AAFX TRADING

Daily Market Lookup

  • Asian shares climbed to a 3-1/2-week high on Wednesday, supported by growing optimism that the United States and China can strike a trade deal to avoid an all-out confrontation that would severely disrupt the global economy. The United States and China agreed to extend trade talks in Beijing for an unscheduled third day on Wednesday, amid signs of progress on issues including purchases of U.S. farm and energy commodities and increased access to China’s markets. But sources said the two sides were still far apart from U.S. demands for structural reforms in China. President Donald Trump wrote on Twitter overnight that “Talks with China are going very well!” Bloomberg reported Trump is increasingly eager to strike a deal with China soon in an effort to perk up financial markets that have slumped on concerns over the trade war, citing people familiar with internal White House deliberations. The rally in riskier assets has accelerated since last Friday, when Federal Reserve Chairman Jerome Powell said he was aware of risks to the economy and would be patient and flexible in policy decisions this year. In another sign of subsiding worries about the U.S. economic outlook, Fed funds rate futures show traders are now pricing in only a small chance of a rate hike this year, a change from late last week when a rate cut was almost fully priced in. There was little market reaction to Trump’s prime-time televised address where he made his case that a U.S.-Mexico border wall is urgently needed, despite opposition from Democrats. That suggests the dispute on the issue, which has sparked a government shutdown since late December and already caused some delays in the release of key U.S. economic data, is nowhere near a resolution.
  • The dollar eased against some of its peers on Wednesday, as hopes of progress in the Sino-U.S. trade dispute boosted commodity-linked and riskier currencies. Increased risk appetite helped lift the Australian dollar after U.S. government officials said that trade talks between China and the United States will continue for an unscheduled third day on Wednesday. The Australian dollar is often seen as a proxy for Chinese growth because of Australia's export-reliant economy and China being the country's biggest destination for its commodities. The rally in risk assets has accelerated since last Friday when Federal Reserve Chairman Jerome Powell said he was aware of risks to the economy and would be patient and flexible in policy decisions this year. An unexpected fall in German industrial output for the third straight month weighed on the euro overnight. The drop was modest, but it underscored concerns about a slowdown and the European Central Bank's caution as it tries to wean the region off stimulus. The British parliament is due to vote on Prime Minister Theresa May's Brexit agreement on Jan. 15, and the run-up is likely to dominate trading in sterling. May is set to lose the vote unless she can convince opponents within and outside her party to back her deal.
  • The Chinese yuan and the Australian dollar gained on Wednesday in Asia following reports that Beijing and Washington may be making progress in resolving their trade dispute. Talks between the two countries were extended for a third day, according to various media, which added that negotiators made progress on issues including the purchase of U.S. goods and services. U.S. President Donald Trump is said to be eager to strike a deal with Beijing in an effort to help Wall Street recoup some of the steep losses suffered in recent months, CNBC reported citing people familiar with internal White House deliberations. The new round of talks began on Monday as Beijing and Washington hoped to reach an agreement before a March 1 deadline when U.S. tariffs on some $200 billion in Chinese goods would rise to 25% from 10%.
  • Oil prices gained on Wednesday in Asia, with West Texas Intermediate crude rose above the key $50 per barrel mark on hopes for a China-U.S. trade breakthrough. The gains in oil price were in line with Asian stock markets, which climbed to 3-1/2 week highs on Wednesday. The Hang Seng Index jumped more than 2.5%, while other major markets in Asia also rose more than 1%. China and the U.S. extended trade talks for an unscheduled third day on Wednesday, amid signs of progress on issues including buying of U.S. farm and energy commodities and increased access to China's markets. Meanwhile, state-run newspaper China Daily reported on Wednesday that China would not make any "unreasonable concessions", although Beijing remained keen to reach a trade deal with Washington. Although not a directional driver, Goldman Sachs said on Monday that China’s oil demand growth was expected to drop by 26% to 350,000 barrels per day year on year in 2019, down from 475,000 bpd in 2018. Uncertainty about the global economy, particularly China, has been holding back this year's comeback rally in crude after the 40% drop from last year's highs, despite aggressive Saudi output cuts and a Federal Reserve that has indicated it might not raise interest rates like last year.

 

 
Intraday RESISTANCE LEVELS
9th January 2019 R1 R2 R3
GOLD-XAU 1.289 1,300-1,309 1,315
Silver-XAG 15.80-16.00 16.40 17.00
Crude Oil 51.00-51.70 52.70 53.50
EURO/USD 1.1460 1.1490 1.1560-1.1600
GBP/USD 1.2760-1.2800 1.2850 1.2895-1.2940
USD/JPY 109.10 109.60-110.20 111.00

Intraday SUPPORTS LEVELS
9th January 2019 S1 S2 S3
GOLD-XAU 1,282 1,274 1,266-1,260
Silver-XAG 15.40 15.10 14.90-14.75
Crude Oil 50.20-49.50 49.00 48.50-48.00
EURO/USD 1.1420-1.1390 1.1345 1.1300-1.1260
GBP/USD 1.2700 1.2660 1.2850
USD/JPY 108.50-108.10 107.50 107.05-106.60

Intra-Day Strategy (9th 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$1290.15/oz and low of US$1279.31/oz. Gold down by 0.292% at US$1285.02/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 1282-1260 with risk below 1260, targeting 1294-1300-1309 and 1315-1324. Sell below 1294-1321 keeping stop loss closing above 1321, targeting 1284-1274 and 1266-1260.

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

Technical Indicators

Name   Value Action
14DRSI  

68.171

Buy
20-DMA   1259.30 Buy
50-DMA  

1237.54

Buy
100-DMA   1220.00 Buy
200-DMA   1250.09 Sell
STOCH(5,3)   75.907 Sell
MACD(12,26,9)   15.891 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$15.67/oz and low of US$15.48/oz. Silver settled down by 0.012% at US$15.63/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     15.40
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   74.66 Buy
20-DMA   14.77 Buy
50-DMA   14.54 Buy
100-DMA   14.50 Buy
200-DMA   15.36 Sell
STOCH(5,3)   93.409 Sell
MACD(12,26,9)   0.305 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$50.11/bbl, intraday low of US$48.49/bbl and settled up by 2.100% to close at US$49.98/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 51.00-53.50 with stop loss at 53.50; targeting 50.20-49.50-49.00 and 48.50-47.60. Buy above 50.20-48.00 with risk daily closing below 48.00 and targeting 51.00-51.70 and 52.70-53.50.

 
Intraday Support Levels
S1     50.20-49.50
S2     49.00
S3     48.50-48.00

Intraday Resistance Levels
R1     51.00-51.70
R2     52.70
R3     53.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.843 Sell
20-DMA   47.97 Sell
50-DMA   52.96 Sell
100-DMA   61.56 Sell
200-DMA   64.82 Sell
STOCH(5,3)   92.750 Buy
MACD(12,26,9)   -1.667 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1421/EUR, high of US$1.1483/EUR and settled the day down by 0.296% to close at US$1.1439/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 1.1420-1.1460-1.1490 and 1.1540-1.1600. Sell below 1.1420-1.1600 targeting 1.1390-1.1345 and 1.1300-1.1260-1.1215 with stop-loss at daily closing above 1.1600.

 
Intraday Support Levels
S1     1.1420-1.1390
S2     1.1345
S3     1.1300-1.1260

Intraday  Resistance Levels
R1     1.1460
R2     1.1490
R3     1.1560-1.1600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.514 Buy
20-DMA   1.1380 Buy
50-DMA   1.1476 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 Tuesday made an intra‐day low of US$1.2706/GBP, high of US$1.2796/GBP and settled the day down by 0.485% to close at US$1.2712/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 1.2760-1.2940 with targets at 1.2700-1.2660 and 1.2600-1.2550. Buy above 1.2700-1.2490 with targets 1.2760-1.2800-1.2850 and 1.2900-1.2940 with stop loss closing below 1.2490.

 
Intraday Support Levels
S1     1.2700
S2     1.2660
S3     1.2850

Intraday Resistance Levels
R1     1.2760-1.2800
R2     1.2850
R3     1.2895-1.2940

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

52.299

Buy
20-DMA   1.2652 Sell
50-DMA   1.2768 Sell
100-DMA   1.2893 Sell
200-DMA   1.3143 Sell
STOCH(5,3)   84.636 Sell
MACD(12,26,9)   -0.0033 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY108.43/USD and made an intraday high of JPY109.08/USD and settled the day up by 0.001% at JPY108.71/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 109.10-111.00 with risk above 111.00 targeting 108.50-108.10 and 107.70-107.05-106.60. Long positions above 108.50-106.60 with targets of 109.10-109.60 and 110.20-111.00 with stop below 107.00.

 
Intraday Support Levels
S1     108.50-108.10
S2     107.50
S3     107.05-106.60

INTRADAY RESISTANCE LEVELS
R1     109.10
R2     109.60-110.20
R3     111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.168 Buy
20-DMA   111.13 Sell
50-DMA   112.39 Sell
100-DMA   112.25 Buy
200-DMA   112.08 Buy
STOCH(9,6)   72.250 Buy
MACD(12,26,9)   -1.171 Sell

AAFX TRADING
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