AAFX TRADING

Daily Market Lookup

  • Asian shares rallied on Monday after U.S. and Chinese leaders brokered a truce in their trade conflict, a relief for the global economic outlook and a tonic for emerging markets and battered oil prices. Trade-exposed currencies led the early gains, with the Australian dollar notching a four-month peak, while the dollar dropped to one-month lows against the yuan. China and the United States agreed to halt additional tariffs in a deal that keeps their trade war from escalating as the two sides try again to bridge their differences with fresh talks aimed at reaching a deal within 90 days. The White House said on Saturday that President Donald Trump told Chinese President Xi Jinping during high-stakes talks in Argentina that he would not boost tariffs on $200 billion of Chinese goods to 25 percent on Jan. 1 as previously announced. Indeed, many market players doubt the two countries can bridge their differences that cover a range of issues within three months. The dollar had come under pressure last week when comments by Federal Reserve Chair Jerome Powell were interpreted by markets as hinting at a slower pace of rate hikes. Powell was scheduled to testify on Wednesday to a congressional Joint Economic Committee. But the hearing is expected to be postponed to Thursday because major exchanges will be closed on Wednesday in honor of former U.S. President George H.W. Bush, who died on Saturday at the age of 94. The progress on Sino-U.S. trade and an easier dollar provided some support to commodity prices.
  • The dollar broadly weakened on Monday as investor demand for riskier assets rose after China and the United States agreed to a ceasefire in their trade war that has shaken global markets. Apart from trade, investor focus will also return to U.S. monetary policy, with the Federal Reserve expected to raise interest rates by 25 basis points later in December, which would be its fourth rate hike this year. The dollar had come under pressure last week when the market took comments by Fed Chairman Jerome Powell as hinting at a slower pace of rate hikes. Powell is scheduled to testify before a congressional Joint Economic Committee later this week. The British pound gained marginally versus the dollar to $1.2760. Sterling has posted losses for three consecutive weeks as traders bet that British Prime Minister Theresa May will not be able to pass her Brexit deal through Parliament on Dec. 11. Combined with the suspension of trade hostilities, the CNY was affected by the release of the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for November which suggested that factory activity has improved marginally. The Caixin PMI was 50.2 for November, beating a forecast of 50.0 and higher than the 50.1 recorded in October. On Friday, the official PMI came in at 50, below expectations. Despite the positive tone of the Caixin PMI reading, a sub-index that tracks new export orders fell to 47.7, down from 48.8 in October.
  • Oil prices soared by around 5 percent on Monday after the United States and China agreed to a 90-day truce in their trade war, and ahead of a meeting this week by producer club OPEC that is expected to result in a supply cut. U.S. crude prices were further pushed up by an announcement from Canada that Alberta province will force producers to cut output by 8.7 percent, or 325,000 barrels per day (bpd), to deal with a pipeline bottleneck that has led to crude building up in storage. Most of Alberta's oil is exported to the United States. China and the United States agreed during a weekend meeting in Argentina of the Group of 20 (G20) leading economies not to impose additional trade tariffs for at least 90 days while the pair hold talks to resolve existing disputes. The trade war between the world's two biggest economies has weighed heavily on global trade, sparking concerns of an economic slowdown. Crude oil has not been included in the list of hundreds of products each side has slapped with import tariffs, but traders said the positive sentiment of the truce was also driving crude markets. Looking ahead, oil traders will eye a meeting by the OPEC on Dec. 6. At the meeting, the producer group, along with non-OPEC member Russia, is expected to announce cuts aimed at reining in a production overhang that has pulled down crude prices by around a third since October. Analysts expect a reduction of 1 mn-1.4 mn bpd versus October levels, which were the highest by OPEC as a group since Dec 2016. Within OPEC, Qatar said on Monday it would leave the producer club in January. Qatar's oil production is only around 600K bpd, while it is the world's biggest exporter of LNG. The small Middle East country has also been at loggerheads with its much bigger neighbor and de facto OPEC leader Saudi Arabia. Outside OPEC, Russian oil output stood at 11.37 min bpd in November, down from a post-Soviet record of 11.41 mn bpd it reached in October, Energy Ministry data showed on Sunday. Meanwhile, oil producers in the United States continue to churn out record amounts of oil, with crude output at an unprecedented level of more than 11.5 million bpd. With drilling activity still high, most analysts expect U.S. oil production to rise further in 2019.

 

 
Intraday RESISTANCE LEVELS
3rd December 2018 R1 R2 R3
GOLD-XAU 1,230-1,238 1,244 1,260
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 54.05-54.75 56.20 57.00-57.50
EURO/USD 1.1430 1.1500-1.1560 1.1600
GBP/USD 1.2810 1.2855-1.2900 1.2950
USD/JPY 114.00 114.70-115.50 116.00

Intraday SUPPORTS LEVELS
3rd December 2018 S1 S2 S3
GOLD-XAU 1,221-1,214 1,207 1,200-1,195
Silver-XAG 14.30-14.00 13.61 13.00-12.40
Crude Oil 53.30-52.80 52.00 51.20-50.10
EURO/USD 1.1350-1.1300 1.1260 1.1205-1.1160
GBP/USD 1.2760 1.2700 1.2660-1.2600
USD/JPY 113.00 112.10 111.50-111.00

Intra-Day Strategy (3rd December 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 Friday made its intraday high of US$1225.47/oz and low of US$1216.63/oz. Gold down by 0.168% at US$1222.16/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 1230-1260 keeping stop loss closing above 1260, targeting 1221-1214-1200 and 1195-1189. Buy above 1221-1180 with risk below 1180, targeting 1230-1238-1244 and 1250-1260.

 
Intraday Support Levels
S1     1,221-1,214
S2     1,207
S3     1,200-1,195
Intraday Resistance Levels
R1     1,230-1,238
R2     1,244
R3     1,260

Technical Indicators

Name   Value Action
14DRSI  

54.327

Buy
20-DMA   1220.01 Sell
50-DMA  

1214.92

Sell
100-DMA   1211.02 Sell
200-DMA   1258.69 Sell
STOCH(5,3)   48.8668 Buy
MACD(12,26,9)   1.232 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$14.32/oz and low of US$14.04/oz. Silver settled up by 0.700% at US$14.17/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 oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 14.10-12.40 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     14.30-14.00
S2     13.61
S3     13.00-12.40

Intraday  Resistance Levels
R1     14.80
R2     15.10
R3     15.50-16.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.641 Buy
20-DMA   14.33 Sell
50-DMA   14.44 Sell
100-DMA   14.66 Sell
200-DMA   15.55 Sell
STOCH(5,3)   37.127 Sell
MACD(12,26,9)   -0.075 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$51.84/bbl, intraday low of US$49.71/bbl and settled down by 1.28% to close at US$50.70/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 66.10 which is a resistance level and breakage above will call for 66.80-67.08. 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 52.00-54.05 with stop loss at 54.05; targeting 51.20-50.20-49.60 and 49.00-48.50. Buy above 51.20-48.00 with risk daily closing below 48.60 and targeting 50.10-49.60 and 49.00-48.50.

 
Intraday Support Levels
S1     53.30-52.80
S2     52.00
S3     51.20-50.10

Intraday Resistance Levels
R1     54.05-54.75
R2     56.20
R3     57.00-57.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.426 Sell
20-DMA   55.40 Buy
50-DMA   64.22 Buy
100-DMA   66.18 Buy
200-DMA   66.56 Buy
STOCH(5,3)   59.428 Buy
MACD(12,26,9)   -3.875 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1304/EUR, high of US$1.1399/EUR and settled the day down by 0.237% to close at US$1.1315/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 1.1300-1.1160 with risk below 1.1160, targeting 1.1430-1.1490 and 1.1540-1.1610. Sell below 1.1350-1.1620 targeting 1.1350-1.1300-1.1260 and 1.1160-1.1100 with stop-loss at daily closing above 1.1620.

 
Intraday Support Levels
S1     1.1350-1.1300
S2     1.1260
S3     1.1205-1.1160

Intraday  Resistance Levels
R1     1.1430
R2     1.1500-1.1560
R3     1.1600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.057 Buy
20-DMA   1.1393 Buy
50-DMA   1.1456 Sell
100-DMA   1.1531 Sell
200-DMA   1.1766 Sell
STOCH(5,3)   46.877 Buy
MACD(12,26,9)   -0.034 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2734/GBP, high of US$1.2808/GBP and settled the day down by 0.297% to close at US$1.2746/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 1.2810-1.3000 with targets at 1.2800-1.2710 and 1.2660-1.2600. Buy above 1.2760-1.2600 with targets 1.2855-1.2900 and 1.3000-1.3050 with stop loss closing below 1.2600.

 
Intraday Support Levels
S1     1.2760
S2     1.2700
S3     1.2660-1.2600

Intraday Resistance Levels
R1     1.2810
R2     1.2855-1.2900
R3     1.2950

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

44.014

Buy
20-DMA   1.2894 Buy
50-DMA   1.2973 Buy
100-DMA   1.2979 Buy
200-DMA   1.3318 Buy
STOCH(5,3)   31.086 Sell
MACD(12,26,9)   -0.0005 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY113.30/USD and made an intraday high of JPY113.71/USD and settled the day up by 0.0793% at JPY113.56/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 114.00-116.00 with risk above 116.00 targeting 113.50-113.00-112.10 and 111.50-111.20. Long positions above 113.50-110.70 with targets of 114.00-114.70 and 115.50-116.00 with stop below 110.50.

 
Intraday Support Levels
S1     113.00
S2     112.10
S3     111.50-111.00

INTRADAY RESISTANCE LEVELS
R1     114.00
R2     114.70-115.50
R3     116.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.795 Buy
20-DMA   113.40 Sell
50-DMA   113.07 Sell
100-DMA   112.23 Buy
200-DMA   110.45 Buy
STOCH(9,6)   95.140 Buy
MACD(12,26,9)   0.087 Sell

AAFX TRADING
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