AAFX TRADING

Daily Market Lookup

  • Asian stocks advanced to 4-1/2-month highs on Wednesday as investors bet that Chinese and U.S. trade negotiators would be able to secure a deal to de-escalate their year-long tariff war. U.S. President Donald Trump said on Tuesday that trade talks with China were going well and suggested he was open to pushing off the deadline to complete negotiations, saying March 1 was not a “magical” date. U.S. tariffs on $200 billion worth of Chinese imports are currently scheduled to rise to 25 percent from 10 percent if no trade deal is reached by March 1. Investors now expect Trump to meet Chinese President Xi Jinping next month, likely after China’s annual congress meeting starting from March 5, to strike a deal, or secure a “memorandum of understanding.” But he predicted China “will not back down on so-called structural issues. The two countries may perhaps agree to set up a body to continue discussing those issues. Markets are already in the middle of pricing in these things.” The two countries started a new round of talks to resolve their trade war on Tuesday, and sessions at a higher level are planned later this week, with Chinese Vice Premier Liu He visiting Washington on Thursday and Friday. Investors are also looking to the release later on Wednesday of minutes from the Federal Reserve’s January policy-setting meeting, where policymakers effectively signaled no further rate hikes and possible tweaks to its balance sheet normalization. New York Fed President John Williams told Reuters he was comfortable with the level U.S. interest rates are at now and that he sees no need to raise them again unless economic growth or inflation shifts to an unexpectedly higher gear. But he also suggested the balance sheet rolloff would continue at least into next year at its current pace, dampening speculation that the Fed could end the process this year. The British pound soared to $1.3063 on Tuesday, gaining 1.09 percent, a move some traders attributed to rising hopes Prime Minister Theresa May will make progress in seeking changes to her Brexit deal with the European Union.
  • New York Fed President John Williams on Tuesday said he was comfortable with the level U.S. interest rates are at now and that he sees no need to raise them again unless economic growth or inflation shifts to an unexpectedly higher gear.In an interview with Reuters, Williams estimated the Federal Reserve would continue trimming its bond portfolio well into next year. He also said he felt rates had reached his current view of a lower “neutral” level, with growth and unemployment leveling off and inflation, if anything, a bit weaker than hoped Asked if it would take some sort of shock to resume rate increases, he said it would require one or more of those factors to surprise to the upside. Williams’ comments, made just weeks after the U.S. central bank paused its once quarterly rate hikes, underscore just how high the bar would be for tighter monetary policy, and suggest that such a move may not come anytime soon The Fed could also keep levels of bank reserves on its books that are far closer to current levels than previously thought, Williams said.
  • The dollar was capped against its peers on Wednesday on falling U.S. yields and before the Federal Reserve's policy meeting minutes, though it managed to gain on the yen as stronger investor risk appetite curbed demand for the Japanese currency. The Japanese currency, which tends to serve as a safe-haven in times of risk aversion, gave up ground as Tokyo shares climbed to fresh two-month highs. The dollar had already received a lift against the yen on Tuesday after Bank of Japan Governor Haruhiko Kuroda said the central bank was ready to ramp up stimulus if sharp yen rises hurt the economy. The minutes from the January Fed meeting will be closely watched following a dovish statement at that review. The dollar has struggled against most of its rivals as, along with the yen, it has also served as a safe-haven. The dollar index rose to a two-month high last week but demand for the liquid greenback has recently ebbed on optimism that a fresh round of talks between China and the United States would help resolve their trade conflict. Sterling had surged more than 1 percent on Tuesday on hopes that British Prime Minister Theresa May will make progress in seeking changes to her Brexit deal with the European Union. The yuan advanced after Bloomberg reported that the United States is pressing to secure a pledge from China that it will not devalue its yuan as a part of a trade deal.
  • Oil prices were around 2019 highs on Wednesday, propped up by supply cuts led by producer club OPEC and by U.S. sanctions on Iran and Venezuela. But soaring U.S. production and expectations of an economic slowdown look set to cap prices, analysts said. Oil prices have been supported by supply cuts led by the OPEC. OPEC-member and top crude exporter Saudi Arabia is expected to reduce shipments of light crude oil to Asia in March as part of the effort to tighten markets. OPEC as well as some non-affiliated producers such as Russia agreed late last year to cut output by 1.2 million barrels per day (bpd) to prevent a large supply overhang from swelling. Another key oil price driver has been U.S. sanctions on oil exporters Iran and Venezuela. Despite the sanctions, Iran's crude exports were higher than expected in January, averaging around 1.25 million bpd, according to Refinitiv ship tracking data. Many analysts had expected Iran oil exports to drop below 1 million bpd after the imposition of U.S. sanctions last November. Standing against the supply cuts and sanctions is U.S. crude output, which soared by more than 2 million bpd in 2018 to a record 11.9 million bpd, thanks to booming shale oil production, which the Energy Information Administration on Tuesday said was expected to keep rising. BNP Paribas said surging U.S. output would feed into lower oil prices towards the end of the year, with Brent to dip to an average of $67 a barrel by the fourth quarter and WTI to average $61.

 

 
Intraday RESISTANCE LEVELS
20th February 2019 R1 R2 R3
GOLD-XAU 1,351-1,358 1,364 1,370
Silver-XAG 16.40 17.00-17.40 18.00
Crude Oil 57.00-57.30 58.00 59.40
EURO/USD 1.1380 1.1420-1.1460 1.1500
GBP/USD 1.3080 1.3120 1.3170-1.3220
USD/JPY 111.00-111.60 112.25 112.90

Intraday SUPPORTS LEVELS
20th February 2019 S1 S2 S3
GOLD-XAU 1.342-1,334 1,326 1.316-1,309
Silver-XAG 15.90 15.60--15.40 15.10
Crude Oil 56.50-56.00 55.50 54.80-53.80
EURO/USD 1.1330-1.1305 1.1250 1.1210-1.1160
GBP/USD 1.3010-1.2950 1.2910 1.2850-1.2790
USD/JPY 110.60-110.02 109.90 109.50-109.10

Intra-Day Strategy (20th 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$1341.78/oz and low of US$1322.77/oz. Gold up by 1.119% at US$1340.84/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1287) and breakage below will call for 1280-1274. 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 1334-1300 with risk below 1300, targeting 1346-1351-1358 and 1364-1370. Sell below 1351-1370 keeping stop loss closing above 1370, targeting 1341-1334-1326 and 1316-1309-1300.

 
Intraday Support Levels
S1     1.342-1,334
S2     1,326
S3     1.316-1,309
Intraday Resistance Levels
R1     1,351-1,358
R2     1,364
R3     1,370

Technical Indicators

Name   Value Action
14DRSI  

73.112

Buy
20-DMA   1314.02 Buy
50-DMA  

1289.42

Buy
100-DMA   1255.17 Buy
200-DMA   1246.11 Sell
STOCH(5,3)   95.473 Buy
MACD(12,26,9)   12.260 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$15.99/oz and low of US$15.72/oz. Silver settled up by 1.204% at US$15.97/oz.

Technicals in Focus:

On daily charts, silver is sustaining above200DMA (15.22), 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 15.90-14.70 targeting 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 15.90-15.40 and 15.10-14.80.

 
Intraday  Support Levels
S1     15.90
S2     15.60--15.40
S3     15.10

Intraday  Resistance Levels
R1     16.40
R2     17.00-17.40
R3     18.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.977 Buy
20-DMA   15.77 Buy
50-DMA   15.42 Buy
100-DMA   14.93 Buy
200-DMA   15.21 Sell
STOCH(5,3)   92.300 Buy
MACD(12,26,9)   0.119 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$56.64/bbl, intraday low of US$55.70/bbl and settled down by 0.106% to close at US$56.41/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 57.00-59.40 with stop loss at 58.00; targeting 56.50-56.00-55.50 and 54.80-53.80. Buy above 56.00-53.00 with risk daily closing below 53.00 and targeting 56.50-57.00-57.30 and 58.00-58.60.

 
Intraday Support Levels
S1     56.50-56.00
S2     55.50
S3     54.80-53.80

Intraday Resistance Levels
R1     57.00-57.30
R2     58.00
R3     59.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.054 Sell
20-DMA   54.29 Sell
50-DMA   51.46 Buy
100-DMA   56.79 Sell
200-DMA   62.76 Sell
STOCH(5,3)   91.916 Buy
MACD(12,26,9)   1.000 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1274/EUR, high of US$1.1356/EUR and settled the day up by 0.283% to close at US$1.1339/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1405), which become immediate resistance level, break above will target 1.1560-1.1600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider.

Trading Strategy: Neutral to Buy

Buy above 1.1330-1.1160 with risk below 1.1160, targeting 1.1380-1.1420-1.1460 and 1.1500. Sell below 1.1380-1.1500 targeting 1.1330-1.1265-1.1210 and 1.1160-1.1090 with stop-loss at daily closing above 1.1500.

 
Intraday Support Levels
S1     1.1330-1.1305
S2     1.1250
S3     1.1210-1.1160

Intraday  Resistance Levels
R1     1.1380
R2     1.1420-1.1460
R3     1.1500

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.133 Buy
20-DMA   1.1361 Sell
50-DMA   1.1384 Sell
100-DMA   1.1397 Sell
200-DMA   1.1522 Sell
STOCH(5,3)   82.157 Buy
MACD(12,26,9)   -0.003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2895/GBP, high of US$1.3072/GBP and settled the day up by 1.072% to close at US$1.3060/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 1.3090-1.2790 with targets at 1.3010-1.2950-1.2910 and 1.2850-1.2790. Buy above 1.3010-1.2790 with targets 1.3090-1.3120 and 1.3170-1.3220 with stop loss closing below 1.2790.

 
Intraday Support Levels
S1     1.3010-1.2950
S2     1.2910
S3     1.2850-1.2790

Intraday Resistance Levels
R1     1.3080
R2     1.3120
R3     1.3170-1.3220

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

59.102

Buy
20-DMA   1.2995 Sell
50-DMA   1.2839 Buy
100-DMA   1.2879 Sell
200-DMA   1.3003 Sell
STOCH(5,3)   92.972 Sell
MACD(12,26,9)   0.0021 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY110.44/USD and made an intraday high of JPY110.81/USD and settled the day up by 0.036% at JPY110.62/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 111.00-112.25 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     110.60-110.02
S2     109.90
S3     109.50-109.10

INTRADAY RESISTANCE LEVELS
R1     111.00-111.60
R2     112.25
R3     112.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.265 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

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