AAFX TRADING

Daily Market Lookup

  • Asian shares turned tail on the first trading day of the new year as more disappointing economic data from China darkened the mood and upended U.S. stock futures. Private sector survey showed China manufacturing activity contracted for the first time in 19 months. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) for December fell to 49.7, from 50.2 in November, and followed a poor official survey on factory output. The dollar has been dragged by a steep fall in Treasury yields in recent weeks as investors wagered the U.S. Federal Reserve would not raise rates again, even though it is still projecting at least two more hikes. Federal Reserve Chairman Jerome Powell will have the chance to comment on the economic outlook when he participates in a joint discussion with former Fed chairs Janet Yellen and Ben Bernanke on Friday. Also looming are a closely-watched survey on U.S. manufacturing due on Thursday, followed by the December payrolls report on Friday. Fed fund futures have all but priced out any hike for this year and now imply a quarter point cut by mid-2020. The spread between two- and 10-year yields has in turn shrunk to the smallest since 2007, a flattening that has been a portent of recessions in the past. The pullback in the dollar and the chance of no more U.S. rate hikes has been a boon for gold. The precious metal fetched $1,283.71 an ounce to be close to a six-month peak. The Japanese yen gained on Wednesday in Asia as stock markets traded mostly lower on the first trading day of the New Year. Wider concerns about global economic growth, the U.S. government shutdown and a slower pace of Federal Reserve rate hikes were cited as catalysts for the selling. Meanwhile, disappointing economic data from China also piled pressure on Chinese stocks. The U.S.-Sino trade dispute received some continued focus this week. Reports that Trump indicated progress had been made toward a potential settlement with China provided some cause for optimism, although The People’s Daily, China’s state-owned newspaper, cautioned on Wednesday that Beijing “has not given in, is not giving in, and will never give in” in matters related to core national interests. Reports on late Tuesday suggested U.S. President Donald Trump is willing to make a deal to end a government shutdown. Parts of the government have now been shut for 11 days, affecting 9 of the 15 federal departments, dozens of agencies, and hundreds of thousands of workers, according to reports.
  • The dollar fell against the yen and euro in thin year-end trading on Monday as optimism about progress in the U.S.-China trade dispute hurt its safe-haven allure, but the greenback stayed on track to log its strongest annual performance in three years. Equities around the world rose on Monday as hints of progress on the Sino-U.S. trade standoff provided optimism in what has been a punishing end of year for markets globally. Risk sentiment brightened slightly when U.S. President Donald Trump said he held a "very good call" with China's President Xi Jinping on Saturday to discuss trade and claimed "big progress" was being made. The two nations have engaged in a trade war for much of 2018, shaking world financial markets as punitive tariffs disrupted the flow of hundreds of billions of dollars worth of goods between the world's two largest economies. The yen which tends to benefit during geopolitical or financial stress as Japan is the world's biggest creditor nation, remained in demand and the greenback hit a fresh six-month low against the Japanese currency. The persistent tensions have boosted safe-haven demand for the greenback this year as investors bet that the United States is in better shape than its rivals to weather a trade war. While the dollar has been relatively stable going into the end of 2018, expensive valuation, a flagging equity boom, waning cash repatriation by U.S. companies, and the possibility that the U.S. Federal Reserve will not raise interest rates as many times as previously signaled pose a challenge for the greenback. Euro has gained versus the dollar in recent weeks, economic growth and inflation in Europe remain much weaker than the European Central Bank's expectations.
  • Oil markets dropped by around 1 percent in 2019's first trading on Wednesday, pulled down by surging U.S. output and concerns about an economic slowdown in 2019 as factory activity in China, the world's biggest oil importer, contracted. Traders said futures prices fell on expectations of oversupply amid surging U.S. production and concerns about a global economic slowdown. Factory activity weakened in December across Asia, including in China, as the Sino-U.S. trade war and a slowdown in Chinese demand hit production in most economies, pointing to a rocky start for the world's top economic growth region in 2019. Oil prices ended 2018 lower for the first time since 2015, after a desultory fourth quarter that saw buyers flee the market over growing worries about too much supply and mixed signals related to renewed U.S. sanctions on Iran. The outlook for 2019 is riddled with uncertainty, analysts said, including the U.S.-China trade concerns and Brexit, as well as political instability and conflict in the Middle East. A Reuters poll showed oil prices are expected to trade below $70 per barrel in 2019 as surplus production, much of it from the United States, and slowing economic growth undermine efforts led by the OPEC to cut supply and prop up prices. On the production side, all eyes will be on the ongoing surge in U.S. output and on OPEC's and Russia's supply discipline. U.S. crude output rose to an all-time high of 11.537 mn bpd in October, the EIA said on Monday. That makes the U.S. the world's biggest oil producer ahead of Russia and Saudi Arabia. Weekly data, which is more open to revisions, was reported last week at 11.7 million bpd in late December by the EIA.

 

 
Intraday RESISTANCE LEVELS
2nd January 2019 R1 R2 R3
GOLD-XAU 1.289-1,300 1,309 1,315
Silver-XAG 15.40-15.60 16.00 16.40
Crude Oil 45.50-46.50 47.00 47.60-48.40
EURO/USD 1.1490 1.1560-1.1600 1.1640
GBP/USD 1.2760 1.2800-1.2850 1.2900
USD/JPY 109.60-110.20 111.00 111.50-112.10

Intraday SUPPORTS LEVELS
2nd January 2019 S1 S2 S3
GOLD-XAU 1,282 1,274 1,266-1,260
Silver-XAG 15.10-14.90 14.75 14.40-14.00
Crude Oil 45.10 44.50 43.90-43.00
EURO/USD 1.1460-1.1400 1.1350 1.1300-1.1260
GBP/USD 1.2700-1.2660 1.2600 1.2550-1.2490
USD/JPY 109.00 108.50-18.10 107.70

Intra-Day Strategy (2nd January 2019)
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$1284.01/oz and low of US$1277.39/oz. Gold up by 0.001% at US$1280.20/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 1284-1244 with risk below 1244, targeting 1289-1300 and 1309-1315. Sell below 1289-1315 keeping stop loss closing above 1315, targeting 1284-1274-1266 and 1260- 1253.

 
Intraday Support Levels
S1     1,282
S2     1,274
S3     1,266-1,260
Intraday Resistance Levels
R1     1.289-1,300
R2     1,309
R3     1,315

Technical Indicators

Name   Value Action
14DRSI  

73.363

Buy
20-DMA   1254.15 Buy
50-DMA  

1235.25

Buy
100-DMA   1217.28 Buy
200-DMA   1250.69 Sell
STOCH(5,3)   92.002 Buy
MACD(12,26,9)   13.891 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$15.38/oz and low of US$15.31/oz. Silver settled up by 0.455% at US$15.44/oz.

Technicals in Focus:

On daily charts, silver is sustaining above100DMA (14.50), 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 15.10-14.00 targeting 15.40-15.60 and 16.00-16.40.; stop breakage below 14.00. Sell below 15.40-16.40 with stop loss above 16.40; targeting 15.10-14.90-14.75 14.40-13.90.

 
Intraday  Support Levels
S1     15.10-14.90
S2     14.75
S3     14.40-14.00

Intraday  Resistance Levels
R1     15.40-15.60
R2     16.00
R3     16.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.401 Buy
20-DMA   14.65 Buy
50-DMA   14.50 Buy
100-DMA   14.49 Buy
200-DMA   15.37 Sell
STOCH(5,3)   89.330 Buy
MACD(12,26,9)   0.174 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$46.60/bbl, intraday low of US$44.82/bbl and settled up by 0.198% to close at US$45.54/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 46.50-49.90 with stop loss at 49.90; 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 46.50-47.20 and 48.10-49.00-49.50.

 
Intraday Support Levels
S1     45.10
S2     44.50
S3     43.90-43.00

Intraday Resistance Levels
R1     45.50-46.50
R2     47.00
R3     47.60-48.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.621 Sell
20-DMA   49.12 Sell
50-DMA   54.71 Sell
100-DMA   62.35 Sell
200-DMA   65.19 Sell
STOCH(5,3)   61.078 Buy
MACD(12,26,9)   -2.966 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1420/EUR, high of US$1.1465/EUR and settled the day up by 0.104% to close at US$1.1444/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 1.1460-1.1210 with risk below 1.1210, targeting 1.1490-1.1540-1.1600 and 1.1640-1.1700. Sell below 1.1490-1.1600 targeting 1.1450-1.1400-1.1350 and 1.1300-1.1260 with stop-loss at daily closing above 1.1600.

 
Intraday Support Levels
S1     1.1460-1.1400
S2     1.1350
S3     1.1300-1.1260

Intraday  Resistance Levels
R1     1.1490
R2     1.1560-1.1600
R3     1.1640

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.019 Buy
20-DMA   1.1379 Buy
50-DMA   1.1370 Sell
100-DMA   1.1476 Sell
200-DMA   1.1662 Sell
STOCH(5,3)   84.143 Sell
MACD(12,26,9)   -0.0018 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2679/GBP, high of US$1.2814/GBP and settled the day up by 0.394% to close at US$1.2739/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 1.2730-1.2660-1.2600 and 1.2550-1.2490. Buy above 1.2700-1.2490 with targets 1.2760-1.2800 and 1.2850-1.2900 with stop loss closing below 1.2490.

 
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  

53.912

Buy
20-DMA   1.2659 Sell
50-DMA   1.2786 Sell
100-DMA   1.2896 Sell
200-DMA   1.3178 Sell
STOCH(5,3)   67.611 Sell
MACD(12,26,9)   -0.0023 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY109.62/USD and made an intraday high of JPY110.46/USD and settled the day down by 0.435% at JPY109.68/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 109.60-112.10 with risk above 112.10 targeting 109.00-108.50-108.10 and 107.70-107.00. Long positions above 109.00-107.00 with targets of 109.60-110.20-111.00 and 111.50-112.10 with stop below 107.00.

 
Intraday Support Levels
S1     109.00
S2     108.50-18.10
S3     107.70

INTRADAY RESISTANCE LEVELS
R1     109.60-110.20
R2     111.00
R3     111.50-112.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   26.528 Buy
20-DMA   112.01 Sell
50-DMA   112.69 Sell
100-DMA   112.34 Buy
200-DMA   110.04 Buy
STOCH(9,6)   22.332 Sell
MACD(12,26,9)   -0.861 Sell

AAFX TRADING
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