AAFX TRADING

Daily Market Lookup

  • World stocks extended a steep sell-off on Friday as the threat of a U.S. government shutdown and further hikes in U.S. borrowing costs compounded investor anxieties over the trajectory of global economic growth. Most European bourses and industry indexes were in the red after the S&P 500 fell overnight, heading for its worst quarter since the dark days of the financial crisis in late 2008, with a loss of 15 percent so far. The Nasdaq has shed 19.5 percent from its August peak, just shy of confirming a bear market He said speculation the U.S. economy could be headed for a recession has picked up, dampening global sentiment. "Fear about a U.S. government shutdown is playing into the mix too. Eyes will be on U.S. inflation numbers due later on Friday, day, which include the Federal Reserve's preferred measure of core inflation. Sentiment had turned sour on Thursday when the U.S. Federal Reserve largely retained plans to increase interest rates despite mounting risks to growth. Markets were further spooked when U.S. President Donald Trump refused to sign legislation to fund the U.S. government unless he received money for a border wall, thus risking a partial federal shutdown on Saturday. Adding to the air of crisis was news U.S. Defense Secretary Jim Mattis had resigned after Trump announced a withdrawal of all U.S. forces from Syria and sources said a military pullback from Afghanistan was on the cards The mood change has triggered a rush out of crowded trades, including massive long positions in U.S. equities and the dollar and short positions in Treasuries. Lipper data on Thursday showed investors pulled nearly $34.6 billion out of stock funds in the latest week and were heading for the biggest month of net withdrawals on record. The gap between two- and 10-year yields was back up to just 12 basis points, after flattening to 9 basis points overnight The rally in longer-dated bonds has been fueled by the huge slide in oil prices, which will pile downward pressure on inflation at a time when the global economy is already slowing.
  • The dollar languished close to one-month lows on Friday, seemingly pressured by year-end positioning with financial markets whipsawed by a collapse in oil prices, sell-off in equities and a threat of a U.S. government shutdown. A day after the Federal Reserve raised policy rates and delivered an outlook that was less dovish than traders had anticipated, the liquidation of heavy long positions in the dollar in markets thinned by holidays seemed to be the only explanation for the dollar's weakness. Investors have been on edge all week on rising risks to global growth, with the plunge in oil prices sending a strong disinflationary pulse and extending a slide in U.S. Treasury yields. That has kept the dollar on the back foot even as the less dovish Fed helped it stave off a potentially bigger sell-off. The U.S. currency underperformed particularly against the yen as global stock markets sank as investors worried about the Fed's plans to continue raising rates despite heightening risks to growth. igh currency hedging costs have prompted a move by Japanese investors towards unhedged foreign bonds. Japan's life insurers have expressed a desire to move purchase unhedged foreign bonds when the yen appreciates. The 10-year U.S. Treasury yield (US10YT=RR) was at 2.804 percent after sliding to 2.748 percent overnight, its lowest since early April. Adding to pressure on the dollar was news that U.S. President Donald Trump has refused to sign legislation to fund the U.S. government unless he got money for a border wall, risking a partial federal shutdown on Saturday. Sterling had climbed to a 10-day peak of $1.2707 on Thursday but pulled back from the high after the Bank of England kept interest rates on hold, saying Brexit uncertainty had "intensified considerably" over the last month.
  • Although oil prices bounced higher in overnight trade as OPEC said it would make deeper-than-expected quotas of its output cuts public, optimism faded in early morning trade on Friday as crude headed for the largest weekly decline in a month as concerns over weak economic growth and rising U.S. shale production outweighed hopes that the cartel could keep the global supply glut in check. Prices had briefly moved higher overnight as OPEC Secretary General Mohammad Barkindo said in a letter seen by Reuters that member states should reduce output to 3.02%, which is higher than the originally agreed figure of 2.5%, according to a letter seen. Barkindo also reportedly said that member countries would make their quotas public and applauded Saudi Arabis for pledging to reduce output in 10.2 million barrels per day, more than allocated. The cartel is expected to publish the full list of supply cuts by the end of next week. But buying interest faded in early morning trade, falling further from their peak in October as concerns over oil demand increased because of a slowing global economy and signs of oversupply. Stephen Innes, head of trading for Asia-Pacific at OANDA said in a note that market volatility was "getting exaggerated by immensely thin liquidity conditions, risk sentiment, and holiday market participation" Worries of a global supply glut will remain in the spotlight on Friday as investors keep an eye on a measure of future U.S. output with Baker Hughes’ weekly data out at 1:00 PM (18:00 GMT). Bulls hold hopes that the number of active domestic rigs drilling for oil will register its third straight decline, after falling last week by four to 873, the lowest since mid-October.

 

 
Intraday RESISTANCE LEVELS
21st December 2018 R1 R2 R3
GOLD-XAU 1,260-1,266 1,274 1,280
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 47.20-48.10 49.00 49.50-50.10
EURO/USD 1.1490-1.1560 1.1600 1.1700
GBP/USD 1.2700 1.2760 1.2850-1.2900
USD/JPY 112.10 112.70 113.50-114.00

Intraday SUPPORTS LEVELS
21st December 2018 S1 S2 S3
GOLD-XAU 1,253-1,244 1,238 1,230-1,221
Silver-XAG 14.40-14.00 13.61 13.00-12.40
Crude Oil 46.50-46.00 45.10 44.50-43.90
EURO/USD 1.1450-1.1400 1.1350 1.1300-1.1260
GBP/USD 1.2660-1.2600 1.2550 1.2490-1.2430
USD/JPY 111.50 111.00-110.20 109.60

Intra-Day Strategy (21st 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$1266.44/oz and low of US$1242.69/oz. Gold up by 1.348% at US$1259.59/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 1260-1274 keeping stop loss closing above 1274, targeting 1253-1244-1236 and 1230-1221. Buy above 1253-1214 with risk below 1214, targeting 1260-1266 and 1274-1288.

 
Intraday Support Levels
S1     1,253-1,244
S2     1,238
S3     1,230-1,221
Intraday Resistance Levels
R1     1,260-1,266
R2     1,274
R3     1,280

Technical Indicators

Name   Value Action
14DRSI  

67.033

Buy
20-DMA   1238.24 Buy
50-DMA  

1229.14

Buy
100-DMA   1213.86 Buy
200-DMA   1252.18 Sell
STOCH(5,3)   68.875 Sell
MACD(12,26,9)   8.387 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$14.83/oz and low of US$14.54/oz. Silver settled up by 1.029% at US$14.72/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     14.40-14.00
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$47.52/bbl, intraday low of US$45.70/bbl and settled down by 2.428% to close at US$46.21/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 Thursday made an intraday low of US$1.1369/EUR, high of US$1.1485/EUR and settled the day up by 0.615% to close at US$1.1444/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 1.1450-1.1260 with risk below 1.1260, targeting 1.1490-1.1540 and 1.1610-1.1700. Sell below 1.1490-1.1700 targeting 1.1450-1.1400-1.1350 and 1.1300-1.1260 with stop-loss at daily closing above 1.1700.

 
Intraday Support Levels
S1     1.1450-1.1400
S2     1.1350
S3     1.1300-1.1260

Intraday  Resistance Levels
R1     1.1490-1.1560
R2     1.1600
R3     1.1700

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.440 Buy
20-DMA   1.1358 Buy
50-DMA   1.1382 Sell
100-DMA   1.1483 Sell
200-DMA   1.1690 Sell
STOCH(5,3)   77.8155 Buy
MACD(12,26,9)   -0.0031 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2606/GBP, high of US$1.2706/GBP and settled the day up by 0.341% to close at US$1.2651/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
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 Thursday made intra‐day low of JPY110.80/USD and made an intraday high of JPY112.59/USD and settled the day down by 1.058% at JPY111.27/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
R2     112.70
R3     113.50-114.00

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)   14.83 Sell
MACD(12,26,9)   -0.163 Sell

AAFX TRADING
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