AAFX TRADING

Daily Market Lookup

  • Asian stocks trod water on Wednesday as concerns over the outlook for global economic growth and the ongoing Sino-U.S. trade war kept investors away from riskier assets. Following a sharp drop in December, U.S. shares gained through much of January, supported in part by expectations for a thaw in U.S.-China trade tensions and a more dovish-sounding Federal Reserve. That also prompted global investors to plow into riskier assets. But putting a dent on sentiment again was a report by the Financial Times that the Trump administration had rejected an offer from China for preparatory trade talks this week ahead of high-level negotiations scheduled for next week. White House economic adviser Larry Kudlow denied the report, helping U.S. equities pare some losses though the fresh concerns about U.S.-China relations kept share prices in check. Recently published data all pointed to a rough year ahead for the world economy. U.S. home sales tumbled 6.4 percent in December, falling short of the weakest forecast, to their lowest in three years. Compared with a year earlier, they were down more than 10 percent for the first time since 2011. House price increases slowed sharply, adding to evidence of a further loss of momentum in the housing market. Canadian factory sales and wholesale trade both slumped more than expected in November, while in Germany a survey by the ZEW research institute showed morale among German investors improved slightly in January, but their assessment of the economy's current condition deteriorated to a four-year low. Japan's exports and imports also fell short of market expectations, with exports posting their biggest fall in more than two years. As expected the Bank of Japan kept monetary policy easy and trimmed its inflation forecast on Wednesday with the domestic economy facing headwinds. The IMF trimmed its global growth forecasts for 2019 and 2020 on Monday, in its second downgrade in three months, just after China reported its 2018 growth slipped to the worst level in nearly three decades. U.S. bond prices have found support, with the benchmark 10-year yield slipping to 2.744 percent from Friday's peak of 2.799 percent, the highest since Dec. 27, with money market futures pricing out any chance of a Fed rate hike this year.
  • The Japanese yen traded lower on Wednesday in Asia. Official data showed a larger-than-expected drop in December export data, while the Bank of Japan kept monetary policy unchanged as expected. Meanwhile, the Bank of Japan (BOJ) kept its monetary policy steady on Wednesday as expected. The BOJ maintained its short-term interest rate target at minus 0.1% and trimmed its forecast for core consumer inflation to 0.9% in the fiscal year beginning in April from 1.4%. The central bank also maintained its view that Japan's economy will continue to expand at a modest pace. The Japanese currency received some support on Tuesday following reports that the IMF cut its 2019 and 2020 global growth forecasts. Sino-U.S. trade frictions received some attention this week. Overnight, Financial Times reported that the White House rejected a trade meeting with Chinese officials this week. Data on Tuesday showed that Britain's labor market remained robust despite an economic slowdown ahead of Brexit. Average weekly earnings, including bonuses, rose by 3.4 percent on the year, the biggest rise since mid-2008. Sterling is sitting close to its highs last seen in mid-November, a sign that traders expect Britain to avoid a chaotic exit from the European Union despite the looming March 29 Brexit date. Since Prime Minister Theresa May’s divorce deal with the EU was rejected by lawmakers last week in the biggest defeat in modern British history, lawmakers have been trying to plot a course out of the crisis, yet no option has the majority support of parliament.
  • Oil prices inched up on Wednesday after China said it would raise spending to stem an economic slowdown that has been weighing on financial markets. The firmer prices followed a 2-percent fall in crude futures and a slump in international financial markets on Tuesday as concerns over global growth spooked investors into looking for safe-haven assets such as government bonds or gold. A widespread economic slowdown is expected to dent growth in demand for fuel, weighing on energy prices. Chinese finance ministry officials on Wednesday said the government would step up fiscal spending this year to support its economy, which last year registered its lowest growth rate since 1990. The Bank of Japan said on Wednesday it would keep its ultra-easy monetary settings which have been running since 2013. That came after Japan reported that its December 2018 exports fell by 3.8 percent, the most in more than two years, dragged down as weak global demand and U.S.-Sino trade frictions took their toll on the trade-reliant economy. Meanwhile, Japan's 2018 crude oil imports fell to 3 million bpd, the lowest since records started in 1979, the finance ministry said on Wednesday. Providing oil prices with support in 2019 have been production cuts led by the OPEC, aimed at reining in an emerging supply overhang. Whether OPEC's efforts will be successful will also depend on the development of oil production in the United States, where crude output jumped by 2 million barrels per day (bpd) in 2018 to an unprecedented 11.9 million bpd The boom was largely fueled by onshore shale oil drilling. And while the U.S. Energy Information Administration (EIA) said on Tuesday that it expected shale output to rise further, it said that production growth would slow in the coming years.

 

 
Intraday RESISTANCE LEVELS
23rd 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 1.1460 1.1490-1.1560
GBP/USD 1.2970-1.3010 1.3050 1.3100
USD/JPY 109.80-110.20 111.00 111.45

Intraday SUPPORTS LEVELS
23rd 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 53.00 52.50 51.70-51.00
EURO/USD 1.1340-1.1305 1.1265 1.1200
GBP/USD 1.2940-1.2900 1.2850 1.2800-1.2750
USD/JPY 109.50-109.10 108.50 108.00-107.50

Intra-Day Strategy (23rd 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 Tuesday made its intraday high of US$1285.39/oz and low of US$1277.37/oz. Gold up by 0.382% at US$1284.76/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 Tuesday made its intraday high of US$15.33/oz and low of US$15.16/oz. Silver settled up by 0.591% at US$15.30/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 Tuesday made an intra‐day high of US$54.29/bbl, intraday low of US$52.06/bbl and settled down by 2.178% to close at US$52.98/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 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     53.00
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   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 Tuesday made an intraday low of US$1.1335/EUR, high of US$1.1373/EUR and settled the day up by 0.044% to close at US$1.1358/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     1.1460
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 Tuesday made an intra‐day low of US$1.2854/GBP, high of US$1.2974/GBP and settled the day up by 0.488% to close at US$1.2953/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     1.2940-1.2900
S2     1.2850
S3     1.2800-1.2750

Intraday Resistance Levels
R1     1.2970-1.3010
R2     1.3050
R3     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 Tuesday made intra‐day low of JPY109.13/USD and made an intraday high of JPY109.75/USD and settled the day down by 0.264% at JPY109.35/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     109.50-109.10
S2     108.50
S3     108.00-107.50

INTRADAY RESISTANCE LEVELS
R1     109.80-110.20
R2     111.00
R3     111.45

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

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