AAFX TRADING

Daily Market Lookup

  • Asian stocks extended gains on Tuesday as overnight strength on Wall Street and the Federal Reserve’s cautious turn underpinned appetite for riskier assets, while the dollar held firm on last week’s upbeat U.S. data. Australian shares jumped 2 percent, with long-battered financials surging on short-covering after a special government-appointed inquiry excoriated Australia’s financial sector for misconduct but left the structure of the country’s powerful banks in place. Elsewhere in Asia, trade was light, with markets in greater China, Taiwan, South Korea, Singapore and Indonesia all closed for the Lunar New Year. Fed Chairman Jerome Powell has signalled its three-year tightening drive may be coming to an end amid a suddenly cloudy outlook for the U.S. economy due to global growth concerns and the U.S.-China trade dispute. The Fed said in a statement that Powell had told President Donald Trump and Treasury Secretary Steven Mnuchin late on Monday that “the path of policy will depend entirely on incoming economic information.” Data announced on Friday showed U.S. job growth surged in January while a key gauge of U.S. manufacturing sector showed surprising resilience after December’s shocking fall, allaying fears the U.S. economy might be losing momentum quickly. The dollar held on to recent gains against its major peers as investors continued to lap-up Friday’s strong payrolls number and a manufacturing survey. On Monday, sterling quickly erased brief gains following a newspaper report that goods shipped to Britain from the European Union could be waved through without checks in the event of a “no-deal” Brexit . raders’ focus quickly shifted to U.S. President Donald Trump’s delayed State of the Union address, due at 2100 ET Tuesday/0200 GMT Wednesday, as well as U.S. ISM’s non-manufacturing figures, also due later in the day. Trump told a White House event over the weekend that he might declare an emergency because it did not appear Democrats in Congress were moving toward a deal to provide wall money. Such a step likely would prompt a court challenge from Democrats.
  • The dollar held on to recent gains against its major peers on Tuesday, supported by a recovery in investors' risk appetite, which gave an overnight boost to U.S. yields. Trading was likely to remain subdued in Asia with many markets across the region closed for Lunar New Year holidays for much of the week. It had traded in negative territory during most of the session after retail sales for December came in weaker than expected. Some market players are still expecting a rate cut later this year due to mounting signs of economic weakness. In late Monday trade, sterling gave up gains made earlier in the day after a newspaper report said that goods shipped to Britain from the European Union could be waved through without checks in the event of a "no-deal" Brexit. It fell one tenth of a percent overnight, reversing some of last week's rally, as oil prices fell and the greenback broadly climbed. U.S. President Donald Trump and Fed Chairman Jerome Powell dined at the White House on Monday in their first meeting after months in which Trump lambasted the central bank for raising interest rates and, in the president’s view, endangering the economy’s growth. The dinner, which included Treasury Secretary Steven Mnuchin and Vice chair Richard Clarida, follows a Fed meeting last week at which the central bank said, in fact, that further rate hikes were on hold for now - a step Powell and others said was based on recent economic developments, not the president’s public tirades against the Fed. The hour-and-a-half steak dinner, a possible opportunity for the two men to reset their relationship, covered a variety of economic topics, the Fed said in a statement, but did not delve into expectations of future monetary policy decisions. Powell’s statements to the president, the Fed said, were all consistent with remarks made at a press conference after the Fed’s meeting last week. Fed chairs routinely meet with the Treasury secretary, but sessions with the president are less frequent: Monday’s dinner is the first session between Trump and Powell since the Fed chair took over a year ago. Recent presidents have largely steered clear of directly criticizing the Fed. While the central bank’s control over interest rates can cause headaches for elected officials, the ability of the central bank to make decisions free of direct political influence is considered a key part of its effectiveness and credibility with households and global investors. As Fed rate increases continued through last year, however, Trump was unabashed in a series of comments from the summer through the end of the year - calling the central bank “crazy,” out of touch with markets, and according to reports exploring whether he could remove Powell as chair.
  • U.S. oil prices inched up on Tuesday, buoyed by expectations of tightening global supply due to U.S. sanctions on Venezuela and production cuts led by OPEC. Analysts said that U.S. sanctions on Venezuela had focused market attention on tighter global supplies. The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to but slightly less extensive than those imposed on Iran last year, experts said on Friday after looking at details posted by the Treasury Department. With fresh sanctions potentially looming, a flotilla loaded with about 7 million barrels of Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest U.S. sanctions and others whose buyers are weighing who to pay, according to traders, shippers and Refinitiv Eikon data. Meanwhile, oil supply from the Organization of the Petroleum Exporting Countries fell in January by the largest amount in two years, a Reuters survey found, as Saudi Arabia and its Gulf allies over-delivered on the group's supply-cutting pact while Iran, Libya and Venezuela registered involuntary declines. Russia has been in full compliance with its pledge to gradually cut its oil production, Russian Energy Minister Alexander Novak said in a statement on Monday, adding that production fell by 47,000 barrels per day (bpd) in January from October.

 

 
Intraday RESISTANCE LEVELS
5th 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 1.3050-1.3090 1.3150 1.3200-1.3260
USD/JPY 109.90-110.20 110.60 111.00

Intraday SUPPORTS LEVELS
5th 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 1.3010-1.2950 1.2909 1.2850
USD/JPY 109.50-109.10 108.50 108.00-107.30

Intra-Day Strategy (5th 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 Monday made its intraday high of US$1318.91/oz and low of US$1308.55/oz. Gold down by 0.471% at US$1311.69/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 Monday made its intraday high of US$15.91/oz and low of US$15.67/oz. Silver settled down by 0.377% 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 Monday made an intra‐day high of US$55.88/bbl, intraday low of US$53.45/bbl and settled down by 0.793% to close at US$54.98/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 Monday made an intraday low of US$1.1423/EUR, high of US$1.1457/EUR and settled the day up by 0.137% to close at US$1.1434/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 sellBuy 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. z.

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 Monday made an intra‐day low of US$1.3028/GBP, high of US$1.3102/GBP and settled the day down by 0.206% to close at US$1.3034/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     1.3010-1.2950
S2     1.2909
S3     1.2850

Intraday Resistance Levels
R1     1.3050-1.3090
R2     1.3150
R3     1.3200-1.3260

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 JPY109.42/USD and made an intraday high of JPY110.15/USD and settled the day up by 0.323% at JPY109.86/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     109.50-109.10
S2     108.50
S3     108.00-107.30

INTRADAY RESISTANCE LEVELS
R1     109.90-110.20
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

AAFX TRADING
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