AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged down on Wednesday in Asia as investors await the Federal Reserve's interest rate decision due later in the day. The central bank is expected to leave its key federal fund's rate target unchanged at 2.25% to 2.5%. On Tuesday, the Conference Board, a business research group, said the U.S. consumer confidence index dropped to 120.2 in January, an 18-month low, from 126.6 last month. The reading was below economists forecast for a reading of 124.7. Meanwhile, the USD/CNY pair fell 0.2% to 6.7139 as China's Vice Premier Liu He is set to begin trade talks with U.S. officials, including President Donald Trump, in Washington today. The Reserve Bank of Australia is due to meet next Tuesday. The central bank had kept interest rates at a record low of 1.50% for the past 26 meetings. Yesterday, RBA board member Ian Harper said the next move in rates was “likely to be higher. Labour MP Yvette Cooper's amendment, which sought to extend Article 50 if MPs fail to approve the Withdrawal Agreement by Feb. 26, was voted down. Without an option to extend the deadline beyond March 29, there's a risk the U.K. crashes out of the EU without a deal. The Federal Open Market Committee will meet as scheduled on Wednesday despite U.S. government offices opening late in Washington due to inclement weather, the Federal Reserve Board said in a statement on Tuesday. The FOMC will release a statement as scheduled at 2 p.m. EST (1900 GMT) and hold a news conference starting at 2:30 p.m. EST (1930 GMT), the Fed said. The positive turnaround, however, could be short-lived if the German consumer price index misses estimates, validating the ECB recent dovish turn. Last week, the central bank downgraded assessment on the economy, leaving the forward guidance wording unchanged. The data, due for release at 13:00 GMT, is expected to show that the cost of living rose 1.6% year-on-year in January; having jumped 1.7% in December. Meanwhile, the FOMC is expected to keep rates unchanged and confirm the message delivered by the recent round of Fed speakers - the central bank has time to sit back and review rate hikes and its impact on the economy. The dollar, however, could pick up a strong bid, pushing the EUR/USD lower if Fed's Powell downplays recent reports that the central bank is planning to end the quantitative tightening program sooner-than-expected.
  • The United States and China launch a critical round of trade talks on Wednesday amid deep differences over U.S. demands for structural economic reforms from Beijing that will make it difficult to reach a deal before a March 2 U.S. tariff hike.. The two sides will meet next door to the White House in the highest-level talks since U.S. President Donald Trump and Chinese President Xi Jinping agreed a 90-day truce in their trade war in December. People familiar with the talks and trade experts watching them say that, so far, there has been little indication that Chinese officials are willing to address core U.S. demands to protect American intellectual property rights and end policies that Washington says force U.S. companies to transfer technology to Chinese firms. Another government shutdown could inflict greater harm on the U.S. economy, especially it were to happen only three weeks after the end of the longest ever such closure, Moody’s Investors Service said on Tuesday. The recent shutdown began in late December after U.S. President Donald Trump refused to sign a bill to fund the government as he demanded $5.7 billion for building a wall along the border between the United States and Mexico. Last Friday, Trump agreed to fund the government through Feb. 15 in a bid to reach an agreement on border security. He said he would be willing to shut down the government again if U.S. lawmakers do not deliver a deal he finds acceptable. The 35-day partial government shutdown affected some 800,000 federal employees who were furloughed or worked without pay. After the government reopened, these workers are expected to receive missed salaries, but federal contractors will not be compensated. The shutdown’s effects “have been concentrated with limited ramifications for the broader economy,” Moody’s said in a statement. The U.S. economy was expected to lose $3 billion from the partial government shutdown, the Congressional Budget Office said on Monday. If the governments were to shut down again in less than three weeks, it would “complicate negotiations over the debt ceiling,” kindling worries about the Treasury delaying its debt payments, according to Moody’s. On Monday, Fitch Ratings said another shutdown could raise the risks to U.S. economic growth and corporate earnings in the first quarter.
  • Oil prices rose on Wednesday as concerns about supply disruptions following U.S. sanctions on Venezuela's oil industry outweighed downward pressure from a darkening outlook for the global economy. The gains followed a 2 percent price jump in the previous session, when markets first digested the U.S. sanctions on Venezuela's oil exports. Washington on Monday announced export sanctions against state-owned oil firm Petroleos de Venezuela SA (PDVSA), limiting transactions between U.S. companies that do business with Venezuela through purchases of crude oil and sales of refined products. She added, however, that Canadian oil exports would be "constrained by pipeline capacity bottlenecks The sanctions aim to freeze sale proceeds from PDVSA's exports of roughly 500,000 bpd of crude oil to the United States. Although the move pushed up oil prices, markets appeared relatively relaxed as the sanctions only affect Venezuelan supply to the United States. With the United States dropping out as a customer for Venezuelan oil, she added that "China and India ... will be able to pick up these oil volumes at great discounts." Despite this, some analysts said that non-U.S. oil trading firms with operations in the United States may still avoid dealing with Venezuelan oil. Other analysts also pointed to economic weakness as countering supply-side efforts to tighten the market such as the voluntary supply restraint by the OPEC "Pulling in the opposite (oil price) direction are heightened concerns about global growth, particularly that of China," said Ole Hansen, head of commodity strategy at Denmark's Saxo Bank. Global economic growth and fuel consumption are expected to slow this year amid a trade dispute between the United States and China, the world's two biggest economies. Officials from Washington and Beijing are set to launch a new round of trade talks on Wednesday aimed at resolving their disputes amid which both sides have slapped hefty import tariffs on each other's goods.

 

 
Intraday RESISTANCE LEVELS
30th January 2019 R1 R2 R3
GOLD-XAU 1.316-1,326 1,334 1.340
Silver-XAG 16.00-16.40 17.00 17.40
Crude Oil 54.00 54.80-55.50 56.00
EURO/USD 1.1460-1.1490 1.1520 1.1570
GBP/USD 1.3150-1.3200 1.3260 1.3290-1.3340
USD/JPY 109.50-109.80 110.00 111.00

Intraday SUPPORTS LEVELS
30th January 2019 S1 S2 S3
GOLD-XAU 1,309-1.296 1.289 1,282-1,274
Silver-XAG 15.60-15.40 15.10 14.90-14.75
Crude Oil 53.00-52.50 52.00 51.50-51.00
EURO/USD 1.1420-1.1380 1.1340 1.1305-1.1265
GBP/USD 1.3090 1.3050 1.3010-1.2940
USD/JPY 109.10 108.50-108.00 107.30

Intra-Day Strategy (30th 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$1311.91/oz and low of US$1302.63/oz. Gold up by 0.639% at US$1311.28/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 1309-1274 with risk below 1274, targeting 1315-1326 and 1334-1340. Sell below 1315-1340 keeping stop loss closing above 1340, targeting 1309-1296-1289 and 1282-1274.

 
Intraday Support Levels
S1     1,309-1.296
S2     1.289
S3     1,282-1,274
Intraday Resistance Levels
R1     1.316-1,326
R2     1,334
R3     1.340

Technical Indicators

Name   Value Action
14DRSI  

71.256

Buy
20-DMA   1291.27 Buy
50-DMA  

1262.77

Buy
100-DMA   1237.15 Buy
200-DMA   1245.96 Sell
STOCH(5,3)   97.473 Sell
MACD(12,26,9)   97.170 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$15.90/oz and low of US$15.70/oz. Silver settled down by 0.069% at US$15.80/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 16.00-17.40 with stop loss above 17.40; targeting 15.70-15.40-15.10 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     16.00-16.40
R2     17.00
R3     17.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.082 Buy
20-DMA   15.57 Buy
50-DMA   14.99 Buy
100-DMA   14.70 Buy
200-DMA   15.26 Sell
STOCH(5,3)   89.342 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 54.00-56.00 with stop loss at 56.00; targeting 53.00-52.50-51.70 and 51.00-50.40. Buy above 53.00-50.50 with risk daily closing below 50.50 and targeting 54.00-54.80 and 55.50-56.00.

 
Intraday Support Levels
S1     53.00-52.50
S2     52.00
S3     51.50-51.00

Intraday Resistance Levels
R1     54.00
R2     54.80-55.50
R3     56.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.107 Sell
20-DMA   51.93 Sell
50-DMA   50.71 Sell
100-DMA   59.23 Sell
200-DMA   63.84 Sell
STOCH(5,3)   60.099 Sell
MACD(12,26,9)   0.803 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1410/EUR, high of US$1.1449/EUR and settled the day up by 0.0437% to close at US$1.1430/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 Tuesday made an intra‐day low of US$1.3055/GBP, high of US$1.3198/GBP and settled the day down by 0.136% to close at US$1.3064/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 1.3100-1.3050 and 1.3010-1.2940-1.2850. Buy above 1.3090-1.2940 with targets 1.3150-1.3100-1.3050 and 1.3010-1.2940 with stop loss closing below 1.2940.

 
Intraday Support Levels
S1     1.3090
S2     1.3050
S3     1.3010-1.2940

Intraday Resistance Levels
R1     1.3150-1.3200
R2     1.3260
R3     1.3290-1.3340

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

61.825

Buy
20-DMA   1.2907 Sell
50-DMA   1.2780 Sell
100-DMA   1.2902 Sell
200-DMA   1.3056 Sell
STOCH(5,3)   60.972 Sell
MACD(12,26,9)   -0.010260.972 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY109.12/USD and made an intraday high of JPY109.53/USD and settled the day up by 0.054% at JPY109.38/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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