AAFX TRADING

Daily Market Lookup

  • Asian shares stumbled on Tuesday and the dollar hovered near two-week lows as prospects for a long-awaited Sino-U.S. trade deal was dealt another blow after the United States leveled sweeping criminal charges against China’s telecom giant Huawei. Japan’s Nikkei slid about 1 percent. U.S. stock futures also lost ground following from a torrid overnight session on Wall Street, with E-Minis for the S&P 500 down 0.4 percent. Investor sentiment, already shaken by pessimism over global growth, took another hit after the U.S. Justice Department unsealed indictments against China’s top telecom equipment maker, Huawei, accusing it of bank and wire fraud to evade Iran sanctions and conspiring to steal trade secrets from T-Mobile US Inc. The jolt to Huawei could undermine prospects for a trade deal between the economic giants as markets nervously await a fresh round of trade talks with Chinese Vice Premier Liu He set to meet U.S. officials on Wednesday and Thursday. Further complicating matters, China triggered the legal process on Monday for the World Trade Organization to hear Beijing’s challenge to U.S. tariffs, and berated the United States for blocking the appointment of judges who could rule on it. Souring U.S.-China relations roiled global markets for much of last year, and have kept investors on the back foot this month. The trade war’s broadening impact on world growth is one reason the U.S. Federal Reserve has signaled it will be patient on policy after raising rates four times in 2018. Overnight, markets got a reminder of the potentially damaging economic impact of the Sino-U.S. trade war as Wall Street stocks were hit by profit warnings. Worryingly, earnings at China’s industrial firms too shrank in December, pointing to more troubles for the country’s vast manufacturing sector already struggling with a decline in orders, job layoffs and factory closures. Many economists, including the International Monetary Fund, have cut their forecasts for global growth this year citing the U.S.-China trade war.
  • The Japanese yen climbed on Tuesday in Asia on safe-haven appeal as investors' risk appetite was hurt after the U.S. Justice Department announced charges against China’s Huawei Technologies Co Ltd with fraud. Acting Attorney General Matthew Whitaker confirmed during a press conference that the Justice Department is seeking the extradition of Huawei's CFO Meng Wanzhou from Canada. The charges came ahead of high-level trade talks between China and the U.S. this week, which are set to begin on Wednesday. China's Vice Premier Liu He will meet with a U.S. delegation led by Trade Representative Robert Lighthizer in Washington. The U.S. dollar index that tracks the greenback against a basket of other currencies was little changed at $95.40, as traders remained cautious ahead of the Federal Reserve's two-day meeting. Many Fed watchers expect the U.S. central bank to stand pat on interest rates on Wednesday and tout a more dovish stance on monetary policy. Investor attention will likely be focused on Fed Chairman Jerome Powell's news conference and the central bank's ongoing balance sheet reduction program. Powell's news conference will follow the release of the Fed decision. Market participants are focusing on the Federal Open Market Committee policy meeting between Jan. 29-30, where Chairman Jerome Powell is widely expected to acknowledge growing risks to the U.S. economy as global momentum weakens. Investors expect the Fed to adopt a more cautious stance on policy than they did in 2018, pressured by signs of a peak in U.S. corporate earnings and the loss of economic momentum both at home and globally. The interest rate futures market is pricing in no Fed hikes this year. Last year, the dollar enjoyed a solid rally as the U.S. central bank raised rates four times because of a robust economy. Elsewhere, the euro was a bit weaker at $1.1427, but not far off its highest level in more than a week. Traders believe recent weak economic readings in Germany and France, and the European Central Bank's dovish stance, are already priced into the euro. Sterling was also slightly down 0.1 percent at $1.3150, pulling back from 3-month highs. Later on Tuesday, lawmakers will debate and vote on British Prime Minister Theresa May's next steps, after the overwhelming rejection of her Brexit plan earlier this month, and have been proposing amendments seeking to shape the future direction of Brexit. Analysts 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.
  • The Trump administration on Monday imposed sweeping sanctions on Venezuelan state-owned oil firm PDVSA, aimed at severely curbing the OPEC member's crude exports to the United States and at pressuring socialist President Nicolas Maduro to step down. Minutes before the announcement, Juan Guaido, the Venezuelan opposition leader who proclaimed himself interim president last week with U.S. backing, said congress would name new boards of directors to the company and its U.S. subsidiary, Citgo. Guaido, supported by the United States and most countries in the Western Hemisphere, says Maduro stole his re-election and must resign to allow new, fair polls. Maduro, in a live national broadcast on Monday, accused the United States of trying to steal U.S. refining arm Citgo Petroleum, the OPEC member's most important foreign asset, which also manages a chain of U.S. gas stations. He said Venezuela would take legal actions in response. In the first sign of serious retaliation, three sources with knowledge of the decision told Reuters that PDVSA had ordered customers with tankers waiting to load Venezuelan crude bound for the United States to prepay for the cargoes or they will not receive authorization to fill the vessels or leave the ports. The Trump administration sanctions stopped short of banning U.S. companies from buying Venezuelan oil, but because the proceeds of such sales will be put in a "blocked account," PDVSA is likely to quickly stop shipping much crude to the United States, its top client. Oil at sea, already paid for, would continue its journey to the United States, he said. White House national security adviser John Bolton said at the briefing the measure would cost Maduro $11 billion in lost export proceeds over the next year and block him from accessing PDVSA assets worth $7 billion. While there are significant exceptions, such as rules that should allow Citgo to keep using Venezuelan crude in U.S. refineries, the sanctions will likely cause some reordering of global oil flows as Venezuela seeks to sell elsewhere. Gulf refineries that use Venezuela's heavy crude will have to look for alternatives to replace supplies. Despite a sharp decline in oil exports due largely to mismanagement of the industry and the economic crisis Venezuela remains the fourth-biggest vendor of oil to the United States, supplying some 500,000 barrels per day.

 

 
Intraday RESISTANCE LEVELS
29th January 2019 R1 R2 R3
GOLD-XAU 1,309-1.316 1,326 1,334
Silver-XAG 15.80 16.00-16.40 17.00
Crude Oil 52.50-53.00 54.20 54.80-55.50
EURO/USD 1.1460-1.1490 1.1520 1.1570
GBP/USD 1.3200 1.3260 1.3290-1.3340
USD/JPY 109.50-109.80 110.00 111.00

Intraday SUPPORTS LEVELS
29th 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 52.00 51.50 51.00-50.40
EURO/USD 1.1420-1.1380 1.1340 1.1305-1.1265
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 (29th 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$1304.33/oz and low of US$1297.59/oz. Gold up by 0.132% at US$1302.89/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     1,309-1.316
R2     1,326
R3     1,334

Technical Indicators

Name   Value Action
14DRSI  

67.126

Buy
20-DMA   1289.41 Buy
50-DMA  

1260.82

Buy
100-DMA   1235.89 Buy
200-DMA   1245.81 Sell
STOCH(5,3)   96.459 Sell
MACD(12,26,9)   9.170 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$15.80/oz and low of US$15.59/oz. Silver settled down by 0.108% at US$15.70/oz.

Technicals in Focus:

On daily charts, silver is sustaining above200DMA (15.27), 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   64.691 Buy
20-DMA   15.53 Buy
50-DMA   14.93 Buy
100-DMA   14.67 Buy
200-DMA   15.27 Sell
STOCH(5,3)   76.342 Buy
MACD(12,26,9)   0.153 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$53.68/bbl, intraday low of US$51.40/bbl and settled down by 2.796% to close at US$52.14/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 52.50-56.10 with stop loss at 56.10; targeting 51.70-51.00 and 50.40-49.50. Buy above 52.00-50.50 with risk daily closing below 50.50 and targeting 52.50-53.00-54.20 and 54.80-55.50.

 
Intraday Support Levels
S1     52.00
S2     51.50
S3     51.00-50.40

Intraday Resistance Levels
R1     52.50-53.00
R2     54.20
R3     54.80-55.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.523 Sell
20-DMA   51.52 Sell
50-DMA   50.76 Sell
100-DMA   59.36 Sell
200-DMA   63.91 Sell
STOCH(5,3)   41.995 Sell
MACD(12,26,9)   0.689 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1389/EUR, high of US$1.1443/EUR and settled the day up by 0.228% to close at US$1.1425/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 1.1460-1.1570 targeting 1.1420-1.1380-1.1345 and 1.1305-1.1265 with stop-loss at daily closing above 1.1570.

 
Intraday Support Levels
S1     1.1420-1.1380
S2     1.1340
S3     1.1305-1.1265

Intraday  Resistance Levels
R1     1.1460-1.1490
R2     1.1520
R3     1.1570

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.252 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 Monday made an intra‐day low of US$1.3136/GBP, high of US$1.3210/GBP and settled the day down by 0.136% to close at US$1.3158/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 Monday made intra‐day low of JPY109.15/USD and made an intraday high of JPY109.57/USD and settled the day down by 0.191% at JPY109.32/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

AAFX TRADING
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