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Daily Market Lookup

  • Asian shares fell on Tuesday as relief over a pause in escalation of the trade war between the U.S. and China gave way to doubt over the two countries' ability to resolve differences. Adding to market worries, an inversion at the short end of the U.S. yield curve raised the specter of a possible U.S. recession. But Chinese blue-chip shares in Shenzhen and Shanghai added 0.2 percent after struggling to break into positive territory for much of the day. The temporary freeze on further hostilities in the trade war between the United States and China had sparked a global rally in equity markets on Monday, pushing MSCI's all-country world index up 1.3 percent. But even before the trading day ended, major U.S. indexes pulled back from intraday highs on scepticism that Washington and Beijing can resolve their deep-seated differences in the three-month negotiating window that was agreed, after which tariffs could escalate again. Already, there was confusion over when the 90-day period would start. A White House official said it started on Dec. 1, while earlier, White House economic adviser Larry Kudlow told reporters it would start on Jan. 1. Moreover, none of the commitments that U.S. officials said had been given by China, including reducing its 40 percent tariffs on autos, were agreed to in writing and specifics had yet to be hammered out. Adding to worries over the outlook for the global economy, the yield curve between U.S. three-year and five-year notes, and between two-year and five-year paper inverted on Monday - the first parts of the Treasury yield curve to invert since the financial crisis, excluding very short-dated debt. Goh said that comments from U.S. Trade Secretary Steven Mnuchin that the yuan had been discussed during dinner between the Chinese and U.S. presidents "suggests that perhaps there is an intention for the Chinese side to ensure that the currency doesn't weaken further," providing a further boost to the yuan. Federal Reserve Chairman Jerome Powell was scheduled to testify on Wednesday to a congressional Joint Economic Committee, but the hearing was postponed because of a national day of mourning for U.S. President George H.W. Bush, who died on Friday. The dollar came under pressure last week on Powell's comments that rates were nearing neutral levels, which markets widely interpreted as signaling a slowdown in the Fed's rate-hike cycle.
  • The dollar fell on Tuesday in Asia as traders fled the greenback in favour of risk-sensitive currencies on easing U.S.-China trade worries. The index fell after U.S. President Donald Trump and his Chinese counterpart Xi Jinping promised to halt the introduction of new tariffs for 90 days, according to Chinese Foreign Minister Wang Yi. Yi Gang, governor of the People’s Bank of China, said in an interview with the state-owned China Finance magazine that the central bank would keep its monetary policy flexible, but tools he described as a "slow release of air" and "soft landing" must be used when the economy begins overheating. The central bank would also promote the opening up of China’s financial industry to technology to enhance international confidence in the yuan, said Yi. Separately, the China Securities Journal said interest rate spread between China and the U.S. is stabilising at a low level, and that could lead to a stable yuan, but the USD/CNY pair is unlikely to rise above 7.0000 this year. The weakness in the dollar comes against the backdrop of a temporary truce in the US-China trade conflict, which has bolstered investor confidence in riskier currencies versus the safe-haven greenback. The dollar had been supported for most of 2018 by a robust U.S. economy and a relatively hawkish Fed, which is widely expected to raise its policy interest rate later this month. Markets have priced in an 87 percent probability of a rate hike at the Fed's Dec. 18-19 meeting. The dollar came under pressure last week when the market took comments from Fed Chair Jerome Powell as signaling a slower pace of rate hikes. A more dovish tone from the Fed last week has led markets to question how many times the central bank will hike rates in 2019.
  • Oil prices rose on Tuesday, extending bigger gains from the previous day amid expected OPEC-led supply cuts and a mandated reduction in Canadian output. Both crude benchmarks climbed by around 4 percent the previous session after Washington and Beijing agreed a truce in their trade disputes and said they would negotiate for 90 days before taking any further action. The Middle East-dominated OPEC will on Dec. 6 meet at its headquarters in Vienna, Austria, to agree a joint output policy. OPEC will also discuss policy with non-OPEC production giant Russia. It added that it expected a joint effort by OPEC and Russia to withhold supply to push Brent oil prices "above the mid-$60 per barrel level". Helping OPEC in its efforts to rein in emerging oversupply was an order on Sunday by the Canadian province of Alberta for producers to scale back output by 325,000 bpd until excess crude in storage is reduced. OPEC's biggest problem is surging production in the United States, where output has grown by around 2 million bpd in a year to more than 11.5 million bpd. China in November resumed imports of U.S. crude oil, taking in one tanker at the end of last month, according to ship-tracking data, with another on order for delivery in January. Iraq is OPEC's second-biggest oil producer, behind only Saudi Arabia.

 

 
Intraday RESISTANCE LEVELS
4th December 2018 R1 R2 R3
GOLD-XAU 1,238-1,244 1,260 1,266
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 54.05-54.90 55.40 56.50
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
4th December 2018 S1 S2 S3
GOLD-XAU 1,230 1,221-1,214 1,207
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 1.1430
GBP/USD 1.2760 1.2700 1.2660-1.2600
USD/JPY 113.00 112.10 111.50-111.00

Intra-Day Strategy (4th 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 Monday made its intraday high of US$1234.88/oz and low of US$1221.22/oz. Gold up by 0.666% at US$1220.34/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 1238-1266 keeping stop loss closing above 1266, targeting 1230-1221-1214 and 1200-1195. Buy above 1230-1190 with risk below 1190, targeting 238-1244 and 1250-1260.

 
Intraday Support Levels
S1     1,230
S2     1,221-1,214
S3     1,207
Intraday Resistance Levels
R1     1,238-1,244
R2     1,260
R3     1,266

Technical Indicators

Name   Value Action
14DRSI  

61.8417

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 Monday made its intraday high of US$14.55/oz and low of US$14.25/oz. Silver settled up by 1.056% at US$14.35/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 Monday made an intra‐day high of US$53.88/bbl, intraday low of US$52.80/bbl and settled up by 1.198% to close at US$53.18/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 54.05-56.50 with stop loss at 56.50; targeting 53.30-52.80-52.00 and 51.20-50.20. Buy above 53.30-50.10 with risk daily closing below 50.10 and targeting 54.05-54.90 and 55.40-56.50.

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

Intraday Resistance Levels
R1     54.05-54.90
R2     55.40
R3     56.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.505 Sell
20-DMA   54.96 Buy
50-DMA   63.84 Buy
100-DMA   66.05 Buy
200-DMA   66.51 Buy
STOCH(5,3)   75.949 Buy
MACD(12,26,9)   -3.366 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.3186/EUR, high of US$1.1379/EUR and settled the day up by 0.035% to close at US$1.1352/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     1.1430

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 Monday made an intra‐day low of US$1.2698/GBP, high of US$1.2824/GBP and settled the day down by 0.086% to close at US$1.2722/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  

44.137

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 JPY113.36/USD and made an intraday high of JPY113.81/USD and settled the day up by 0.026% at JPY113.64/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   60.208 Buy
20-DMA   113.34 Sell
50-DMA   113.02 Sell
100-DMA   112.20 Buy
200-DMA   110.35 Buy
STOCH(9,6)   95.140 Buy
MACD(12,26,9)   0.087 Sell

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