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Daily Market Lookup

  • Asian share markets played second string to bonds on Wednesday as a spectacular fall in the price of oil spurred speculation the U.S. Federal Reserve might be done with tightening after its policy meeting later in the session. That has only added to pressure on the Fed to abandon its commitment to yet more hikes. U.S. President Donald Trump on Tuesday warned the central bank not to "make yet another mistake", while a Wall Street Journal editorial called for a pause. He also expects the median Fed forecast, or dot plots, to drop to two rate rises for next year, from the three projected back in September. The market is well ahead of that and pricing in less than one rise in 2019. Reasons for the rally were easy to find. The latest survey of fund managers globally from BofA Merrill Lynch showed the third biggest decline in inflation expectations on record, while just over half expected the world economy to slow next year. Investors rushed into bonds, with the largest ever one-month rotation into fixed-income assets, while cutting equities.
  • It was all about the Federal Reserve for the dollar on Wednesday, as it struggled to shake off expectations policy makers would slow the pace of U.S. monetary tightening after their keenly-watched meeting later in the day. The safe-haven yen and the Swiss franc held a firm tone as an overnight plunge in oil prices provided another stark reminder of the dimming prospects for the global economy, and underscored why traders expect the Fed will likely be done after an expected rate hike this week. The yen and the Swiss franc each added a little more than 0.1 percent on the dollar, changing hands at 112.33 and 0.9916 respectively, building on three consecutive days of gains. Risk sentiment has been soured by weaker-than-expected economic data out of China and the eurozone, while the Sino-U.S. trade dispute and a collapse in oil prices have added to fears the global economy is fast losing momentum. Nervous anticipation was palpable in global markets as they awaited the Fed's decision later in the day, especially as they look to its policy guidance for 2019 after what is expected to be its fourth rate hike for this year. While the U.S. central bank's latest median dot plot projections from September indicated three more hikes in 2019, the rate futures market is pricing in only one more rate hike for 2019 - a shift that underscored growing signs of stress on the global economy that many believe will eventually crimp U.S. growth. Comments by Fed Chairman Jerome Powell in late November that the key interest rate was “just below” neutral, a level that neither brakes nor boosts the economy, have bolstered investor expectations that U.S. central bank is nearing a pause on its monetary tightening. Moreover, U.S. President Donald Trump kept up the pressure on the Fed, taking yet another jab in a tweet saying 'I hope the people over at the Fed will read today's Wall Street Journal Editorial before they make yet another mistake. Elsewhere, the euro (EUR=) gained 0.2 percent at $1.1380, enjoying a rare uptick in the past three sessions as the dollar grappled with lower yields and monetary policy risks.
  • Oil prices clawed back some ground on Wednesday as global equity markets showed signs of stabilizing, but crude was still under pressure from worries about oversupply and a slowing global economy that had driven sharp losses in the last three sessions. Further adding to the oversupply concerns, the American Petroleum Institute on Tuesday said U.S. crude stocks rose unexpectedly last week, while gasoline inventories increased. If the build in crude stockpiles is confirmed by U.S. government data on Wednesday, it will be the first increase in three weeks. Meanwhile, analysts said that upcoming output cuts led by the OPEC had so far failed to stimulate the market as they were not due to kick in until next month. Output from de facto OPEC leader Saudi Arabia as well as the United States and Russia - leading producers outside the group - has been at or near record highs. The U.S. government said shale production is expected to climb to over 8 million bpd for the first time by the end of December. Russian oil output is at a record 11.42 million bpd so far this month, an industry source told Reuters. However, there were some factors tightening supply, with Libya's state oil company declaring force majeure at the country's largest oilfield. That came a week after the firm announced a contractual waiver on exports from the field following its seizure by protesters. Elsewhere, a speech marking 40 years of market liberalization by Chinese President Xi Jinping offered no specific support measures for the second-largest economy, disappointing investors who were expecting fiscal policy loosening and a tax cut. Oil market investors were also turning their attention to the outcome of a two-day meeting of the U.S. Federal Reserve that is due to end on Wednesday. /The Fed is expected to raise U.S. interest rates for the fourth time this year though the central bank may temper the outlook for further increases in 2019 due to concerns about the economy.

 

 
Intraday RESISTANCE LEVELS
19th December 2018 R1 R2 R3
GOLD-XAU 1,253 1,260-1,266 1,274
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 47.20-48.10 49.00 49.50-50.10
EURO/USD 1.1400 1.1450 1.1500-1.1560
GBP/USD 1.2700 1.2760-1.2850 1.2900
USD/JPY 112.70-113.50 114.00 114.70-115.50

Intraday SUPPORTS LEVELS
19th 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 46.50-46.00 45.10 44.50-43.90
EURO/USD 1.1350-1.1300 1.1260 1.1205-1.1150
GBP/USD 1.2660-1.2600 1.2550 1.2490-1.2430
USD/JPY 112.10 111.50 111.00-110.20

Intra-Day Strategy (19th 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 Tuesday made its intraday high of US$1250.35/oz and low of US$1244.95/oz. Gold up by 0.288% at US$1249.24/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 1253-1274 keeping stop loss closing above 1274, targeting 1244-1236-1230 and 1221-1214. Buy above 1244-1207 with risk below 1207, targeting 1253-1260 and 1266-1274.

 
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     1,274

Technical Indicators

Name   Value Action
14DRSI  

62.044

Buy
20-DMA   1233.74 Buy
50-DMA  

1226.55

Buy
100-DMA   1212.57 Buy
200-DMA   1253.18 Sell
STOCH(5,3)   62.905 Sell
MACD(12,26,9)   5.804 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$14.70/oz and low of US$14.59/oz. Silver settled down by 0;.205% at US$14.60/oz.

Technicals in Focus:

On daily charts, silver is sustaining above100DMA (14.55), breakage below will lead to 14.30-13.60. 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 Tuesday made an intra‐day high of US$49.88/bbl, intraday low of US$46.12/bbl and settled down by 6.569% to close at US$46.22/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 47.20-50.10 with stop loss at 50.10; targeting 46.50-46.00-45.10 and 44.50-43.90. Buy above 46.50-43.90 with risk daily closing below 43.90 and targeting 47.20-48.10-49.00 and 49.50-50.10.

 
Intraday Support Levels
S1     46.50-46.00
S2     45.10
S3     44.50-43.90

Intraday Resistance Levels
R1     47.20-48.10
R2     49.00
R3     49.50-50.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   28.896 Sell
20-DMA   51.63 Buy
50-DMA   59.23 Buy
100-DMA   64.32 Buy
200-DMA   64.32 Buy
STOCH(5,3)   8.257 Sell
MACD(12,26,9)   -2.557 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1336/EUR, high of US$1.1401/EUR and settled the day up by 0.123% to close at US$1.1360/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     1.1350-1.1300
S2     1.1260
S3     1.1205-1.1150

Intraday  Resistance Levels
R1     1.1400
R2     1.1450
R3     1.1500-1.1560

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.397 Buy
20-DMA   1.1350 Buy
50-DMA   1.1387 Sell
100-DMA   1.1486 Sell
200-DMA   1.1698 Sell
STOCH(5,3)   74.8155 Buy
MACD(12,26,9)   -0.0031 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2609/GBP, high of US$1.2704/GBP and settled the day up by 0.126% to close at US$1.2632/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 1.2700-1.2900 with targets at 1.2660-1.2600-1.2550 and 1.2490-1.2430. Buy above 1.2660-1.2360 with targets 1.2700-1.2760 and 1.2850-1.2900 with stop loss closing below 1.2360.

 
Intraday Support Levels
S1     1.2660-1.2600
S2     1.2550
S3     1.2490-1.2430

Intraday Resistance Levels
R1     1.2700
R2     1.2760-1.2850
R3     1.2900

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.228

Buy
20-DMA   1.2729 Buy
50-DMA   1.2885 Buy
100-DMA   1.2928 Buy
200-DMA   1.3253 Buy
STOCH(5,3)   44.144 Sell
MACD(12,26,9)   -0.0083 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY112.24/USD and made an intraday high of JPY112.85 /USD and settled the day down by 0.292% at JPY112.49/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 112.50-115.50 with risk above 115.50 targeting 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     112.10
S2     111.50
S3     111.00-110.20

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.636 Buy
20-DMA   113.21 Sell
50-DMA   113.00 Sell
100-DMA   112.39 Buy
200-DMA   110.82 Buy
STOCH(9,6)   84.204 Sell
MACD(12,26,9)   0.0078 Sell

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