AAFX TRADING

Daily Market Lookup

  • Chinese shares rose on Tuesday after Beijing confirmed it was still in trade talks with Washington, but investor confidence remained fragile in Asia after Britain's prime minister postponed a Brexit vote, sending the pound to near 20-month lows. Disappointing data from major economies including China and Japan have fanned worries about corporate earnings and factory output, with the Sino-U.S. trade battle clouding the outlook for world growth. Traders in India are now cautiously awaiting results from crucial state elections due later in the day. Some exit poll suggested Prime Minister Narendra Modi may be facing his biggest defeat since he took office in 2014, and months ahead of a general election. Chinese shares inched up on news that the country's Vice Premier Liu He had spoken with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer, exchanging views on pushing forward the next stage of trade talks. Yet the gains were tentative as markets fretted over the prospects for a lasting resolution to a trade dispute that has turned increasingly bitter in the past several months. Adding to the gloom in markets, British Prime Minister Theresa May abruptly postponed a parliamentary vote on her Brexit agreement on Monday, a move that hit risk assets globally and sent the pound spiraling down to $1.2505. Sterling slumped below important chart support around $1.26. With the European Union refusing to renegotiate the deal, lawmakers doubted her chances of winning big changes. May's abrupt decision opened up a range of possibilities from a Brexit without a deal, a last-minute agreement or another referendum on EU membership. The greenback has jumped 5.5 percent so far this year on safe-haven demand and as the U.S. Federal Reserve stayed on its gradual policy tightening path. However, uncertainties over how much further the Fed will tighten have turned bullish dollar bets sour lately.
  • The U.S. dollar slipped on reports that Beijing and Washington are preparing their next stage of trade talks. Meanwhile, the British pound remained near 20-month lows against the U.S. dollar after U.K. prime minister Theresa May called off Tuesday’s vote on her Brexit deal so she could go back to Brussels and ask for changes to it. The move put pressure on the pound as the market judged the risk of no-deal Brexit has increased. The U.S. dollar index traded 0.1% lower to 97.058 after Reuters reported that Chinese Vice Premier Liu He, U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer spoke on the phone on Tuesday to discuss the roadmap for the next stage of their trade talks. The conversation came after U.S. President Donald Trump and Chinese President Xi Jinping agreed to pause the planned increase of Jan.1 U.S. tariffs to 25% from 10% on $200 billion of Chinese goods. However, the tension between the two countries remained high following the arrest of CFO at China’s Huawei Technologies last week. A fourth rate hike for this year is expected next week, but the road from there is unclear. While Fed policymakers have pointed to three increases in 2019, the market is only anticipating one. Lower interest rates can give gold a lift as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout. The dollar received some support earlier in the day, reportedly due to Brexit uncertainty. U.K. prime minister Theresa May called off Tuesday’s vote on her Brexit deal so she could go back to Brussels and ask for changes to it. The news was said to be supportive for the safe-haven dollar, as the market judged the risk of no-deal Brexit has increased.
  • Oil prices edged up on Tuesday after Libya's National Oil Company declared force majeure on exports from the El Sharara oilfield, which was seized last weekend by a militia group. Despite that, overall sentiment on oil prices remained weak amid worries over global stock markets and doubts that planned supply cuts led by producer club OPEC will be enough to rein in oversupply. Libya's National Oil Company (NOC) late on Monday declared force majeure on exports from the El Sharara oilfield, the country's biggest, which was seized at the weekend by a militia group. NOC said the shutdown would result in a production loss of 315,000 barrels per day (bpd), and an additional loss of 73,000 bpd at the El Feel oilfield. The rise in prices came after crude dropped by 3 percent the session before amid ongoing weakness in global stock markets and concerns that slowing oil demand-growth could erode supply cuts announced last week by the OPEC and some non-OPEC producers including Russia. Crude futures have lost around a third of their value since early October amid the financial market slump and an emerging oil supply overhang. There are also some doubts that all producers will follow through with their announced cuts. Russia plans to cut its oil output by 50,000 to 60,000 bpd in January, its energy minister said on Tuesday, much less than its target under a global production deal reached last week. In a show of no confidence, money managers cut their bullish wagers on crude to the lowest in more than two years in the week ending Dec. 4, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday. The financial speculator group cut its combined futures and options position in New York and London by 25,619 contracts to 144,775 during the period. That is the lowest level since Sept. 20, 2016. In physical markets, Kuwait and Iran this week both reduced their January crude oil supply prices to Asia. The OPEC-led group of oil producers last Friday announced a supply cut of 1.2 million barrels per day (bpd) in crude oil supply from January, measured against October 2018 output levels.

 

 
Intraday RESISTANCE LEVELS
11th 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 52.00-52.80 53.30 54.05-54.90
EURO/USD 1.1400-1.1450 1.1500 1.1560-1.1600
GBP/USD 1.2600-1.2660 1.2700 1.2760-1.2810
USD/JPY 113.50 114.00 114.70-115.50

Intraday SUPPORTS LEVELS
11th 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 51.00-50.10 49.50 48.10-47.90
EURO/USD 1.1350 1.1300 1.1260-1.1205
GBP/USD 1.2550-1.2490 1.2430 1.2360
USD/JPY 112.70-112.10 111.50 111.00-110.20

Intra-Day Strategy (11th December 2018)
GOLD-XAU Sell on Strength
Silver-XAG Neutral
Crude Oil
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$1239.17/oz and low of US$1233.25/oz. Gold down by 0.436% at US$1236.86/oz.

Technicals in Focus:

In daily charts, prices are below 200DMA (1255) and breakage above will call for 1266-1274. MACD is above zero line and histograms are increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside 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 Buy
50-DMA  

1221.03

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

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$14.63/oz and low of US$14.46/oz. Silver settled down by 0.685% at US$14.49/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (14.66), breakage above will lead to 15.10-15.50. 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 overbought region and giving positive crossover to show upside 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   14.36 Buy
50-DMA   14.44 Buy
100-DMA   14.67 Sell
200-DMA   15.47 Sell
STOCH(5,3)   76.084 Buy
MACD(12,26,9)   0.031 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$52.93/bbl, intraday low of US$50.73/bbl and settled down by 2.31% to close at US$51.01/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:

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     51.00-50.10
S2     49.50
S3     48.10-47.90

Intraday Resistance Levels
R1     52.00-52.80
R2     53.30
R3     54.05-54.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.930 Sell
20-DMA   53.04 Buy
50-DMA   61.65 Buy
100-DMA   65.23 Buy
200-DMA   66.25 Buy
STOCH(5,3)   47.505 Buy
MACD(12,26,9)   -2.737 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1349/EUR, high of US$1.1441/EUR and settled the day down by 0.351% to close at US$1.1354/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     1.1350
S2     1.1300
S3     1.1260-1.1205

Intraday  Resistance Levels
R1     1.1400-1.1450
R2     1.1500
R3     1.1560-1.1600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.317 Buy
20-DMA   1.1358 Buy
50-DMA   1.1406 Sell
100-DMA   1.1505 Sell
200-DMA   1.1734 Sell
STOCH(5,3)   51.466 Buy
MACD(12,26,9)   -0.0013 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2505/GBP, high of US$1.2759/GBP and settled the day down by 1.118% to close at US$1.2559/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 1.2600-1.2810 with targets at 1.2550-1.2490-1.2430 and 1.2360-1.2300. Buy above 1.2550-1.2360 with targets 1.2550-1.2490-1.2430 and 1.2360-1.2300 with stop loss closing below 1.2360.

 
Intraday Support Levels
S1     1.2550-1.2490
S2     1.2430
S3     1.2360

Intraday Resistance Levels
R1     1.2600-1.2660
R2     1.2700
R3     1.2760-1.2810

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

35.143

Buy
20-DMA   1.2770 Buy
50-DMA   1.2912 Buy
100-DMA   1.2944 Buy
200-DMA   1.3272 Buy
STOCH(5,3)   26.027 Sell
MACD(12,26,9)   -0.0056 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY112.23/USD and made an intraday high of JPY113.37/USD and settled the day up by 0.647% at JPY113.31/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 113.50-115.50 with risk above 115.50 targeting 112.70-112.10-111.50 and 111.00-110.20. Long positions above 112.70-110.20 with targets of 113.50-114.00 and 114.70-115.50 with stop below 110.50.

 
Intraday Support Levels
S1     112.70-112.10
S2     111.50
S3     111.00-110.20

INTRADAY RESISTANCE LEVELS
R1     113.50
R2     114.00
R3     114.70-115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.920 Buy
20-DMA   113.18 Sell
50-DMA   113.02 Sell
100-DMA   112.29 Buy
200-DMA   110.65 Buy
STOCH(9,6)   58.748 Buy
MACD(12,26,9)   0.005 Sell

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