AAFX TRADING

Daily Market Lookup

  • GOLD: Gold prices edged down on Monday in Asia, weighed down by a rising U.S. dollar as traders awaited comments from a number of Federal Reserve officials this week, which may reinforce expectations for a pause in its rate hike cycle. Fed Chairman Jerome Powell, Cleveland Fed President Loretta Mester and St Louis Fed President James Bullard are due to speak later this week. In its January meeting, the U.S. central bank halted its plans for further rate hikes, adding that it would be "patient" on raising rates amid muted inflation and rising risks to global economic growth. Gold tends to appreciate on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion. The price of gold tends to fall when the value of the dollar increases, as the precious metal becomes more expensive in other currencies. Trading volume in the Asian markets will be thin this week, with China’s financial markets closed the whole week for the Lunar New Year Holiday. South Korea’s KOSPI is also closed today for a holiday.
  • CRUDE OIL: Oil prices were stable on Monday, largely maintaining gains from the previous session as OPEC-led supply cuts and U.S. sanctions against Venezuela provided the market with support. Output declines from the OPEC as they make good on their pact to curb a supply overhang were compounded by falling U.S. oil rig counts and sanctions on Venezuelan oil sales. The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran last year, experts said after examining details posted by the Treasury Department. OPEC oil supply fell in January by the largest amount in two years despite sluggish production declines from Russia, according to a Reuter’s survey. Russian oil output in January missed the target for the output cuts, Energy Ministry data showed on Saturday. Production last month declined to 11.38 million barrels per day (bpd), but that was only down by 35,000 bpd from its October 2018 level that is the baseline for the pact. Russian Energy Minister Alexander Novak has said the country's overall cuts from the October baseline would total 50,000 bpd in January. Russia has pledged to reduce oil output by 230,000 bpd from October. U.S. Energy firms last week cut the number of oil rigs operating to their lowest in eight months, to 847, as some drillers followed through on plans to spend less on new wells this year. Meanwhile, hopes for thawing China-U.S. relations have also helped ease concerns over slowing economic growth U.S. President Donald Trump last week said he would meet with Chinese President Xi Jinping, perhaps twice, in the coming weeks to try to seal a comprehensive trade deal with Beijing, but acknowledged it was not yet clear whether a deal could be reached. Overall, Fitch Solutions said on Monday oil markets had a "fundamentally bullish outlook due mainly to the supply cuts led by OPEC as well as increasing oil demand despite the slowdown in economic growth."
  • U.S. EQUITIES: The Dow Jones Industrial Average posted slight gains on Friday after the U.S. government released jobs growth data that easily beat expectations. The 30-stock Dow rose 64.22 points to 25,063.89 as Chevron, Exxon Mobil and Merck all closed higher. The Dow also posted its sixth straight week of gains, its longest since November 2017. The S&P 500 closed 0.1 percent higher at 2,706.53 as gains in the energy and tech sector’s offset losses in consumer discretionary. The Nasdaq Composite declined 0.25 percent to 7,263.87 as Amazon shares fell. The U.S. economy added 304,000 jobs in January, according to data released by the Bureau of Labor Statistics. Economists polled by Refinitiv expect the U.S. economy to have added 170,000 jobs in January.
  • U.S. DOLLAR: The dollar hovered near a one-week high against the yen on Monday, buoyed by stronger-than-expected U.S. jobs and factory data, although the Federal Reserve's cautious policy outlook and thinned holiday trade in Asia are likely to cap further gains. The dollar index, a gauge of its value versus six major peers, was steady at 95.58. Despite the strong labour market, the U.S. central bank is widely expected to keep rates steady this year thanks to heightened worries over global growth, especially in China Having signalled further rate rises as recently as December, the U.S. central bank announced it is putting plans for further rate hikes on hold and pledged to be "patient" on further moves in its January meeting, citing muted inflation and rising risks to global economic growth. Market watchers will be tuned in to remarks by Cleveland Fed President Loretta Mester on Monday and St Louis Fed President James Bullard on Friday. Fed Chairman Jerome Powell is due to speak on Wednesday, but it is unclear if his remarks will address monetary policy. Stronger-than-expected U.S. jobs data were cited as providing support to the greenback today. The report showed the U.S. economy created 304,000 new jobs, the highest in 11 months, beating forecasts for 165,000 jobs. The Bank of England is expected to keep interest rates on hold at its upcoming meeting on Thursday, amid growing uncertainty over the prospect of Britain exiting the European Union on March 29 with no deal in place. Despite the strong labor market, the U.S. central bank is widely expected to keep rates steady this year thanks to heightened worries over global growth, especially in China. Growth in the euro area has also been weaker-than-expected with Europe's main economic engines, France and Germany, slowing down. Rising U.S. interest rates were the main driver of the greenback's outperformance last year. However, most analysts do not see much upside in the dollar this year as U.S. borrowing costs are widely expected to remain steady. The solid jobs report also allayed concerns of the slowdown in the U.S. economy, leading traders to trim expectations the Fed would need to cut interest rates to support the economy later this year.

 

 
Intraday RESISTANCE LEVELS
4th February 2019 R1 R2 R3
GOLD-XAU 1.316 1,326-1,334 1,340
Silver-XAG 15.90-16.40 17.00 17.40-18.00
Crude Oil 55.50-56.00 56.50 57.00-57.60
EURO/USD 1.1460 1.1500-1.1540 1.1570
GBP/USD 1.3150-1.3200 1.3260 1.3290-1.3340
USD/JPY 109.80-110.20 110.60 111.00

Intraday SUPPORTS LEVELS
4th February 2019 S1 S2 S3
GOLD-XAU 1,309 1.296 1.289-1,282
Silver-XAG 15.60 15.40 15.10-14.90
Crude Oil 54.80 53.80 53.00-52.50
EURO/USD 1.1420 1.1380 1.1340-1.1305
GBP/USD 1.3090 1.3050 1.3010-1.2940
USD/JPY 109.10-109.50 108.50 108.00-107.30

Intra-Day Strategy (4th 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 Friday made its intraday high of US$1323.44/oz and low of US$1323.44/oz. Gold down by 0.287% at US$1316.05/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     1,309
S2     1.296
S3     1.289-1,282
Intraday Resistance Levels
R1     1.316
R2     1,326-1,334
R3     1,340

Technical Indicators

Name   Value Action
14DRSI  

65.265

Buy
20-DMA   1295.81 Buy
50-DMA  

1268.42

Buy
100-DMA   1240.66 Buy
200-DMA   1245.89 Sell
STOCH(5,3)   72.473 Sell
MACD(12,26,9)   12.950 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.06/oz and low of US$15.87/oz. Silver settled down by 0.248% at US$15.83/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 15.90-16.40-17.00 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     15.60
S2     15.40
S3     15.10-14.90

Intraday  Resistance Levels
R1     15.90-16.40
R2     17.00
R3     17.40-18.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.664 Buy
20-DMA   15.61 Buy
50-DMA   15.08 Buy
100-DMA   14.76 Buy
200-DMA   15.25 Sell
STOCH(5,3)   60.342 Buy
MACD(12,26,9)   0.218 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$55.74/bbl, intraday low of US$53.49/bbl and settled up by 2.40% to close at US$55.43/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     54.80
S2     53.80
S3     53.00-52.50

Intraday Resistance Levels
R1     55.50-56.00
R2     56.50
R3     57.00-57.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.231 Sell
20-DMA   53.00 Sell
50-DMA   50.78 Sell
100-DMA   58.80 Sell
200-DMA   63.65 Sell
STOCH(5,3)   83.459 Sell
MACD(12,26,9)   1.113 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1487/EUR, high of US$1.1487/EUR and settled the day up by 0.0873% to close at US$1.1455/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 Friday made intra‐day low of JPY108.71/USD and made an intraday high of JPY109.57/USD and settled the day up by 0.597% at JPY109.48/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     109.10-109.50
S2     108.50
S3     108.00-107.30

INTRADAY RESISTANCE LEVELS
R1     109.80-110.20
R2     110.60
R3     111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.035 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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