AAFX TRADING

Daily Market Lookup

  • Asian shares crept back from four-month highs on Friday as a dismal survey on Chinese factory activity dulled optimism about the prospects for a Sino-U.S. deal on tariffs. The Australian dollar, a liquid barometer of investor sentiment toward China, skidded 0.5 percent after the Caixin/Markit index of manufacturing fell to its lowest since February 2016. That was more downbeat than the official version of the index and inflamed fears for the economy. Investor caution is also mounting ahead of U.S. jobs data later in the session with analysts unsure what impact the government shutdown might have had employment. Stocks had taken heart after U.S. President Donald Trump said he would meet with Chinese President Xi Jinping soon to try to seal a comprehensive trade deal as the top U.S. negotiator reported “substantial progress” in the talks. Beijing’s trade delegation said the talks made “important progress” for the current stage, China’s official Xinhua news agency reported on Friday. The previously upbeat mood was also chilled somewhat by White House insistence that March 1 was a hard deadline for a deal, a failure of which would lead to an increase in U.S. tariffs on Chinese goods. Equity markets have also been relieved by a change of heart at the U.S. Federal Reserve, which this week surprised many by all but abandoning plans for further rate hikes. Investors responded by pricing in a one-in-three chance that interest rates could actually be cut this year. Yields on two-year Treasuries were down almost 15 basis points on the week so far, which if sustained would be the largest weekly decline since mid-2010. The single currency had taken a knock when Bundesbank president Jens Weidmann painted an unusually bleak picture of the German economy, saying the country’s slump will last longer than initially thought.
  • U.S. job growth likely slowed in January after December’s weather-related outsized surge, but the pace of hiring probably remains fast enough to support the economy amid a darkening outlook resulting from government policy and cooling global economies. The Labor Department will publish its closely watched monthly employment report on Friday, two days after the Federal Reserve signaled its three-year interest rate hike campaign might be ending because of rising headwinds to the economy. It also comes at the end of the first week back at work for hundreds of thousands of federal workers furloughed during the recent partial government shutdown. The 35-day shutdown, which ended a week ago, may complicate the report but is not expected to have a lasting effect on U.S. employment or the economy. Nonfarm payrolls probably increased by 165,000 jobs last month, according to a Reuters survey of economists, after shooting up 312,000 in December - the most in 10 months. The anticipated job gains would be more than the roughly 100,000 per month needed to keep up with growth in the working-age population. In addition to the impact of the shutdown, the report may be muddied by annual revisions to payrolls, hourly earnings and the work week, as well as the incorporation of new population estimates. The shift in population controls means figures on the labor force or number of employed or unemployed would not be directly comparable to December. The shutdown saw about 380,000 workers furloughed but is seen having a minimal impact on January’s job growth as President Donald Trump signed a law guaranteeing these employees back pay. According to the Labor Department’s Bureau of Labor Statistics (BLS), which compiles the employment report, these workers will be included in the payrolls count. Workers employed by government contractors will, however, not be paid retroactively. This means the longest shutdown in history, which ended last Friday after Trump and Congress agreed to temporary government funding, without money for his U.S.-Mexico border wall, could reduce January employment in business services, manufacturing and restaurant sectors. While the unemployment rate is forecast steady at 3.9 percent in January, there is a risk that the shutdown could have pushed it up. According to the BLS, the furloughed workers would be considered unemployed on “temporary layoff.” Some economists expect the jobless rate to temporarily rise to as high as 4.1 percent in January, which would be the highest in nearly a year. Average hourly earnings are forecast rising 0.3 percent in January after accelerating 0.4 percent in December. That is seen keeping the annual increase in wages at 3.2 percent. Nineteen states raised their minimum wages in January. But in the past this did not boost wage gains. With key data from the Commerce Department, including the fourth-quarter gross domestic product report, still delayed because of the government shutdown, the employment report will be scrutinized for signs on the economy’s path. The Fed on Wednesday kept interest rates steady but said it would be patient in raising borrowing costs further this year. The U.S. central bank removed language from its December policy statement that risks to the outlook were “roughly balanced.” Clouds have been gathering over the economic expansion, now in its ninth year and the second longest on record, with business and consumer confidence deteriorating in recent months. Confidence has been eroded by the fight over the government budget and Washington’s trade war with Beijing. Other headwinds to the economy include the fading boost from a $1.5 trillion tax cut, slowing growth in China and Europe, as well as the risk of a disorderly departure by Britain from the European Union.
  • Oil prices held steady on Friday, torn between hopes the United States and China could soon settle their trade disputes and new data raising fresh concerns over China's economic slowdown. Oil futures received support from a broader financial market rally, which saw Asian shares hit four-month highs on Friday on hopes the United States and China could strike a trade deal. U.S. President Donald Trump said on Thursday he will meet with Chinese President Xi Jinping soon to try to seal a comprehensive trade deal as Trump and his top trade negotiator both cited substantial progress in two days of high-level talks. Yet prices were weighed down by a survey on Friday that showed China's factory activity shrank by the most in almost three years in January amid slumping orders, reinforcing fears a slowdown in the world's second-largest economy is deepening. Despite these concerns, traders said oil markets overall are being supported by supply cuts from the OPEC, which according to a Reuters poll pumped 30.98 million bpd in January, down 890,000 bpd from December. In Venezuela, meanwhile, U.S. sanctions imposed on state oil firm PDVSA this week are keeping tankers stuck at ports and are expected to accelerate the supply drop in February Much Venezuelan crude oil is rated as heavy and requires the light petroleum naphtha, much of it supplied from the United States, for dilution before export to refineries.

 

 
Intraday RESISTANCE LEVELS
1st February 2019 R1 R2 R3
GOLD-XAU 1,326-1,334 1,340 1,356
Silver-XAG 16.40-17.00 17.40 18.00
Crude Oil 54.80-55.50 56.00 56.50
EURO/USD 1.1460 1.1500-1.1540 1.1570
GBP/USD 1.3150-1.3200 1.3260 1.3290-1.3340
USD/JPY 109.10 109.50-109.80 110.00

Intraday SUPPORTS LEVELS
1st February 2019 S1 S2 S3
GOLD-XAU 1.316-1,309 1.296 1.289-1,282
Silver-XAG 15.90-15.60 15.40 15.10-14.90
Crude Oil 53.80 53.00-52.50 52.00
EURO/USD 1.1420 1.1380 1.1340-1.1305
GBP/USD 1.3090 1.3050 1.3010-1.2940
USD/JPY 108.50-108.00 107.30 106.70

Intra-Day Strategy (1st February 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$1330.01/oz and low of US$1317.36/oz. Gold up by 0.159% at US$1321.43/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 1316-1274 with risk below 1274, targeting 1320-1326 and 1334-1340. Sell below 1326-1356 keeping stop loss closing above 1350, targeting 1316-1309-1296 and 1289 and 1282-1274.

 
Intraday Support Levels
S1     1.316-1,309
S2     1.296
S3     1.289-1,282
Intraday Resistance Levels
R1     1,326-1,334
R2     1,340
R3     1,356

Technical Indicators

Name   Value Action
14DRSI  

73.265

Buy
20-DMA   1292.81 Buy
50-DMA  

1264.84

Buy
100-DMA   1238.41 Buy
200-DMA   1245.99 Sell
STOCH(5,3)   94.473 Sell
MACD(12,26,9)   97.170 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$16.17/oz and low of US$15.80/oz. Silver settled down by 0.248% at US$16.03/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 16.00-14.70 targeting 16.40-17.00 and 17.40-18.00; stop breakage below 14.70. Sell below 16.40-18.00 with stop loss above 18.00; targeting 16.00-15.70-15.40 and 15.10-14.80.

 
Intraday  Support Levels
S1     15.90-15.60
S2     15.40
S3     15.10-14.90

Intraday  Resistance Levels
R1     16.40-17.00
R2     17.40
R3     18.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.935 Buy
20-DMA   15.60 Buy
50-DMA   15.06 Buy
100-DMA   14.74 Buy
200-DMA   15.25 Sell
STOCH(5,3)   89.342 Buy
MACD(12,26,9)   0.218 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$55.45/bbl, intraday low of US$53.71/bbl and settled down by 0.368% to close at US$54.09/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 54.80-56.50 with stop loss at 56.50; targeting 54.00-53.00-52.50 and 51.70-51.00. Buy above 54.00-51.50 with risk daily closing below 51.50 and targeting 54.80-55.50 and 56.00-56.50.

 
Intraday Support Levels
S1     53.80
S2     53.00-52.50
S3     52.00

Intraday Resistance Levels
R1     54.80-55.50
R2     56.00
R3     56.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.075 Sell
20-DMA   51.97 Sell
50-DMA   50.72 Sell
100-DMA   59.24 Sell
200-DMA   63.84 Sell
STOCH(5,3)   60.927 Sell
MACD(12,26,9)   0.856 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1435/EUR, high of US$1.1513/EUR and settled the day down by 0.278% to close at US$1.1445/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 1.1420-1.1305 with risk below 1.1215, targeting 1.1460-1.1490 and 1.1520-1.1570. 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
S2     1.1380
S3     1.1340-1.1305

Intraday  Resistance Levels
R1     1.1460
R2     1.1500-1.1540
R3     1.1570

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.058 Buy
20-DMA   1.1423 Buy
50-DMA   1.1389 Sell
100-DMA   1.1443 Sell
200-DMA   1.1564 Sell
STOCH(5,3)   70.157 Buy
MACD(12,26,9)   0.0008 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3096/GBP, high of US$1.3159/GBP and settled the day down by 0.091% to close at US$1.3103/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  

61.481

Buy
20-DMA   1.2951 Sell
50-DMA   1.2794 Sell
100-DMA   1.2904 Sell
200-DMA   1.3048 Sell
STOCH(5,3)   37.972 Sell
MACD(12,26,9)   -0.0102 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY108.49/USD and made an intraday high of JPY109.06/USD and settled the day down by 0.174% at JPY108.83/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     108.50-108.00
S2     107.30
S3     106.70

INTRADAY RESISTANCE LEVELS
R1     109.10
R2     109.50-109.80
R3     110.00

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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