AAFX TRADING

Daily Market Lookup

  • The dollar held above a three-week low on Thursday as investors remained cautious amid uncertainty over the progress in U.S.-China trade talks, while sterling rallied on bets that the chance of a no-deal Brexit was shrinking. Monthly gauges of factory activity in both China and Japan came in weaker than expected on Thursday, offering fresh evidence that the seven-month U.S.-Sino trade dispute was taking a toll on economic growth around the world. The dollar mostly held onto gains booked during the previous session after U.S. Trade Representative Robert Lighthizer told a Congressional hearing it was too early to predict an outcome in U.S.-China trade negotiations. The greenback had also found support on a flare-up in tensions between Pakistan and India, sending investors out of riskier markets and into safer assets. Sterling held onto gains after rallying to its highest levels in seven months on Wednesday as traders ramped up bets that a no-deal Brexit was less likely and that Britain's departure from the European Union would be delayed. British Prime Minister Theresa May on Tuesday had offered lawmakers the chance to vote in two weeks for a no-deal Brexit or to delay Britain's exit from the E.U. if her attempt to ratify an agreement fails. Sterling has risen about 1.5 percent against the dollar so far this month, adding to a 2.8-percent gain booked in January. The Australian dollar, widely seen as a liquid proxy for China risk because of Australia's dependence on Chinese demand for its exports, struggled after China's official manufacturing gauge fell more than expected to a three-year low. India and Pakistan both said they shot down each other's fighter jets on Wednesday, with Pakistan capturing an Indian pilot a day after Indian warplanes struck inside Pakistan for the first time since a 1971 war, prompting world powers to urge restraint. This month’s manufacturing PMI came in at 49.2, sliding lower than the 49.5 in January, official data showed. The February reading was expected to stay unchanged from last month’s 49.5. A reading below 50 means the manufacturing sector contracted, while a PMI above 50 represents an expansion when compared with the previous month. Meanwhile, activity in the non-manufacturing sector also slowed to 54.3 from January’s 54.7. The decline was larger than the expected 54.5. The Caixin manufacturing PMI is due on Friday, while ongoing developments surrounding the U.S.-China trade talks are also expected to direct near-term movements. Although not a major directional driver, U.S. Donald Trump’s top trade negotiator Robert Lighthizer dialled back expectations for a sweeping trade deal with China. Lighthizer said "it is too early to predict the outcome” of negotiations between the U.S. and China, as "significant structural changes" were needed to the Chinese economy. His comments came after U.S. President Donald Trump delayed more tariffs on Chinese goods earlier this week, citing “substantial progress” in the latest round of trade talks that were led by Lighthizer and China Vice Premier Liu He.
  • The U.S. economy probably slowed in the fourth quarter, held back by softer consumer spending and weak exports, which could leave 2018 growth just shy of the Trump administration’s 3 percent annual target. The Commerce Department’s gross domestic product (GDP) report to be published on Thursday at 08:30 a.m. (1330 GMT) will offer the latest assessment of the impact of President Donald Trump’s economic policies, including deregulation, tax cuts, increased government spending and tariffs aimed at securing more favorable trade deals. Trump has touted the economy as one of the biggest achievements of his presidency and declared last July that his administration had “accomplished an economic turnaround of historic proportions.” Gross domestic product probably increased at a 2.3 percent annualized rate in the fourth quarter, according to a Reuters survey of economists after expanding at a 3.4 percent pace in the July-September period. However, the survey was completed before the release of December wholesale and retail inventories as well as housing, factory orders and goods trade deficit data, which led many institutions to downgrade their forecasts. The release of the fourth-quarter GDP report was delayed by a 35-day partial shutdown of the government that ended on Jan. 25, which affected the collection and processing of economic data. The economy is slowing as the boost from the Trump administration’s $1.5 trillion tax cut and more government spending fades. Growth is also being restrained by a trade war between the United States and China, which economists say is making businesses and households more cautious about spending.
  • Oil prices dipped on Thursday, dragged down by weakening factory output in China and Japan and record U.S. crude output, although markets remained relatively well supported by supply cuts led by producer club OPEC. Prices were dragged down by surging American crude oil production, which has risen by more than 2 million barrels per day (bpd) over the last year, to an unprecedented 12.1 million bpd. Traders said China's weakening economy also weighed on oil prices. Factory activity in China, the world's biggest oil importer, shrank for a third straight month in February, as export orders fell at the fastest pace since the global financial crisis a decade ago, official data showed on Thursday. Amid weak demand from China, oil producers are having to cut prices Russia's Surgutneftegaz is selling April-loading ESPO crude oil at the lowest level in three months, charging $2.20 to $2.40 per barrel over benchmark Dubai quotesIn Japan, Asia's second-biggest economy, factory output posted the biggest decline in a year in January as China's slowdown affects the entire region. Still, oil markets remain relatively well supported by supply cuts by the Organization of the Petroleum Exporting Countries (OPEC), which together with some non-affiliated producers like Russia, known as 'OPEC+', agreed late last year to reduce output by 1.2 million bpd to prop up prices. Because of these cuts, U.S. commercial crude inventories fell 8.6 million barrels in the week to Feb. 22 to 445.87 million barrels.

 

 
Intraday RESISTANCE LEVELS
28th February 2019 R1 R2 R3
GOLD-XAU 1,325-1,334 1.342 1,351-1,358
Silver-XAG 16.00-16.40 17.00 17.40-18.00
Crude Oil 57.50-58.00 59.00 59.60
EURO/USD 1.1380 1.1420-1.1460 1.1500
GBP/USD 1.3310-1.3350 1.3440 1.3500
USD/JPY 111.00-111.60 112.25 112.90

Intraday SUPPORTS LEVELS
28th February 2019 S1 S2 S3
GOLD-XAU 1.316-1,309 1,300 1,294-1280
Silver-XAG 15.60--15.40 15.10 14.70
Crude Oil 57.00-56.50 56.00 55.50-55.10
EURO/USD 1.1330-1.1305 1.1250 1.1210-1.1160
GBP/USD 1.3250-1.3220 1.3170 1.3120-1.3080
USD/JPY 110.60-110.02 109.90 109.50-109.10

Intra-Day Strategy (28th 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 Wednesday made its intraday high of US$1329.77/oz and low of US$1316.84/oz. Gold down by 0.693% at US$1319.29/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1298) and breakage below will call for 1290-1280. MACD is above zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; sell below 1325-1364 keeping stop loss closing above 1364, targeting 1316-1309 and 1298-1288. Buy above 1309-1288 with risk below 1288, targeting 1323-1334-1342 and 1351-1358.

 
Intraday Support Levels
S1     1.316-1,309
S2     1,300
S3     1,294-1280
Intraday Resistance Levels
R1     1,325-1,334
R2     1.342
R3     1,351-1,358

Technical Indicators

Name   Value Action
14DRSI  

53.966

Buy
20-DMA   1319.05 Buy
50-DMA  

1298.94

Buy
100-DMA   1262.77 Buy
200-DMA   1247.07 Sell
STOCH(5,3)   18.473 Sell
MACD(12,26,9)   8.260 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$16.58/oz and low of US$15.68/oz. Silver settled down by 1.257% at US$15.70/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 15.60-14.70 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 15.90-15.40 and 15.10-14.80.

 
Intraday  Support Levels
S1     15.60--15.40
S2     15.10
S3     14.70

Intraday  Resistance Levels
R1     16.00-16.40
R2     17.00
R3     17.40-18.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.868 Buy
20-DMA   15.81 Buy
50-DMA   15.52 Buy
100-DMA   14.98 Buy
200-DMA   15.20 Sell
STOCH(5,3)   33.300 Sell
MACD(12,26,9)   0.105 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$57.53/bbl, intraday low of US$55.88/bbl and settled up by 1.727% to close at US$57.11/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 55.88 which is a resistance level and breakage above will call for 59.60. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in oversold 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 57.50-59.60 with stop loss at 59.60; targeting 57.00-56.00-55.50and 55.10-54.80. Buy above 57.00-55.00 with risk daily closing below 55.00 and targeting 57.50-58.00 and 59.00-59.60.

 
Intraday Support Levels
S1     57.00-56.50
S2     56.00
S3     55.50-55.10

Intraday Resistance Levels
R1     57.50-58.00
R2     59.00
R3     59.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.681 Sell
20-DMA   55.28 Sell
50-DMA   52.20 Buy
100-DMA   55.71 Sell
200-DMA   62.31 Sell
STOCH(5,3)   58.916 Sell
MACD(12,26,9)   1.129 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1361/EUR, high of US$1.1402/EUR and settled the day down by 0.166% to close at US$1.1368/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   52.616 Buy
20-DMA   1.1344 Sell
50-DMA   1.1386 Sell
100-DMA   1.1388 Sell
200-DMA   1.1509 Sell
STOCH(5,3)   71.157 Sell
MACD(12,26,9)   -0.008 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3232/GBP, high of US$1.3349/GBP and settled the day up by 0.422% to close at US$1.3306/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 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 1.3310-1.3500 with targets at 1.3250-1.3170-1.3120 and 1.3080-1.3010. Buy above 1.3250-1.3010 with targets 1.3310-1.3350-1.3400 and 1.3440-1.3500 with stop loss closing below 1.3010.

 
Intraday Support Levels
S1     1.3250-1.3220
S2     1.3170
S3     1.3120-1.3080

Intraday Resistance Levels
R1     1.3310-1.3350
R2     1.3440
R3     1.3500

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

70.507

Buy
20-DMA   1.3012 Sell
50-DMA   1.2908 Buy
100-DMA   1.2887 Sell
200-DMA   1.2994 Sell
STOCH(5,3)   88.972 Buy
MACD(12,26,9)   0.0065 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY110.34/USD and made an intraday high of JPY111.06/USD and settled the day up by 0.370% at JPY110.98/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (110.03), 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   57.265 Buy
20-DMA   110.07 Buy
50-DMA   110.03 Buy
100-DMA   111.51 Sell
200-DMA   111.30 Sell
STOCH(9,6)   60.080 Buy
MACD(12,26,9)   0.247 Buy

AAFX TRADING
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