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Daily Market Lookup

  • The Federal Reserve is expected to raise interest rates at its first policy meeting under Chairman Jerome Powell and may signal more hikes are coming in response to tax cuts and government spending that could further stoke a robust U.S. economy. The U.S. central bank projected late last year that it would lift rates three times in 2018, but some investors believe the fiscal stimulus and recent hints of inflation pressures will push policymakers to add an additional increase to the mix. The Fed is scheduled to issue its latest policy statement at 2 p.m. EDT (1800 GMT). Powell is due to hold a press conference half an hour later. Fed officials have speculated in recent weeks that the stimulus could drive more Americans into an already tight labor market and lift inflation to the central bank’s 2 percent target, or much above that level if the economy gets too hot. Yet analysts are split over whether the Fed, which is wary of an early misstep under its new leadership, will raise policy tightening expectations until more price pressures are clearly evident, especially given outside risks to the economy such as a possible global trade war. The Fed’s drive to stimulate the world’s largest economy in the wake of the 2007-2009 financial crisis and recession is drawing to a close. It raised its benchmark overnight lending rate three times last year, to a range of 1.25 to 1.50 percent, as joblessness fell and economic growth accelerated. It is expected to raise rates by another 25 basis points on Wednesday. With futures markets anticipating another increase in June, Powell's Fed could leave its rate outlook unchanged until then to see how the economy absorbs the $1.8 trillion in stimulus expected from the Trump administration tax cuts and planned spending. While recent home sales and retail spending data have been on the weak side, the overall economic picture has brightened this year. Inflation has strengthened after remaining below the Fed’s target for more than five years, and there have been more hints of wage gains. The central bank is expected on Wednesday to boost its economic growth forecasts for the next few years, and could project that the unemployment rate will fall well below the current 4.1 percent, which is seen as a low but stable level. The blockbuster U.S. jobs report for February could further convince Powell and his colleagues that the Fed’s stated “gradual” rate hike path could carry on longer than previously thought. A sign of this would be a rise in the Fed’s longer-term, or neutral, expected policy rate, currently at 2.8 percent. Powell, who took over from former Fed chief Janet Yellen in early February, triggered a brief global market selloff when he told U.S. lawmakers late last month that he had grown more confident in the economic outlook. Yet worries over a new hawkish central bank are likely overblown given Powell’s cautious, consensus-building approach. Seven of the 15 Fed policymakers who will update their forecasts on Wednesday have recently indicated the fiscal stimulus could boost their expectations for the economy, rate hikes, or for both, according to an analysis of public statements. New York Fed President William Dudley, one of the most influential policymakers, said four rate increases this year would still be considered “gradual,” noting that fiscal policy is turning “quite stimulative.”
  • Oil prices continued to climb on Wednesday morning in Asia amid tensions in the Middle East. Saudi Arabia’s Crown Prince Mohammed bin Salman arrived in Washington on Tuesday for a state visit, raising speculation for an agenda to ramp up pressure on Iran. Following renewed criticism of the 2015 nuclear deal, the U.S. could reimpose sanctions on Iran, a concern that has lifted oil prices. If the U.S. does reimpose sanctions on Iran, that would likely result in a 250,000 to 500,000 bpd drop in its exports by year-end, according to energy consultancy FGE. The nomination of Mike Pompeo as new U.S. Secretary of State also raises the likelihood of oil trade disruptions, given he fiercely opposed the 2015 pact as a member of Congress. Further supporting prices is healthy demand for oil. The American Petroleum Institute said on Tuesday that U.S. crude stocks fell by 2.7 million barrels in the week ended March 16 to 425.3 million, a sign of healthy demand. However, non-OPEC supply, led by the U.S., will grow by 1.8 million bpd this year, while demand will only grow by about 1.5 million bpd The U.S. has already surpassed top exporter Saudi Arabia in crude production and is expected to overtake Russia as the top producer by late 2018, with output of more than 11 million bpd. The relentless surge in U.S. production is capping oil prices and undermining efforts from the OPEC to prop up prices by withholding production. OPEC has been cutting output by around 1.2 million bpd since January 2017, which has inadvertently allowed the U.S. to take more market share.

 

 
Intraday RESISTANCE LEVELS
21st 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 64.20-64.70 65.50 66.60
EURO/USD 1.2300-1.2350 1.2450 1.2510-1.2560
GBP/USD 1.4070-1.4150 1.4250 1.4300
USD/JPY 106.70 107.50 108.45-109.00

Intraday SUPPORTS LEVELS
21st 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 63.10-62.70 62.00 61.00-60.50
EURO/USD 1.2210-1.2160 1.2100 1.2050
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 (21st 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 Tuesday made its intraday high of US$1318.18/oz and low of US$1318.18/oz. Gold was down by 0.423% at US$1310.92/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  

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 Tuesday made its intraday high of US$16.33/oz and low of US$16.10/oz. Silver settled down by 0.675% at US$16.17/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   40.159 Buy
20-DMA   16.46 Sell
50-DMA   16.71 Sell
100-DMA   16.69 Sell
200-DMA   16.76 Sell
STOCH(5,3)   21.270 Sell
MACD(12,26,9)   -0.1045 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     63.10-62.70
S2     62.00
S3     61.00-60.50

Intraday Resistance Levels
R1     64.20-64.70
R2     65.50
R3     66.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.933 Sell
20-DMA   62.04 Sell
50-DMA   62.62 Sell
100-DMA   60.27 Buy
200-DMA   54.36 Buy
STOCH(5,3)   89.924 Buy
MACD(12,26,9)   -0.185 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.2238/EUR, high of US$1.2354/EUR and settled the day down by 0.737% to close at US$1.2242/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   46.038 Buy
20-DMA   1.2311 Buy
50-DMA   1.2321 Buy
100-DMA   1.2068 Buy
200-DMA   1.1874 Buy
STOCH(5,3)   22.139 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$1.4065/GBP and settled the day up by 0.580% to close at US$1.3999/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     1.4070-1.4150
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 Tuesday made intra‐day low of JPY105.92/USD and made an intraday high of JPY106.60/USD and settled the day up by 0.471% at JPY106.52/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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