AAFX TRADING

Daily Market Lookup

  • Asian stocks rose on Tuesday, supported by a bounce in Chinese shares amid hopes for government stimulus, while sterling braced for the vote in parliament over the British government's plan to exit the European Union. The odds look stacked against Prime Minister Theresa May winning approval for her deal. Voting is expected to start about 1900 GMT Tuesday. State television also quoted Chinese Premier Li Keqiang as saying the government is seeking to establish conditions helpful to meeting this year's economic goals. That came after data on Monday showed China's exports unexpectedly fell the most in two years in December, while imports also contracted sharply. The British pound was expected to steal the limelight later in the day as the Britain's parliament votes on the proposed Brexit deal. On Monday, May urged lawmakers to take a "second look" at her deal, which lawmakers are expected to reject. Such a result could produce a wide range of outcomes, from a disorderly exit from the union to a reversal of Brexit. Indeed, currency option markets are barely pricing in the chances of sharp moves in sterling. The pound's one-month implied volatility stood at 12.625 percent, above the average for the past year of around 8.8 percent well off 20-percent plus levels seen in the days just before the UK referendum on June 23, 2016.
  • The dollar weakened on Tuesday on heightened expectations the Federal Reserve will hold off on raising rates this year due to a slowdown in global growth, while sterling edged up ahead of Britain's parliamentary vote on its Brexit plan. Worries over the U.S. economy losing steam as well as a shock contraction in Chinese trade have fanned worries about a sharp global slowdown, which will likely keep the Fed from tightening monetary policy further this year. Interest rate futures markets are pricing in no further U.S. rate hikes in 2019. Fed Chairman Jerome Powell said last week the U.S. central bank has the ability to be patient on monetary policy given that inflation remains stable. Sterling will be in focus as British Prime Minister Theresa May must win a vote in parliament later on Tuesday to get her Brexit deal approved or risk a chaotic exit for Britain from the European Union. The numbers are not in May's favor and her chances of winning the vote look extremely slim. May needs to secure 318 votes to win. But other analysts expect the pound will take a major beating if May loses the vote by a wide margin. Sentiment was aided by a fresh round of commitments from Chinese policymakers to stimulate their economy though fiscal and monetary steps. Trade tensions between the world's two largest economies had rattled financial markets for most of last year. The British pound was in focus and traded slightly higher against the U.S. dollar on Tuesday in Asia ahead of a vote on U.K. Prime Minister Theresa May’s Brexit Deal. The U.K. parliament is expected to vote down May’s Brexit plan later in the day. While the defeat is widely anticipated by the market, it could still trigger a volatile knee-jerk market reaction if May loses the vote by a wide margin, analysts said. Separately, the People's Bank of China's (PBOC) Deputy Governor Zhu Hexin said on Tuesday that he is confident that the PBOC could keep the Yuan stable despite cuts in banks' reserve requirement ratio (RRR). On Monday, data showed China’s exports in December unexpectedly shrank the most in 2 years, putting Chinese equities under pressure. Federal Chairman Jerome Powell and several other officials reiterated last week the U.S. central bank could afford to be patient on monetary policy given that inflation remains stable.
  • Oil prices rose by more than 1 percent on Tuesday amid supply cuts led by producer club OPEC and Russia, although a darkening economic outlook may soon weigh on growth in fuel demand. The Middle East-dominated producer club of the OPEC and some non-OPEC allies, including Russia, agreed in late 2018 to cut supply to rein in a global glut. In the United States, the amount of rigs looking for new oil production has dropped from a 2018-peak of 888 to a still high number of 873 in early 2019, pointing to a potential dent in production growth which was at more than 2 mn bpd last year, bringing American crude ouput to a record 11.7 mn bpd. Meanwhile, the United States last November re-imposed sanctions against Iran's oil exports. Although Washington granted sanctions waivers to Iran's biggest oil customers, mostly in Asia, the Middle Eastern country's exports have plummeted since. On the demand side, an economic slowdown is looming over oil and financial markets. China's National Development and Reform Commission (NDRC) on Tuesday signalled it may roll out more fiscal stimulus measures to stem a further economic slowdown. Tuesday's oil price increases came after crude futures fell by more than 2 percent the previous session, dragged down by weak Chinese trade data which pointed to a global economic slowdown. The bank said it had cut its average 2019 Brent crude oil price forecast by $16 per barrel, to $64 per barrel, citing surging U.S. production and an "increasingly uncertain demand backdrop".

 

 
Intraday RESISTANCE LEVELS
15th 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 51.70-52.70 53.00 53.50-54.00
EURO/USD 1.1590 1.1590 1.1620-1.1660
GBP/USD 1.2900-1.2940 1.3010 1.3050
USD/JPY 108.50-109.10 109.60 110.20-111.00

Intraday SUPPORTS LEVELS
15th 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 51.00-50.20 49.50 48.90-48.02
EURO/USD 1.1460 1.1420-1.1390 1.1340
GBP/USD 1.2850-1.2800 1.2750 1.2700-1.2660
USD/JPY 108.00 107.50 107.05-106.60

Intra-Day Strategy (15th 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 Monday made its intraday high of US$1295.79/oz and low of US$1287.10/oz. Gold down by 0.535% at US$1291.26/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 Monday made its intraday high of US$15.72/oz and low of US$15.53/oz. Silver settled up by 0.256% at US$15.61/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 15.40-14.75 targeting 15.60-15.80-16.00 and 16.40-16.80.; stop breakage below 14.75. Sell below 15.60-17.00 with stop loss above 17.00; targeting 15.40-15.10-14.90 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
R2     16.00
R3     16.40-17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.422 Buy
20-DMA   15.20 Buy
50-DMA   14.71 Buy
100-DMA   14.57 Buy
200-DMA   15.33 Sell
STOCH(5,3)   22.852 Sell
MACD(12,26,9)   0.328 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$52.33/bbl, intraday low of US$50.62/bbl and settled down by 2.00% to close at US$50.98/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 51.70-54.00 with stop loss at 54.00; targeting 51.00-50.20 and 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     51.00-50.20
S2     49.50
S3     48.90-48.02

Intraday Resistance Levels
R1     51.70-52.70
R2     53.00
R3     53.50-54.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.847 Sell
20-DMA   48.02 Sell
50-DMA   52.21 Sell
100-DMA   61.11 Sell
200-DMA   64.65 Sell
STOCH(5,3)   73.955 Buy
MACD(12,26,9)   -0.236 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1449/EUR, high of US$1.1481/EUR and settled the day down by 0.279% to close at US$1.1467/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.1475), 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 1.1460-1.1340 with risk below 1.1340, targeting 1.1490-1.1560-1.1620 and 1.1660-1.1700. Sell below 1.1490-1.1700 targeting 1.1460-1.1420-1.1390 and 1.1345-1.1300 with stop-loss at daily closing above 1.1700.

 
Intraday Support Levels
S1     1.1460
S2     1.1420-1.1390
S3     1.1340

Intraday  Resistance Levels
R1     1.1590
R2     1.1590
R3     1.1620-1.1660

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.387 Buy
20-DMA   1.1415 Buy
50-DMA   1.1380 Sell
100-DMA   1.1475 Sell
200-DMA   1.1628 Sell
STOCH(5,3)   52.257 Sell
MACD(12,26,9)   0.0032 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2708/GBP, high of US$1.2865/GBP and settled the day down by 0.023% to close at US$1.2856/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 1.2900-1.3050 with targets at 1.2850-1.2800-1.2700 and 1.2750-1.2660. Buy above 1.2850-1.2600 with targets 1.2900-1.2940 and 1.3010-1.350 with stop loss closing below 1.2550.

 
Intraday Support Levels
S1     1.2850-1.2800
S2     1.2750
S3     1.2700-1.2660

Intraday Resistance Levels
R1     1.2900-1.2940
R2     1.3010
R3     1.3050

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

61.110

Buy
20-DMA   1.2706 Sell
50-DMA   1.2767 Sell
100-DMA   1.2893 Sell
200-DMA   1.3119 Sell
STOCH(5,3)   79.636 Sell
MACD(12,26,9)   -0.0018 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY107.98/USD and made an intraday high of JPY108.57/USD and settled the day down by 0.0461% at JPY108.15/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     108.00
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

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