AAFX TRADING

Daily Market Lookup

  • U.S. stock futures and Asian shares tumbled on Thursday after Canadian authorities arrested a top executive of Chinese tech giant Huawei for extradition to the United States, fanning fears of a fresh flareup in tensions between the two superpowers. he news came as Washington and Beijing begin three months of negotiations aimed at de-escalating their bruising trade war, which is adding to global investors' worries over rising U.S. interest rates and other risks to global economic growth. The arrest is related to violations of U.S. sanctions, a person familiar with the matter said, though officials have so far stayed mum on her allegations. The arrest heightened the sense of a major collision between the world's two largest economic powers not just over tariffs but also over technological hegemony. Britain's BT said on Wednesday it was removing Huawei's equipment from the core of its existing 3G and 4G mobile operations. Australia and New Zealand have also rejected Huawei's products. Markets had initially brightened after U.S. and Chinese leaders agreed a temporary trade truce at a meeting on Saturday. But the mood has quickly soured on scepticism that the two sides can reach a substantive deal on a host of highly divisive issues within the tight 90-day timeframe set out.
  • The dollar was little changed on Thursday while the Chinese yuan fell after the arrest of the CFO of tech giant Huawei Technologies. The dollar is under pressure this week amid concerns about economic growth following an inversion of the U.S. Treasury yield curve. The two-year/10-year spread was at its flattest this week in more than a decade amid a sharp fall in long-term rates. A flatter curve is seen as an indicator of a slowing economy. USD/CNY pair gained 0.32% to 6.8777. Canada’s Department of Justice said on Wednesday that Meng Wanzhou, CFO of Huawei, was arrested in Vancouver due to violations of U.S. sanctions. She is facing extradition to the United States, according to various media. The news broke after the U.S. and China agreed to halt the planned increase in tariffs to 25% from 10% on Chinese imports earlier this week. A Reuters poll suggested that the pound could fall as much as 2.75% should the parliament reject the Brexit deal next week.
  • Gold prices edged higher on Thursday in Asia and traded near a 5-month high amid U.S. yield curve inversion. The yield curve inversion triggered concerns about economic growth and a dollar sell-off recently. The two-year/10-year spread was at its flattest this week in more than a decade amid a sharp fall in long-term rates. A flatter curve is seen as an indicator of a slowing economy. The upcoming Federal Reserve policy decision is also expected to be in focus, as the Dec. 18-19 meeting looms just over the horizon. The greenback came under pressure last week when the market took comments from Fed chairman Jerome Powell as signalling a slower pace of rate hikes. That more dovish tone led markets to question how many times the central bank will hike rates in 2019. Markets still expect the Fed to move forward with a quarter-point hike this month but have interpreted cautious remarks from policymakers to mean that further tightening in 2019 will have to be reevaluated on economic and inflation data.
  • Oil prices fell on Thursday as stock markets slid, but trading was tepid in the countdown to an OPEC-meeting expected to result in a supply cut aimed at draining a glut that has pulled down crude by 30 percent since October. Traders said oil prices were being weighed down by weak global financial markets, which saw stock markets tumble on Thursday. Barclays (LON:BARC) bank said in its Global Outlook published on Thursday that "investors need to lower their expectations" and that "2019 should be a period of lower returns and higher volatility". The British bank said that it expected "the global economy to slow over the next several quarters" although it added that "not one major economy is near recession." The financial downturn has also hit oil markets hard. Since early October, crude oil has lost around 30 percent of its value amid surging supply and fears that an economic downturn will erode fuel demand. The Organisation of the Petroleum Exporting Countries (OPEC) is meeting at its headquarters in Vienna, Austria, on Thursday to decide its production policy.
  • Led by Saudi Arabia, OPEC's crude oil production has risen by 4.1 percent since mid-2018, to 33.31 million barrels per day (bpd). Oil output from the world's biggest producers - OPEC, Russia and the United States - has increased by a 3.3 million bpd since the end of 2017, to 56.38 million bpd, meeting almost 60 percent of global consumption. The increase alone is equivalent to the output of major OPEC producer United Arab Emirates. Russia, a major oil producer but not a member of OPEC, will meet with the producer cartel on Friday to discuss production levels, and it is widely expected that a supply cut will be agreed.

 

 
Intraday RESISTANCE LEVELS
6th 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 1.1350-1.1430 1.1500 1.1560-1.1600
GBP/USD 1.2760 1.2810 1.2855-1.2900
USD/JPY 113.50-114.00 114.70 115.50-116.00

Intraday SUPPORTS LEVELS
6th December 2018 S1 S2 S3
GOLD-XAU 1,230 1,238-1,244 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 1.1300 1.1260 1.1500
GBP/USD 1.2700 1.2660-1.2600 1.2520
USD/JPY 112.70 112.10 113.50-114.00

Intra-Day Strategy (6th 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 Wednesday made its intraday high of US$1239.17/oz and low of US$1236.86/oz. Gold up by 0.129% at US$1236.86/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     1,238-1,244
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 Wednesday made its intraday high of US$14.53/oz and low of US$14.40/oz. Silver settled down by 0.344% at US$14.46/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 Wednesday made an intra‐day high of US$54.57/bbl, intraday low of US$52.27/bbl and settled up by 0.664% to close at US$53.03/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 Wednesday made an intraday low of US$1.1309/EUR, high of US$1.1360/EUR and settled the day up by 0.0176% to close at US$1.1343/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     1.1300
S2     1.1260
S3     1.1500

Intraday  Resistance Levels
R1     1.1350-1.1430
R2     1.1500
R3     1.1560-1.1600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.416 Buy
20-DMA   1.1343 Buy
50-DMA   1.1418 Sell
100-DMA   1.1515 Sell
200-DMA   1.1743 Sell
STOCH(5,3)   46.194 Buy
MACD(12,26,9)   -0.034 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2670/GBP, high of US$1.2797/GBP and settled the day up by 0.141% to close at US$1.2732/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 1.2760-1.3000 with targets at 1.2710-1.2660 and 1.2600-1.2520. Buy above 1.2700-1.2520 with targets 1.2760-1.2810-1.2855 and 1.2900-1.3000 with stop loss closing below 1.2520.

 
Intraday Support Levels
S1     1.2700
S2     1.2660-1.2600
S3     1.2520

Intraday Resistance Levels
R1     1.2760
R2     1.2810
R3     1.2855-1.2900

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

40.510

Buy
20-DMA   1.2811 Buy
50-DMA   1.2933 Buy
100-DMA   1.2958 Buy
200-DMA   1.3290 Buy
STOCH(5,3)   32.225 Sell
MACD(12,26,9)   -0.0005 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY112.64/USD and made an intraday high of JPY113.23/USD and settled the day down by 0.354% at JPY113.17/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     112.70
S2     112.10
S3     113.50-114.00

INTRADAY RESISTANCE LEVELS
R1     113.50-114.00
R2     114.70
R3     115.50-116.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.127 Buy
20-DMA   113.30 Sell
50-DMA   113.07 Sell
100-DMA   112.24 Buy
200-DMA   110.54 Buy
STOCH(9,6)   25.179 25.179 Buy
MACD(12,26,9)   0.004 Sell

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