AAFX TRADING

Daily Market Lookup

  • The rumblings of a global trade war shook stock and currency markets on Friday after U.S. President Donald Trump announced long-promised tariffs on Chinese goods and Beijing pledged to fight any such war to the end. Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 bn of imports from China, although they have a 30-day consultation period, raising the chance that final measures could be watered down. Investors fear that the U.S. measures could escalate into a trade war, with potentially dire consequences for the global economy. Beijing urged the United States on Friday to “pull back from the brink”. China unveiled its own plans on Friday to impose tariffs on up to $3 billion of U.S. imports in retaliation against U.S. tariffs on Chinese steel and aluminum products. As equities took a beating, the yen, often sought in times of market turmoil, rallied against the dollar.
  • The dollar plunged further against other currencies in Asia on Friday morning as U.S. tariffs imposed on Chinese imports and China’s retaliation measures rocked investors’ confidence and sent the dollar down. A lack of data on Friday left markets exposed to sentiment swings. U.S. President Donald Trump signed a presidential memorandum to target tariffs up to $60 bn in Chinese goods that represent “misappropriation of U.S. intellectual property”. In response to the U.S. anti-China tariffs, China planned to impose retaliatory tariffs on $3 billion of U.S. imports - 15% tariffs on steel pipes, fruit, wine and other products from the U.S. It also planned to add 25% tariffs on pork and recycled aluminum.   The trade in the pair was much driven by risk sentiment at this point as investors are stocking up on the safe-haven currency at times of market volatility, when the world’s two largest economies seem to be heading towards a trade war.
  • Gold finally broke out of its Asian session consolidation phase and spiked to over one-month tops in the last hour. After yesterday's modest pull-back, a fresh wave of US Dollar selling pressure was seen underpinning demand for dollar-denominated commodities - like gold. Adding to this, the US President Donald Trump's anti-China tariffs revived fears of a full-blown trade war and triggered a fresh wave of global risk aversion trade, which provided an additional boost to the precious metal's safe-haven appeal. The risk-off mood, as depicted by a selloff across global equity markets, was further reinforced by a follow-through retracement in the US Treasury bond yields and remained supportive of the strong bid tone surrounding the non-yielding metal. Meanwhile, possibilities of some trading stops being triggered on a move beyond $1340 level might have further collaborated to the commodity's sharp spike over the past hour or so. Hence, it would be prudent to wait for a follow-through buying interest to confirm if the up-move marks a fresh bullish breakout or is only a stop-run. Later during the early NA session, the release of US durable goods orders data might now provide some impetus and would be looked upon for some short-term trading impetus on the last trading day of the week.
  • Oil prices rose on Friday morning in Asia, lifted by a statement from Saudi Arabia that production curbs led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia will need to be extended into 2019. Saudi Arabian Energy Minister Khalid al-Falih said on Thursday that OPEC members will need to continue coordinating with Russia and other non-OPEC oil-producing countries on supply restraints in 2019 to reduce the global oil oversupply OPEC, of which Saudi Arabia is the de-facto leader, as well as a group of non-OPEC countries led by Russia, have been cutting crude output by 1.8 mn bpd to prop up oil prices. The pact began in January 2017 and is set to expire at the end of 2018, but Saudi Arabia now seems to be pushing for an extension. OPEC said earlier this week that the cuts were close to having the desired effect of reducing global inventories to five year averages, although it gave little detail.
  • But according to Falih, there is still some time to go before inventories will be brought down to normal levels. The strategy for 2019 will hopefully be identified by year-end, he said. Meanwhile, the U.S. continues to ramp up its crude production, which climbed to a new record of 10.4 million bpd last week, putting a drag on OPEC efforts to control supply. Having already surpassed top exporter Saudi Arabia in production, the U.S. is expected to overtake Russia as the top producer by late 2018, with output of more than 11 million bpd. Although global demand looks healthy, non-OPEC supply, led by the U.S., will grow by 1.8 mn bpd this year, while demand will only grow by about 1.5 mn bpd.

 

 
Intraday RESISTANCE LEVELS
23rd March 2018 R1 R2 R3
GOLD-XAU 1,350-1,357 1,363 1,370
Silver-XAG 17.00 17.40 17.70-18.20
Crude Oil 65.50 66.60-67.00 68.00
EURO/USD 1.2350-1.2400 1.2450 1.2510-1.2560
GBP/USD 1.4150 1.4200-1.4250 1.4300
USD/JPY 105.50 106.00-106.70 107.50

Intraday SUPPORTS LEVELS
23rd March 2018 S1 S2 S3
GOLD-XAU 1,340-1,331 1,320 1,313-1,306
Silver-XAG 16.50 16.00-15.80 15.60
Crude Oil 64.70-64.20 63.10 62.70-62.00
EURO/USD 1.2300 1.2210 1.2160-1.2100
GBP/USD 1.4070 1.4000 1.3900-1 3855
USD/JPY 104.90-104.40 103.90 103.10

Intra-Day Strategy (23rd 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$1334.77/oz and low of US$1324.71/oz. Gold was down by 0.223% at US$1328.81/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 overbought territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Sell on Strength

Based on the charts and explanations above; sell below 1350-1370 keeping stop loss closing above 1370 and targeting 1340-1331-1320 and 1314-1306. Buy above 1340-1306 with risk below 1306, targeting 1350-1357-1362-1370

 
Intraday Support Levels
S1     1,340-1,331
S2     1,320
S3     1,313-1,306
Intraday Resistance Levels
R1     1,350-1,357
R2     1,363
R3     1,370

Technical Indicators

Name   Value Action
14DRSI  

59.579

Buy
20-DMA   1323.42 Sell
50-DMA  

1330.96

Buy
100-DMA   1306.83 Buy
200-DMA   1291.23 Buy
STOCH(5,3)   85.0494 Buy
MACD(12,26,9)   0.153 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$16.59/oz and low of US$16.33/oz. Silver settled down by 1.088% at US$16.36/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     16.00-15.80
S3     15.60

Intraday  Resistance Levels
R1     17.00
R2     17.40
R3     17.70-18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.886 Buy
20-DMA   16.46 Sell
50-DMA   16.69 Sell
100-DMA   16.68 Sell
200-DMA   16.76 Sell
STOCH(5,3)   71.886 Buy
MACD(12,26,9)   -0.0630 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$65.64/bbl, intraday low of US$64.08/bbl and settled down by 2.00% to close at US$64.10/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 65.50-68.00 with stop loss at 68.00; targeting 64.70-64.20-63.10 and 62.70-62.00-61.00. Buy above 64.70-62.00 with risk daily closing below 62.00 and targeting 65.50-66.60 and 67.00-68.00.

 
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   60.849 Sell
20-DMA   62.27 Sell
50-DMA   62.68 Sell
100-DMA   60.49 Buy
200-DMA   54.56 Buy
STOCH(5,3)   82.287 Buy
MACD(12,26,9)   0.571 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.2284/EUR, high of US$1.2387/EUR and settled the day down by 0.259% to close at US$1.2305/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     1.2300
S2     1.2210
S3     1.2160-1.2100

Intraday  Resistance Levels
R1     1.2350-1.2400
R2     1.2450
R3     1.2510-1.2560

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.709 Buy
20-DMA   1.2315 Buy
50-DMA   1.2331 Buy
100-DMA   1.2082 Buy
200-DMA   1.1886 Buy
STOCH(5,3)   56.690 Buy
MACD(12,26,9)   0.00021 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.4074/GBP, high of US$1.4218/GBP and settled the day down by 0.261% to close at US$1.4099/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 1.4150-1.4300 with targets at 1.4070-1.4010 and 1.3900-1.3855. Buy above 1.4070-1.3855 with stop loss closing below 1.3855 targeting 1.4070-1.4150 and 1.4250-1.4300.

 
Intraday Support Levels
S1     1.4070
S2     1.4000
S3     1.3900-1 3855

Intraday Resistance Levels
R1     1.4150
R2     1.4200-1.4250
R3     1.4300

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

61.694

Buy
20-DMA   1.3928 Sell
50-DMA   1.3963 Buy
100-DMA   1.3661 Buy
200-DMA   1.3368 Buy
STOCH(5,3)   72.468 Sell
MACD(12,26,9)   0.0048 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY105.25/USD and made an intraday high of JPY106.06/USD and settled the day down by 0.431% at JPY105.30/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 105.50-108.00 with risk above 108.00 targeting 104.90-104.40 and 103.90-103.10. Long positions above 104.90-103.10 with targets of 105.50-106.00-106.70 and 107.50-107.90 with stop below 104.90.

 
Intraday Support Levels
S1     104.90-104.40
S2     103.90
S3     103.10

INTRADAY RESISTANCE LEVELS
R1     105.50
R2     106.00-106.70
R3     107.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   32.244 Buy
20-DMA   106.22 Sell
50-DMA   107.79 Sell
100-DMA   110.25 Sell
200-DMA   110.87 Sell
STOCH(9,6)   19.375 Sell
MACD(12,26,9)   -0.619 Sell

AAFX TRADING
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