AAFX TRADING

Daily Market Lookup

  • Asian markets kept their nerve on Monday as data showed the Chinese economy slowed at the end of last year, underlining the urgent need for more stimulus as Beijing wrestles with the United States over trade. Investors are also waiting to hear British Prime Minister Theresa May's 'Plan B' for Brexit which is due to be presented to parliament later on Monday. The world's second-largest economy grew 6.4 percent in the fourth quarter from a year earlier, as had been expected and matching levels last seen in early 2009 during the global financial crisis. Yet there were some bright spots with industrial output rising a surprisingly strong 5.7 percent, while retail sales rose 8.2 percent in December, from a year earlier. Chinese stocks had rallied on Friday on reports U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports, a story later denied. U.S. President Donald Trump said on Saturday there has been progress toward a trade deal with China, but denied that he was considering lifting tariffs. Over in Britain, May will return to parliament on Monday to set out how she plans to try to break the Brexit deadlock after her deal was rejected by lawmakers last week. May told ministers on Sunday she was looking for ways to make the so-called Northern Irish backstop more acceptable to her Conservative Party and Northern Irish allies.
  • The dollar held steady near a two-week high against a basket of currencies on Monday, as investor risk appetite held up despite the latest data showing China's 2018 economic growth slowing to a near three-decade low. Hopes for a thaw in U.S.-China trade tensions, a more dovish-sounding Federal Reserve and optimism that Britain could avoid a "No-Deal" Brexit are some of the factors that have fanned the return in investor risk appetite, which went into a deep freeze in December as global equity markets tumbled. Along with a decline in Treasury yields earlier in the month which had accompanied the retreat in equities, the dollar index had slipped to a three-month low near 95.00 on Jan. 10. The U.S.-China trade friction has already put pressure on China's economy, with the latest data showing the world's second-biggest economy slowing further in the last quarter of 2018. Markets appeared to take the outcome, largely in line with expectations, in their stride. Sterling had climbed to a two-month peak of $1.3001 on Thursday on growing confidence that Britain can avoid leaving the European Union without a deal, but faced profit-taking on Friday. British Prime Minister Theresa May will on Monday put forward a motion on her proposed next steps. Over the following week, lawmakers will be able to propose alternatives. They will debate these plans on Jan. 29, and voting on them should indicate whether any could get majority support. The Aussie was largely unfazed by China's growth numbers though analysts agree that any sharp drop in demand from its biggest trading partner would put a dent in local assets. The U.S. financial markets will be closed on Monday for Martin Luther King Jr. Day.
  • Crude prices rose to their highest so far in 2019 on Monday after data showed refinery processing in China, the world's second-largest oil consumer, climbed to a record last year despite a slowing economy. This came as prices have generally been supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), analysts said. Traders said the price rises came after data released by China's National Bureau of Statistics on Monday showed crude oil refinery throughput climbed to a record 603.57 million tonnes in 2018, or 12.1 million barrels per day (bpd), up 6.8 percent from the previous year. The strong oil demand figures came despite China's 2018 economic growth slowing to the weakest in 28 years, at 6.6 percent versus 6.8 percent in 2017.
  • Although the slowdown was in line with expectations and not as sharp as some analysts had expected, the cooling of the world's No.2 economy casts a shadow over global growth. Despite this, analysts said supply cuts led by OPEC would likely support crude oil prices. Energy consultancy Wood Mackenzie said on Monday that it expected Brent prices to average $66 per barrel in 2019, adding that despite the OPEC-led supply cuts there would be "ample supply through to the end of 2019." Researchers at Bernstein Energy said the supply cuts led by OPEC "will move the market back into supply deficit" for most of 2019 and that should cause prices to rise to $70 a barrel before year-end. In the United States, energy firms cut the number of rigs drilling for oil by 21 in the week to Jan. 18, taking the total count down to 852, the lowest since May 2018, energy services firm Baker Hughes said in a weekly report on Friday. It was biggest decline since February 2016, as drillers reacted to the 40-percent plunge in U.S. crude prices late last year. However, U.S. crude oil production still rose by more than 2 million bpd in 2018, to a record 11.9 million bpd. With the rig count stalling, last year's growth rate is unlikely to be repeated in 2019, although most analysts expect annual production to average well over 12 million bpd, making the United States the world's biggest oil producer ahead of Russia and Saudi Arabia.

 

 
Intraday RESISTANCE LEVELS
21st January 2019 R1 R2 R3
GOLD-XAU 1.289 1,300-1,309 1,315
Silver-XAG 15.40-15.60 15.80 16.00-16.40
Crude Oil 54.20-54.80 55.50 56.10
EURO/USD 1.1420-1.1460 1.1490 1.1560-1.1590
GBP/USD 1.3010-1.3050 1.3100 1.3145-1.3180
USD/JPY 109.50-109.80 110.20 111.00

Intraday SUPPORTS LEVELS
21st January 2019 S1 S2 S3
GOLD-XAU 1,282 1,274 1,266-1,260
Silver-XAG 15.10 14.90-14.75 14.40
Crude Oil 53.50-53.00 52.50 51.70-51.00
EURO/USD 1.1380-1.1340 1.1305 1.1265
GBP/USD 1.2940-1.2900 1.2850 1.2800-1.2750
USD/JPY 109.10 108.50-108.00 107.50

Intra-Day Strategy (21st January 2019)
GOLD-XAU Buy on Dips
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Friday made its intraday high of US$1292.44/oz and low of US$1280.56/oz. Gold down by 0.802% at US$1281.52/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     1,282
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  

56.875

Buy
20-DMA   1283.05 Buy
50-DMA  

1230.20

Buy
100-DMA   1230.20 Buy
200-DMA   1247.54 Sell
STOCH(5,3)   22.971 Sell
MACD(12,26,9)   10.383 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$15.56/oz and low of US$15.31/oz. Silver settled down by 1.352% at US$15.32/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 15.10-14.40 targeting 15.40-15.60-15.80 and 16.00-16.40; stop breakage below 14.40. Sell below 15.40-17.00 with stop loss above 17.00; targeting 15.40-15.10-14.90 and 14.75 14.40.

 
Intraday  Support Levels
S1     15.10
S2     14.90-14.75
S3     14.40

Intraday  Resistance Levels
R1     15.40-15.60
R2     15.80
R3     16.00-16.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.873 Buy
20-DMA   15.41 Buy
50-DMA   14.80 Buy
100-DMA   14.61 Buy
200-DMA   15.30 Sell
STOCH(5,3)   9.852 Sell
MACD(12,26,9)   0.1859.852 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$54.12/bbl, intraday low of US$52.34/bbl and settled down by 2.82% to close at US$53.96/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 54.20-56.10 with stop loss at 56.10; targeting 53.50-53.00-52.50 and 51.70-51.00. Buy above 53.50-51.00 with risk daily closing below 51.00 and targeting 54.20-54.80 and 55.50-56.10.

 
Intraday Support Levels
S1     53.50-53.00
S2     52.50
S3     51.70-51.00

Intraday Resistance Levels
R1     54.20-54.80
R2     55.50
R3     56.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.619 Sell
20-DMA   49.23 Sell
50-DMA   51.32 Sell
100-DMA   60.32 Sell
200-DMA   64.35 Sell
STOCH(5,3)   84.995 Buy
MACD(12,26,9)   0.711 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1369/EUR, high of US$1.1409/EUR and settled the day down by 0.201% to close at US$1.1365/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     1.1380-1.1340
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 Friday made an intra‐day low of US$1.2855/GBP, high of US$1.2992/GBP and settled the day down by 0.870% to close at US$1.2871/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 Sell

Based on the charts and explanations above; sell below 1.3000-1.3180 with targets at 1.2940-1.2900-1.2850 and 1.2800-1.2700-1.2750. Buy above 1.2940-1.2750 with targets 1.3010-1.3050-1.3100 and 1.3145-1.3180 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.2940-1.2900
S2     1.2850
S3     1.2800-1.2750

Intraday Resistance Levels
R1     1.3010-1.3050
R2     1.3100
R3     1.3145-1.3180

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

65.412

Buy
20-DMA   1.2753 Sell
50-DMA   1.2758 Sell
100-DMA   1.2893 Sell
200-DMA   1.3101 Sell
STOCH(5,3)   90.636 Sell
MACD(12,26,9)   -0.0057 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY109.05/USD and made an intraday high of JPY109.88/USD and settled the day up by 0.476% at JPY109.76/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 108.50-108.10-107.70 and 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     109.10
S2     108.50-108.00
S3     107.50

INTRADAY RESISTANCE LEVELS
R1     109.50-109.80
R2     110.20
R3     111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.753 Buy
20-DMA   109.35 Sell
50-DMA   111.69 Sell
100-DMA   112.07 Buy
200-DMA   111.15 Buy
STOCH(9,6)   91.250 Buy
MACD(12,26,9)   -1.213 Sell

AAFX TRADING
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