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Daily Market Lookup

  • Asian stocks advanced on Monday as Wall Street rallied after a deal was announced to reopen the U.S. government following a prolonged shutdown that had taken a toll on investor sentiment. U.S. President Donald Trump agreed on Friday to temporarily end a 35-day-old partial U.S. government shutdown without getting the $5.7 billion he had demanded from Congress for a border wall. In response Wall Street rallied broadly on Friday as investors were relieved to see an end to one of the longest U.S. government shutdown in history. The shutdown had left the markets anxious as it came at a time of heightened worries over slowing global growth, signs of stress in corporate earnings and a still unresolved Sino-U.S. trade war. Chinese Vice Premier Liu He will visit the United States on Jan. 30-31 for the next round of trade negotiations with Washington. Besides the underlying anxiety on trade, the temporary nature of the U.S. government's reopening - Trump has threatened to resume the shutdown on Feb. 15 if his demands aren't met - remained a source of concern. Britain is set to leave the European Union on March 29, but the country's members of parliament remain far from agreeing a divorce deal and longer term prospects for sterling remained far from clear. The immediate focus was on Tuesday, when the British parliament will debate and vote on Prime Minister Theresa May's Brexit "plan B". The euro was also on the front foot against the sagging dollar, which was on the defensive ahead of the Federal Reserve's Jan. 29-30 policy meeting where it is expected to leave interest rates unchanged after raising them four times last year. The attention will be on the policy outlook as the Fed has signaled a slower pace of rate increases this year with markets speculating it might pause its tightening cycle soon.
  • The dollar eased versus most of its peers on Monday as investors turned their attention to this week's Federal Reserve policy meeting, with traders wagering policymakers will signal a pause in their tightening cycle. The Federal Open Market Committee meets between Jan 29-30, and Chairman Jerome Powell is widely expected to acknowledge growing risks to the U.S. economy as global momentum weakens. A deal to reopen the U.S. government for now after a prolonged shutdown also reduced investor demand for the safety of the greenback. Over the past two months or so, Powell and several other Fed policymakers have taken a more cautious approach on further monetary tightening, leaving the dollar underpowered after it enjoyed a boost from the Fed's four rate increases last year Traders are bearish on the dollar for 2019. Amid a weakening global economy and U.S.-Sino trade tensions, the U.S. central bank is widely expected to hold rates steady this year to avoid hurting growth at home. Interest rate futures markets are pricing in no rate hikes for 2019. Investors are also anxiously waiting news from high-level U.S.-China trade talks on Tuesday and Wednesday to see if the world's largest economies can reach a compromise that will end their trade war. President Donald Trump has threatened to hike tariffs on Chinese goods if there is no significant progress in the negotiations. The dollar has gained around 1.2 percent on the yen over the last two weeks. Not helping the yen was the Bank of Japan's downgrade of its inflation forecasts last week when it also maintained its accommodative monetary policy, as widely expected. Moreover, Japanese investors have been net buyers of foreign bonds over the last few weeks, stoking demand for dollars. This likely explains why the safe-haven yen has not appreciated during this period even though risks of a global economic slowdown have rattled investor sentiment Growth data out of Europe's economic powerhouses such as Germany and France has been weaker-than-expected and analysts expect the ECB to remain dovish for an extended period. Cable gained 2.5 percent last week after a report in the Sun newspaper that Northern Ireland's Democratic Unionist Party had privately decided to offer conditional backing for British Prime Minister Theresa May's Brexit deal this week. However, Ireland's Deputy Prime Minister Simon Coveney said on Sunday the backstop was already a compromise drawn up to meet May's negotiating red lines, and the EU and Ireland were united in the view it "was not going to change". Analyst expect sterling to remain volatile. Britain is set to leave the European Union on March 29, but the country’s members of parliament remain far from agreeing a divorce deal.
  • Oil prices fell by 1 percent on Monday after U.S. companies added rigs for the first time this year, a signal that crude output may rise further, and China, the world's second-largest oil user, reported additional signs of an economic slowdown. High U.S. crude oil production, which rose to a record 11.9 million barrels per day (bpd) late last year, has been weighing on oil markets, traders said. In a sign that output could rise further, U.S. energy firms last week raised the number of rigs looking for new oil for the first time in 2019 to 862, an additional 10 rigs, Baker Hughes energy services firm said in its weekly report on Friday. Beyond oil supply, a key question for this year will be demand growth. Oil consumption has been increasing steadily, likely averaging above 100 million bpd for the first time ever in 2019, driven largely by a boom in China. However, an economic slowdown amid a trade dispute between Washington and Beijing is weighing on fuel demand-growth expectations. Earnings at China's industrial firms shrank for a second straight month in December on sluggish factory activity, piling more pressure on the world's second-largest economy, which reported the slowest pace of growth last year since 1990. China is trying to stem the slowdown with aggressive fiscal stimulus measures. But there are concerns that these measures may not have the desired effect as China's economy is already laden with massive debt and some of the bigger government spending measures may be of little real use. The increased U.S. supply, the country is now the world's largest oil producer, and the economic slowdown are weighing on the oil price outlook. However, Tortoise added that oil prices would be supported above $50 per barrel as it was "very clear that Saudi Arabia will no longer be willing to accept these lower oil prices". The Organization of the Petroleum Exporting Countries (OPEC), de-facto led by Saudi Arabia, started supply cuts late last year to tighten markets and buoy prices.

 

 
Intraday RESISTANCE LEVELS
28th January 2019 R1 R2 R3
GOLD-XAU 1,305-1,309 1,326 1,326
Silver-XAG 15.80 16.00-16.40 17.00
Crude Oil 54.20-54.80 55.50 56.00
EURO/USD 1.1420 1.1460-1.1490 1.1520
GBP/USD 1.3200 1.3260 1.3290-1.3340
USD/JPY 109.50-109.80 110.00 111.00

Intraday SUPPORTS LEVELS
28th January 2019 S1 S2 S3
GOLD-XAU 1.296-1.289 1,282 1,274-1,266
Silver-XAG 15.60-15.40 15.10 14.90-14.75
Crude Oil 53.00-52.50 51.70 51.00-50.40
EURO/USD 1.1380-1.1340 1.1305 1.1265-1.1215
GBP/USD 1.3150-1.3100 1.3050 1.3010-1.2940
USD/JPY 109.10 108.50-108.00 107.30

Intra-Day Strategy (28th 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$1303.68/oz and low of US$1276.64/oz. Gold up by 1.76% at US$1303.22/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 1296-1266 with risk below 1266, targeting 1304-1309 and 1315-1326. Sell below 1309-1326 keeping stop loss closing above 1326, targeting 1296-1289-1282 and 1274-1266.

 
Intraday Support Levels
S1     1.296-1.289
S2     1,282
S3     1,274-1,266
Intraday Resistance Levels
R1     1,305-1,309
R2     1,326
R3     1,326

Technical Indicators

Name   Value Action
14DRSI  

66.917

Buy
20-DMA   1288.24 Buy
50-DMA  

1259.18

Buy
100-DMA   1234.81 Buy
200-DMA   1234.81 Sell
STOCH(5,3)   81.459 Sell
MACD(12,26,9)   9.170 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$15.74/oz and low of US$15.27/oz. Silver settled up by 3.012% at US$15.73/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 15.60-14.70 targeting 15.80-16.00-16.40 and 17.00-17.40; stop breakage below 14.70. Sell below 15.80-17.00 with stop loss above 17.00; targeting 15.60-15.40-15.10 and 14.90-14.75.

 
Intraday  Support Levels
S1     15.60-15.40
S2     15.10
S3     14.90-14.75

Intraday  Resistance Levels
R1     15.80
R2     16.00-16.40
R3     17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.556 Buy
20-DMA   15.53 Buy
50-DMA   14.93 Buy
100-DMA   14.67 Buy
200-DMA   15.27 Sell
STOCH(5,3)   79.342 Buy
MACD(12,26,9)   0.153 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$53.96/bbl, intraday low of US$52.98/bbl and settled up by 0.676% to close at US$53.57/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     51.70
S3     51.00-50.40

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   50.43 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 Friday made an intraday low of US$1.1299/EUR, high of US$1.1417/EUR and settled the day up by 0.911% to close at US$1.1405/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 1.1380-1.1215 with risk below 1.1215, targeting 1.1420-1.1460 and 1.1490-1.1520. Sell below 1.1420-1.1520 targeting 1.1380-1.1345 and 1.1305-1.1265-1.1215 with stop-loss at daily closing above 1.1520.

 
Intraday Support Levels
S1     1.1380-1.1340
S2     1.1305
S3     1.1265-1.1215

Intraday  Resistance Levels
R1     1.1420
R2     1.1460-1.1490
R3     1.1520

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.491 Buy
20-DMA   1.1412 Buy
50-DMA   1.1386 Sell
100-DMA   1.1449 Sell
200-DMA   1.1579 Sell
STOCH(5,3)   65.157 Sell
MACD(12,26,9)   0.0005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday 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 1.3200-1.3340 with targets at 1.3150-1.3100-1.3050 and 1.3010-1.2940-1.2850. Buy above 1.3150-1.2940 with targets 1.3150-1.3100-1.3050 and 1.3010-1.2940 with stop loss closing below 1.2940.

 
Intraday Support Levels
S1     1.3150-1.3100
S2     1.3050
S3     1.3010-1.2940

Intraday Resistance Levels
R1     1.3200
R2     1.3260
R3     1.3290-1.3340

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

70.571

Buy
20-DMA   1.2868 Sell
50-DMA   1.2772 Sell
100-DMA   1.2900 Sell
200-DMA   1.3065 Sell
STOCH(5,3)   92.972 Sell
MACD(12,26,9)   -0.0106 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY109.44/USD and made an intraday high of JPY109.94/USD and settled the day down by 0.082% at JPY109.54/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 109.50-111.05 with risk above 111.05 targeting 109.10-108.50 and 108.10-107.70-107.05. Long positions above 109.10-107.30 with targets of 109.50-109.80 and 110.20-111.00 with stop below 107.00.

 
Intraday Support Levels
S1     109.10
S2     108.50-108.00
S3     107.30

INTRADAY RESISTANCE LEVELS
R1     109.50-109.80
R2     110.00
R3     111.00

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

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