AAFX TRADING

Daily Market Lookup

  • Asian shares edged up on Tuesday as investors hoped a new round of U.S.-China trade talks would help to resolve a dispute that’s dented global growth and some corporate earnings. U.S. and Chinese officials expressed hopes the new round of talks, which began in Beijing on Monday, would bring them closer to easing their months-long trade war. Beijing and Washington are trying to hammer out a deal before a March 1 deadline, without which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent. The trade dispute has already started to impact global growth, hitting businesses confidence, factory activity and disrupting supply chains. The worry is that a protracted Sino-U.S. tariff row could severely hurt corporate earnings globally. Analysts are now expecting U.S. corporate earnings for the current quarter to drop 0.2 percent from last year, which would be the first contraction since the second quarter of 2016. In the currency market, the dollar held firm, having gained for eight straight sessions against a basket of six major currencies until Monday, its longest rally in two year. Although the Federal Reserve’s dovish turn dented the dollar earlier this year, some analysts noted the U.S. currency still has the highest yield among major peers and that the Fed continues to shrink its balance sheet. Growing evidence of a loss of momentum in the global economy has also lifted the U.S. currency, most recently led by the European Commission’s downgrade of growth in Europe, making the dollar a better investment option by default.
  • The dollar held close to its 2019 high on Tuesday as U.S.-Sino trade tensions and global growth worries underpinned the greenback's safe-haven appeal, while the euro and the British pound were hurt by troubles of their own. Investors are focusing on high level trade talks in China this week where Washington is expected to keep pressing Beijing on long-standing demands that it make sweeping structural reforms to protect American companies' intellectual property, to end policies aimed at forcing the transfer of technology to Chinese companies, and curb industrial subsidies. This week's talks come as the world's two largest economies try to hammer out a deal before a March 1 deadline, after which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent. Financial markets have been roiled by the trade tensions over the past year, with business sentiment taking a hit around the world as the fallout of the U.S.-China dispute disrupted factory activity and hurt global growth. The dollar index was steady at 97.06, after advancing 0.45 percent in the previous session, its largest percentage gain since Jan. 24. The index has risen for eight straight sessions, mainly thanks to a tumbling euro, which has the largest weighting in the index. The euro has weakened for six consecutive sessions, and traders expect further losses now that the crucial psychological support of $1.13 has been broken. The European Central Bank is expected to maintain a highly accommodative monetary policy this year as growth slows in the eurozone and inflation stays low. Last week, the European Commission sharply cut its forecasts for euro zone growth for this year and next.
  • The GBP/USD pair trades little positive near 1.2860 while heading towards European session on Tuesday. The pair dropped yesterday after fourth-quarter 2018 GDP growth lagged behind market consensus of 0.3% to 0.2%. Investors now await Bank of England (BoE) Governor Mark Carney’s comments for the fresh impulse. Also in the watch list will be, developments at the Brexit front. GBP/USD closed at the lowest levels since early January on the UK data miss yesterday but recovered some of the losses around initial Tuesday. BoE’s Carney is scheduled to deliver a speech relating to “the latest developments in the global economy and risks to the outlook” in London around 13:00 GMT today. The Governor is up for a speech after the British GDP rose the smallest in 2018 since the year before he took over as the BoE Chief in 2013. The UK economy is already finding it hard to confront Brexit problems and the central bank has recently cut down growth forecast to the lowest in a decade during its last week's monetary policy meeting. In addition to Carney’s speech, developments at Brexit will also be closely observed. As per recent reports from the Sky News, the UK PM Theresa May discussed changes to the key blocks in the Brexit negotiations with the former European Council President Herman van Rompuy. On a separate note, the Sun reported that the cabinet ministers are expecting Theresa May is preparing to resign as the PM in the UK summer. It should also be noted that EU & UK leaders are presently struggling to overcome Irish backstop, which if solved can re-open the Brexit negotiation for the British PM. Given the present downturn of the UK data, the BoE Governor might not refrain from conveying economic weakness and Brexit uncertainty, as he did recently. Though, positive signals could have a higher upside impact on the GBP.
  • Oil prices rose on Tuesday amid OPEC-led supply cuts and U.S. sanctions against Iran and Venezuela, although analysts expect surging U.S. production and concerns over economic growth to keep markets in check. The ongoing closure of parts of the Keystone pipeline that brings Canadian oil into the United States also helped prop up WTI, traders said. Analysts said markets are tightening amid voluntary production cuts led by the OPEC and because of U.S. sanctions on Venezuela and Iran. But some said supply-side risks were not receiving enough focus. Should U.S.-China talks to end trade disputes between the two nations have a positive outcome, the bank said oil markets would "switch attention from macro concerns impacting future demand growth to physical tightness and geopolitical risks impacting immediate supply". With OPEC engaged in supply management and the Middle East entangled in political conflicts while production outside the group surges, Bank of America Merrill Lynch said OPEC's global market share would fall as its outright output drops to 29 million bpd in 2024 from 31.9 million bpd in 2018. Growing U.S. supply and a potential economic slowdown this year could cap oil markets. U.S. bank Morgan Stanley (NYSE:MS) said the surge in U.S. crude oil production, which tends to be light in quality and which rose by more than 2 million barrels per day (bpd) last year to a record 11.9 million bpd, had resulted in overproduction of gasoline Refining profits for gasoline have plunged since mid-2018, going negative in Asia and Europe, amid tepid demand growth and a surge in supply. Bank of America also warned of "a significant slowing in growth globally", adding that it expected Brent and WTI to average $70 per barrel and $59 per barrel respectively in 2019, and $65 per barrel and $60 per barrel in 2020.

 

 
Intraday RESISTANCE LEVELS
12th February 2019 R1 R2 R3
GOLD-XAU 1,309-1.316 1,326 1,334-1.342
Silver-XAG 15.90-16.40 17.00 17.40-18.00
Crude Oil 53.80 54.80-55.50 56.00
EURO/USD 1.1330-1.1380 1.1420 1.1460-1.1500
GBP/USD 1.2910 1.2950-1.3010 1.3090
USD/JPY 110.60-111.00 111.75 112.25

Intraday SUPPORTS LEVELS
12th February 2019 S1 S2 S3
GOLD-XAU 1,300 1.296 1.289-1,282
Silver-XAG 15.60 15.40 15.10-14.90
Crude Oil 53.00-52.50 52.00 51.00-50.40
EURO/USD 1.1305-1.1250 1.1210 1.1160
GBP/USD 1.2850-1.2790 1.2750 1.2700-1.2660
USD/JPY 110.20-109.90 109.50 109.10-108.50

Intra-Day Strategy (12th 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$1314.47/oz and low of US$1303.60/oz. Gold down by 0.487% at US$1303.36/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     1,300
S2     1.296
S3     1.289-1,282
Intraday Resistance Levels
R1     1,309-1.316
R2     1,326
R3     1,334-1.342

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 Monday made its intraday high of US$15.82/oz and low of US$15.65/oz. Silver settled down by 0.696% at US$15.68/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 Monday made an intra‐day high of US$53.02/bbl, intraday low of US$51.54/bbl and settled down by 0.415% to close at US$52.69/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     53.00-52.50
S2     52.00
S3     51.00-50.40

Intraday Resistance Levels
R1     53.80
R2     54.80-55.50
R3     56.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.609 Sell
20-DMA   53.45 Sell
50-DMA   51.04 Buy
100-DMA   57.81 Sell
200-DMA   63.20 Sell
STOCH(5,3)   33.916 Buy
MACD(12,26,9)   0.541 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1266/EUR, high of US$1.12665/EUR and settled the day down by 0.397% to close at US$1.1274/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 Monday made an intra‐day low of US$1.2843/GBP, high of US$1.2938/GBP and settled the day down by 0.564% to close at US$1.2852/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2812) 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 oversold territory and giving negative crossover to confirm bearish 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 1.2900-1.3090 with targets at 1.2850-1.2790-1.2750 and 1.2700-12660. Buy above 1.2900-1.2790 with targets 1.2910-1.2950-1.3010 and 1.3050-1.3090 with stop loss closing below 1.2790.

 
Intraday Support Levels
S1     1.2850-1.2790
S2     1.2750
S3     1.2700-1.2660

Intraday Resistance Levels
R1     1.2910
R2     1.2950-1.3010
R3     1.3090

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

44.816

Buy
20-DMA   1.2997 Sell
50-DMA   1.2812 Buy
100-DMA   1.2889 Sell
200-DMA   1.3021 Sell
STOCH(5,3)   20.972 Sell
MACD(12,26,9)   0.0021 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY109.71/USD and made an intraday high of JPY110.46/USD and settled the day up by 0.583% at JPY109.71/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (110.42), which is initial 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 110.70-112.25 with risk above 112.25 targeting 110.20-109.90-109.50 and 109.10-108.50. Long positions above 110.20-108.50 with targets of 109.80-110.20 and 110.60-111.00 with stop below 108.50.

 
Intraday Support Levels
S1     110.20-109.90
S2     109.50
S3     109.10-108.50

INTRADAY RESISTANCE LEVELS
R1     110.60-111.00
R2     111.75
R3     112.25

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.2661 Buy
20-DMA   109.60 Buy
50-DMA   110.42 Buy
100-DMA   111.74 Sell
200-DMA   111.26 Sell
STOCH(9,6)   79.080 Buy
MACD(12,26,9)   0.0392 Buy

AAFX TRADING
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