AAFX TRADING

Daily Market Lookup

  • Asian shares were subdued on Wednesday after U.S. President Donald Trump's State of the Union speech failed to give markets fresh trading catalysts, while the Australian dollar slumped after the central bank opened the door to a possible rate cut. The Australian dollar slumped more than 1 percent to hit a one-week low of $0.7153 after Reserve Bank of Australia (RBA) Governor Philip Lowe said the central bank remained optimistic about the economic outlook but acknowledged rates might fall if unemployment were to rise and inflation stay too low. Trump vowed in his State of the Union speech on Tuesday to build a border wall that is a source of a deep partisan divide and said Democratic attempts at "ridiculous partisan investigations" could damage U.S. prosperity. Some investors were hoping Trump would offer evidence of real, concrete progress in the U.S.-China trade negotiations, said Nick Twidale, chief operating officer at Rakuten Securities in Sydney. Senior U.S. and Chinese officials are poised to start another round of trade talks in Beijing next week to push for a deal on American intellectual property and avert a March 2 increase in U.S. tariffs on Chinese goods, two people familiar with the plans said on Tuesday. The Federal Reserve should leave interest rates where they are until the U.S. economic outlook is clearer, Dallas Fed President Robert Kaplan said on Tuesday, a process that could take several more months. The dollar held up well thanks in part to a retreat in sterling, which hit two-week lows at $1.2923 in early trade after poor survey data and uncertainty about Brexit talks pushed it below a key market level.
  • The dollar held steady against its peers on Wednesday, showing little reaction to U.S. President Donald Trump's State of the Union address which touched upon trade and budget issues but provided investors with few surprises. In an annual speech on Tuesday outlining his priorities for the coming year, President Trump said that illegal immigration was an urgent national crisis and reiterated his vow to build a border wall. Trump also said any trade agreement with China "must include real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs." The Australian dollar tumbled after central bank chief Philip Lowe opened the door to a possible rate cut after more than a year of signaling tighter future policy. In his first public speech of the year, Lowe said rates could go in either direction, depending on the labor market and inflation. The Reserve Bank of Australia has left its official cash rate at a record low of 1.50 percent since August 2016 and Governor Lowe had repeatedly emphasized the next move was more likely to be up. The single currency was pressured after a survey released on Tuesday showed euro zone businesses expanded at their weakest rate since mid-2013 at the start of the year. The dollar has been managed to hold its ground although U.S. Treasury yields declined the previous day and pulled back from one-week highs. The State of the Union and what President Donald Trump tell Congress is giving a gold a bid even as the dollar retains its upward bias.
  • Fresh concerns about the U.S. economy after a back-to-back slump in durable goods orders and services sector data boosted the yellow metal in the spot market. Investors turned toward gold to hedge against potential market eventualities from Trump's 9:00 PM ET speech, which could touch on anything from trade negotiations with China to the spat with Democrats refusing to fund his border wall. The President has warned he might shut the government down again if he doesn't get his wall or declare a national emergency to fund the wall and bypass Congress. The Institute of Supply Management, meanwhile, reported a five-month low in U.S. services sector activity for January, missing consensus estimates and increasing worries of demand on a global scale. That followed through with data from Monday that showed an unexpected fall in new orders for U.S.-made goods in November, with sharp declines, particularly in demand for machinery and electrical equipment. Gold has moved solidly above $1,300 over the past two weeks, but it has lost some steam since Friday as investors returned to the dollar, strengthened by the U.S. January jobs report that showed a solid growth of 304,000 jobs versus an estimated rise of 165,000. Even White House economic adviser Kevin Hassett's remarks on Monday that there was still "a lot of work to do” on the U.S.-China trade talks did not result in a bid for gold. Investors have been buying gold either as a hedge against a further U.S. fallout with China or a direct bet that a trade deal between the two countries would not happen. But some analysts think gold still has a chance of advancing toward $1,350 if the Federal Reserve honors its promise to be patient with rate hikes. Investors will be closely watching a number of Fed speeches this week for further clues on interest rates. Topping the list of the speakers will Fed Chair Jerome Powell, who will come on Wednesday. Others from the central bank lined up to speak this week are Fed Vice Chair Richard Clarida, Cleveland Fed President Loretta Mester, St. Louis Fed President James Bullard and Fed Governor Randal Quarles.
  • Oil prices edged higher for the first time in three sessions on Wednesday, although concerns over the outlook for the global economy capped gains. Global economic worries have weighed on market sentiment in recent days, offsetting support from signs that global supplies are tightening. With a nervous market, traders are focused on the U.S. State of the Union address by President Donald Trump. U.S. sanctions on Venezuela have been viewed as supportive for prices by helping tighten global supplies. A flotilla loaded with Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest U.S. sanctions on Venezuela and others whose buyers are weighing who to pay. The Organization of the Petroleum Exporting Countries and its allies, including Russia, agreed to production cuts effective from last month to beat back supply growth. However, U.S. crude stocks rose last week even as refineries boosted output, while gasoline and distillate stocks increased, data from industry group the American Petroleum Institute showed on Tuesday. Crude inventories rose by 2.5 million barrels in the week ended Feb. 1 to 448.2 million, compared with analysts' expectations for an increase of 2.2 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 889,000 barrels, API said.

 

 
Intraday RESISTANCE LEVELS
6th February 2019 R1 R2 R3
GOLD-XAU 1.316 1,340 1,340
Silver-XAG 15.90-16.40 17.00 17.40-18.00
Crude Oil 54.80 55.50-56.00 57.00
EURO/USD 1.1420 1.1460 1.1500-1.1540
GBP/USD 1.3010-1.3050 1.3090 1.3150-1.3200
USD/JPY 109.90-110.20 110.60 111.00

Intraday SUPPORTS LEVELS
6th 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 53.80 53.00-52.50 52.00
EURO/USD 1.1380 1.1340-1.1305 1.1250
GBP/USD 1.2950-1.2910 1.2850 1.2790
USD/JPY 109.50-109.10 108.50 108.00-107.30

Intra-Day Strategy (6th 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 Tuesday made its intraday high of US$1316.80/oz and low of US$1316.80/oz. Gold up by 0.246% at US$1314.90/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 1315-1320-1326 and 1334-1340. Sell below 1316-1350 keeping stop loss closing above 1350, targeting 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     1,340
R3     1,340

Technical Indicators

Name   Value Action
14DRSI  

65.014

Buy
20-DMA   1298.20 Buy
50-DMA  

1272.07

Buy
100-DMA   1242.98 Buy
200-DMA   1245.84 Sell
STOCH(5,3)   34.473 Sell
MACD(12,26,9)   12.396 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$15.91/oz and low of US$15.79/oz. Silver settled down by 0.189% at US$15.82/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 Tuesday made an intra‐day high of US$55.37/bbl, intraday low of US$53.45/bbl and settled down by 1.890% to close at US$53.97/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
R2     55.50-56.00
R3     57.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.091 Sell
20-DMA   53.25 Sell
50-DMA   50.89 Sell
100-DMA   58.50 Sell
200-DMA   63.51 Sell
STOCH(5,3)   48.916 Sell
MACD(12,26,9)   0.970 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1400/EUR, high of US$1.1439/EUR and settled the day down by 0.262% to close at US$1.1404/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     1.1380
S2     1.1340-1.1305
S3     1.1250

Intraday  Resistance Levels
R1     1.1420
R2     1.1460
R3     1.1500-1.1540

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.832 Buy
20-DMA   1.1413 Buy
50-DMA   1.1393 Sell
100-DMA   1.1436 Sell
200-DMA   1.1554 Sell
STOCH(5,3)   10.157 Sell
MACD(12,26,9)   0.0005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2923/GBP, high of US$1.3050/GBP and settled the day down by 0.659% to close at US$1.2948/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 1.3010-1.3300 with targets at 1.2940-1.2910 and 1.2850-1.2790. Buy above 1.2950-1.2790 with targets 1.3010-1.3050-1.3090 and 1.3150-1.3200 with stop loss closing below 1.2790.

 
Intraday Support Levels
S1     1.2950-1.2910
S2     1.2850
S3     1.2790

Intraday Resistance Levels
R1     1.3010-1.3050
R2     1.3090
R3     1.3150-1.3200

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.539

Buy
20-DMA   1.2983 Sell
50-DMA   1.2802 Sell
100-DMA   1.2900 Sell
200-DMA   1.3035 Sell
STOCH(5,3)   8.972 Sell
MACD(12,26,9)   -0.0102 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY109.77/USD and made an intraday high of JPY110.03/USD and settled the day up by 0.0819% at JPY109.95/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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