AAFX TRADING

Daily Market Lookup

  • Asian shares stepped back on Tuesday, weighed by U.S. growth concerns and as China cut its economic expansion target amid growing challenges from rising debt and a dispute over trade and technology with the United States. Beijing lowered the growth target for this year to 6.0 to 6.5 percent, as expected, from around 6.5 percent last year and offered more stimulus, including cuts in taxes and social security fees, increases in infrastructure investment and lending to small firms. Reflecting lower tax revenue and higher government spending, Beijing has set a budget deficit target of 2.8 percent of GDP, up from last year’s 2.6 percent. The Finance Ministry set the quota for local government’s special bond issues at 2.15 trillion yuan ($320 billion), 0.8 trillion yuan above last year’s quota.
  • Higher bond yields in the U.S. combined with the lowest growth target in China in 30 years to support the greenback. On Monday, stock markets in the U.S. gained and then plummeted as concerns that a much-anticipated trade deal between the U.S. and China could fail to deliver significant gains to global growth. Further supporting the dollar and pressuring the Chinese yuan was the work report by Chinese Premier Li Keqiang at the opening of the 10-day annual meeting of the National People's Congress (NPC). Li said China will target GDP growth of between 6% and 6.5% for 2019, which would be the lowest rate in 30 years. Li also announced significant cuts to the value-added tax (VAT) that could support manufacturing.
  • U.S. construction spending unexpectedly fell in December as investment in both private and public projects dropped, leading economists to expect that the government will trim its economic growth estimate for the fourth quarter. The report from the Commerce Department on Monday was further evidence the economy lost momentum at the tail end of 2018. Growth is slowing as the stimulus from a $1.5 trillion tax cut and increased government spending ebbs. Trade tensions between the United States and China as well as slowing global economies are also hurting domestic activity. The construction spending report extended the run of weak December economic data, that has included retail sales, housing starts, trade and home sales. Construction spending declined 0.6 percent after an unrevised 0.8 percent increase in November. Economists polled by Reuters had forecast construction spending rising 0.2 percent in December. Construction spending increased 1.6 percent on a year-on-year basis. It rose 4.1 percent in 2018, the weakest reading since 2011. The release of the December report was delayed by a five-week partial shutdown of the government that ended on Jan. 25. Based on the construction spending data, economists expect the government will pare its fourth-quarter gross domestic product estimate by at least one-tenth of a percentage point to a 2.5 percent annualized rate. The government reported last Thursday that the economy grew at a 2.6 percent rate in the October-December period, slowing from the third quarter’s brisk 3.4 percent pace. It is scheduled to publish revisions to the fourth-quarter GDP data at the end of the month. The stream of soft December reports set the economy on a slower growth path in the first quarter. In December, spending on private construction projects fell 0.6 percent after surging 1.3 percent in November. Investment in private residential projects tumbled 1.4 percent after rebounding 3.4 percent in November. The housing market has been weighed down by higher mortgage rates, expensive building materials as well as land and labor shortages. Residential investment contracted 0.2 percent in 2018, the worst performance since 2010. Spending on private nonresidential structures, which includes manufacturing and power plants, gained 0.4 percent in December after declining 1.1 percent in November. Spending on nonresidential structures contracted in both the third and fourth quarters.
  • Oil prices fell on Tuesday as markets eyed only modest prospects for growth in fuel demand, although OPEC-led efforts to cut output still offered some support. And despite optimism that the United States and China will soon end their bitter trade disputes, oil demand growth has been slowing along with an economic slowdown especially in Europe and Asia. Meanwhile, fuel efficiency is improving, denting demand growth. To prop up the market, the Organization of the Petroleum Exporting Countries (OPEC) has led efforts since the start of the year to withhold around 1.2 million barrels per day (bpd) of supply. The group was due to decide in April whether to continue withholding supply, but OPEC sources said this week a decision would likely be delayed until June, meaning cuts will continue at least until then.The OPEC-led supply cuts, as well as U.S. sanctions against its members Iran and Venezuela, come at the same time as U.S. crude output chases ever new records, rising by more than 2 million barrels per day (bpd) since early 2018 and above 12 million bpd for the first time in February. The cuts to OPEC supply have pushed up the Brent international crude price benchmark due to a shortage of the heavy crudes that OPEC mostly produces. At the same time, the surge in U.S. output is weighing down U.S. WTI prices as there is ample supply of America's mainly light crudes. Because of this, energy researchers at TS Lombard said "the Brent-WTI spread can be expected to stay wide." Without a clear data drivers on Tuesday morning in Asia, oil prices took cues from the longer term trends and the newfound doubts about the ultimate impact of the end of the long trade conflict between the U.S. and China. Data on supplies is expected on Tuesday from the American Petroleum Institute and a report from the U.S. Energy Information Administration on stockpiles on Wednesday. On Friday, Baker Hughes is expected to release its weekly count of active oil rigs in the U.S.

 

 
Intraday RESISTANCE LEVELS
5th March 2019 R1 R2 R3
GOLD-XAU 1,294-1,300 1,309 1.316-1,325
Silver-XAG 15.40-15.60 16.00 16.40-17.00
Crude Oil 56.50-57.00 57.50 58.00-59.00
EURO/USD 1.1380 1.1420-1.1460 1.1500
GBP/USD 1.3170-1.3200 1.3250 1.3310-1.3350
USD/JPY 111.90 112.25-112.90 113.50

Intraday SUPPORTS LEVELS
5th March 2019 S1 S2 S3
GOLD-XAU 1,282 1,276 1,267-1.260
Silver-XAG 15.10-14.85 14.50 14.00
Crude Oil 56.00 55.50-55.10 54.30
EURO/USD 1.1330-1.1305 1.1250 1.1210-1.1160
GBP/USD 1.3120-1.3075 1.3010 1.2850
USD/JPY 111.60-111.00 110.60 110.02-109.90

Intra-Day Strategy (5th March 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$1297.11/oz and low of US$1282.92/oz. Gold down by 0.628% at US$1287.18/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 1294-1334 keeping stop loss closing above 1334, targeting 1282-1276 and 1267-1260. Buy above 1282-1260 with risk below 1260, targeting 1294-1300-1309 and 1316-1323-1334.

 
Intraday Support Levels
S1     1,282
S2     1,276
S3     1,267-1.260
Intraday Resistance Levels
R1     1,294-1,300
R2     1,309
R3     1.316-1,325

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 Monday made its intraday high of US$15.28/oz and low of US$15.06/oz. Silver settled down by 0.984% at US$15.08/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 15.10-14.70 targeting 15.90-16.40-17.00 and 17.40-18.00; stop breakage below 14.70. Sell below 15.40-17.00 with stop loss above 17.00; targeting 15.10-14.85-14.50 and 14.00.

 
Intraday  Support Levels
S1     15.10-14.85
S2     14.50
S3     14.00

Intraday  Resistance Levels
R1     15.40-15.60
R2     16.00
R3     16.40-17.00

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 Monday made an intra‐day high of US$57.00/bbl, intraday low of US$55.81/bbl and settled up by 0.749% to close at US$56.44/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 56.50-59.60 with stop loss at 59.60; targeting 56.00-55.50and 55.10-54.80. Buy above 56.00-54.30 with risk daily closing below 54.30 and targeting 57.50-58.00 and 59.00-59.60.

 
Intraday Support Levels
S1     56.00
S2     55.50-55.10
S3     54.30

Intraday Resistance Levels
R1     56.50-57.00
R2     57.50
R3     58.00-59.00

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 Monday made an intraday low of US$1.1309/EUR, high of US$1.1375/EUR and settled the day down by 0.449% to close at US$1.1330/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 Monday made an intra‐day low of US$1.3167/GBP, high of US$1.3255/GBP and settled the day down by 0.453% to close at US$1.3178/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 1.3170-1.3500 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     1.3120-1.3075
S2     1.3010
S3     1.2850

Intraday Resistance Levels
R1     1.3170-1.3200
R2     1.3250
R3     1.3310-1.3350

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 Monday ade intra‐day low of JPY111.64/USD and made an intraday high of JPY112.01/USD and settled the day down by 0.0894% at JPY111.78/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 111.90-113.50 with risk above 113.50 targeting 111.60-111.00-110.20 and 109.90-109.50. Long positions above 111.60-109.00 with targets of 111.90-112.25-112.90 and 113.50-114.00 with stop below 108.50.

 
Intraday Support Levels
S1     111.60-111.00
S2     110.60
S3     110.02-109.90

INTRADAY RESISTANCE LEVELS
R1     111.90
R2     112.25-112.90
R3     113.50

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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