AAFX TRADING

Daily Market Lookup

  • Asian shares tumbled on Friday after China reported a set of weak data, fanning fresh worries of a sharp slowdown in the world's second-biggest economy and leaving investors fretting over the wider impact of a yet unresolved Sino-U.S. trade dispute. China's November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years as domestic demand softened further, underlining rising risks to the economy as Beijing works to defuse a trade dispute with the United States. U.S. corporate earnings due next month could throw a spotlight on the impact from the U.S. tariffs on imports from China, while there is risk of a government shutdown and further political stalemate in a divided U.S. congress, he said. A Chinese commerce ministry spokesman said on Thursday China and the United States are in close contact over trade and that any U.S. trade delegation would be welcome to visit. But that has hardly dispelled concerns about a broadening confrontation between the two economic heavyweights. China said on Thursday a Canadian businessman is being investigated on suspicion of harming China's security, days after a former Canadian diplomat was detained in an escalating diplomatic row. The ECB ended its 2.6 trillion euro crisis-fighting bond purchase scheme but pledged to continue reinvesting maturing bonds - thereby avoiding shrinking its balance sheet - for an extended period of time. The plan lifted Portuguese and Irish government bond prices sharply on Thursday. Sterling's rally fizzled as signs that the British parliament was headed toward a deadlock over Brexit prompted traders to take profits from its gains made after Prime Minister Theresa May had survived a no-confidence vote. May admitted on Thursday she did not expect a quick breakthrough in Brexit talks that would help get the deal through parliament. The European Union has said the agreed Brexit deal is not open for renegotiation even though its leaders on Thursday gave May assurances that they would seek to agree a new pact with Britain by 2021 so that the contentious Irish "backstop" is never triggered.
  • The dollar firmed against most major counterparts on Friday, as investor focus shifted to an expected U.S. interest rate hike next week, although gains are likely to be capped on greater uncertainty about next year's policy outlook. The greenback found broad support as the euro and pound came under pressure after downbeat comments from the European Central Bank president about the outlook for the euro zone and renewed concerns about a hard Brexit. Analysts say the next catalyst for larger moves in the currency markets will be the Federal Reserve's Dec. 18-19 meeting. The Fed is widely expected to raise interest rates by 25 basis points, its fourth rate hike this year though greater focus will center on the policy outlook for 2019, over which there is more uncertainty. McCarthy said markets will be watching for any revisions in the Fed's growth and inflation outlook. He sees more upside to the dollar versus the euro and yen if its forward guidance paints a stronger picture for the U.S. economy. The dollar has gained 1.2% versus the Japanese currency in the past six trading sessions as interest rate differentials between U.S. and Japan make the greenback a more attractive bet than the yen. However, in recent weeks, a softening in U.S. Treasury yields and tepid data have led some analysts to forecast a peak for the dollar. Comments from Fed officials have also been read as dovish by the market, where they have signaled that interest rates are nearing their "neutral range" With economic growth faltering, most analysts are expecting support measures from Chinese authorities including interest rate cuts to support the economy which would likely keep the yuan under pressure. The ECB formally ended its 2.6 trillion euro crisis-fighting bond purchase scheme on Thursday. However, monetary policy is most likely to remain accommodative as ECB President Mario Draghi warned that the euro area's growth outlook is likely to remain weak amid threats of a global trade war and the prospect of a hard Brexit. British Prime Minister Theresa May appealed to fellow EU leaders for concessions to help her win support in parliament next month for a deal that can smooth Britain's exit from the European Union. The pound had posted two consecutive sessions of gains versus the greenback after Prime Minister May fought off a bid to unseat her by colleagues unhappy with her Brexit plans.
  • Oil prices gave up some of their Thursday's gains following inventory declines in the United States and expectations that the global oil market could have a deficit sooner than they had previously thought. The International Energy Agency said in its monthly report that OPEC's output agreement with Russia and Canada's decision to mandate production cuts could create an oil market supply deficit by the second quarter of next year. U.S. crude inventories fell by 1.2 mn barrels in the week to Dec. 7, the EIA reported. However, the decline was less than expected, as markets previously forecasted a decrease of 3 million barrels. Crude oil prices have also been supported by OPEC-led supply curbs announced last week. The Saudi-dominated Organization of the Petroleum Exporting Countries and its Russian-led allies announced a deal to cut their combined supplies by 1.2 million bpd over the next six months to clear a global oil glut and pull prices higher. In a separate outlook report, the OPEC said 2019 demand for its crude would fall to 31.44 mn barrels per day, 100,000 bpd less than predicted last month and 1.53 min less than it currently produces.

 

 
Intraday RESISTANCE LEVELS
14th December 2018 R1 R2 R3
GOLD-XAU 1,244 1,253 1,260-1,266
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 52.60 53.30 54.05-54.90
EURO/USD 1.1400 1.1450 1.1500-1.1560
GBP/USD 1.2660 1.2700-1.2760 1.2850
USD/JPY 113.50 114.00 114.70-115.50

Intraday SUPPORTS LEVELS
14th December 2018 S1 S2 S3
GOLD-XAU 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 49.50-48.10
EURO/USD 1.1300 1.1260-1.1205 1.1150
GBP/USD 1.2600 1.2490-1.2430 1.2360
USD/JPY 112.70-112.10 111.50 111.00-110.20

Intra-Day Strategy (14th 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$1246.68/oz and low of US$1240.06/oz. Gold down by 0.285% at US$1241.70/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     1,238
S2     1,230
S3     1,221-1,214
Intraday Resistance Levels
R1     1,244
R2     1,253
R3     1,260-1,266

Technical Indicators

Name   Value Action
14DRSI  

59.481

Buy
20-DMA   1231.55 Buy
50-DMA  

1224.31

Buy
100-DMA   1212.11 Buy
200-DMA   1253.57 Sell
STOCH(5,3)   40.786 Sell
MACD(12,26,9)   6.821 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$14.79/oz and low of US$14.67/oz. Silver settled down by 0.230% at US$14.72/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 14.50-12.40 targeting 14.90-15.10 and 15.60-16.35; stop breakage below 12.40. Sell below 14.80-17.00 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   60.762 Buy
20-DMA   14.41 Buy
50-DMA   14.45 Buy
100-DMA   14.55 Sell
200-DMA   15.45 Sell
STOCH(5,3)   75.708 Buy
MACD(12,26,9)   0.065 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$53.43/bbl, intraday low of US$50.56/bbl and settled up by 3.15% to close at US$53.02/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 52.00-55.40 with stop loss at 55.40; targeting 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     52.00-51.00
S2     50.10
S3     49.50-48.10

Intraday Resistance Levels
R1     52.60
R2     53.30
R3     54.05-54.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.472 Sell
20-DMA   52.58 Buy
50-DMA   60.71 Buy
100-DMA   64.89 Buy
200-DMA   66.15 Buy
STOCH(5,3)   30.743 Sell
MACD(12,26,9)   -2.436 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.13304/EUR, high of US$1.1392/EUR and settled the day down by 0.087% to close at US$1.1357/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 1.1400-1.1450-1.1490 and 1.1540-1.1610. Sell below 1.1400-1.1620 targeting1.1300-1.1260 and 1.1200-1.1160 with stop-loss at daily closing above 1.1620.

 
Intraday Support Levels
S1     1.1300
S2     1.1260-1.1205
S3     1.1150

Intraday  Resistance Levels
R1     1.1400
R2     1.1450
R3     1.1500-1.1560

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.667 Buy
20-DMA   1.1361 Buy
50-DMA   1.1400 Sell
100-DMA   1.1499 Sell
200-DMA   1.1718 Sell
STOCH(5,3)   32.157 Buy
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2608/GBP, high of US$1.2685/GBP and settled the day up by 0.031% to close at US$1.2631/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     1.2600
S2     1.2490-1.2430
S3     1.2360

Intraday Resistance Levels
R1     1.2660
R2     1.2700-1.2760
R3     1.2850

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

40.994

Buy
20-DMA   1.2740 Buy
50-DMA   1.2901 Buy
100-DMA   1.2936 Buy
200-DMA   1.3264 Buy
STOCH(5,3)   39.049 Sell
MACD(12,26,9)   -0.009 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY113.17/USD and made an intraday high of JPY113.70/USD and settled the day up by 0.291% at JPY113.60/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   52.765 Buy
20-DMA   113.19 Sell
50-DMA   113.03 Sell
100-DMA   112.29 Buy
200-DMA   110.65 Buy
STOCH(9,6)   63.013.748 Buy
MACD(12,26,9)   0.0023 Sell

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