AAFX TRADING

Daily Market Lookup

  • Oil traders’ worries over record supplies arriving in Asia just as the outlook for its key growth economies weakens have pulled down global crude benchmarks by a quarter since early October. Ship-tracking data shows a record of more than 22 million barrels per day (bpd) of crude oil hitting Asia’s main markets in November, up around 15% since January 2017, and an increase of nearly 5% since the start of this year. Much of this oil was ordered ahead of U.S. sanctions against Iran that were imposed this month, as refiners prepared for a sudden drop in supply. But with unexpectedly broad exemptions granted by Washington that allow Asia’s main oil consumers to continue buying crude from Iran, the overall supply drop has not materialized. China, Asia’s biggest economy, may see its first fall in car sales on record in 2018 as consumption is stifled amid a trade war between Washington and Beijing. In Japan, the economy contracted in the third quarter, hit by natural disasters but also by a decline in exports amid the rising protectionism that is starting to take its toll on global trade. Since then, there has been a dramatic shift in sentiment that has turned the entire forward curve for crude oil upside down.
  • The euro and sterling climbed higher on Wednesday as investor confidence rose on news Britain had struck a draft divorce deal with the European Union after more than a year of talks. The rise in the euro and sterling led investors to take profits on the U.S. dollar, which has retraced from a 16-month high. The sell-off in the dollar has been due to the improved risk sentiment around a potential Brexit deal and not because of any deterioration in the fundamentals of the U.S. economy. The euro and sterling constitute around 70 percent of the weight in the dollar index. Lien expects the dollar to strengthen further on the back of a robust U.S. economy, rising interest rates and its safe haven status. The British pound traded at $1.3009 on Wednesday, gaining 0.3 percent as traders reduced bearish bets after Britain and the European Union agreed a preliminary text that would allow the United Kingdom to leave the EU with a deal that avoids a chaotic "hard Brexit" departure. The challenge for British Prime Minister Theresa May is now to sell this deal to the parliament, where hardline Brexit supporters accuse her of surrendering to the EU. McCarthy said while there was still plenty of scope for further sterling appreciation, it would be prudent to wait on the sidelines until a clearer picture emerged.
  • The yuan was flat on Wednesday after China reported a mixed economic report card for October. The dollar was unchanged as traders awaited Federal Reserve chairman Jerome Powell’s speech later in the day. China’s October industrial output and third-quarter investment grew faster than expected, but retail sales missed expectations, the NBS reported on Wednesday. Industrial output jumped 5.9% in October, outperforming previous expectations of a 5.7% growth, the NBS said. Meanwhile, Fixed-asset investment growth came in at 5.7% in the January-October period, again beating analysts’ estimates of a 5.5% growth. Private-sector fixed-asset investment rose 8.8% in January-October, compared with an increase of 8.7% in the first three quarters. Private investment accounts for about 60% of overall investment in China. Retail sales, on the other hand, rose 8.6% year-on-year in October. Markets expected sales to rise by 9.1%. Federal Reserve chairman Jerome Powell will speak later in the day, reports citing analysts said Powell might attempt to calm concerns about the Fed hiking rates too fast. U.K. Prime Minister Theresa May will present a draft text of a Brexit withdrawal agreement to her senior ministers on Wednesday after both the UK and EU reached consensus on the Brexit divorce deal.
  • Oil struggled to find its footing on Wednesday after plunging 7 percent the previous session, with surging supply and the specter of faltering demand scaring off investors. Crude oil has lost over a quarter of its value since early October in what has become one of the biggest declines since a price collapse in 2014. The slump in spot prices has turned the entire forward curve for crude oil upside down. Spot prices in September were significantly higher than those for later delivery, a structure known as backwardation that implies a tight market as it is unattractive to put oil into storage. By mid-November, the curve had flipped into contango, when crude prices for immediate delivery are cheaper than those for later dispatch. That implies an oversupplied market as it makes it attractive to store oil for later sale. Oil markets are being pressured from two sides: a surge in supply and increasing concerns about an economic slowdown, as seen with the economic contractions in powerhouses Japan and Germany during the third quarter as well as in China's falling car sales. U.S. crude oil output from its seven major shale basins is expected to hit a record 7.94 mn bpd in December, the EIA said on Tuesday. That surge in onshore output has helped overall U.S. crude production hit a record 11.6mn bpd, making the United States the world's biggest oil producer ahead of Russia and Saudi Arabia. Most analysts expect U.S. output to climb above 12 million bpd within the first half of 2019. The surge in U.S. production is contributing to rising stockpiles. Official storage data is due on Wednesday from the Energy Information Administration, with analysts expecting a 3mn barrel rise in commercial crude inventories. The producer cartel of the OPEC has been watching the jump in supply and price slump with concern. OPEC has been making increasingly frequent public statements that it would start withholding crude in 2019 to tighten supply and prop up prices. That puts OPEC on a collision course with U.S. President Donald Trump, who publicly supports low oil prices and who has called on OPEC not to cut production.

 

 
Intraday RESISTANCE LEVELS
14th November 2018 R1 R2 R3
GOLD-XAU 1,207-1,214 1,221 1,230-1,238
Silver-XAG 14.30-14.80 15.10 15.50-16.40
Crude Oil 56.00-57.00 57.80 58.50-59.00
EURO/USD 1.1300 1.1340-1.1430 1.1500
GBP/USD 1.3000 1.3050-1.3100 1.3230
USD/JPY 114.00 114.70-115.50 116.00

Intraday SUPPORTS LEVELS
14th November 2018 S1 S2 S3
GOLD-XAU 1,200-1,195 1,189 1,180
Silver-XAG 14.00 13.61 13.00-12.40
Crude Oil 54.80-54.05 53.40 52.65
EURO/USD 1.1260-1.1200 1.1160 1.1100-1.1020
GBP/USD 1.2950-1.2900 1.2845 1.2780-1.2700
USD/JPY 113.50-113.00 111.50-111.20 111.50-111.20

Intra-Day Strategy (14th November 2018)
GOLD-XAU Sell on Strength
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Wednesday made its intraday high of US$1205.06/oz and low of US$1196.14/oz. Gold down by 0.129% at US$1201.80/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1228) and breakage above will call for 1240-1260. 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 1207-1238 keeping stop loss closing above 1266, targeting 1200-1195 and 1189-180. Buy above 1200-1180 with risk below 1180, targeting 1207-1214-1221 and 1238-1244.

 
Intraday Support Levels
S1     1,200-1,195
S2     1,189
S3     1,180
Intraday Resistance Levels
R1     1,207-1,214
R2     1,221
R3     1,230-1,238

Technical Indicators

Name   Value Action
14DRSI  

40.177

Buy
20-DMA   1226.67 Sell
50-DMA  

1209.90

Sell
100-DMA   1216.65 Sell
200-DMA   1267.30 Sell
STOCH(5,3)   45.970 Buy
MACD(12,26,9)   5.120 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$14.11/oz and low of US$13.94/oz. Silver settled down by 1.202% at US$13.97/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (15.45), breakage above will lead to16.05-16.30. 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 14.00-12.40 targeting 14.30-14.90-15.10 and 15.60-16.35; stop breakage below 12.40. Sell below 14.30-17.00 with stop loss above 17.00; targeting 13.90-13.50 and 13.00-12.40.

 
Intraday  Support Levels
S1     14.00
S2     13.61
S3     13.00-12.40

Intraday  Resistance Levels
R1     14.30-14.80
R2     15.10
R3     15.50-16.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   7.799 Buy
20-DMA   14.49 Sell
50-DMA   14.41 Sell
100-DMA   14.86 Sell
200-DMA   15.69 Sell
STOCH(5,3)   7.799 Sell
MACD(12,26,9)   -0.089 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$59.48/bbl, intraday low of US$54.88/bbl and settled down by 6.12% to close at US$55.36/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 50DMA i.e. 69.62 which is a support level 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 negative crossover for confirmation of bearish 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 56.00-59.00 with stop loss at 59.00; targeting 54.80-54.05 and 53.40-52.65. Buy above 54.80-52.65 with risk daily closing below 52.65 and targeting 56.00-57.00-57.80 and 58.50-59.00.

 
Intraday Support Levels
S1     54.80-54.05
S2     53.40
S3     52.65

Intraday Resistance Levels
R1     56.00-57.00
R2     57.80
R3     58.50-59.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   15.824 Sell
20-DMA   63.80 Buy
50-DMA   68.37 Buy
100-DMA   68.54 Buy
200-DMA   67.05 Buy
STOCH(5,3)   6.495 Buy
MACD(12,26,9)   -3.420 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1215/EUR, high of US$1.1292/EUR and settled the day up by 0.624% to close at US$1.1286/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1621), which become immediate resistance level, break below will target 1.1690-1.1730. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider sell.

Trading Strategy: Neutral to Buy

Buy above 1.1200-1.1020 with risk below 1.1020, targeting 1.1260-1.1340-1.1430 and 1.1490-1.1540-1.1610. Sell below 1.1260-1.1430 targeting 1.1200-1.1160 and 1.1100-1.1020 with stop-loss at daily closing above 1.1430.

 
Intraday Support Levels
S1     1.1260-1.1200
S2     1.1160
S3     1.1100-1.1020

Intraday  Resistance Levels
R1     1.1300
R2     1.1340-1.1430
R3     1.1500

TECHNICAL INDICATORS
Name   Value Action
14DRSI   19.004 Buy
20-DMA   1.1381 Sell
50-DMA   1.1518 Sell
100-DMA   1.1566 Sell
200-DMA   1.1825 Sell
STOCH(5,3)   6.036 Buy
MACD(12,26,9)   -0.0054 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2833/GBP, high of US$1.3046/GBP and settled the day down by 0.941% to close at US$1.2967/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3096) 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 positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; sell below 1.3000-1.3230 with targets at 1.2950-1.2900-1.2850 and 1.2780-1.2700. Buy above 1.2950-1.2700 with targets 1.3000-1.3050 and 1.3100-1.3150 with stop loss closing below 1.2700.

 
Intraday Support Levels
S1     1.2950-1.2900
S2     1.2845
S3     1.2780-1.2700

Intraday Resistance Levels
R1     1.3000
R2     1.3050-1.3100
R3     1.3230

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.758

Buy
20-DMA   1.2944 Buy
50-DMA   1.3032 Buy
100-DMA   1.3023 Buy
200-DMA   1.3381 Buy
STOCH(5,3)   32.891 Sell
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY113.57/USD and made an intraday high of JPY114.21/USD and settled the day up by 0.035% at JPY113.78/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (111.82), which is major support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. 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 buy as it has given positive crossover to confirm bullish stance.

Trading Strategy: Neutral to Sell

Sell below 113.50-115.50 with risk above 115.50 targeting 113.00-112.00-111.50 and 111.20-110.70. Long positions above 113.00-110.70 with targets of 113.50-114.00 and 114.70-115.50 with stop below 110.50.

 
Intraday Support Levels
S1     113.50-113.00
S2     111.50-111.20
S3     111.50-111.20

INTRADAY RESISTANCE LEVELS
R1     114.00
R2     114.70-115.50
R3     116.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.046 Buy
20-DMA   112.68 Sell
50-DMA   112.51 Sell
100-DMA   111.81 Buy
200-DMA   109.98 Buy
STOCH(9,6)   88.401 Buy
MACD(12,26,9)   0.278 Sell

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