dropped by 209K bpd, the API data also showed, implying a drop in demand for feedstock crude. Gasoline stocks rose by 1.9 mn barrels Official data from the U.S. EIA is due out later on Wednesday. Soaring U.S. production has pressured oil prices at a time when the OPEC and Russia have reduced output to support prices. U.S. crude oil production has risen by a fifth since mid-2016 to more than 10 mn bpd. On Tuesday, IEA Director Fatih Birol said the United States will likely overtake Russia as the world's biggest oil producer by 2019. The United States overtook Saudi Arabia, the world's top crude oil exporter, late last year.

 

 
Intraday RESISTANCE LEVELS
28th February 2018 R1 R2 R3
GOLD-XAU 1324-1,331 1,340 1,350
Silver-XAG 17.00 17.40-17.70 18.20
Crude Oil 62.80-63.40 64.00 64.70
EURO/USD 1.2300 1.2390-1.2450 1.2520
GBP/USD 1.3950 1.4050 1.4100-1.4170
USD/JPY 107.50 108.45 109.00-110.10

Intraday SUPPORTS LEVELS
28th February 2018 S1 S2 S3
GOLD-XAU 1,313-1,306 1,300 1,287
Silver-XAG 16.20-15.90 15.60 15.00
Crude Oil 62.20 61.50-61.00 60.50
EURO/USD 1.2210-1.2160 1.2090 1.2005
GBP/USD 1.3900-1.3855 1.3765 1.3700
USD/JPY 106.90 106.00-105.50 104.90

Intra-Day Strategy (28th 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$1336.63/oz and low of US$1313.35/oz. Gold was down by 1.078% at US$1318.37/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 1324-1350 keeping stop loss closing above 1350 and targeting 1314-1306 and 1300-1287. Buy above 1320-1310 with risk below 1310, targeting 1331-1340 and 1350-1358-1366.

 
Intraday Support Levels
S1     1,313-1,306
S2     1,300
S3     1,287
Intraday Resistance Levels
R1     1324-1,331
R2     1,340
R3     1,350

Technical Indicators

Name   Value Action
14DRSI  

43.604

Buy
20-DMA   1331.54 Sell
50-DMA  

1323.31

Buy
100-DMA   1299.89 Buy
200-DMA   1286.59 Buy
STOCH(5,3)   26.071 Buy
MACD(12,26,9)   -0.197 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$16.68/oz and low of US$16.31/oz. Silver settled down by 1.38% at US$16.40/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   41.491 Buy
20-DMA   16.58 Sell
50-DMA   16.81 Sell
100-DMA   16.78 Sell
200-DMA   16.83 Sell
STOCH(5,3)   32.645 Sell
MACD(12,26,9)   -0.0108 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$63.99/bbl, intraday low of US$62.59/bbl and settled down by 1.908% to close at US$62.72/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 62.20-61.50 and 61.00-60.50. Buy above 62.20-60.50 with risk daily closing below 60.50 and targeting 62.80-63.40 and 64.00-64.70-65.50.

 
Intraday Support Levels
S1     62.20
S2     61.50-61.00
S3     60.50

Intraday Resistance Levels
R1     62.80-63.40
R2     64.00
R3     64.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.864 Sell
20-DMA   61.97 Sell
50-DMA   62.22 Sell
100-DMA   58.85 Buy
200-DMA   53.36 Buy
STOCH(5,3)   68.491 Buy
MACD(12,26,9)   -0.108 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.2220/EUR, high of US$1.2345/EUR and settled the day down by 0.682% to close at US$1.2231/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 1.2300-1.2520 targeting 1.2210-1.2160 and 1.2090-1.2005 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     1.2210-1.2160
S2     1.2090
S3     1.2005

Intraday  Resistance Levels
R1     1.2300
R2     1.2390-1.2450
R3     1.2520

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.488 Buy
20-DMA   1.2344 Buy
50-DMA   1.2208 Buy
100-DMA   1.1984 Buy
200-DMA   1.1792 Buy
STOCH(5,3)   18.673 Sell
MACD(12,26,9)   0.0010 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3856/GBP, high of US$1.3996/GBP and settled the day down by 0.429% to close at US$1.3906/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 1.3950-1.41700 with targets at 1.3900-1.3855 and 1.3765- 1.3700. Buy above 1.3900-1.3650 with stop loss closing below 1.3650 targeting 1.3950-1.4050-1.4100 and 1.4170-1.4250.

 
Intraday Support Levels
S1     1.3900-1.3855
S2     1.3765
S3     1.3700

Intraday Resistance Levels
R1     1.3950
R2     1.4050
R3     1.4100-1.4170

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

48.069

Buy
20-DMA   1.3965 Sell
50-DMA   1.3814 Buy
100-DMA   1.3539 Buy
200-DMA   1.3278 Buy
STOCH(5,3)   31.3661 Buy
MACD(12,26,9)   0.0032 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY106.77/USD and made an intraday high of JPY107.66/USD and settled the day up by 0.392% 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   39.501 Buy
20-DMA   107.86 Sell
50-DMA   110.03 Sell
100-DMA   111.44 Sell
200-DMA   111.26 Sell
STOCH(9,6)   48.429 Sell
MACD(12,26,9)   -0.869 Sell

AAFX TRADING
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