AAFX TRADING

Daily Market Lookup

  • The U.S. dollar slipped on Thursday after the Federal Reserve held back from increasing the pace of this year’s rate hikes, while worries over an impending announcement on trade tariffs from U.S. President Donald Trump capped Asian shares. The U.S. Federal Reserve raised interest rates on Wednesday and forecast two more hikes for 2018, based on board members’ median projection. Given that some investors had expected it to project three more rate hikes, the guidance was perceived as less hawkish than anticipated, a positive factor for risk assets in general. But otherwise the Fed was upbeat on the economy; revising up rate projections for 2019 and 2020 and raising the estimated longer-term “neutral” interest rate a touch, suggesting the current tightening cycle could last for longer than previously thought. That pushed the U.S. dollar lower in the currency market; with the dollar index testing this month’s low after posting its biggest fall in two months on Wednesday. Strong British wage data published on Wednesday cemented expectations that the Bank of England was likely to signal a May rate hike after its monetary policy meeting later in the day Following the Fed’s move, the People’s Bank of China gingerly raised the seven-day reverse repo rate, a key short-term interest rate, by 5 basis points, to prevent U.S.-China rate differential from getting too wide. With the Fed meeting over, investors are watching Trump, who is due to sign a memo on imposing tariffs on Chinese imports at 1630 GMT on Thursday. Concerns about a trade war between the world’s two largest economies has put many investors on guard. U.S. Trade Representative Robert Lighthizer said on Wednesday the tariffs would target China’s high-technology sector and could also include restrictions on Chinese investment in the United States Investors worry such a move could trigger countermeasures by China, possibly causing a vicious cycle of escalating retaliation.
  • Gold prices edged higher as the dollar continued to lose ground on Thursday, hours after the U.S. Federal Reserve moved to raise interest rates and China followed suit. The Fed raised its benchmark interest rates target range 0.25% to between 1.5% and 1.75%, which puts the effective funds rate at about 1.63%, the highest level since 2008 and forecast at least two more hikes in 2018. Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand for the precious metal. In Mainland China, the People’s Bank of Chinaraised its own short-term market interest rates Thursday morning in Asia, following the US Fed’s move. The PBOC raised rates on reverse repurchase agreements by five basis points to 2.55%.
  • The dollar fell to one-month lows against a currency basket on Thursday after the Federal Reserve raised interest rates but stuck to its forecast for two more hikes this year, while worries over heightened trade tensions also weighed. Some investors had expected the Fed to project three more rate hikes this year so the decision to stick to its forecast for two additional hikes was seen by some as less hawkish than expected. Fed policymakers did lift their 2019 projection to three increases from the two it forecast in December and also indicated that they could raise rates at a slightly more aggressive pace in coming years to keep the strengthening economy from overheating. U.S. President Donald Trump was expected to unveil up to $60 billion in new tariffs on Chinese imports later in the day. The Trump administration already imposed tariffs on U.S. steel and aluminum imports earlier this month. Investors are concerned that major U.S. trade partners could retaliate with similar measures and threaten the outlook for global growth. Sterling remained supported after strong UK wage growth data on Wednesday bolstered expectations that the Bank of England could flag a May rate hike after its policy meeting later in the day. Oil prices were firm on Thursday, buoyed by a surprise decline in U.S. crude inventories as well as ongoing supply cuts led by OPEC, although a relentless rise in U.S. oil output threatens to undermine efforts to tighten the market. Both benchmarks are hovering just below their highest since early February, having risen around 10 percent from March lows. Some support for crude futures came from currency markets, where the dollar fell as Federal Reserve officials stuck to their view of three rate increases for 2018, even as they delivered an expected quarter point rate hike. In oil markets, U.S. crude inventories fell 2.6 mn barrels in the week ended March 16 to 428.31 million barrels, the EIA said late on Wednesday. Dutch bank ING said the drawdown in U.S. crude inventories was down to a fall in imports by around 500K bpd to an average 7.08 mn bpd last week, and a rise in exports by 86,000 bpd to an average 1.57 mn bpd. Also, refinery utilization rates rose above 90 percent for the first time since early February. Further supporting oil prices has been supply restraint led by the OPEC and Russia, which started in 2017 and is scheduled to go on for the rest of 2018. OPEC said on Wednesday the cuts were close to having the desired effect of bringing down global inventories to five year averages, although it gave little detail. The overall bullish mood is being somewhat tempered by U.S. crude production, which climbed to a fresh record of 10.4 mn bpd last week, putting the United States ahead of top exporter Saudi Arabia and within reach of Russia's 11 million bpd.

 

 
Intraday RESISTANCE LEVELS
22nd March 2018 R1 R2 R3
GOLD-XAU 1,331 1,340 1,350-1,358
Silver-XAG 17.00 17.40 17.70-18.20
Crude Oil 65.50 66.60-67.00 68.00
EURO/USD 1.2400 1.2450 1.2510-1.2560
GBP/USD 1.4200-1.4250 1.4300 1.4350
USD/JPY 106.00-106.70 107.50 108.45-109.00

Intraday SUPPORTS LEVELS
22nd March 2018 S1 S2 S3
GOLD-XAU 1,320 1,313-1,306 1,300
Silver-XAG 16.50 15.6016.00-15.80 15.60
Crude Oil 64.70-64.20 63.10 62.70-62.00
EURO/USD 1.2350-1.2300 1.2210 1.2160-1.2100
GBP/USD 1.4150-1.4070 1.4000 1.3900-1.3855
USD/JPY 105.50-104.90 104.50 104.00

Intra-Day Strategy (22nd 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$1336.54/oz and low of US$1318.18/oz. Gold was down by 0.423% at US$1331.93/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 1331-1358 keeping stop loss closing above 1358 and targeting 1320-1314-1306 and 1300-1294. Buy above 1320-1290 with risk below 1290, targeting 1331-1340 and 1350-1358.

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

Technical Indicators

Name   Value Action
14DRSI  

53.8006

Buy
20-DMA   1322.82 Sell
50-DMA  

1330.90

Buy
100-DMA   1306.17 Buy
200-DMA   1290.83 Buy
STOCH(5,3)   63.590 Sell
MACD(12,26,9)   -1.390 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$16.63/oz and low of US$16.14/oz. Silver settled up by 2.47% at US$16.54/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 16.50-15.00 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     16.50
S2     15.6016.00-15.80
S3     15.60

Intraday  Resistance Levels
R1     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)   57.868 Buy
MACD(12,26,9)   -0.1045 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$65.48/bbl, intraday low of US$63.52/bbl and settled up by 2.79% to close at US$65.39/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 overbought 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     64.70-64.20
S2     63.10
S3     62.70-62.00

Intraday Resistance Levels
R1     65.50
R2     66.60-67.00
R3     68.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.110 Sell
20-DMA   62.25 Sell
50-DMA   62.69 Sell
100-DMA   60.39 Buy
200-DMA   54.47 Buy
STOCH(5,3)   92.873 Buy
MACD(12,26,9)   0.506 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.2241/EUR, high of US$1.2349/EUR and settled the day up by 0.776% to close at US$1.2337/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 1.2400-1.2600 targeting 1.2350-1.2300-1.2210 and 1.2160-1.2100 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     1.2350-1.2300
S2     1.2210
S3     1.2160-1.2100

Intraday  Resistance Levels
R1     1.2400
R2     1.2450
R3     1.2510-1.2560

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.279 Buy
20-DMA   1.2317 Buy
50-DMA   1.2330 Buy
100-DMA   1.2076 Buy
200-DMA   1.1881 Buy
STOCH(5,3)   50.380 Buy
MACD(12,26,9)   0.00061 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3997/GBP, high of US$1.4149/GBP and settled the day up by 0.978% to close at US$1.4136/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 1.4200-1.4350 with targets at 1.4150-1.4100 and 1.4000-1.3900-1.3855. 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     1.4150-1.4070
S2     1.4000
S3     1.3900-1.3855

Intraday Resistance Levels
R1     1.4200-1.4250
R2     1.4300
R3     1.4350

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

66.630

Buy
20-DMA   1.3924 Sell
50-DMA   1.3957 Buy
100-DMA   1.3653 Buy
200-DMA   1.3362 Buy
STOCH(5,3)   85.039 Buy
MACD(12,26,9)   0.0047 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY105.87/USD and made an intraday high of JPY106.63/USD and settled the day down by 0.431% at JPY106.06/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     105.50-104.90
S2     104.50
S3     104.00

INTRADAY RESISTANCE LEVELS
R1     106.00-106.70
R2     107.50
R3     108.45-109.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.185 Buy
20-DMA   106.34 Sell
50-DMA   107.92 Sell
100-DMA   110.35 Sell
200-DMA   110.90 Sell
STOCH(9,6)   45.269 Sell
MACD(12,26,9)   -0.5 Sell

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