AAFX TRADING

Daily Market Lookup

  • Asian shares started the week on the backfoot as investors were unable to shake off worries about global growth, U.S. politics and the Sino-U.S. trade war, keeping the safe-haven dollar well bid near a six-week top against major currencies. Trading volumes are expected to be light with Japan on public holiday. Investors are now looking ahead to trade talks this week with a delegation of U.S. officials travelling to China for the next round of negotiations. The U.S. Federal Reserve has signalled patience on policy after it delivered four hikes in 2018, citing growing economic risks from a slowdown in global growth. The collapse in talks between U.S. Democrat and Republican lawmakers over the weekend amid a clash over immigrant detention policy raised fears of another government shutdown. That development was yet another worry for markets already under strain from a drumroll of gloomy news on the global economy. Last week, the European Commission sharply downgraded euro zone growth for this year and next and U.S. President Donald Trump added to the anxiety with a declaration that he had no plans to meet with Chinese President Xi Jinping before the March 1 deadline to achieve a trade deal. The rising pressure on growth means the near term fortunes of the equity markets will partly depend on earnings from major U.S. companies. These include Coca-Cola Co (KO.N), PepsiCo Inc (PEP.O), Walmart Inc (WMT.N), Home Depot Inc (HD.N), Macy’s Inc (M.N) and Gap Inc (GPS.N) for further clues about the health of the consumer sector. Analysts now expect first-quarter earnings for S&P 500 companies to decline 0.1 percent from a year earlier, which would be the first such quarterly profit decline since 2016, according to IBES data from Refinitiv.
  • The dollar rose against most other currencies on Monday, holding near a six-week high as fresh worries about U.S.-Sino trade tensions and global growth drove appetite for safe-haven assets. U.S. negotiators will this week press China on longstanding demands that it reform how it treats U.S. companies' intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports. However, traders expect moves in dollar/yen to be small on Monday as Japanese markets remain shut for a public holiday. Trade tensions between the world's two largest economies have been a major driver of global investor sentiment over the past year. Market confidence took a hit last week when U.S. President Donald Trump said he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal. Trump has vowed to increase U.S. tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent currently if the two sides cannot reach a deal by March 2. The euro was marginally lower versus the greenback at $1.1322 in early Asian trade while the Aussie was 0.15 percent higher at $0.7099, after a disastrous week in which it lost 2.2 percent. The strength in the dollar has come despite the Federal Reserve taking a dovish stance at its last policy meeting in January. For now, investors are piling into the safety of the greenback due to fears of a sharp global economic slowdown The euro came under pressure as core European government debt yields touched their lowest in over two years. The single currency has lost 2.5 percent so far this month. Benchmark German yields were just 10 basis points away from zero percent. The European Commission sharply cut on Thursday its forecasts for euro zone economic growth for this year and next with the bloc's largest economies expected to be held back by global trade tensions and domestic challenges. Last month, the International Monetary Fund also downgraded its forecasts for global growth.
  • The US dollar will see if it continues to benefit on risk aversion flows as a critical week for trade talks will see if the US is able to get any concessions on core issues and not just further commitments from China purchasing more US goods. Deputies from both sides will speak on Monday, with the apex falling on high-level talks on Thursday and Friday. Chinese officials, including Vice Premier Liu He will meet both the US Trade Representative Lighthizer and Treasury Secretary Mnuchin, with the bar currently set at delivering an extension of the trade truce. President Trump has been clear a deal will not be reached until he meets with President Xi, which is now expected to be at sometime in mid-March. The short-term spending bill last month that ended the longest federal government shutdown on record saw talks fall apart over the weekend, potentially signaling talks will go down to the wire and that the possibility remains that we could see another shutdown or the President may finally use his emergency powers.
  • Oil prices fell by more than 1 percent on Monday as U.S. drilling activity picked up and as a refinery fire in the U.S. state of Illinois resulted in the shutdown of a large crude distillation unit. In the United States, energy firms last week increased the number of oil rigs operating for the second time in three weeks, a weekly report by Baker Hughes said on Friday. Companies added 7 oil rigs in the week to Feb. 8, bringing the total count to 854, pointing to a further rise in U.S. crude production, which already stands at a record 11.9 million bpd. Elsewhere, the head of Russian oil giant Rosneft, Igor Sechin, has written to the Russian President Vladimir Putin saying Moscow's deal with the Organization of the Petroleum Exporting Countries (OPEC) to withhold output is a strategic threat and plays into the hands of the United States. The so-called OPEC+ deal has been in place since 2017, aimed at reining in a global supply overhang. It has been extended several times and, under the latest deal, participants are cutting output by 1.2 million bpd until the end of June. OPEC and its allies will meet on April 17-18 in Vienna to review the pact. Preventing crude prices from falling much further have been U.S. sanctions on Venezuela, targetting its state-owned oil firm PDVSA.

 

 
Intraday RESISTANCE LEVELS
11th February 2019 R1 R2 R3
GOLD-XAU 1.316 1,326-1,334 1.342
Silver-XAG 15.90-16.40 17.00 17.40-18.00
Crude Oil 53.00 53.80 54.80-55.50
EURO/USD 1.1330-1.1380 1.1420 1.1460-1.1500
GBP/USD 1.2950-1.3010 1.3050 1.3090-1.3150
USD/JPY 109.90-110.20 110.60 111.00

Intraday SUPPORTS LEVELS
11th February 2019 S1 S2 S3
GOLD-XAU 1,309-1,300 1.296 1.289-1,282
Silver-XAG 15.60 15.40 15.10-14.90
Crude Oil 52.50-52.00 51.00 53.00
EURO/USD 1.1305-1.1250 1.1210 1.1160
GBP/USD 1.2910-1.2850 1.2790 1.2700
USD/JPY 109.50-109.10 108.50 108.00-107.30

Intra-Day Strategy (11th 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$1315.57/oz and low of US$1307.71/oz. Gold up by 0.271% at US$1314.08/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 1309-1276 with risk below 1274, targeting 1315-1320 and 1326-1334. Sell below 1315-1342 keeping stop loss closing above 1334, targeting 1309-1300-1296 and 1289-1282.

 
Intraday Support Levels
S1     1,309-1,300
S2     1.296
S3     1.289-1,282
Intraday Resistance Levels
R1     1.316
R2     1,326-1,334
R3     1.342

Technical Indicators

Name   Value Action
14DRSI  

62.972

Buy
20-DMA   1300.33 Buy
50-DMA  

1275.70

Buy
100-DMA   1245.13 Buy
200-DMA   1245.88 Sell
STOCH(5,3)   32.473 Sell
MACD(12,26,9)   10.976 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$15.85/oz and low of US$15.63/oz. Silver settled up by 0.661% 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   54.013 Buy
20-DMA   15.63 Buy
50-DMA   15.20 Buy
100-DMA   14.82 Buy
200-DMA   15.24 Sell
STOCH(5,3)   9.300 Buy
MACD(12,26,9)   0.146 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$53.42/bbl, intraday low of US$52.32/bbl and settled up by 0.170% to close at US$52.94/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 53.00-55.50 with stop loss at 55.50; targeting 52.50-52.00-51.50 and 51.00-50.40. Buy above 52.50-50.00 with risk daily closing below 50.00 and targeting 52.50-53.00-53.80 and 54.80-55.50.

 
Intraday Support Levels
S1     52.50-52.00
S2     51.00
S3     53.00

Intraday Resistance Levels
R1     53.00
R2     53.80
R3     54.80-55.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.938 Sell
20-DMA   53.32 Sell
50-DMA   50.96 Buy
100-DMA   58.16 Sell
200-DMA   63.36 Sell
STOCH(5,3)   25.916 Sell
MACD(12,26,9)   0.725 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1317/EUR, high of US$1.1350/EUR and settled the day down by 0.194% to close at US$1.1317/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 1.1305-1.1160 with risk below 1.1160, targeting 1.1330-1.1380-1.1460 and 1.1490-1.1520. Sell below 1.1330-1.1540 targeting 1.1305-1.1265 and 1.1210-1.1160 with stop-loss at daily closing above 1.1570.

 
Intraday Support Levels
S1     1.1305-1.1250
S2     1.1210
S3     1.1160

Intraday  Resistance Levels
R1     1.1330-1.1380
R2     1.1420
R3     1.1460-1.1500

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.4966 Buy
20-DMA   1.1396 Sell
50-DMA   1.1393 Sell
100-DMA   1.1428 Sell
200-DMA   1.1547 Sell
STOCH(5,3)   3.157 Sell
MACD(12,26,9)   0.0001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2920/GBP, high of US$1.2946/GBP and settled the day down by 0.023% to close at US$1.2946/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

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.

 
Intraday Support Levels
S1     1.2910-1.2850
S2     1.2790
S3     1.2700

Intraday Resistance Levels
R1     1.2950-1.3010
R2     1.3050
R3     1.3090-1.3150

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.539

Buy
20-DMA   1.2991 Sell
50-DMA   1.2806 Sell
100-DMA   1.2897 Sell
200-DMA   1.3031 Sell
STOCH(5,3)   6.972 Sell
MACD(12,26,9)   -0.0102 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY109.64/USD and made an intraday high of JPY109.89/USD and settled the day down by 0.054% at JPY109.72/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 109.90-111.05 with risk above 111.05 targeting 109.50-109.10-108.50 and 108.10-107.30. Long positions above 109.50-107.30 with targets of 109.80-110.20 and 110.60-111.00 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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