AAFX TRADING

Daily Market Lookup

  • Asian stocks shuddered lower on Friday after shockingly weak export data from China heightened market fears about a global economic slowdown, a day after European policymakers slashed growth forecasts for the bloc. Analysts cautioned the timing of the Lunar New Year made it difficult to draw a true signal from the data noise, but the scale of the miss was alarming. Adding insult to injury, China’s leading brokerage Citic Securities issued a rare “sell” rating on the Shanghai-listed shares of People’s Insurance Group of China (PICC) sending them down almost 10 percent. The mood had already been brittle after the European Central Bank slashed its growth forecasts and surprised everyone with a new round of policy stimulus, leaving investors fearing the worst for the global economy. ECB President Mario Draghi said the economy was in “a period of continued weakness and pervasive uncertainty” as he pushed out a planned rate hike and instead offered banks a new round of cheap loans. The reversal came in the same week that Canada’s central bank took a sudden dovish turn and dismal data from Australia to the UK instilled a sense of foreboding in markets. Yields on German and French 10-year bonds dived to their lowest since 2016, while banking stocks took a beating. The euro duly sank to depths last seen in mid-2017, sending the safe-haven U.S. dollar and yen surging. The next hurdle for investors will be U.S. payrolls data for February, with analysts uncertain how much payback there might be for January’s outsized jump. There was also a chance the jobless rate could fall by more than forecast given the recent strength in employment. The numbers are still likely to highlight the relative outperformance of the U.S. economy, especially against the European Union, and further encourage dollar bulls. The euro cowered at $1.1198, having suffered its biggest one-day loss against the dollar since June 2018 when the ECB last pushed back plans for a rate hike. ECB pushes out rate hike, offers cheap cash to banks.
  • The euro took a big hit by the ECB’s economic forecast slash, rate hike delay and new cheap bank loans on Friday morning as the market looks to the U.S. employment data to be released later in the day. The Euro was struggling near a 21-month low against the dollar as the ECB meeting on Thursday concluded with a series of dovish signals including a downbeat attitude towards the economic growth. Draghi said in a statement following the policy meeting that the ECB would launch a new series of quarterly targeted longer-term refinancing operations in September to help preserve favorable bank lending conditions and sooth transmission of monetary policy. The ECB also plans to keep its key interest rates unchanged throughout 2019. The news came in the same week that China cut its economic expansion target, the Bank of Canada lowered its expectations for policy tightening and the Organization for Economic Co-operation and Development slashed its global outlook again, causing more concerns about the slowdown in the global economy. U.S. non-farm payrolls for February, to be released later on Friday, will indicate the strength of the labour market. Reuters says economists expect to see 180,000 jobs added in the country last month, after two months of staggering growth. The U.S. economy added 304,000 jobs in January and 222,000 in December. On another note, Bloomberg reported on Wednesday that U.S. President Donald Trump is pushing U.S. negotiators to close a Sino-U.S. trade deal soon.
  • Oil prices fell on Friday after the European Central Bank (ECB) warned economic weakness would continue and as U.S. crude output and exports chase new records, undermining efforts by producer club OPEC to tighten global markets. Financial markets, including crude oil futures, took a hit after ECB President Mario Draghi said on Thursday the economy was in "a period of continued weakness and pervasive uncertainty". Europe's economic weakness comes as growth in Asia is also slowing down. A slowdown in economic growth would also likely result in stalling fuel demand, putting pressure prices. On the supply side, prices have been receiving support this year from output cuts led by the Organization of the Petroleum Exporting Countries (OPEC). Together with some non-affiliated producers like Russia, the producer group has pledged to withhold around 1.2 million barrels per day (bpd) of supply to tighten markets and prop up prices. But these efforts are being undermined by soaring U.S. crude oil production, which has increased by more than 2 million bpd since early 2018, to an unprecedented 12.1 million bpd. That makes America the world's biggest producer, ahead of Russia and Saudi Arabia. As a result, U.S. crude exports have also been chasing new records, reaching 3.6 million bpd in February - more than OPEC members like the United Arab Emirates, Kuwait or Iran produce. Some analysts even expect the United States to soon overtake Saudi Arabia as the world's biggest oil exporter. "The (Saudi) kingdom currently exports some 7 million bpd of crude oil plus about 2 million bpd of NGLs and petroleum products, compared with the U.S. now exporting approximately 3 million bpd of crude oil and 5 million barrels of NGLs and petroleum products," Rystad said. The consultancy "forecasts that U.S. oil production...will grow by close to another 1 million bpd in 2019. Beyond added supply to global markets and likely downward pressure on crude prices, Rystad said this export surge would have huge benefits for the U.S. economy.

 

 
Intraday RESISTANCE LEVELS
8th 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 57.00 57.50 58.00-59.00
EURO/USD 1.1210-1.1270 1.1305 1.1330-1.1380
GBP/USD 1.3120 1.3170 1.3200-1.3250
USD/JPY 111.90 112.25-112.90 113.50

Intraday SUPPORTS LEVELS
8th March 2019 S1 S2 S3
GOLD-XAU 1,282 1,276 1,267-1.260
Silver-XAG 15.00-14.75 14.50 14.00
Crude Oil 56.50-56.00 55.50 55.10-54.30
EURO/USD 1.1160 1.1090-1.1065 1.1020
GBP/USD 1.3075 1.3010-1.2950 1.2850
USD/JPY 111.60-111.00 110.60 110.02-109.90

Intra-Day Strategy (8th March 2019)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Thursday made its intraday high of US$1288.97/oz and low of US$1280.81/oz. Gold down by 0.080% at US$1280.81/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1266) and breakage below will call for 1254-1247. 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 positive crossover to confirm bullish 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  

37.4786

Buy
20-DMA   1312.74 Sell
50-DMA  

1301.74

Sell
100-DMA   1266.24 Buy
200-DMA   1247.07 Buy
STOCH(5,3)   13.473 Buy
MACD(12,26,9)   -3.260 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$15.10/oz and low of US$14.96/oz. Silver settled down by 0.398% at US$14.98/oz.

Technicals in Focus:

On daily charts, silver is sustaining below200DMA (15.15), breakage above will lead to 15.60. 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 oversold region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 15.00-14.00 targeting 15.40-15.90-16.40 and 17.00-17.40; stop breakage below 14.00. 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     15.00-14.75
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   34.762 Buy
20-DMA   15.56 Sell
50-DMA   15.59 Sell
100-DMA   15.04 Buy
200-DMA   15.15 Sell
STOCH(5,3)   5.240 Buy
MACD(12,26,9)   -0.151 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$57.23/bbl, intraday low of US$56.33/bbl and settled up by 0.265% to close at US$56.59/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 decreasing 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 57.00-59.60 with stop loss at 59.60; targeting 56.50-56.00-55.50 and 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     56.50-56.00
S2     55.50
S3     55.10-54.30

Intraday Resistance Levels
R1     57.00
R2     57.50
R3     58.00-59.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.283 Sell
20-DMA   55.84 Buy
50-DMA   53.28 Buy
100-DMA   54.96 Buy
200-DMA   62.00 Sell
STOCH(5,3)   33.916 Sell
MACD(12,26,9)   0.864 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1175/EUR, high of US$1.1319/EUR and settled the day down by 1.00% to close at US$1.1192/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 negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider.

Trading Strategy: Neutral to Buy

Buy above 1.1170-1.1020 with risk below 1.1020, targeting 1.1210-1.1270-1.1305 and 1.1380-1.1420-1.1460. Sell below 1.1210-1.1380 targeting 1.1170-1.1090 and 1.1065-1.1020 with stop-loss at daily closing above 1.1380.

 
Intraday Support Levels
S1     1.1160
S2     1.1090-1.1065
S3     1.1020

Intraday  Resistance Levels
R1     1.1210-1.1270
R2     1.1305
R3     1.1330-1.1380

TECHNICAL INDICATORS
Name   Value Action
14DRSI   31.252 Buy
20-DMA   1.1314 Sell
50-DMA   1.1372 Sell
100-DMA   1.1372 Sell
200-DMA   1.1498 Sell
STOCH(5,3)   10.157 Sell
MACD(12,26,9)   -0.002 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3067/GBP, high of US$1.3184/GBP and settled the day down by 0.675% to close at US$1.3080/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 1.3120-1.3300 with targets at 1.3080-1.3010 and 1.2950-1.2850. Buy above 1.3075-1.2850 with targets 1.3120-1.3170-1.3200 and 1.3250-1.3310 with stop loss closing below 1.3010.

 
Intraday Support Levels
S1     1.3075
S2     1.3010-1.2950
S3     1.2850

Intraday Resistance Levels
R1     1.3120
R2     1.3170
R3     1.3200-1.3250

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

59.352

Buy
20-DMA   1.3060 Sell
50-DMA   1.2968 Buy
100-DMA   1.2885 Sell
200-DMA   1.2989 Sell
STOCH(5,3)   18.972 Buy
MACD(12,26,9)   0.0072 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY111.47/USD and made an intraday high of JPY111.84/USD and settled the day down by 0.178% at JPY111.56/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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