AAFX TRADING

Daily Market Lookup

  • Asian shares stumbled and oil prices fell on Tuesday as pessimism about world growth drove investors away from risky assets, while sterling ticked lower in the face of the latest twists and turns in the Brexit saga. China got the week off to a shaky start on Monday after Beijing reported 2018 growth in the world's second-largest economy slowed to its weakest pace in nearly 30 years. Adding to the air of caution, the International Monetary Fund trimmed its global growth forecasts and a survey showed increasing pessimism among business chiefs as trade tensions loomed. The gloomy news highlighted the challenges facing policymakers globally as they tackle an array of current or potential crises, from the U.S.-China trade war to Brexit. U.S. markets were closed on Monday for a holiday so trading was generally subdued overnight. However, equity prices in Europe and Latin America stumbled after the weak Chinese data.
  • The U.S. dollar steadied on Tuesday in Asia after the International Monetary Fund (IMF) cut its 2019 and 2020 global growth forecasts overnight. The IMF now projects a 3.5% growth rate worldwide for 2019 and 3.6% for 2020. These are 0.2 and 0.1% points below its last forecasts in October. The fund cited China-U.S. trade disputes, a renewed tightening of financial conditions, a “no deal” Brexit and a deeper-than-anticipated slowdown in China as the reasons for the downgrade. The news came just hours after China reported its slowest quarterly economic growth since the financial crisis on Monday. China's economy grew 6.4% in the fourth quarter of 2018 from a year earlier, as expected, official data from the National Bureau of Statistics showed on Monday. The growth was slower than the previous quarter's 6.5% growth. Full-year growth for 2018 came in at 6.6%, also in line with expectations. Traders are also awaiting further news on the U.S.-China trade development, as Chinese Vice Premier Liu He is set to visit the U.S. on Jan. 30 and 31 for a new round of trade talks. Analysts at Morgan Stanley said in a Reuters report last week that they had turned bullish on the yuan, as they believed the People's Bank of China (PBOC) would refrain from intervening during trade talks. Overnight, the IMF cut its 2019 and 2020 global growth forecasts, citing a bigger-than-expected slowdown in China and the eurozone, and said failure to resolve trade tensions could further destabilize a slowing global economy. The downgrade came just hours after China reported its slowest quarterly economic growth since the financial crisis and its weakest annual expansion since 1990. On the whole, the dollar is also facing indirect pressure from slackening momentum in the global economy which has forced the U.S. Federal Reserve to take a cautious approach on any further interest rate increases. Speculation is rife the Fed might soon pause its tightening cycle. Sterling continued to wobble. With little time left until the United Kingdom is due to leave the European Union on March 29, there is no agreement in London on how and even whether it should leave the world's biggest trading bloc, and a growing chance of a dramatic 'no-deal' exit with no provisions to soften the economic shock. Prime Minister Theresa May’s Brexit deal was roundly rejected by parliament last week and on Monday she set out a proposal to overcome the impasse by seeking further concessions from the EU on a plan to prevent customs checks on the Irish border. The euro is likely to remain under pressure as growth in Europe's economic powerhouses, Germany and France, is languishing and inflation remains weak. The European Central Bank is widely expected to maintain an accommodative mode for this year.
  • Oil prices slid about 1% on Tuesday in Asia as global growth worries continued to stoke concerns over future fuel demand. Weakening global economic data were cited as a headwind for oil prices. On Monday, China reported that its 2018 economic growth dropped to its slowest pace in nearly three decades, although analysts later pointed to the fact that the slowdown was in line with expectations and simply reflected a normal part of the economic cycle. These are 0.2 and 0.1% points below its last forecasts in October The fund cited China-U.S. trade disputes, a renewed tightening of financial conditions, and the risks of a “no deal” Brexit and a deeper-than-anticipated slowdown in China as the reasons for the downgrade. Meanwhile, the National Development and Reform Commission, China's top economic planner, warned on Tuesday that economic pressure will hit the job market. China's state planner on Tuesday warned that the downward pressure on the economy will affect China's job market as falling factory orders point to a further drop in activity in coming months and more job shedding. On Monday, China reported its lowest annual economic growth since 1990. In a sign of spreading economic weakness, South Korea's export-oriented economy slowed to a six-year low growth rate of 2.7 percent in 2018, official data showed on Tuesday. This came after the International Monetary Fund on Monday trimmed its 2019 global growth forecast to 3.5 percent, down from 3.7 percent in last October's outlook. Despite the darkening outlook, oil prices have been getting some support from supply cuts started in late 2018 by the Organization of the Petroleum Exporting Countries (OPEC).

 

 
Intraday RESISTANCE LEVELS
22nd January 2019 R1 R2 R3
GOLD-XAU 1,282 1.289 1,300-1,309
Silver-XAG 15.40-15.60 15.80 16.00-16.40
Crude Oil 54.20-54.80 55.50 56.10
EURO/USD 1.1380-1.1420 1.1490-1.1560 1.1490-1.1560
GBP/USD 1.3050-1.3100 1.3010 1.3050-1.3100
USD/JPY 109.50-109.80 110.20 111.00

Intraday SUPPORTS LEVELS
22nd January 2019 S1 S2 S3
GOLD-XAU 1,274 1,266-1,260 1,252
Silver-XAG 15.10 14.90-14.75 14.40
Crude Oil 53.50-53. 52.50 51.70-51.00
EURO/USD 1.1340-1.1305 1.1265 1.1200
GBP/USD 1.2850 1.2800-1.2750 1.2690
USD/JPY 109.10 108.50-108. 107.50

Intra-Day Strategy (22nd 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 Monday made its intraday high of US$1281.44/oz and low of US$1276.73/oz. Gold down by 0.104% at US$1280.10/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 1274-1252 with risk below 1260, targeting 1282-1289-1300 and 1309-1315. Sell below 1282-1309 keeping stop loss closing above 1309, targeting 1274-1266 and 1260-1252.

 
Intraday Support Levels
S1     1,274
S2     1,266-1,260
S3     1,252
Intraday Resistance Levels
R1     1,282
R2     1.289
R3     1,300-1,309

Technical Indicators

Name   Value Action
14DRSI  

53.256

Buy
20-DMA   1284.03 Buy
50-DMA  

1252.17

Buy
100-DMA   1230.94 Buy
200-DMA   1247.19 Sell
STOCH(5,3)   11.971 Sell
MACD(12,26,9)   8.383 Buy

Silver - XAG

AAFX TRADING

Silver on Monday 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)   0.185 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$54.47/bbl, intraday low of US$53.55/bbl and settled up by 0.426% to close at US$54.18/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.
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   59.535 Sell
20-DMA   49.65 Sell
50-DMA   51.19 Sell
100-DMA   60.16 Sell
200-DMA   64.29 Sell
STOCH(5,3)   87.995 Buy
MACD(12,26,9)   0.711 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1356/EUR, high of US$1.1390/EUR and settled the day up by 0.0352% to close at US$1.1363/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     1.1340-1.1305
S2     1.1265
S3     1.1200

Intraday  Resistance Levels
R1     1.1380-1.1420
R2     1.1490-1.1560
R3     1.1490-1.1560

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.934 Buy
20-DMA   1.1418 Buy
50-DMA   1.1378 Sell
100-DMA   1.1458 Sell
200-DMA   1.1599 Sell
STOCH(5,3)   8.157 Sell
MACD(12,26,9)   0.0032 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2829/GBP, high of US$1.2909/GBP and settled the day up by 0.202% to close at US$1.2890/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 1.2900-1.3180 with targets at 1.2850-1.2800 and 1.2750-1.2690. Buy above 1.2850-1.2690 with targets 1.2900-1.2940 1.3010 and 1.3050-1.3100 with stop loss closing below 1.2690.

 
Intraday Support Levels
S1     1.2850
S2     1.2800-1.2750
S3     1.2690

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.578

Buy
20-DMA   1.2771 Sell
50-DMA   1.2751 Sell
100-DMA   1.2890 Sell
200-DMA   1.3087 Sell
STOCH(5,3)   55.636 Sell
MACD(12,26,9)   -0.0057 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY109.46/USD and made an intraday high of JPY109.75/USD and settled the day down by 0.027% at JPY109.64/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.
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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