AAFX TRADING

Daily Market Lookup

  • Asian shares slid on Thursday after the U.S. Federal Reserve raised rates, as expected, and kept most of its guidance for additional hikes next two years, dashing investor hopes for a more dovish policy outlook. Markets across the region are nearing gloomy milestones, with Japan's Topix and South Korea's Kospi heading into a bear market, which means they are down more than 20 percent off their recent highs, to join Shanghai and Hong Kong's Han Seng. The Fed raised key overnight lending rate rates by 0.25 percent point as expected to a range of 2.25 percent to 2.50 percent. But the slight revision was not enough to ease market fears over a further U.S. economic slowdown on the back of trade tensions, a waning boost from tax cuts and tightening monetary conditions for companies. A rise in short-term interest rates and a fall in the long-date yield rekindled worries of an inversion in the yield curve, where shorter-debt yields become higher than longer-term ones. Fed funds futures are now pricing in only about 50 percent chance of one rate hike. The dollar bounced back against major currencies after the Fed was perceived to be more hawkish than anticipated On Thursday, Japan kept its policy settings unchanged, as expected. Later in the day, UK and Sweden will make policy announcements. Both are expected to keep their policies on hold, though the Swedish central bank's decision is seen as a close call, with some analysts expecting a rate hike.
  • The U.S. dollar slipped on Thursday in Asia after the U.S. Federal Reserve raised rates as expected. Overnight, the central bank took the target range for its benchmark fund rate to 2.25-2.5% on Wednesday while forecasting fewer rate increases in 2019 than it had at its September policy meeting. .S. stocks stumbled up and down after the decision then ultimately closed sharply lower after Powell’s news conference. Citing analysts, Reuters noted this move was effectively a targeted rate cut. The expectation of further monetary easing to combat a slowing economy could put more pressure on the yuan, the article added. The dollar steadied in Asian trade on Thursday after the Federal Reserve stepped back from a more aggressive policy tightening path even as it gave markets the distinct impression of being much less cautious than they had anticipated. In a widely expected decision, the U.S. central bank hiked interest rates by 25 basis points, its fourth increase this year, while forecasting fewer rate increases in 2019 than it had at its September policy meeting. Yet markets were surprised by the Fed's commitment to retain the core of its plan to tighten monetary policy, despite rising uncertainty about global economic growth, sending Wall Street stocks tumbling and depressing Asian equities. Indeed, while the Fed's 'dot plots' now signal two, instead of three, rate hikes for next year, the market remains unconvinced and is barely pricing one increase in a reflection of the slowdown in global growth. In a press conference, Fed Chairman Jerome Powell suggested that the expected two hikes for 2019 weren't set in tone. China's central bank rolled out a policy tool to spur lending to small and private firms on Wednesday. Some analysts said this move was effectively a targeted rate cut and see more pressure on the yuan on expectations of further monetary easing to combat a slowing economy. The single currency was supported by news Italy had struck a deal with the European Commission over its contested 2019 budget. The Bank of England is due to hold its final policy meeting of the year on Thursday, where markets expect the central bank to stay on hold.
  • Oil prices were mixed on Thursday morning in Asia, while oil production cartel OPEC and its allies pledged to keep slashing output next year. OPEC’s de-facto leader Saudi Arabia said the organization, Russia and other oil producers will keep curbing output in 2019 to avoid a global glut, according to Bloomberg. “What has happened in my opinion recently is a confluence of many non-oil fundamental issues including the geopolitical issues, especially around the sanctions and the waiver that were granted by the U.S. It also includes the trade tension between the U.S. and China.” Earlier this month, the cartel and its allies agreed to slash output by 1.2 mn bpd, but the market remains sceptical if the oil producers will walk the talk. Meanwhile, U.S. crude inventories fell 0.5 million barrels as of Dec. 14 from the previous week, but the 441.5 million barrels in stock now is still 7% above the five-year average for mid-December, according to data released from the EIA on Wednesday. The Organization of the Petroleum Exporting Countries and other oil producers including Russia agreed this month to curb output by 1.2 mn bpd in an attempt to drain tanks and boost prices. But the cuts will not happen until next month and production has been at or near record highs in the United States, Russia and Saudi Arabia. Volatility in crude prices this week has driven investors to shut their positions and is draining liquidity from the market, Xi said. Total market open interest in U.S. crude contracts had fallen to 2.063 mn contracts as of Thursday, up from a record of 2.71 mn in May. Innes was referring to the U.S. Federal Reserve's last policy meeting of 2018, at which it suggested the U.S. economy no longer needed the central bank's support either through lower-than-normal interest rates or by maintaining a massive balance sheet. U.S. crude inventories fell by 497K barrels in the week to Dec. 14, the U.S. EIA said on Wednesday, smaller than the decrease of 2.4 mn barrels analysts had expected. The decline was the third consecutive decrease. Distillate stockpiles , which include diesel and heating oil, fell by 4.2 mn barrels, versus expectations of a 573,000-barrel increase, the EIA said.

 

 
Intraday RESISTANCE LEVELS
20th 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 1.2660-1.2700 1.2760 1.2850-1.2900
USD/JPY 112.10-112.70 113.50 114.00-114.70

Intraday SUPPORTS LEVELS
20th 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 1.2600 1.2550 1.2490-1.2430
USD/JPY 111.50 111.00-110.20 109.60

Intra-Day Strategy (20th 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 Wednesday made its intraday high of US$1248.08/oz and low of US$1241.63/oz. Gold down by 0.541% at US$1242.68/oz.

Technicals in Focus:

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$14.81/oz and low of US$14.53/oz. Silver settled down by 0.205% at US$14.57/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 Wednesday made an intra‐day high of US$48.37/bbl, intraday low of US$46.34/bbl and settled up by 2.287% to close at US$47.40/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 Wednesday made an intraday low of US$1.1358/EUR, high of US$1.1438/EUR and settled the day up by 0.140% to close at US$1.1374/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 Wednesday made an intra‐day low of US$1.2605/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     1.2600
S2     1.2550
S3     1.2490-1.2430

Intraday Resistance Levels
R1     1.2660-1.2700
R2     1.2760
R3     1.2850-1.2900

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 Wednesday made intra‐day low of JPY112.08/USD and made an intraday high of JPY112.65/USD and settled the day down by 0.0177% at JPY112.47/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     111.50
S2     111.00-110.20
S3     109.60

INTRADAY RESISTANCE LEVELS
R1     112.10-112.70
R2     113.50
R3     114.00-114.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.636 Buy
20-DMA   113.13 Sell
50-DMA   112.97 Sell
100-DMA   112.40 Buy
200-DMA   110.88 Buy
STOCH(9,6)   14.838 Sell
MACD(12,26,9)   -0.163 Sell

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