AAFX TRADING

Daily Market Lookup

  • Asian stocks clung to narrow ranges on Wednesday as investors awaited fresh clues on the progress of U.S.-China trade negotiations, with a weaker Wall Street finish capping broader gains. The Shanghai Composite Index was up 0.3 percent as China’s state planner said the government will boost domestic consumption further this year. Beijing announced billions of dollar in tax cuts and infrastructure spending on Tuesday to reduce the risk of a sharper economic slowdown A report from the Institute for Supply Management showed U.S. non-manufacturing sector companies in February placing the most new orders since August 2005, an indicator of robust health. On the trade front, U.S. Secretary of State Mike Pompeo said on Monday he thought the United States and China were “on the cusp” of a deal to end their trade war. Pompeo added on Tuesday that “Things are in a good place, but it’s got to be right.” In the currency market, the dollar held gains after rising against its peers on Tuesday’s upbeat ISM non-manufacturing sector report.
  • 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. The U.S. dollar continued to strengthen in Asia on Wednesday morning while the Aussie dollar slipped on disappointing economic growth data's
  • Sales of new U.S. single-family homes rose to a seven-month high in December, but November’s outsized jump was revised lower, pointing to continued weakness in the housing market. While other data on Tuesday showed a rebound in growth in the vast services sector in February amid a surge in new orders, concerns about import tariffs, capacity constraints and labor shortages lingered. The trade dispute between the United States and China is among the factors that analysts say will contribute to slower economic growth this year. Growth is softening as the stimulus from a $1.5 trillion tax cut package and increased government spending ebbs. The economy’s outlook is also being clouded by slowing global growth and uncertainty over Britain’s exit from the European Union The Commerce Department said new home sales increased 3.7 percent to a seasonally adjusted annual rate of 621,000 units, the highest level since May 2018. November’s sales pace was revised down to 599,000 units from the previously reported 657,000 units. October’s sales pace was also revised lower Economists polled by Reuters had forecast new home sales, which account for about 11.2 percent of housing market sales, falling 8.7 percent to a pace of 600,000 units in December. New home sales are drawn from permits and tend to be volatile on a month-to-month basis. They fell 2.4 percent from a year ago. Single-family home sales rose 1.5 percent in 2018. The Atlanta Federal Reserve is currently forecasting GDP rising at a 0.3 percent annualized rate in the first quarter. The economy grew at a 2.6 percent pace in the fourth quarter. U.S. stocks were trading largely flat as investors waited for developments on U.S.-China trade talks. The dollar rose against a basket of currencies, while prices of U.S. Treasuries fell. Despite the anticipated sharp first-quarter slowdown, the economy’s fundamentals remain favorable. In a separate report on Tuesday, the Institute for Supply Management (ISM) said its non-manufacturing activity index increased 3.0 points to a reading of 59.7 last month. The surge in services sector activity last month was in sharp contrast with an ISM survey last week showing its measure of national factory activity tumbled in February to its lowest reading since November 2016. That left some economists skeptical of February’s rebound in services industry growth. The ISM’s new orders sub-index for the services sector surged 7.5 points to a reading of 65.2 last month, the highest level since August 2005. The ISM said industries “are concerned about the uncertainty of tariffs, capacity constraints and employment resources, however, they remain mostly optimistic about overall business conditions and the economy.”
  • Oil prices continued to slip on Wednesday morning in Asia as U.S. producers Chevron Corp and Exxon Mobil Corp forecasted an increase in output and larger-than-expected crude stockpiles. U.S. oil giants Chevron and Exxon Mobil said on Tuesday that they each plan to churn out close to 1 million barrels of shale oil per day in the Permian Basin, one of the most prolific oil basins in the U.S. This could potentially allow the two largest oil companies in the country to dominate the West Texas and New Mexico field in the next five years. Separately, the API reported that U.S. crude inventories rose by 7.3 mn barrels last week to 451.5 mn, significantly higher than the expected 1.2 mn barrels. In particular, stocks at the delivery hub in Cushing, Oklahoma, rose by 1.1 mn barrels. The build in stockpiles undermined the production cuts of as much as 1.2 mn bpd from the OPEC and its partners, most notably Russia. Reuters quoted sources that said OPEC is likely to push back their decision of whether or not to extend the output cut agreement to June from April. Elsewhere, during the annual meeting of China’s National People’s Congress on Tuesday, a plan to create a national oil and pipeline company was mentioned in the National Development and Reform Commission’s work report. Data from the U.S. Department of Energy’s Energy Information Administration is due later on Wednesday. On Friday, Baker Hughes is expected to release its weekly count of active oil rigs in the U.S.

 

 
Intraday RESISTANCE LEVELS
6th 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 1.1305-1.1330 1.1380 1.1420-1.1460
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
6th 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 1.1250 1.1210-1.1160 1.1090
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 (6th 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 Tuesday made its intraday high of US$1289.62/oz and low of US$1281.33/oz. Gold up by 0.071% at US$1288.01/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 Tuesday made its intraday high of US$15.16/oz and low of US$15.05/oz. Silver settled up by 0.357% at US$15.14/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 Tuesday made an intra‐day high of US$57.19/bbl, intraday low of US$56.09/bbl and settled down by 0.425% to close at US$56.19/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 Tuesday made an intraday low of US$1.1290/EUR, high of US$1.1339/EUR and settled the day down by 0.255% to close at US$1.1307/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 1.1250-1.1090 with risk below 1.1090, targeting 1.1305-1.1380-1.1420 and 1.1460-1.1500. Sell below 1.1305-1.1500 targeting 1.1265-1.1210 and 1.1160-1.1090 with stop-loss at daily closing above 1.1500.

 
Intraday Support Levels
S1     1.1250
S2     1.1210-1.1160
S3     1.1090

Intraday  Resistance Levels
R1     1.1305-1.1330
R2     1.1380
R3     1.1420-1.1460

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 Tuesday made an intra‐day low of US$1.3098/GBP, high of US$1.3198/GBP and settled the day down by 0.159% to close at US$1.3156/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 Tuesday made intra‐day low of JPY111.76/USD and made an intraday high of JPY112.14/USD and settled the day up by 0.0626% at JPY111.86/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

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