AAFX TRADING

Daily Market Lookup

  • European Central Bank (ECB) kept key rates and forward guidance unchanged but downgraded its assessment by stating that the balance of risks has moved to the downside. It is worth noting that expectations of ECB rate hike were pushed back to mid-2020 three weeks ago. Further, EUR/USD shed more than 200 pips in the last 2.5-weeks. Put simply, ECB's dovish turn was likely priced in. Still, the EUR dropped post-ECB. Moreover, ECB's decision to revise downward its assessment of risks may have triggered expectations of a change in the forward guidance wording at the next meeting on 07 March. British lawmakers launched an inquiry on Friday to determine if the country should track European Union rules or cut loose to best serve its financial sector after Brexit. Finance is Britain's biggest tax raising sector, earning government coffers more than 70 billion pounds ($91 bn) each year, and the EU is the sector's largest single customer. Supporters of Brexit say departure from the EU is an opportunity to trim the rulebook and keep the City of London competitive as a global financial hub. British regulators want to stay aligned with the EU and have ruled out a "bonfire" of regulations, warning about the perils of "light touch" rules that led to the financial crisis. Britain has yet to secure a divorce settlement with the EU to avoid leaving the bloc on March 29 without any framework, leaving banks, insurers, asset managers and trading platforms in Britain with European customers scrambling to open new EU hubs. The committee said on Friday it will look at what Britain's priorities should be when it negotiates future trading relations with the EU and other countries. The EU has said that Britain's financial sector faces the same patchy and unpredictable system of market access as other non-EU countries like the United States and Japan. Brussels grants access to foreign financial firms if their home regulation stays "equivalent" or closely aligned with the bloc's own rules, a determination that has no timetable.
  • Oil prices rose by more than one percent on Friday as turmoil in Venezuela triggered concerns that its oil exports could soon be disrupted. Washington on Thursday signalled it could impose sanctions on Venezuela's crude exports as Caracas descends further into political and economic turmoil. Amid violent street protests, Venezuela's opposition leader Juan Guaido declared himself interim president earlier this week, winning backing from Washington and large parts of Latin America, prompting Nicolas Maduro, the country's leader since 2013, to break relations with the United States. Fundamentally, however, global oil markets are still well supplied, thanks in part to surging output in the United States, where crude production rose by more than 2 million barrels per day (bpd) last year to a record 11.9 million bpd. Record U.S. production would likely offset any short-term disruptions to Venezuelan supply due to possible U.S. sanctions, Britain's Barclays (LON:BARC) on Thursday said in a note. The bank cut its 2019 average Brent crude oil forecast to $70 a barrel, down from $72 previously. Gasoline stocks rose for an eighth consecutive week in the week to Jan. 18, by 4.1 million barrels to a record 259.6 million barrels, the U.S. Energy Information Administration (EIA) said in a weekly report on Thursday. Crude inventories rose by 8 million barrels.
  • U.S. Commerce Secretary Wilbur Ross on Thursday urged furloughed federal workers facing a second missed paycheck to seek loans to pay their bills while adding that he could not understand why they were having trouble getting by. In a CNBC interview, Ross, who made a fortune buying distressed companies, said it was disappointing that some federal workers affected by the government shutdown were not showing up to work. Ross made the comments as the longest government shutdown in U.S. history entered its 34th day with no end in sight. Ross’s boss, President Donald Trump, said he had not heard the comments “but I do understand.” About 800,000 workers have been furloughed across roughly one-quarter of the federal government. Many have turned to unemployment assistance, food banks or other work to try to make ends meet. Democrats took Ross to task for the comments. U.S. Representative Jennifer Wexton, whose northern Virginia district includes many furloughed workers and federal contractors, said she invited Ross to visit a food bank with her. “That’s one thing that’s been so striking about this entire process is the complete lack of empathy from the president on down through his administration, a complete lack of understanding of what day-to-day life is for regular people in this district,” Wexton told CNN. Ross is not the first Trump administration official to downplay federal workers’ plight. White House economic adviser Kevin Hassett likened the furlough to a vacation in an interview with PBS this month, though on Tuesday he told Fox News that he knew workers felt “a lot of pain right now.”
  • The British Pound gained against the U.S. dollar on Friday in Asia after the U.K. newspaper The Sun reported that Ireland’s Democratic Unionist Party was prepared to conditionally back Theresa May’s Brexit Plan B next week. The deal faces a debate and vote in Parliament on January 29. Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies was down 0.2% to 96.080 as traders digested the latest news on U.S-China trade disputes. In an interview on CNBC on Thursday, U.S. Secretary of Commerce Wilbur Ross said while he acknowledged there is a “fair chance” of a trade deal, and that he thinks both China and the U.S. are eager to end their trade war, he is concerned that the two nations remained far apart on trade. Ross added that the two sides have been making progress on “easier” issues like how much of certain American products the Chinese will agree to buy, such as soybeans and liquefied natural gas. On the other hand, contradicting Ross’s comments, White House Economic Adviser Lawrence Kudlow later said President Donald Trump is optimistic about trade talks, adding that he expected the January jobs report would be up a significant amount. Elsewhere, the Australian dollar was little changed after traded lower on Thursday after one of the Australian top 4 big national banks, the National Australia Bank (NAB), raised the home loan rates.

 

 
Intraday RESISTANCE LEVELS
25th 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 56.00
EURO/USD 1.1340-1.1380 1.1420 1.1460-1.1490
GBP/USD 1.3150-1.3200 1.3260 1,3290-1.3340
USD/JPY 110.00-110.20 111.00 111.45

Intraday SUPPORTS LEVELS
25th 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 54.20-54.80 54.20-54.80
EURO/USD 1.1305-1.1265 1.1215 1.1160
GBP/USD 1.3100-1.3050 1.3010 1.2940-1.2900
USD/JPY 109.80-109.50 109.10 108.50-108.00

Intra-Day Strategy (25th 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 Thursday made its intraday high of US$1284.71/oz and low of US$1276.64/oz. Gold down by 0.134% at US$1280.68/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  

54.820

Buy
20-DMA   1285.75 Buy
50-DMA  

1255.53

Buy
100-DMA   1232.72 Buy
200-DMA   1246.58 Sell
STOCH(5,3)   11.971 Sell
MACD(12,26,9)   0.120 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$15.38/oz and low of US$15.22/oz. Silver settled down by 0.261% at US$15.28/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 Thursday made an intra‐day high of US$53.49/bbl, intraday low of US$52.10/bbl and settled down by 1.372% to close at US$53.19/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 53.00-56.10 with stop loss at 56.10; targeting 52.50-51.70-51.00 and 50.40-49.50. Buy above 52.50-50.50 with risk daily closing below 50.50 and targeting 53.00-54.20-54.80 and 55.50-56.10.

 
Intraday Support Levels
S1     53.00-52.50
S2     54.20-54.80
S3     54.20-54.80

Intraday Resistance Levels
R1     54.20-54.80
R2     55.50
R3     56.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.273 Sell
20-DMA   51.00 Sell
50-DMA   51.00 Sell
100-DMA   59.81 Sell
200-DMA   64.15 Sell
STOCH(5,3)   46.995 Sell
MACD(12,26,9)   0.783 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1288/EUR, high of US$1.1390/EUR and settled the day up by 0.685% to close at US$1.1301/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 1.1305-1.1160 with risk below 1.1160, targeting 1.1340-1.1380-1.1420 and 1.1460-1.1500. Sell below 1.1340-1.1490 targeting 1.1390-1.1345 and 1.1305-1.1265 with stop-loss at daily closing above 1.1490.

 
Intraday Support Levels
S1     1.1305-1.1265
S2     1.1215
S3     1.1160

Intraday  Resistance Levels
R1     1.1340-1.1380
R2     1.1420
R3     1.1460-1.1490

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.517 Buy
20-DMA   1.1409 Buy
50-DMA   1.1326 Sell
100-DMA   1.1450 Sell
200-DMA   1.1584 Sell
STOCH(5,3)   30.157 Sell
MACD(12,26,9)   0.0015 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2855/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 1.3150-1.3340 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     1.3100-1.3050
S2     1.3010
S3     1.2940-1.2900

Intraday Resistance Levels
R1     1.3150-1.3200
R2     1.3260
R3     1,3290-1.3340

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

68.439

Buy
20-DMA   1.2839 Sell
50-DMA   1.2761 Sell
100-DMA   1.2897 Sell
200-DMA   1.3069 Sell
STOCH(5,3)   93.972 Sell
MACD(12,26,9)   -0.0089 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY109.41/USD and made an intraday high of JPY109.79/USD and settled the day up by 0.018% at JPY109.61/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 110.00-111.45 with risk above 111.45 targeting 109.80-109.10-108.50 and 108.10-107.70-107.05. Long positions above 109.80-108.00 with targets of 109.10-109.60 and 110.20-111.00 with stop below 107.00.

 
Intraday Support Levels
S1     109.80-109.50
S2     109.10
S3     108.50-108.00

INTRADAY RESISTANCE LEVELS
R1     110.00-110.20
R2     111.00
R3     111.45

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.263 Buy
20-DMA   109.01 Sell
50-DMA   111.27 Sell
100-DMA   111.99 Buy
200-DMA   111.22 Buy
STOCH(9,6)   70.080 Buy
MACD(12,26,9)   -0.434 Sell

AAFX TRADING
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