AAFX TRADING

Daily Market Lookup

  • Global share markets and the sterling weathered a UK political storm as investors wagered that London will have no choice but to delay its Brexit deadline to avoid a disorderly exit from the European Union. Trading in Asian equities on Wednesday broadly mirrored overnight resilience in the face of the latest setback for British Prime Minister Theresa May. British opposition Labour Party leader Jeremy Corbyn called a vote of no confidence in May's government, to be held at 1900 GMT, after her Brexit plan was soundly defeated in parliament on Tuesday. But many investors expect May to survive, and to subsequently pursue delaying the planned March 29 departure date, even as few investors have any clarity on what that would mean in the longer run. Equity markets had rallied on Tuesday after Chinese officials came out in force to signal more measures to stabilize a slowing economy. Underscoring that commitment, China's central bank earlier on Wednesday injected a record amount of money into the country's financial system.. Ester George, president of the Federal Reserve Bank of Kansas City and a voting member of the Fed's policy-setting committee this year, made the case for patience and caution on interest rate hikes to avoid choking off growth. Sentiment was partly undermined by reported comments from United States Trade Representative Robert Lighthizer that he did not see any progress made on structural issues during U.S. talks with China last week. Lighthizer's caution helped force the dollar to remain on the defensive against the Japanese yen, a safe-haven currency that's often preferred by traders during times of market and economic stress.
  • The British pound traded flat on Wednesday in Asia after U.K. Prime Minister Theresa May’s Brexit plan was voted down by a hefty margin. According to various media, some traders now believe the outcome could either delay Britain’s March 29 departure date or bring about a second referendum that could end up cancelling Brexit. On Tuesday, the House of Commons voted 432 versus 202 against Prime Minister May’s Brexit Deal. Following the defeat, May now faces a confidence vote in Parliament later today. The injection was to maintain "reasonably ample" liquidity in the banking system, the central bank said in a statement on its website The move came one day after Chinese officials signalled that they would roll out more stimulus measures in the near-term. Chinese Premier Li Keqiang said the government would help the country to meet its economic goals for 2019, while the National Development and Reform Commission said it would aim to achieve “a good start” in the first quarter.
  • Gold prices edged up on Wednesday in Asia as political uncertainty in the U.K. boosted demand for the safe-haven metal. The gain in gold prices came after U.K. Prime Minister Theresa May’s Brexit plan was voted down by a hefty margin. The House of Commons voted 432 versus 202 against Prime Minister May’s Brexit Deal on Tuesday. Following the defeat, May now faces a confidence vote in Parliament later today. If nothing is approved by March 29, Britain would make a “no-deal” departure from the bloc, which could pose dire economic risks. Meanwhile, in separate appearances, several Federal Reserve officials agreed on Wednesday in Asia that the central bank should halt further rate hikes until it is clear how much the U.S. economic outlook will be held back by “larger risks”, including a slowing Chinese economy and the continuing U.S. government shutdown. Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favour of yield-bearing investments. After the Fed hiked rates four times in 2018, investors now expect the U.S. central bank to halt its monetary tightening policy this year as risks to the U.S. economy mount. Elsewhere, global equities recovered this week following reports that China is stepping up monetary and fiscal stimulus efforts to support its sagging economy. On Tuesday, China vowed tax cut on a larger scale to help support its slowing economy on Tuesday, while the PBOC injected a record CNY 560 billion via reverse repo operations earlier today.
  • Oil prices rose on Wednesday in Asia as China took fresh measures to stimulate its economy as it struggles with the threat of an escalating trade war with the U.S. The People's Bank of China injected over $84 billion into the banking system - a record daily net cash injection - to support domestic liquidity, a day after announcing a range of tax cuts and a reduction in banks' reserve requirements. The development came as Ren Hongbin, an assistant minister at China’s commerce ministry, told a news conference that China's trade faces rising uncertainties this year. China is the world's largest oil importer. Elsewhere, there was further evidence of the impact of the U.S.-China trade dispute spreading to the global economy, as Japan’s core machinery orders in November dropped sharply. Oil markets had earlier shrugged off the decision by British lawmakers on Tuesday to reject Prime Minister Theresa May's deal to leave the European Union. The House of Commons voted 432 versus 202 against Prime Minister May’s Brexit Deal. Following the defeat, May now faces a confidence vote in Parliament later today. In other news, U.S. crude oil output is expected to jump to a record of more than 12 mn bpd in 2019 and to climb to nearly 13 mn bpd in 2020, the U.S. Energy Information Administration said on Tuesday.

 

 
Intraday RESISTANCE LEVELS
16th 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 52.70 53.00 53.50-54.00
EURO/USD 1.1420-1.1460 1.1490 1.1560-1.1590
GBP/USD 1.2900-1.2940 1.3010 1.3050
USD/JPY 109.10 109.60 110.20-111.00

Intraday SUPPORTS LEVELS
16th 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 51.70-51.00 50.20 49.50-48.90
EURO/USD 1.1390-1.1340 1.1305 1.1265
GBP/USD 1.2850-1.2800 1.2750 1.2700-1.2660
USD/JPY 108.50-108.00 107.50 107.05-106.60

Intra-Day Strategy (16th 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$1294.65/oz and low of US$1286.71/oz. Gold down by 0.186% at US$1289.07/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 Wednesday made its intraday high of US$15.68/oz and low of US$15.53/oz. Silver settled down by 0.454% at US$15.55/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   14.57 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 Tuesday made an intra‐day high of US$52.51/bbl, intraday low of US$50.86/bbl and settled up by 2.372% to close at US$52.21/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 52.70-54.00 with stop loss at 54.00; targeting 51.70-51.00-50.20 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     51.70-51.00
S2     50.20
S3     49.50-48.90

Intraday Resistance Levels
R1     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 Tuesday made an intraday low of US$1.1381/EUR, high of US$1.1489/EUR and settled the day down by 0.488% to close at US$1.1411/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 1.1390-1.1265 with risk below 1.1250, targeting 1.1420-1.1490-1.1560 and 1.1620-1.1660. Sell below 1.1420-1.1590 targeting 1.1390-1.1345 and 1.1305-1.1265 with stop-loss at daily closing above 1.1590.

 
Intraday Support Levels
S1     1.1390-1.1340
S2     1.1305
S3     1.1265

Intraday  Resistance Levels
R1     1.1420-1.1460
R2     1.1490
R3     1.1560-1.1590

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 Tuesday made an intra‐day low of US$1.2667/GBP, high of US$1.2915/GBP and settled the day up by 0.007% to close at US$1.2859/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 Tuesday made intra‐day low of JPY108.12/USD and made an intraday high of JPY108.76/USD and settled the day up by 0.453% at JPY108.63/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 108.50-111.00 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     108.50-108.00
S2     107.50
S3     107.05-106.60

INTRADAY RESISTANCE LEVELS
R1     109.10
R2     109.60
R3     110.20-111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.521 Buy
20-DMA   111.93 Sell
50-DMA   111.93 Sell
100-DMA   112.13 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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