AAFX TRADING

Daily Market Lookup

  • Asian stocks fell on Thursday after Wall Street marked its worst monthly performance in two years as the impact from new Federal Reserve Chief Jerome Powell’s hawkish-sounding comments reverberated across the broader risk asset markets. Investors have been on edge in recent weeks amid concerns higher interest rates in advanced economies, led by the United States, could dent world growth. Powell, in his first public appearance as head of the Fed, had vowed on Tuesday at a congressional hearing to prevent the economy from overheating while sticking with a plan to gradually raise interest rates. Those comments rekindled speculation in the equity markets about the pace of U.S. monetary tightening this year being more rapid than expected, amid concerns that higher borrowing rates could crimp corporate activity and cool economic growth. Chinese shares bucked the trend and edged up after a private survey showed growth in China’s manufacturing sector picking up to a six-month high. Shanghai shares rose 0.4 percent. The losses in Asia came amid a broad selloff on Wall Street; where the Dow and S&P 500 capped their worst months since Jan 16 overnight after suffering sharp losses early in February. It went on to recover a bulk of those losses before the rebound stalled following Powell’s comments. The Fed’s last round of economic projections in December pointed to three rate increases this year, but views expressed by Powell prompted investors to increase bets on four rate increases in 2018. A stronger greenback tends to weigh on commodities including crude, as it makes it more expensive for non-U.S. buyers of the dollar-denominated products. The common currency came under pressure after data on Wednesday showed euro zone inflation slowing to a 14-month low and underscored the ECB’s caution in removing monetary stimulus.
  • Japanese Prime Minister Shinzo Abe has abandoned for now a key labor law reform aimed at boosting productivity after admitting data used to support the change was flawed, an embarrassing political climb-down likely to disappoint businesses and investors Japan's Prime Minister Shinzo Abe speaks to the media after phone talks with U.S. President Donald Trump at Abe's official residence in Tokyo, Japan, in this photo taken by Kyodo February 14, 2018. Abe had pledged to pass in the current session of parliament, set to end in June, a package of reforms to increase labor market flexibility and allow a more efficient allocation of resources, a core part of his “Abenomics” recipe for growth. But after weeks of defending the reforms against opposition attack after the government admitted some supporting data was flawed, Abe confirmed on Thursday that one of the most contentious parts of the package would be dropped for now. The change would have expanded a system of “discretionary labor” where employees are regarded as having worked a certain number of hours and paid a fixed wage regardless of how long they actually work. The flawed data related primarily to this proposal. Abe came to office in December 2012 promising to revive the economy with “three arrows” of his “Abenomics” policies: hyper-easy monetary policy, fiscal spending and structural reforms. Critics say he has lagged on the third part of this agenda. Another part of the package would expand the categories of highly skilled and highly paid professions with no limits on their working hours. That provision remains for now, but is already facing similar opposition attacks. Some members of Abe’s Liberal Democratic Party favor cutting out this provision, too.
  • Oil prices were little changed on Thursday after falling in the previous two sessions as investors shied away from riskier assets amid volatile equity markets and the U.S. dollar gained, limiting overall interest in commodities. Both global benchmark oil futures fell sharply on Wednesday after crude and gasoline inventories in the United States rose unexpectedly. Some industry sources said Wednesday’s decline was also due to profit-taking by market participants at the end of the month after oil hit a three-week high earlier this week. A stronger U.S. dollar limits demand for dollar-denominated commodities such as oil since investors paying in other currencies must pay a higher price. U.S. crude inventories rose by 3 million barrels last week, compared with analyst expectations for a build of 2.1 mn barrels, weekly data by the EIA showed. Gasoline stocks also rose by 2.5 mn barrels against expectations for a 190K barrel drop, which pushed gasoline futures sharply lower. Distillate stockpiles, which include diesel and heating oil, fell by 1 mn barrels, versus expectations for a 709,000-barrel drop. Soaring U.S. crude production has also kept a lid on oil prices this year, even though producers, led by the Organization of the Petroleum Exporting Countries and Russia, have reduced output U.S. crude oil production rose to a record 10.057 mn bpd in November and retreated slightly in December to 9.949 million bpd, the EIA said on Wednesday. OPEC, meanwhile, is doing its part to keep a lid on prices. The group’s oil output fell in February to a 10-month low as the United Arab Emirates joined other Gulf members in over-delivering on the reduction pact, a Reuters survey found on Wednesday.

 

 
Intraday RESISTANCE LEVELS
1st March 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 62.20 62.80-63.40 64.00
EURO/USD 1.2300 1.2390-1.2450 1.2520
GBP/USD 1.3765 1.3855-1.3900 1.3950
USD/JPY 107.50 108.45 109.00-110.10

Intraday SUPPORTS LEVELS
1st March 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 61.50-61.00 60.50 58.05
EURO/USD 1.2210-1.2160 1.2090 1.2005
GBP/USD 1.3700-1.3620 1.3550 1.3500
USD/JPY 106.70 106.00-105.50 104.90

Intra-Day Strategy (1st March 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 Wednesday made its intraday high of US$1322.43/oz and low of US$1315.50/oz. Gold was up by 0.040% at US$1317.97/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 Wednesday made its intraday high of US$16.49/oz and low of US$16.34/oz. Silver settled down by 0.012% at US$16.39/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 Wednesday made an intra‐day high of US$63.34/bbl, intraday low of US$61.25/bbl and settled down by 2.088% to close at US$61.40/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 62.20-64.00 with stop loss at 64.00; targeting 62.20-61.50 and 61.00-60.50. Buy above 61.50-60.50 with risk daily closing below 60.50 and targeting 62.20-62.80-63.40 and 64.00-64.70.

 
Intraday Support Levels
S1     61.50-61.00
S2     60.50
S3     58.05

Intraday Resistance Levels
R1     62.20
R2     62.80-63.40
R3     64.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.415 Sell
20-DMA   61.70 Sell
50-DMA   62.28 Sell
100-DMA   58.94 Buy
200-DMA   53.41 Buy
STOCH(5,3)   30.964 Buy
MACD(12,26,9)   -0.037 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.2240/EUR, high of US$1.2240/EUR and settled the day down by 0.318% to close at US$1.2192/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   42.326 Buy
20-DMA   1.2326 Buy
50-DMA   1.2214 Buy
100-DMA   1.1988 Buy
200-DMA   1.1797 Buy
STOCH(5,3)   5.798 Sell
MACD(12,26,9)   0.0016 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3755/GBP, high of US$1.3915/GBP and settled the day down by 1.064% to close at US$1.3758/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 1.3765-1.3950 with targets at 1.3700-1.3620 and 1.3550-1.3500. Buy above 1.3700-1.3500 with stop loss closing below 1.3500 targeting 1.3765-1.3855 and 1.3900-1.3950-1.4050.

 
Intraday Support Levels
S1     1.3700-1.3620
S2     1.3550
S3     1.3500

Intraday Resistance Levels
R1     1.3765
R2     1.3855-1.3900
R3     1.3950

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.854

Buy
20-DMA   1.3933 Sell
50-DMA   1.3818 Buy
100-DMA   1.3543 Buy
200-DMA   1.3281 Buy
STOCH(5,3)   7.525 Sell
MACD(12,26,9)   -0.0052 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY106.55/USD and made an intraday high of JPY107.52/USD and settled the day down by 0.605% at JPY106.66/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     106.70
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   39.105 Buy
20-DMA   107.86 Sell
50-DMA   110.03 Sell
100-DMA   111.44 Sell
200-DMA   111.26 Sell
STOCH(9,6)   40.429 Sell
MACD(12,26,9)   -0.869 Sell

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