AAFX TRADING

Daily Market Lookup

  • Asian stocks inched up to five-week highs on Friday, after Chairman Jerome Powell reiterated the Federal Reserve will be patient about raising interest rates and news that trade talks between Washington and Beijing are moving to higher levels. As the Fed's dovish stance kept a lid on the dollar, China's yuan rose to its highest levels in more than five months and was on course for its biggest weekly gains since the 2005 revaluation in onshore trade. At the Economic Club of Washington, Powell reiterated the views of other policymakers that the Fed would be patient about interest rate hikes. Major U.S. stock indexes also quickly recovered from brief losses after Powell said that the Fed's balance sheet would be "substantially smaller". The term "Powell put" refers to the idea that Powell's policy will protect investors from falls in share prices, much like put options, or rights to sell assets at a pre-determined price. U.S. and Chinese officials are working on arrangements for higher-level trade talks after mid-level officials this week discussed U.S. demands that would require structural change in China to address issues such as IP theft, forced technology transfers and other non-tariff barriers. U.S. Treasury Secretary Steven Mnuchin said Chinese Vice Premier Liu He will "most likely" visit Washington later in January for trade talks. Still, fundamental tensions between the U.S. and China "are unlikely to go away and there is a high likelihood that any agreement to suspend tariffs eventually breaks down when it becomes clear that Trump’s objectives cannot really be met." Some investors are also increasingly wary of lingering disputes in Washington over a wall Trump wants on the U.S.-Mexico border, which has led to a weeks-long partial government shutdown. Flanked by border agents who are going without paychecks during the shutdown, Trump again threatened on Thursday to declare a national emergency to bypass Congress to fund a wall.
  • The dollar fell versus its major peers on Friday, as investors grew increasingly confident that the U.S. Federal Reserve may hit the pause button on monetary tightening this year. Fed Chairman Jerome Powell reiterated on Thursday the U.S. central bank has the ability to be patient on monetary policy given that inflation remains stable. Markets are now pricing in no further rate hikes by the Fed this year. Fed Vice Chair Richard Clarida also struck a dovish tone, underscoring the central bank's willingness to remain patient on the issue of raising rates. Traders still remain optimistic that a trade deal between the world's largest economies will eventually materialize. U.S. Treasury Secretary Steven Mnuchin said late on Thursday that Chinese Vice Premier Liu He will "most likely" visit Washington later in January for trade talks. The index has fallen around 2.2 percent since mid-December on expectations that a slowdown in growth, both in the United States as well as globally, will restrict the Fed from raising rates in 2019. In 2018, the greenback outperformed its peers, gaining 4.3 percent as the Fed hiked rates four times on the back of a strong domestic economy, falling unemployment and rising wage pressures. This has caused traders to turn bearish on the dollar. However, few analysts still forecast a rising dollar for this year. The single currency has been pressured by a slew of weaker-than-expected economic data, especially from France and Germany. The European Central Bank is widely expected to remain accommodative in 2019, which should keep a lid on the single currency. British Prime Minister Theresa May must win a vote in parliament to get her Brexit deal approved or risk seeing Britain's exit from the European Union descend into chaos. The vote is now due to take place on Jan. 15. The numbers are not in May's favor and her chances of winning the vote look extremely slim.
  • Oil prices were little changed on Friday in Asia as investors awaited a new catalyst, either a breakthrough in U.S.-Sino trade talks or another impactful number on Saudi production cuts, to take the market higher. Oil prices received some support this week after Saudi Energy Minister Khalid al-Falih vowed to rebalance the market. He said the kingdom was pumping approximately 800,000 barrels fewer a day from a record high of 10.2 million barrels per day in November. The two countries concluded the latest round of trade talks on Wednesday. While no deal has been reached yet, both sides said they had agreed to continue to keep in close contact, while U.S. President Donald Trump said the U.S. was having "tremendous success" in its trade negotiations with China. Following this week’s discussions, U.S. Treasury Secretary Steven Mnuchin said on Thursday that Chinese Vice Premier Liu He may visit Washington later in January.

 

 
Intraday RESISTANCE LEVELS
11th January 2019 R1 R2 R3
GOLD-XAU 1,300-1,309 1,315 1,322
Silver-XAG 15.80-16.00 16.40 17.00
Crude Oil 53.00-53.50 54.00 54.60-55.50
EURO/USD 1.1560 1.1590-1.1620 1.1660
GBP/USD 1.2800 1.2850 1.2895-1.2940
USD/JPY 108.50-109.10 109.60 110.20-111.00

Intraday SUPPORTS LEVELS
11th 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 52.70-51.70 51.00 50.20-49.50
EURO/USD 1.1490 1.1460 1.1420-1.1390
GBP/USD 1.2750-1.2700 1.2660 1.2600-1.2550
USD/JPY 108.10 107.50 107.05-106.60

Intra-Day Strategy (11th 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$1297.01/oz and low of US$1286.02/oz. Gold up by 0.514% at US$1286.17/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 1289-1260 with risk below 1260, targeting 1300-1309 and 1315-1324. Sell below 1300-1324 keeping stop loss closing above 1324, targeting 1289-1284-1274 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     1,322

Technical Indicators

Name   Value Action
14DRSI  

67.186

Buy
20-DMA   1270.72 Buy
50-DMA  

1243.84

Buy
100-DMA   1225.05 Buy
200-DMA   1225.05 Sell
STOCH(5,3)   64.971 Sell
MACD(12,26,9)   14.383 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$15.77/oz and low of US$15.53/oz. Silver settled down by 1.22% at US$15.54/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   74.66 Buy
20-DMA   15.12 Buy
50-DMA   14.67 Buy
100-DMA   14.56 Buy
200-DMA   15.34 Sell
STOCH(5,3)   61.852 Sell
MACD(12,26,9)   0.328 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$52.99/bbl, intraday low of US$51.62/bbl and settled down by 0.286% to close at US$52.53/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 53.0-55.50 with stop loss at 55.50; targeting 52.70-51.70-51.00 and 50.20-49.50-49.00. Buy above 52.50-49.00 with risk daily closing below 49.00 and targeting 53.00-53.50 and 54.00-54.60.

 
Intraday Support Levels
S1     52.70-51.70
S2     51.00
S3     50.20-49.50

Intraday Resistance Levels
R1     53.00-53.50
R2     54.00
R3     54.60-55.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.709 Sell
20-DMA   48.05 Sell
50-DMA   52.99 Sell
100-DMA   61.57 Sell
200-DMA   64.82 Sell
STOCH(5,3)   91.750 Buy
MACD(12,26,9)   -1.085 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1483/EUR, high of US$1.1569/EUR and settled the day down by 0.363% to close at US$1.1499/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 1.1560-1.1390 with risk below 1.1390, targeting 1.1590-1.1620 and 1.1660-1.1700. Sell below 1.1590-1.1700 targeting 1.560-1.1490-1.1460 and 1.1390-1.1345 with stop-loss at daily closing above 1.1700.

 
Intraday Support Levels
S1     1.1490
S2     1.1460
S3     1.1420-1.1390

Intraday  Resistance Levels
R1     1.1560
R2     1.1590-1.1620
R3     1.1660

TECHNICAL INDICATORS
Name   Value Action
14DRSI   79.111 Buy
20-DMA   1.1412 Buy
50-DMA   1.1379 Sell
100-DMA   1.1476 Sell
200-DMA   1.1632 Sell
STOCH(5,3)   79.561 Sell
MACD(12,26,9)   0.0032 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2726/GBP, high of US$1.2800/GBP and settled the day down by 0.328% to close at US$1.2745/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     1.2750-1.2700
S2     1.2660
S3     1.2600-1.2550

Intraday Resistance Levels
R1     1.2800
R2     1.2850
R3     1.2895-1.2940

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.519

Buy
20-DMA   1.2670 Sell
50-DMA   1.2771 Sell
100-DMA   1.2893 Sell
200-DMA   1.3137 Sell
STOCH(5,3)   88.636 Sell
MACD(12,26,9)   -0.0029 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY107.76/USD and made an intraday high of JPY108.51/USD and settled the day up by 0.249% at JPY108.42/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 108.50-111.00 with risk above 111.00 targeting 108.10-107.70 and 107.05-106.60. Long positions above 108.10-106.60 with targets of 108.50-109.10-109.60 and 110.20-111.00 with stop below 107.00.

 
Intraday Support Levels
S1     108.10
S2     107.50
S3     107.05-106.60

INTRADAY RESISTANCE LEVELS
R1     108.50-109.10
R2     109.60
R3     110.20-111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   31.926 Buy
20-DMA   110.36 Sell
50-DMA   112.11 Sell
100-DMA   112.18 Buy
200-DMA   111.11 Buy
STOCH(9,6)   69.250 Buy
MACD(12,26,9)   -1.213 Sell

AAFX TRADING
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