AAFX TRADING

Daily Market Lookup

  • Gold prices were originally up to a decent start last week, boosted by a US CPI report. There, February’s inflation was in-line with expectations. The downside was that real average hourly earnings dropped, from +0.7% m/m to +0.4% m/m. The US Dollar fell on that aspect and this increased demand for the anti-fiat yellow metal. However, on Thursday things turned south. Absent a major catalyst, the greenback appreciated broadly against its major counterparts alongside local 2-year government bond yields. This naturally sapped the appeal of gold and caused it to close at its lowest point in more than two months. The move appeared to reflect pre-positioning for next week’s FOMC monetary policy announcement which brings us to what is in store for gold next week. This meeting is scheduled to occur on Wednesday at 18:00 GMT. There, the markets are unanimously expecting benchmark lending rates to increase to a range of 1.50 – 1.75%. However, that itself is not what investors will be paying attention to. Back towards the end of February, Fed’s new Chair Jerome Powell hinted the possibility of a fourth rate hike by the end of the year. Thus, the forward guidance of the monetary policy announcement will be what traders care most about. At this point, three rate hikes are just about priced in for this year looking at Fed Funds Futures. If the tone from the central bank echoes Mr. Powell’s favorable outlook for the economy, we could see an increase in hawkish policy expectations. This risks boosting the greenback and weakening gold. Beyond that, keep an eye out for Fed commentary towards the end of the week that could echo the rate decision. On Friday, we will get speeches from members Raphael Bostic, Neel Kashkari and Eric Rosengren all within a span of 12 hours. In addition, the preliminary estimate for February’s US durable goods orders will cross the wires on the 23rd as well. Taking into consideration the risks, the fundamental forecast for the yellow precious metal will have to be bearish for the coming week.
  • Global financial markets will focus on this week's Federal Reserve policy meeting, the first with Jerome Powell as chair. A number of other closely watched meetings are also taking place this week, starting with the G20 summit in Buenos Aires on Monday. The Bank of England and the Reserve Bank of New Zealand are due to hold monetary policy meetings later in the week. Staying in the UK, Brexit developments look set to continue to dominate the news agenda ahead of a European Council summit at the end of the week. Euro zone data on private sector growth will be closely watched amid speculation over how soon the European Central Bank will start to wind up its massive monetary stimulus program. Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets. The Fed is expected to raise rates by a quarter point at the conclusion of its two-day policy meeting at 2:00PM ET (1900GMT) on Wednesday. The banks rate statement will be closely watched for any indications as to the pace of monetary policy tightening for the remainder of the year. In December the Fed forecast three rate hikes for 2018, but an upbeat assessment of the economy by Powell late last month fueled speculation that a fourth rate hike could be on the cards. Investors will also be also watching for any signs of concern among policymakers over the prospects for a global trade war. The BoE will announce its rate decision at 1200GMT (7:00AM ET) on Thursday and Governor Mark Carney will hold a press conference shortly after the announcement. While no change is expected, the BoE could flag the possibility of a May rate hike if Monday’s inflation report and Tuesday’s jobs report indicate that the economy is on a solid footing. Brexit developments will also be in focus, as a two-day European Council summit begins on Thursday, with negotiators attempting to reach agreement on the transition period for the UK to leave the EU. The euro zone is to publish preliminary data on manufacturing and service sector activity for March at 0900GMT (4:00AM ET) on Wednesday. Ahead of the euro zone PMI's, France and Germany will release their own PMI reports. The data will offer more information about whether or not a phase of increasing growth is over for now. Growth in the euro area’s private sector remains strong, but momentum eased slightly in February after a very strong start to the year The ECB dropped its easing bias from its rate statement earlier this month, fueling expectations that it is moving closer to normalizing monetary policy in the euro area. ECB President Mario Draghi said that the solid economic recovery in the region had supported the decision to remove the easing bias. The RBNZ’S monetary policy update is due at 2000GMT on Wednesday. Almost no one is expecting any change to the Official Cash Rate, but it will be the last meeting before Adrian Orr takes over as governor on March 27 from Grant Spencer. Before Orr takes over a new Policy Target Agreement is expected to be unveiled and with a new government and RBNZ governor, the document is highly significant Details of the government’s plan to add employment to the RBNZ mandate alongside price stability will be watched closely.

 

 
Intraday RESISTANCE LEVELS
19th March 2018 R1 R2 R3
GOLD-XAU 1,320-1,331 1,340 1,350-1,358
Silver-XAG 16.50-17.00 17.40 17.70-18.20
Crude Oil 62.70 63.10-64.20 65.00
EURO/USD 1.2300-1.2350 1.2450 1.2510-1.2560
GBP/USD 1.4000 1.4070-1.4150 1.4250
USD/JPY 107.50106.70 107.50 108.45-109.00

Intraday SUPPORTS LEVELS
19th March 2018 S1 S2 S3
GOLD-XAU 1,313-1,306 1,300 1,290
Silver-XAG 16.00-15.80 15.60 15.30
Crude Oil 62.00 61.00 60.50-59.80
EURO/USD 1.2210-1.2160 1.2100 1.2050
GBP/USD 1.3910 1.3855 1.3800-1.3765
USD/JPY 106.00 105.50-104.90 104.50

Intra-Day Strategy (19th 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 Thursday made its intraday high of US$1327.82/oz and low of US$1314.87/oz. Gold was down by 0.641% at US$1316.02/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 1320-1358 keeping stop loss closing above 1358 and targeting 1314-1306 and 1300-1294. Buy above 1310-1290 with risk below 1290, targeting 1324-1331-1340 and 1350-1358.

 
Intraday Support Levels
S1     1,313-1,306
S2     1,300
S3     1,290
Intraday Resistance Levels
R1     1,320-1,331
R2     1,340
R3     1,350-1,358

Technical Indicators

Name   Value Action
14DRSI  

42.006

Buy
20-DMA   1324.93 Sell
50-DMA  

1330.53

Buy
100-DMA   1304.15 Buy
200-DMA   1289.76 Buy
STOCH(5,3)   35.709 Sell
MACD(12,26,9)   -2.601 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.48/oz and low of US$16.19/oz. Silver settled down by 0.970% at US$16.32/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 16.50-17.00-17.75 and 18.20-18.60; stop breakage below 15.00. Sell below 16.50-18.20 with stop loss above 18.20; targeting 16.20-15.60 and 15.00-14.50.

 
Intraday  Support Levels
S1     16.00-15.80
S2     15.60
S3     15.30

Intraday  Resistance Levels
R1     16.50-17.00
R2     17.40
R3     17.70-18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.013 Buy
20-DMA   16.50 Sell
50-DMA   16.76 Sell
100-DMA   16.70 Sell
200-DMA   16.77 Sell
STOCH(5,3)   31.089 Sell
MACD(12,26,9)   -0.0724 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$62.57/bbl, intraday low of US$61.12/bbl and settled up by 1.814% to close at US$62.30/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 62.00-64.20 with stop loss at 65.00; targeting 62.00-61.00-60.50 and 59.90-59.00. Buy above 62.00-59.80 with risk daily closing below 59.00 and targeting 62.70-63.10 and 64.20-65.00.

 
Intraday Support Levels
S1     62.00
S2     61.00
S3     60.50-59.80

Intraday Resistance Levels
R1     62.70
R2     63.10-64.20
R3     65.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.965 Sell
20-DMA   61.81 Sell
50-DMA   62.60 Sell
100-DMA   59.99 Buy
200-DMA   54.11 Buy
STOCH(5,3)   62.919 Buy
MACD(12,26,9)   -0.183 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.2259/EUR, high of US$1.2335/EUR and settled the day down by 0.130% to close at US$1.2288/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 1.2300-1.2600 targeting 1.2210-1.2160 and 1.2100-1.2050 with stop-loss at daily closing above 1.2600. Buy above 1.2210-1.2050 with risk below 1.2050 targeting 1.2300-1.2350-1.2450 and 1.2510-1.2570.

 
Intraday Support Levels
S1     1.2210-1.2160
S2     1.2100
S3     1.2050

Intraday  Resistance Levels
R1     1.2300-1.2350
R2     1.2450
R3     1.2510-1.2560

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.487 Buy
20-DMA   1.2321 Buy
50-DMA   1.2302 Buy
100-DMA   1.2048 Buy
200-DMA   1.1858 Buy
STOCH(5,3)   33.462 Buy
MACD(12,26,9)   0.0009 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3888/GBP, high of US$1.3979/GBP and settled the day up by 0.007% to close at US$1.3942/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 1.4000-1.4250 with targets at 1.3950-1.3900-1.3855 and 1.3800-1.3765-1.3700. Buy above 1.3950-1.3765 with stop loss closing below 1.3700 targeting 1.4000-1.4070 and 1.4150-1.4250.

 
Intraday Support Levels
S1     1.3910
S2     1.3855
S3     1.3800-1.3765

Intraday Resistance Levels
R1     1.4000
R2     1.4070-1.4150
R3     1.4250

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

53.336

Buy
20-DMA   1.3913 Sell
50-DMA   1.3913 Buy
100-DMA   1.3617 Buy
200-DMA   1.3336 Buy
STOCH(5,3)   75.268 Buy
MACD(12,26,9)   0.0069 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY105.59/USD and made an intraday high of JPY106.53/USD and settled the day down by 0.310% at JPY106.00/USD.

Technicals in Focus:

In daily charts, JPY is sustaining below 200DMA (111.15), which is major resistance 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 positive crossover to confirm bullish stance.

Trading Strategy: Neutral to Sell

Sell below 106.70-109.00 with risk above 109.00 targeting 106.00-105.50 and 104.90-104.20. Long positions above 105.50-104.90 with targets of 106.00-106.70-107.50 and 107.90-108.45 with stop below 104.90.

 
Intraday Support Levels
S1     106.00
S2     105.50-104.90
S3     104.50

INTRADAY RESISTANCE LEVELS
R1     107.50106.70
R2     107.50
R3     108.45-109.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.927 Buy
20-DMA   106.54 Sell
50-DMA   108.40 Sell
100-DMA   110.65 Sell
200-DMA   111.98 Sell
STOCH(9,6)   30.3351 Sell
MACD(12,26,9)   -0.611 Sell

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