AAFX TRADING

Daily Market Lookup

  • Losses in global stock markets snowballed on Monday, with U.S. equity futures and Asian shares sliding on worries over slowing growth and fears that a rise in tensions between Washington and Beijing could torpedo chances of a trade deal. Traders returned from the weekend to face a growing wall of worry, with the world's largest economies -- the United States, China and Japan -- all reporting weaker-than-expected data which pointed to moderating activity. Investors were also bracing for a Tuesday vote on British Prime Minister Theresa May's European Union divorce deal, which looks set to be rejected by parliament, raising fears of a chaotic exit in March. U.S.-China trade negotiations need to reach a successful end by March 1 or Washington will impose new tariffs, U.S. Trade Representative Robert Lighthizer said on Sunday, clarifying that there is a "hard deadline" after a week of seeming confusion among President Donald Trump and his advisers. Markets were already reeling from news last week that Canadian officials had arrested the chief financial officer of Chinese smartphone maker Huawei for extradition to the United States. The arrest could throw up another hurdle to the resolution of a trade war between the world's top two economies. Trump and Chinese President Xi Jinping early this month agreed to a temporary truce that delayed a planned Jan. 1. U.S. tariff hike while the two sides negotiate. While U.S. officials say the Huawei arrest was a legal matter and not linked to the trade dispute, the move is expected to complicate trade talks. The dollar was on the backfoot after Friday's soft U.S. jobs report raised worries that economic growth has peaked and the Federal Reserve may pause its rate tightening cycle sooner than previously thought. On Friday, the U.S. Labor Department said public and private employers hired 155,000 workers in November, fewer than the 200,000 forecast by economists polled by Reuters, while the jobless rate held at a 49-year low of 3.7 percent. China reported far weaker than expected November exports and imports, underscoring faltering global and domestic demand. The downbeat reading reinforced views that Beijing will have to roll out more support and stimulus soon to keep the economy from cooling too fast.
  • The U.S. dollar, which is widely considered a safe-haven asset, fell on Monday in Asia even after tension with China escalated amid continuing concerns surrounding Chinese technology giant Huawei Technology. Tension with China remained in focus after reports over the weekend said Chinese Vice Foreign Minister Le Yucheng separately summoned both the US and Canadian ambassadors and lodged a "strong protest" urging Huawei Technology’s CFO Meng Wanzhou’s release. Meng was arrested in Vancouver last week and faces extradition to the US, where she could be jailed for up to 30 years if found guilty. Fed Chairman Jerome Powell said last week that U.S. interest rates were nearing neutral levels, which markets interpreted as signalling a slowdown in rate rises. Chinese customs data showed on Saturday that the country’s November exports rose 5.4% from a year earlier, below the 10% jump predicted by a Reuters poll. Annual growth for exports to all of China's major partners slowed significantly, according to the data. JPY data showed Japan’s third-quarter GDP was down at an annualised rate of 2.5%, compared with an initial estimate of a 1.2% contraction and against economists' median forecast for a 1.9% decline. In Europe, Tuesday will see the UK parliamentary vote on Prime Minister Theresa May's current Brexit proposal.
  • Brent crude oil rose on Monday after producer club OPEC and some non-affiliated suppliers last Friday agreed to a supply cut from January. Despite this, the outlook for next year remains muted on the back of an economic slowdown. Prices surged on Friday after the OPEC and some non-OPEC producers including heavyweight Russia announced they would cut oil supply by 1.2 mn bpd, with an 800,000-bpd reduction planned by OPEC members and 400,000 bpd by countries not affiliated with the group. The shutdown of the 315,000-bpd El Sharara oilfield in Libya also helped push Brent, traders said. The OPEC-led supply curbs will be made from January, measured against October 2018 output levels. Despite the cuts, that was still a price forecast reduction of $6 per barrel as Bernstein lowered its crude oil demand forecast from 1.5 million bpd previously to 1.3 million bpd for 2019. U.S. bank Morgan Stanley said the cut was "likely sufficient to balance the market in 1H19 and prevent inventories from building". It added that it expected "Brent to reach $67.5 per barrel by 2Q19, down from $77.5 before." Not all analysts expect the cuts to be sufficient to end oversupply. Oil prices have fallen sharply since October on signs of an economic slowdown, with Brent losing almost 30 percent in value. Japan, the world's third-biggest economy and No.4 oil consumer, on Monday revised its third quarter GDP growth down to an annualized rate of minus 2.5 percent, down from the initial estimate of minus 1.2 percent. Meanwhile the two world's biggest economies, the United States and China, are locked in a trade war which is threatening to slow global growth and battering investor sentiment. Despite the expectations of a slowdown, physical demand on the ground remains healthy. China, the world's biggest oil importer, over the weekend reported November crude oil imports rose 8.5 percent from a year ago, to 10.43 mn bpd, marking the first time China imported more than 10 million bpd. That leaves the world's second-biggest economy on track to set yet another annual import record. Strong demand is being driven by Chinese purchases for strategic reserves, but also by new refineries, triggering excess supply of fuels, filling up storage tanks and eroding refinery profits across Asia.

 

 
Intraday RESISTANCE LEVELS
10th December 2018 R1 R2 R3
GOLD-XAU 1,253 1,260-1,266 1,273
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 52.80 53.30 54.05-54.90
EURO/USD 1.1450 1.1500 1.1560-1.1600
GBP/USD 1.2760 1.2810 1.2855-1.2900
USD/JPY 112.70-113.50 114.00 114.70-115.50

Intraday SUPPORTS LEVELS
10th December 2018 S1 S2 S3
GOLD-XAU 1,244-1,238 1,230 1,221-1,214
Silver-XAG 14.30-14.00 13.61 13.00-12.40
Crude Oil 52.00 51.00-50.10 49.50
EURO/USD 1.1430-1.1350 1.1300 1.1260-1.1205
GBP/USD 1.2700 1.2660 1.2600-1.2520
USD/JPY 112.10 111.50-111.00 110.20

Intra-Day Strategy (10th 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 Thursday made its intraday high of US$1244.17/oz and low of US$1234.67/oz. Gold up by 0.0282% at US$1237.48/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 1253-1273 keeping stop loss closing above 1273, targeting 1244-1238-1230 and 1221-1214. Buy above 1244-1200 with risk below 1200, targeting 1253-1260 and 1266-1273.

 
Intraday Support Levels
S1     1,244-1,238
S2     1,230
S3     1,221-1,214
Intraday Resistance Levels
R1     1,253
R2     1,260-1,266
R3     1,273

Technical Indicators

Name   Value Action
14DRSI  

68.136

Buy
20-DMA   1225.62 Sell
50-DMA  

1221.03

Sell
100-DMA   1211.49 Sell
200-DMA   1255.65 Sell
STOCH(5,3)   87.674 Buy
MACD(12,26,9)   6.601 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$14.63/oz and low of US$14.42/oz. Silver settled up by 1.108 at US$14.60/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$54.35/bbl, intraday low of US$50.75/bbl and settled up by 0.848% to close at US$52.30/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 52.00-51.00-50.20 and 49.50-49.00. Buy above 52.00-49.00 with risk daily closing below 49.00 and targeting 52.80-53.30 and 54.05-54.90-55.00.

 
Intraday Support Levels
S1     52.00
S2     51.00-50.10
S3     49.50

Intraday Resistance Levels
R1     52.80
R2     53.30
R3     54.05-54.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.667 Sell
20-DMA   53.33 Buy
50-DMA   62.16 Buy
100-DMA   65.42 Buy
200-DMA   66.32 Buy
STOCH(5,3)   47.505 Buy
MACD(12,26,9)   -2.705 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1359/EUR, high of US$1.1422/EUR and settled the day up by 0.0263% to close at US$1.1378/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 1.1350-1.1160 with risk below 1.1160, targeting 1.1450-1.1490 and 1.1540-1.1610. Sell below 1.1450-1.1620 targeting 1.1430-1.1350-1.1300 and 1.1260-1.1160 with stop-loss at daily closing above 1.1620.

 
Intraday Support Levels
S1     1.1430-1.1350
S2     1.1300
S3     1.1260-1.1205

Intraday  Resistance Levels
R1     1.1450
R2     1.1500
R3     1.1560-1.1600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.308 Buy
20-DMA   1.1358 Buy
50-DMA   1.1411 Sell
100-DMA   1.1509 Sell
200-DMA   1.1734 Sell
STOCH(5,3)   74.308 Buy
MACD(12,26,9)   -0.0073 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2710/GBP, high of US$1.2791/GBP and settled the day down by 0.234% to close at US$1.2751/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
S3     1.2600-1.2520

Intraday Resistance Levels
R1     1.2760
R2     1.2810
R3     1.2855-1.2900

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

43.918

Buy
20-DMA   1.2804 Buy
50-DMA   1.2955 Buy
100-DMA   1.2955 Buy
200-DMA   1.3285 Buy
STOCH(5,3)   52.844 Sell
MACD(12,26,9)   -0.0056 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY112.54/USD and made an intraday high of JPY112.92/USD and settled the day up by 0.008% at JPY112.67/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 112.70-116.00 with risk above 116.00 targeting 112.10- 111.50 and 111.00-110.20. Long positions above 112.10-110.20 with targets of 112.70-113.50-114.00 and 114.70-115.50 with stop below 110.50.

 
Intraday Support Levels
S1     112.10
S2     111.50-111.00
S3     110.20

INTRADAY RESISTANCE LEVELS
R1     112.70-113.50
R2     114.00
R3     114.70-115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.378 Buy
20-DMA   113.17 Sell
50-DMA   113.02 Sell
100-DMA   112.26 Buy
200-DMA   110.61 Buy
STOCH(9,6)   24.111 Buy
MACD(12,26,9)   0.004 Sell

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