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Daily Market Lookup

  • The European Central Bank's interest rates are set to remain at low levels as long as needed to bring inflation back to its 2-percent target, ECB policymaker Benoit Coeure said on Friday. The ECB ended its 2.6 trillion euro ($2.96 trillion) asset purchase scheme last month but pledged to keep rates at current record lows at least through next summer. "The interest rates we set for the euro zone economy will stay at the current level ... until at least after the summer of 2019 and as long as necessary," Coeure said on France Inter radio. Coeure also said that with growth slowing due to concerns about trade tensions there was a risk of a new financial crisis, which "we need to be very vigilant about". The safe-haven yen weakened versus the dollar on Friday on hopes upcoming U.S.-China trade talks would make some progress, but broader market confidence remained weak amid worries over slowing global growth.
  • The Japanese yen fell against the U.S. dollar while the Chinese yuan gained on Friday in Asia on hopes that the upcoming U.S.-China trade talks would make some progress. Market sentiment recovered somewhat after the Commerce Ministry confirmed in a statement that the U.S. and China would begin another round of trade talks next week. Deputy U.S. Trade Representative Jeffrey Gerrish will lead the U.S. delegation for the negotiations on Jan. 7 and 8. Dallas Fed President Robert Kaplan acknowledged issues such as the deceleration of global growth, tightening of financial conditions and widening credit spreads in an interview with Bloomberg on Thursday.
  • Market sentiment perked up after China confirmed that trade talks with the United States will be held at the vice ministerial level in Beijing on Jan. 7-8. Trade tensions between the world's two largest economies had rattled financial markets for most of 2018. However, fears of a sharp slowdown in economic growth and a failure of the trade talks are likely to keep investors from diving back into riskier assets in a big way in the coming weeks. Weaker-than-expected U.S. factory activity has heightened investor expectations the Federal Reserve will not raise rates in 2019, and possibly even cut them in 2020. Data has also been weak out of China and Europe. Spooked by signs of fresh troubles in the world's largest economy, investors rushed to the safety of bonds. The Fed raised rates four times in 2018 on the back of strong growth and a robust labor market. However, with financial conditions tightening, most analysts now do not expect the Fed to raise rates in 2019. Indeed, interest rate futures markets are now fully pricing in a rate cut by April next year. In an interview with Bloomberg on Thursday, Dallas Fed President Robert Kaplan acknowledged issues such as the deceleration of global growth, tightening of financial conditions and widening credit spreads. A dovish Fed would likely keep the greenback under pressure in the coming months, giving central banks in emerging markets room to cut rates if economic conditions sharply deteriorate.
  • Oil prices rose by more than 1 percent on Friday, shaking off earlier losses, after China said it would hold talks with the U.S. government on Jan. 7-8 to look for solutions to a trade dispute between the world's two biggest economies. Both benchmarks are on track for solid gains in the first week of 2019 trading despite rising concerns that the Sino-American trade war will lead to a global economic slowdown. The firmer prices came after China's commerce ministry said it would hold vice-ministerial level trade talks with U.S. counterparts in Beijing on Jan. 7-8. The two nations have been locked in a trade war for much of the past year, disrupting the flow of hundreds of billions of dollars worth of goods and stoking fears of a global economic slowdown. Data for December from the Institute for Supply Management (ISM) on Thursday showed the broadest U.S. slowdown in growth in a decade. Leading economies in Asia and Europe have already reported a fall in manufacturing activity Japan's MUFG bank said in its 2019 oil market outlook that "on the demand side, oil has not been immune from the broad cross-asset sell-off as global growth concerns...mount downside pressure on oil demand". Despite the turmoil, oil prices have received some support as supply cuts announced by the Organization of the Petroleum Exporting Countries (OPEC) kick in. OPEC-supply fell by 460,000 barrels per day (bpd) between November and December, to 32.68 million bpd, a Reuters survey found on Thursday, although some of the fall were involuntary disruptions in Iran and Libya, which are exempt from cuts. OPEC and non-members led by Russia - an alliance known as OPEC+ - agreed last December to reduce supply by 1.2 million bpd in 2019 versus October 2018 levels to rein in an emerging fuel glut. The fuel surplus was in part depicted by light distillate fuel stocks at Singapore's refining hub climbing to a record 16.1 million barrels in by January. Considering the planned cuts versus ongoing increases in U.S. crude production, which hit a record 11.7 million bpd by late 2018, FGE said it expected Brent prices to range between $55-$60 per barrel in the first months of 2019. Some analysts doubt the OPEC+ group is able to support prices in the longer term, however.

 

 
Intraday RESISTANCE LEVELS
4th January 2019 R1 R2 R3
GOLD-XAU 1,300-1,309 1,315 1,321
Silver-XAG 15.80-16.00 16.40 17.00
Crude Oil 48.00-48.50 49.50 50.20
EURO/USD 1.1460-1.1490 1.1560 1.1600-1.1640
GBP/USD 1.2700-1.2760 1.2800 1.2850-1.2900
USD/JPY 108.10-108.50 109.00 24.089

Intraday SUPPORTS LEVELS
4th January 2019 S1 S2 S3
GOLD-XAU 1.289-1,282 1,274 1,266-1,260
Silver-XAG 15.60-15.40 15.10 14.90-14.75
Crude Oil 47.60-47.00 46.50 45.50-45.10
EURO/USD 1.1400 1.1350 1.1300-1.1260
GBP/USD 1.2660 1.2600 1.2550-1.2490
USD/JPY 107.50-107.05 106.60 106.00

Intra-Day Strategy (4th 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 Thursday made its intraday high of US$1294.88/oz and low of US$1284.26/oz. Gold up by 0.754% at US$1293.95/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 1294-1260 with risk below 1260, targeting 1300-1309 and 1315-1324. Sell below 1300-1321 keeping stop loss closing above 1321, targeting 1294-1284-1274 and 1266-1260.

 
Intraday Support Levels
S1     1.289-1,282
S2     1,274
S3     1,266-1,260
Intraday Resistance Levels
R1     1,300-1,309
R2     1,315
R3     1,321

Technical Indicators

Name   Value Action
14DRSI  

76.305

Buy
20-DMA   1259.74 Buy
50-DMA  

1237.72

Buy
100-DMA   1220.08 Buy
200-DMA   1250.13 Sell
STOCH(5,3)   86.907 Buy
MACD(12,26,9)   13.891 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$15.73/oz and low of US$15.47/oz. Silver settled up by 1.356% at US$15.71/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 15.60-14.75 targeting 15.80-16.00 and 16.40-16.80-17.00.; stop breakage below 14.75. Sell below 15.80-17.00 with stop loss above 17.00; targeting 15.60-15.10-14.90 and 14.75 14.40.

 
Intraday  Support Levels
S1     15.60-15.40
S2     15.10
S3     14.90-14.75

Intraday  Resistance Levels
R1     15.80-16.00
R2     16.40
R3     17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.683 Buy
20-DMA   14.89 Buy
50-DMA   14.58 Buy Buy
100-DMA   14.52 Buy
200-DMA   15.38 Buy
STOCH(5,3)   88.742 Buy
MACD(12,26,9)   0.305 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$47.62/bbl, intraday low of US$45.51/bbl and settled up by 1.207% to close at US$46.95/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 48.00-50.20 with stop loss at 50.20; targeting 47.60-47.00-46.450 and 45.50-45.10. Buy above 47.60-45.10 with risk daily closing below 45.00 and targeting 48.10-49.00 and 49.50-50.20.

 
Intraday Support Levels
S1     47.60-47.00
S2     46.50
S3     45.50-45.10

Intraday Resistance Levels
R1     48.00-48.50
R2     49.50
R3     50.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.197 Sell
20-DMA   48.22 Sell
50-DMA   53.98 Sell
100-DMA   62.01 Sell
200-DMA   65.03 Sell
STOCH(5,3)   79.251 Buy
MACD(12,26,9)   -2.276 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1414/EUR, high of US$1.1410/EUR and settled the day up by 0.423% to close at US$1.1391/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 1.1400-1.1210 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     1.1400
S2     1.1350
S3     1.1300-1.1260

Intraday  Resistance Levels
R1     1.1460-1.1490
R2     1.1560
R3     1.1600-1.1640

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.652 Buy
20-DMA   1.1378 Buy
50-DMA   1.1366 Sell
100-DMA   1.1476 Sell
200-DMA   1.1652 Sell
STOCH(5,3)   36.754 Sell
MACD(12,26,9)   0.0008 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2410/GBP, high of US$1.2646/GBP and settled the day up by 0.134% to close at US$1.2634/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 and 1.2550-1.2490. Buy above 1.2660-1.2490 with targets 1.2700-1.2760-1.2800 and 1.2850-1.2900 with stop loss closing below 1.2490.

 
Intraday Support Levels
S1     1.2660
S2     1.2600
S3     1.2550-1.2490

Intraday Resistance Levels
R1     1.2700-1.2760
R2     1.2800
R3     1.2850-1.2900

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

45.9444

Buy
20-DMA   1.2642 Sell
50-DMA   1.2771 Sell
100-DMA   1.2893 Sell
200-DMA   1.3162 Sell
STOCH(5,3)   43.988 Sell
MACD(12,26,9)   -0.0033 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY104.54/USD and made an intraday high of JPY108.89/USD and settled the day down by 1.129% at JPY109.63/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 108.10-110.20 with risk above 110.20 targeting 109.00-108.50-108.10 and 107.70-107.00. Long positions above 108.10-106.00 with targets of 108.10-108.50-109.00 and 109.60-110.20-111.00 with stop below 107.00.

 
Intraday Support Levels
S1     107.50-107.05
S2     106.60
S3     106.00

INTRADAY RESISTANCE LEVELS
R1     108.10-108.50
R2     109.00
R3     24.089

TECHNICAL INDICATORS
Name   Value Action
14DRSI   24.089 Buy
20-DMA   111.47 Sell
50-DMA   112.51 Sell
100-DMA   112.28 Buy
200-DMA   110.05 Buy
STOCH(9,6)   41.408 Buy
MACD(12,26,9)   -1.207 Sell

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