AAFX TRADING

Daily Market Lookup

  • Asian share markets began the week on a cautious note after soft economic data from China and Europe added to evidence of cooling global growth and reinforced anxiety over the broadening impact of international trade frictions. The benchmark has dropped 11.3% from its Sept. 20 record close - the worst performance since it fell more than 14% between May 2015 and January 2016. The biggest drag was Johnson & Johnson, which tumbled 10 percent for its biggest drop since 2002, after Reuters reported that the pharma major knew its baby powder was contaminated with cancer-causing asbestos. The market's retreat also reflected a worsening global economic outlook, with the latest evidence of slackening momentum coming from China and Europe. IHS Markit's Flash Composite Purchasing Managers' Index slumped to 51.3, it’s weakest since November 2014, from a final November reading of 52.7. That was well below even the most pessimistic forecast in a Reuters poll where the median expectation was for a modest rise to 52.8. The survey showed euro zone businesses ended the year in a gloomy mood, expanding their operations at the slowest pace in over four years as new orders growth all but dried up, hurt by trade tensions and violent protests in France. The discouraging economic news came after China reported a batch of soft indicators, with retail sales growing at their weakest pace since 2003 and industrial output rising the least in nearly three years. China's economy has been losing momentum in recent quarters as a multi-year government campaign to curb shadow lending put increasing financial strains on companies in a blow to production and investment. U.S. retail sales excluding automobiles, gasoline, building materials and food services rose 0.9% last month after an upwardly revised 0.7 percent increase in October. Against that backdrop, the U.S. Federal Reserve is seen as almost certain to raise interest rates at its two-day policy meeting starting on Tuesday, further enhancing the dollar's yield attraction. At the same time, many market players also expect the Fed to lower its projections for future interest rate hikes given increasing headwinds to the economy. Sterling hovered near its 20-month low touched last week, as concerns grew that Britain was headed for a chaotic exit from the European Union.
  • U.S. dollar was little changed on Monday in Asia as investors remained cautious ahead of the highly-anticipated U.S. Federal Reserve meeting later this week. The Fed is widely expected to deliver a quarter-point interest rate hike at its meeting on Wednesday, while a post-policy meeting press conference by Fed Chair Jerome Powell would also be closely watched. Concerns about the outlook for global growth along with trade tensions and market volatility have prompted traders to push back expectations on the expected pace of Fed rate hikes in 2019. Reports from last week said British Prime Minister Theresa May’s failure to win key concessions from the European Union to salvage her Brexit deal has added to concerns over the prospect of a ‘no-deal’ exit from the EU. he dollar held near a 19-month high on Monday, bolstered by safe-haven buying as heightened concerns of a global economic slowdown reduced appetites for riskier assets such as stocks and Asian currencies. Weaker-than-expected economic data from China and Europe and fears of a possible U.S. government shutdown spooked investors away from stocks toward the greenback and yen. Apart from fears of a global economic slowdown, markets are also focusing on the likely trajectory of U.S. monetary policy The Federal Reserve is set to raise interest rates by 25 basis points at its two-day meeting that opens Tuesday. The central bank has lifted rates eight times since December 2015 in a bid to restore policy to more normal settings after having slashed borrowing costs to near zero to combat the financial crisis a decade ago. Traders believe that higher U.S. borrowing costs will likely hurt U.S. growth momentum and ultimately force the Fed to pause its monetary tightening path Recent comments by Fed officials have also been read as dovish by some analysts. Last month, Fed Chairman Jerome Powell said rates were near the range of policymakers' estimates of "neutral" - the level at which they neither stimulate nor impede the economy. The Bank of Japan has a meeting on Dec. 19-20, at which policy is expected to remain highly accommodative as inflation remains well below the its target. British trade Minister Liam Fox said on Sunday talks with the European Union to secure "assurances" for parliament on Prime Minister Theresa May's Brexit deal will take time, with a decision expected in the New Year
  • Oil prices were largely steady on Monday after falling 2% in the previous session, but remained under pressure amid weaker growth in major economies and concerns about oversupply. Persistent growth in U.S. shale output continues to weigh on oil prices, while some analysts doubted that planned supply cuts led by the OPEC would be enough to rebalance markets. OPEC and its Russia-led allies have agreed to curb output from January, in a move to be reviewed at a meeting in April. Saudi Arabia is OPEC's de facto leader. Meanwhile, increasing concerns about weakening growth in major markets such as China and Europe also dampened the mood in oil and other asset classes. Chinese oil refinery throughput in November fell from October, suggesting an easing in oil demand, while the country's industrial output rose the least in nearly three years as the economy continued to lose momentum. French business activity plunged unexpectedly into contraction this month, retreating at the fastest pace in over four years, while Germany's private sector expansion slowed to a four-year low in December. But oil prices were supported after General Electric Co's Baker Hughes energy services firm said on Friday that U.S. drillers cut four oil rigs in the week to Dec. 14, pulling the total count to the lowest since mid-October at 873. However, the current U.S. rig count, which serves as an early indicator of future output, is higher than a year ago when 747 rigs were active.

 

 
Intraday RESISTANCE LEVELS
17th December 2018 R1 R2 R3
GOLD-XAU 1,238-1,244 1,253 1,260-1,266
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 52.00-52.60 53.30 54.05-54.90
EURO/USD 1.1400 1.1450 1.1500-1.1560
GBP/USD 1.2600-1.2660 1.2700 1.2760-1.2850
USD/JPY 113.50 114.00 114.70-115.50

Intraday SUPPORTS LEVELS
17th 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 51.00 50.10 49.50-48.10
EURO/USD 1.1300 1.1260-1.1205 1.1150
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 (17th 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 Friday made its intraday high of US$1242.98/oz and low of US$1232.87/oz. Gold down by 0.269% at US$1238.29/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 1238-1266 keeping stop loss closing above 1266, targeting 1230-1221 and 1214-1207-1200. Buy above 1230-1200 with risk below 1200, targeting 1238-1244-1253 and 1260-1266.

 
Intraday Support Levels
S1     1,230
S2     1,221-1,214
S3     1,207
Intraday Resistance Levels
R1     1,238-1,244
R2     1,253
R3     1,260-1,266

Technical Indicators

Name   Value Action
14DRSI  

55.192

Buy
20-DMA   1232.06 Buy
50-DMA  

1225.23

Buy
100-DMA   1212.26 Buy
200-DMA   1253.52 Sell
STOCH(5,3)   28.903 Sell
MACD(12,26,9)   5.804 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$14.74/oz and low of US$14.47/oz. Silver settled down by 1.086% at US$14.56/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 Sell15.50-16.40
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 Friday made an intra‐day high of US$53.12/bbl, intraday low of US$51.09/bbl and settled down by 2.88% to close at US$51.46/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 51.00-48.00 with risk daily closing below 48.00 and targeting 52.00-52.80-53.30 and 54.05-54.90.

 
Intraday Support Levels
S1     51.00
S2     50.10
S3     49.50-48.10

Intraday Resistance Levels
R1     52.00-52.60
R2     53.30
R3     54.05-54.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.369 Sell
20-DMA   52.38 Buy
50-DMA   60.29 Buy
100-DMA   64.74 Buy
200-DMA   66.12 Buy
STOCH(5,3)   41.612 Sell
MACD(12,26,9)   -2.219 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1269/EUR, high of US$1.1364/EUR and settled the day down by 0.457% to close at US$1.1305/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   44.054 Buy
20-DMA   1.1348 Buy
50-DMA   1.1392 Sell
100-DMA   1.1491 Sell
200-DMA   1.1708 Sell
STOCH(5,3)   28.8155 Buy
MACD(12,26,9)   -0.0017 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2528/GBP, high of US$1.2664/GBP and settled the day down by 0.395% to close at US$1.2583/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 1.2600-1.2660-1.2700 and 1.2760-1.2850 with stop loss closing below 1.2360.

 
Intraday Support Levels
S1     1.2550
S2     1.2490-1.2430
S3     1.2360

Intraday Resistance Levels
R1     1.2600-1.2660
R2     1.2700
R3     1.2760-1.2850

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.228

Buy
20-DMA   1.2715 Buy
50-DMA   1.2875 Buy
100-DMA   1.2922 Buy
200-DMA   1.3246 Buy
STOCH(5,3)   45.130 Sell
MACD(12,26,9)   -0.009 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY113.20/USD and made an intraday high of JPY113.66/USD and settled the day down by 0.202% at JPY113.37/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   54.047 Buy
20-DMA   113.25 Sell
50-DMA   113.00 Sell
100-DMA   112.39 Buy
200-DMA   110.79 Buy
STOCH(9,6)   82.939 Buy
MACD(12,26,9)   0.0078 Sell

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