AAFX TRADING

Daily Market Lookup

  • Asian shares fell on Tuesday after investors took profits in high-flying U.S. technology shares on fears of stiffer regulation as Facebook under fire following reports it allowed improper access to user data. The retreat came as investors braced for new Federal Reserve Chairman Jerome Powell's first policy meeting starting later in the day and amid concerns that U.S. President Donald Trump could impose additional protectionist trade measures. Facebook led the losses, tumbling 6.8 percent as the social media colossus faced demands from U.S. and European lawmakers to explain how a consultancy that worked on President Donald Trump's election campaign gained improper access to data on 50 mn Facebook users. In addition, worries about the potential for a trade war cast a shadow after U.S. President Trump imposed tariffs on steel and aluminum. The Trump administration is also expected to unveil up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, two officials briefed on the matter said Monday. The sharp fall in share prices put a lid on long-term U.S. bond yields while short-dated yields rose ahead of an expected rate hike from the U.S. Federal Reserve after its two-day policy meeting starting on Tuesday. Still, with a Fed rate rise already fully priced in, the dollar barely gained from the prospect of a rate hike. Instead it was the euro that stole the spotlight after Reuters reported that European Central Bank officials were shifting their debate from bond purchases to the expected path of interest rates.
  • The dollar remained soft despite expectation of the first rate hike this year ahead of the meeting of the Federal Open Markets Committee (FOMC) on Tuesday and Wednesday. Investors expect a hawkish Federal Reserve to send the greenback up. Investors await the FOMC meeting to see whether the Fed is planning three or four rate hikes this year. Analysts are also watching closely to see what will come from new Fed head Jerome Powell’s first meeting as chair. The Fed’s target inflation rate is 2%, and it has said it expects to hit that by the end of the year. The USD/JPY pair gained 0.12% to 106.23. The pair has been hit by a series of events recently, with some pressuring the pair due to risk aversion and some giving the pair a lift due to expectation of a rate hike. The hawkish Fed is sending the dollar up, but U.S. President Donald Trump’s tariff plans hampered investors’ risk appetite. On Tuesday, Japan's trade minister Hiroshige Seko said there was a “high possibility” the country would be exempted from U.S. tariffs on steel and aluminum. Seko noted Japanese steel and aluminum products were “irreplaceable” to the U.S. industry. Chinese President Xi Jinping’s comments on Tuesday also gathered some attention as he wrapped up the People’s Congress and said China would expand reform and opening while stepping up efforts to solve environmental problems.
  • The euro on Tuesday held on to gains made the previous day, when it rose on revived bets for the European Central Bank to wind down its bond-buying stimulus this year and to raise interest rates around the middle of 2019. The common currency had drawn strength on Monday from a source-based Reuters report that ECB policymakers are shifting the focus of their debates Policymakers are comfortable with market forecasts, including for a rate hike by mid-2019, and the debate is increasingly about the steepness of the rate path thereafter, as some want future expectations contained, given the slow rebound in inflation, five sources with direct knowledge of the discussion told Reuters. Sterling also stood tall after setting a one-month high against the dollar on Monday, as Britain and the European Union agreed to a 21-month post-Brexit transition period and a potential solution to avoid a "hard border" for Northern Ireland. Market participants are now pondering whether the U.S. Federal Reserve, which holds a two-day policy meeting that ends on Wednesday, will signal a faster pace of rate increases in the coming months as the labor market tightens further. Interest rate futures imply traders have fully priced in a rate increase this week, which would raise the target range to between 1.50% and 1.75%. Oil prices edged up on Tuesday, lifted by tensions in the Middle East, although rising output in the United States and shaky stock markets put a lid on further gains. Traders pointed to concerns in the Middle East, where the United States may reimpose sanctions on Iran, as well as tensions between Saudi Arabia and Iran. Worries about Venezuela’s tumbling crude production also supported oil markets. The International Energy Agency said last week that Venezuela, where an economic crisis has cut oil production by almost half since early 2005 to well below 2 million bpd PRODN-VE, was “clearly vulnerable to an accelerated decline”, and that such a disruption could tip global markets into deficit. Falls on global share markets helped cap gains. Markets are under pressure from concerns over a possible trade war between the United States and other major economies, as well as from fears of stiffer regulation as Facebook came under fire following reports it allowed improper access to user data. Also looming over oil markets has been surging U.S. crude oil production EIA, which has risen by more than a fifth since mid-2016, to 10.38 mn bpd, pushing it past top exporter Saudi Arabia. Many analysts expect global oil markets to flip from slight undersupply in 2017 and early this year into oversupply later in 2018.

 

 
Intraday RESISTANCE LEVELS
20th 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 1.2350 1.2450 1.2510-1.2560
GBP/USD 1.4250 1.4250 1.4300
USD/JPY 106.70 107.50 108.45-109.00

Intraday SUPPORTS LEVELS
20th March 2018 S1 S2 S3
GOLD-XAU 1,3001,313-1,306 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 1.2300 1.2210-1.2160 1.2100
GBP/USD 1.4000-1.3910 1.3855 1.3800-1.3765
USD/JPY 106.00 105.50-104.90 104.50

Intra-Day Strategy (20th 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 Monday made its intraday high of US$1319.52/oz and low of US$1319.52/oz. Gold was up by 0.265% at US$1316.77/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     1,3001,313-1,306
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  

43.487

Buy
20-DMA   1322.74 Sell
50-DMA  

1330.51

Buy
100-DMA   1305.06 Buy
200-DMA   1290.20 Buy
STOCH(5,3)   32.051 Sell
MACD(12,26,9)   -3.119 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$16.34/oz and low of US$16.20/oz. Silver settled down by 0.970% at US$16.30/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 Monday made an intra‐day high of US$62.40/bbl, intraday low of US$61.42/bbl and settled down by 0.144% to close at US$62.15/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 Monday made an intraday low of US$1.2257/EUR, high of US$1.2358/EUR and settled the day up by 0.374% to close at US$1.2338/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 1.2350-1.2600 targeting 1.2300-1.2210-1.2160 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     1.2300
S2     1.2210-1.2160
S3     1.2100

Intraday  Resistance Levels
R1     1.2350
R2     1.2450
R3     1.2510-1.2560

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.565 Buy
20-DMA   1.2317 Buy
50-DMA   1.2317 Buy
100-DMA   1.2062 Buy
200-DMA   1.1870 Buy
STOCH(5,3)   39.472 Buy
MACD(12,26,9)   0.00087 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3912/GBP, high of US$1.4087/GBP and settled the day up by 0.580% to close at US$1.4024/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 1.4070-1.4300 with targets at 1.4000-1.3950 and 1.3900-1.3855-1.3800. Buy above 1.4000-1.3765 with stop loss closing below 1.3700 targeting 1.4070-1.4150 and 1.4250-1.4300.

 
Intraday Support Levels
S1     1.4000-1.3910
S2     1.3855
S3     1.3800-1.3765

Intraday Resistance Levels
R1     1.4250
R2     1.4250
R3     1.4300

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 Monday made intra‐day low of JPY105.67/USD and made an intraday high of JPY106.30/USD and settled the day up by 0.0188% at JPY106.02/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     106.70
R2     107.50
R3     108.45-109.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.473 Buy
20-DMA   106.46 Sell
50-DMA   108.13 Sell
100-DMA   110.49 Sell
200-DMA   110.94 Sell
STOCH(9,6)   33.132 Sell
MACD(12,26,9)   -0.558 Sell

AAFX TRADING
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