AAFX TRADING

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. 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. However, he added that solid U.S. manufacturing data released Monday pointed to a stronger economic outlook, with new orders a "key driver" in boosting activity. 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 Aussie dollar declined on Wednesday in Asia after data showed the country’s economy expanded less than expected in the three months through September. Gross domestic product rose 0.3% from the second quarter, the statistics bureau said on Wednesday. Analysts previously expected GDP to rise 0.6%. On Tuesday, The Reserve Bank of Australia kept interest rates at a record-low 1.5% as expected. The U.S.-China trade war remained in focus after China’s Ministry of Commerce released its first official statement following a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping over the weekend. Beijing said the trade meeting with the U.S. was “very successful” but did not provide any further details on the outcome of the meeting. The plunge in U.S. stocks came after top White House economic adviser Larry Kudlow backtracked from U.S. president Donald Trump’s announcement that Beijing had agreed to reduce tariffs on U.S.-made cars. Gold prices slipped on Wednesday in Asia as the dollar rebounded following a plunge on the Wall Street overnight. The plunge in U.S. stocks came after top White House economic adviser Larry Kudlow backtracked from U.S. president Donald Trump’s announcement that Beijing had agreed to reduce tariffs on U.S.-made cars. The dollar lost its upward momentum on dovish signals from the Fed, which indicated that rate hikes from 2019 would have to be re-evaluated on economic and inflation data vs previous assertions of a more hawkish policy. Gold prices remained near-five-month highs as the greenback struggled in recent weeks, as traders suspect the Federal Reserve will pause its rate hike plan after a fourth Federal Reserve rate increase this month.
  • Oil prices fell on Wednesday, pulled down by swelling U.S. inventories and a plunge in global stock markets as China's government warned of increasing economic headwinds. Oil prices were pressured by a weekly report from the American Petroleum Institute (API) that said U.S. crude inventories rose by 5.4 million barrels in the week to Nov. 30, to 448 million barrels, in a sign that U.S. oil markets are in a growing glut. Official U.S. government oil production and inventory data is due later on Wednesday. More broadly, the slide in U.S. oil followed a tumble in global stock markets on Tuesday, with investors worried about the threat of a widespread economic slowdown. Key to the global economic outlook will be whether the United States and China can resolve their trade disputes. Washington and Beijing announced a 90-day truce last weekend, during which neither side will further increase punitive import tariffs. In a sign of easing tensions between the two world's biggest economies, Chinese oil trader Unipec plans to resume U.S. crude shipments to China by March after the Xi-Trump deal at the G20 meeting reduced the risk of tariffs being imposed on these imports, people with knowledge of the matter said. Yet the truce may not last. U.S. President Donald Trump threatened on Tuesday to place "major tariffs" on Chinese goods imported into the United States if his administration didn't reach a desirable deal with Beijing. China's state council on Wednesday issued guidance to support employment as the economy slows, saying the country should pay "high attention" to the impact on employment from increasing economic headwinds Bank of America Merrill Lynch (NYSE:BAC) said in its 2019 economic outlook, published on Tuesday, that "most major economies are likely to see decelerating activity", although it added that "a steady stream of monetary and fiscal stimulus measures" was expected to stem the slowdown.

 

 
Intraday RESISTANCE LEVELS
5th 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 52.80-53.30 54.05 54.90-55.40
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
5th 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 52.00 51.20-50.10 49.50
EURO/USD 1.1350-1.1300 1.1205-1.1160 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 (5th 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 Tuesday made its intraday high of US$1238.29/oz and low of US$1230.44/oz. Gold up by 0.535% at US$1237.23/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 Tuesday made its intraday high of US$14.49/oz and low of US$14.37/oz. Silver settled up by 0.625% at US$14.48/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 Tuesday made an intra‐day high of US$54.66/bbl, intraday low of US$52.58/bbl and settled down by 1.00% to close at US$52.66/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 52.80-55.40 with stop loss at 55.40; targeting 52.00-51.20 and 50.20. Buy above 52.00-49.50 with risk daily closing below 49.50 and targeting 52.80-53.30-54.05 and 54.90-55.40.

 
Intraday Support Levels
S1     52.00
S2     51.20-50.10
S3     49.50

Intraday Resistance Levels
R1     52.80-53.30
R2     54.05
R3     54.90-55.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.178 Sell
20-DMA   54.45 Buy
50-DMA   63.43 Buy
100-DMA   65.88 Buy
200-DMA   66.45 Buy
STOCH(5,3)   66.326 Buy
MACD(12,26,9)   -3.253 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1317/EUR, high of US$1.1417/EUR and settled the day down by 0.096% to close at US$1.1341/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     1.1205-1.1160
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 Tuesday made an intra‐day low of US$1.2657/GBP, high of US$1.2838/GBP and settled the day down by 0.0628% to close at US$1.2714/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 down by 0.783% 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   32.075 Buy
20-DMA   113.36 Sell
50-DMA   113.08 Sell
100-DMA   112.23 Buy
200-DMA   110.51 Buy
STOCH(9,6)   32.07 Buy
MACD(12,26,9)   0.087 Sell

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