AAFX TRADING

Daily Market Lookup

  • Asian stock markets retreated again on Wednesday, extending a rout that began last week as U.S. political uncertainty exacerbated worries over slowing global economic growth. Investors were unnerved by the U.S. federal government partial shutdown and President Donald Trump's hostile stance toward the Federal Reserve chairman. Markets in Britain, Germany and France will remain closed on Wednesday. U.S. stocks have dropped sharply in recent weeks on concerns over weaker economic growth. Trump has largely laid the blame for economic headwinds on the Fed, openly criticizing its chairman, Jerome Powell, whom he appointed. That has further rattled investors as they grappled with fears of slowing global growth, corporate earnings and U.S.-China trade tensions. In an effort to reassure investors, Treasury Secretary Mnuchin spoke on Sunday with the heads of the six largest U.S. banks, who confirmed they have enough liquidity to continue lending and that "the markets continue to function properly." U.S. bond yields have declined amid the rout, including a steep sell-off in oil, prompted investors to move into safe-haven government debt, adding to the growing pressure on the dollar.
  • The dollar was down against most of its peers on Wednesday, pressured by a cocktail of negative factors including heightened concerns over a partial U.S. government shutdown and tension between the White House and the Federal Reserve. Fears of a U.S. and global economic slowdown have sent U.S. 10-year yields tumbling by around 25 basis points in December, adding to the increasing strain on the dollar and further darkening its outlook. The dollar has struggled particularly against the yen, losing ground for eight straight sessions as a broad risk-off move in financial markets benefited the safe-haven Japanese currency. Over recent months the dollar has struggled to shake off a growing list of bearish factors, led most recently by speculation over the outlook for U.S. interest rates, falling bond yields and the plunge in oil prices. Last week, the Federal Reserve raised rates for the fourth time this year, and largely kept to its plans to hike rates next year despite heightened economic risks. That prompted U.S. President Donald Trump to step up his criticism of Fed Chairman Jerome Powell, with the public tussle between the White House and the Fed rattling investors. Trump blasted the Fed on Monday, describing it as the "only problem" for the U.S. economy. The partial U.S. government shutdown has also added to investor worries about the growth outlook. The U.S. Senate has been unable to break an impasse over Trump's demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until Jan. 3.
  • The British Pound is also mirroring common currency’s price action today and is trading range bound near recent highs on broad based dollar weakness. The US Greenback is trading bearish against all major global currencies pressured by a cocktail of negative factors including heightened concerns over a partial U.S. government shutdown and tension between the White House and the Federal Reserve. Fears of a U.S. and global economic slowdown have sent U.S. 10-year yields tumbling by around 25 basis points in December, adding to the increasing strain on the dollar and further darkening its outlook. Moderating U.S. growth and political tensions are negative for the dollar which is expected to provide support for Pound bulls in immediate and near future market hours. With the absence of the economic data and Brexit-related headlines amid holiday thin market that pair has very little volatility during today’s trading session. As yearend holiday season mood is highly prevalent in market, investors maintain cautious tone despite lack of high impact news on cues which paint bearish picture for both GBP & USD once usual trading activity resumes on first week of January 2019. On release front, calendar has no major releases during US markets hours while UK markets are closed owing to Boxing Day celebrations effectively capping any chance of short term profit opportunities leaving the pair to continue its subdued price action.
  • Oil prices were mixed in thin trading on Wednesday as the U.S. benchmark rebounded from steep losses in the previous session, even though concern over the health of the global economy continued to overshadow the market in the longer term. Broader financial markets have been under pressure on worries about a global economic slowdown amid higher U.S. interest rates and the U.S.-China trade dispute But Innes added macroeconomics fears will continue unless the OPEC "reassures markets the viability of their supply cuts and even impose deeper ones as some members have suggested". OPEC and allies led by Russia agreed this month to cut oil production by 1.2 mn bpd from January. Russian Energy Minister Alexander Novak said on Tuesday that oil prices would become more stable in the first half of 2019, supported by OPEC and non-OPEC countries' joint efforts to cut output. Elsewhere, U.S. political turmoil triggered by the partial shutdown of the federal government is also adding to market concerns. President Donald Trump said on Tuesday that shutdown could last until his demand for U.S.-Mexico border wall money is met. Should that fail to balance the market, OPEC and its allies will hold an extraordinary meeting, United Arab Emirates Energy Minister Suhail al-Mazrouei said on Sunday.

 

 
Intraday RESISTANCE LEVELS
26th December 2018 R1 R2 R3
GOLD-XAU 1,274-1,282 1.289 1,300
Silver-XAG 14.90-15.10 15.60 16.40
Crude Oil 43.00-43.90 44.50 45.10-45.50
EURO/USD 1.1410-1.1450 1.1490 1.1560-1.1600
GBP/USD 1.2760 1.2800-1.2850 1.2900
USD/JPY 111.00 111.50-112.10 112.70

Intraday SUPPORTS LEVELS
26th December 2018 S1 S2 S3
GOLD-XAU 1,266-1,260 1,253 1,244-1,238
Silver-XAG 14.75-14.40 14.00 13.61-13.00
Crude Oil 42.50-42.00 41.60 41.00-40.40
EURO/USD 1.1390-1.1350 1.1300 1.1260-1.1210
GBP/USD 1.2700-1.2660 1.2600 1.2550-1.2490
USD/JPY 110.20-109.60 109.00 108.50

Intra-Day Strategy (26th December 2018)
GOLD-XAU Buy on Dips
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$1269.97/oz and low of US$1256.78/oz. Gold up by 0.916% at US$1268.91/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1251) and breakage below will call for 1246-1236. 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: Buy on Dips

Based on the charts and explanations above; buy above 1266-1236 with risk below 1236, targeting 1274-1282 and 1289-1300. Sell below 1274-1300 keeping stop loss closing above 1300, targeting 1266-1260-1253 and 1244-1236

 
Intraday Support Levels
S1     1,266-1,260
S2     1,253
S3     1,244-1,238
Intraday Resistance Levels
R1     1,274-1,282
R2     1.289
R3     1,300

Technical Indicators

Name   Value Action
14DRSI  

70.465

Buy
20-DMA   1243.26 Buy
50-DMA  

1230.85

Buy
100-DMA   1215.05 Buy
200-DMA   1251.71 Sell
STOCH(5,3)   86.892 Sell
MACD(12,26,9)   10.463 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$14.63/oz and low of US$14.59/oz. Silver settled down by 0.682% at US$14.75/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 14.75-13.00 targeting 14.90-15.10 and 15.60-16.35; stop breakage below 13.00. Sell below 14.90-16.40 with stop loss above 16.40; targeting 14.75-14.40-13.90 and 13.50-13.00.

 
Intraday  Support Levels
S1     14.75-14.40
S2     14.00
S3     13.61-13.00

Intraday  Resistance Levels
R1     14.90-15.10
R2     15.60
R3     16.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.712 Buy
20-DMA   14.54 Buy
50-DMA   14.47 Buy
100-DMA   14.49 Sell
200-DMA   15.38 Sell
STOCH(5,3)   67.075 Buy
MACD(12,26,9)   0.091 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$46.26/bbl, intraday low of US$42.40/bbl and settled down by 6.533% to close at US$42.49/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 46.00-49.00 with stop loss at 49.00; targeting 45.50-45.10 and 44.50-43.90-43.00. Buy above 45.50-43.00 with risk daily closing below 43.00 and targeting 46.00-46.50-47.20 and 48.10-49.00-49.50.

 
Intraday Support Levels
S1     42.50-42.00
S2     41.60
S3     41.00-40.40

Intraday Resistance Levels
R1     43.00-43.90
R2     44.50
R3     45.10-45.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   31.683 Sell
20-DMA   49.71 Buy
50-DMA   57.56 Buy
100-DMA   63.16 Buy
200-DMA   65.56 Buy
STOCH(5,3)   3.573 Sell
MACD(12,26,9)   -3.373 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1359/EUR, high of US$1.1473/EUR and settled the day up by 0.422% to close at US$1.1417/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1480), which become immediate resistance level, break below will target 1.1560-1.1600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider sell.

Trading Strategy: Neutral to Buy

Buy above 1.1390-1.1210 with risk below 1.1210, targeting 1.1400-1.1450-1.1490 and 1.1540-1.1610. Sell below 1.1400-1.1600 targeting 1.1350-1.1300 and 1.1260-1.1210 with stop-loss at daily closing above 1.1600.

 
Intraday Support Levels
S1     1.1390-1.1350
S2     1.1300
S3     1.1260-1.1210

Intraday  Resistance Levels
R1     1.1410-1.1450
R2     1.1490
R3     1.1560-1.1600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.067 Buy
20-DMA   1.1364 Buy
50-DMA   1.1374 Sell
100-DMA   1.1479 Sell
200-DMA   1.1680 Sell
STOCH(5,3)   53.8155 Sell
MACD(12,26,9)   -0.0031 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2633/GBP, high of US$1.2633/GBP and settled the day up by 0.474% to close at US$1.2701/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 1.2760-1.2900 with targets at 1.2700-1.2660-1.2600 and 1.2550-1.2490. Buy above 1.2600-1.2360 with targets 1.2760-1.2800 and 1.2850-1.2900 with stop loss closing below 1.2360.

 
Intraday Support Levels
S1     1.2700-1.2660
S2     1.2600
S3     1.2550-1.2490

Intraday Resistance Levels
R1     1.2760
R2     1.2800-1.2850
R3     1.2900

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

49.208

Buy
20-DMA   1.2675 Buy
50-DMA   1.2814 Buy
100-DMA   1.2901 Buy
200-DMA   1.3207 Buy
STOCH(5,3)   67.805 Sell
MACD(12,26,9)   -0.0083 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY110.26/USD and made an intraday high of JPY111.18/USD and settled the day down by 0.545% at JPY111.32/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 111.50-114.50 with risk above 114.50 targeting 111.00-110.20 and 109.60-109.00. Long positions above 111.00-109.00 with targets of 111.50-112.10-112.70 and 113.50-114.00 with stop below 109.00.

 
Intraday Support Levels
S1     110.20-109.60
S2     109.00
S3     108.50

INTRADAY RESISTANCE LEVELS
R1     111.00
R2     111.50-112.10
R3     112.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   27.523 Buy
20-DMA   112.68 Sell
50-DMA   112.88 Sell
100-DMA   112.37 Buy
200-DMA   110.94 Buy
STOCH(9,6)   9.356 Sell
MACD(12,26,9)   -0.410 Sell

AAFX TRADING
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