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Daily Market Lookup

  • Shares in Asia rose on Thursday after the U.S. Federal Reserve took a more accommodative stance at its policy meeting, but concerns over U.S.-China trade talks and slowing global growth capped broad gains and pulled some markets lower. U.S. President Donald Trump on Wednesday warned that Washington may leave tariffs on Chinese goods for a “substantial period” to ensure Beijing’s compliance with any trade deal. Trump’s comments had more of an effect on U.S. shares than their Asian counterparts, said Sean Darby, chief global equity strategist at Jefferies in Hong Kong, adding that a move lower in U.S. rates “actually has a far bigger impact or efficacy in EM and Asia than in the United States itself. In comments at the end of a two-day policy meeting Wednesday, the Fed abandoned projections for any interest rate hikes this year amid signs of an economic slowdown, and said it would halt the steady decline of its balance sheet in September. But while investors cheered the Fed’s new approach, the reasons behind it are creating concern. The Fed’s comments dragged yields on benchmark U.S. Treasuries lower, with 10-year notes yielding 2.5245 percent compared with a U.S. close of 2.537 percent on Wednesday. The euro was up 0.14 percent on the day at $1.1427, while sterling rebounded from a sharp drop Wednesday after British Prime Minister Theresa May asked the EU to delay Brexit until June 30, a shorter extension than some in the market had been expecting.
  • The dollar nursed heavy losses in Asia on Thursday after the Federal Reserve stunned markets by abandoning all plans to raise rates this year, a signal its three-year campaign to normalize policy might be at an end. Investors rushed to price in the prospect of rate cuts later this year, while benchmark Treasury yields dived to their lowest since early 2018. It had previously tipped two hikes this year. The central bank also trimmed its forecasts for economic growth and inflation, while lifting that for unemployment. Driving home the dovish shift, the Fed will now stop running down its balance sheet in September, some months earlier than many had expected. Investors reacted by wagering the next move in rates would be down, with fund futures now implying around 11 basis points of easing by December. The only solace for the dollar was that other central banks around the globe have also turned decidedly dovish in recent months as growth slowed pretty much everywhere. That need for stimulus means many central banks will not want to see their currencies appreciate against the dollar, giving them reason to sound even more accommodative. One currency with problems of its own was sterling, which retreated to $1.3192 after British Prime Minister Theresa May's request to delay Brexit until June 30 faced resistance from parts of the European Union.
  • The U.S. Federal Reserve on Wednesday brought its three-year drive to tighten monetary policy to an abrupt end, abandoning projections for any interest rate hikes this year amid signs of an economic slowdown, and saying it would halt the steady decline of its balance sheet in September. The measures, announced following the end of a two-day policy meeting, mean the Fed’s gradual and sometimes fitful efforts to return monetary policy to a more normal footing will stop well short of what was foreseen in late 2015 when the central bank first moved rates from the near-zero level adopted in response to the 2007-2009 financial crisis and recession. Having downgraded their U.S. growth, unemployment and inflation forecasts, policymakers said the Fed’s benchmark overnight interest rate, or fed funds rate, was likely to remain at the current level of between 2.25 percent and 2.50 percent at least through this year, a wholesale shift of their outlook. In contrast to projections through much of last year, Fed policymakers no longer see the need to move rates to a “restrictive” level as a guard against inflation, which remains lodged below the central bank’s 2 percent target. They also said that as of May they would slow their monthly reduction of as much as $50 billion in asset holdings, and halt them altogether in September, ending what amounted to a second lever of monetary tightening that had run in the background since late 2017.
  • U.S. crude prices rose on Wednesday to a four-month high above $60 a barrel after U.S. government data showed tightening domestic oil supplies, but gains were capped by concerns over global economic growth due to the ongoing U.S.-China trade war. Stockpiles fell 9.6 million barrels last week, compared with analysts' expectations for an increase of 309,000 barrels. The draw was the largest since July 2018 and brought stockpiles to their lowest since January. Gasoline and distillate inventories both fell by more than expected. Gasoline stocks fell by 4.6 million barrels, while distillate inventories fell by 4.1 million barrels. Crude prices have risen almost a third this year, pushed up by supply cuts among the Organization of the Petroleum Exporting Countries and its allies including Russia, as well as U.S. sanctions against oil exporters Iran and Venezuela. The United Arab Emirates's energy minister said he expects OPEC to finalize the long-term cooperation charter with its non-OPEC partners in June. However, an eight-month trade war between China and the United States has worried global markets already concerned by signs of a slowdown in economic growth this year. There have been mixed signals whether the standoff between the world's top two economies can soon be resolved Washington announced that Treasury Secretary Steven Mnuchin plans to travel to China next week for another round of trade talks with senior officials. Analysts said an economic slowdown could soon dent fuel consumption, holding back crude. Asian business confidence held near three-year lows in the first quarter as the U.S.-China trade war dragged on, pulling down a global economy that is already on a downward path, a Thomson Reuters/INSEAD survey found.

 

 
Intraday RESISTANCE LEVELS
21st March 2019 R1 R2 R3
GOLD-XAU 1,325-1,331 1,338 1,346
Silver-XAG 15.60 16.00 16.40-17.00
Crude Oil 60.20-61.00 61.64 62.50
EURO/USD 1.1430 1.1450-1.1480 1.1500
GBP/USD 1.3250-1.3300 1.3350 1.3400-1.3480
USD/JPY 111.90 112.25 112.90-113.50

Intraday SUPPORTS LEVELS
21st March 2019 S1 S2 S3
GOLD-XAU 1.316-1,309 1,300 1,294-1,282
Silver-XAG 15.30-15.00 14.75 14.50-14.00
Crude Oil 59.50-59.00 58.00 57.50-57.
EURO/USD 1.1380-1.1350 1.1330 1.1305-1.1270
GBP/USD 1.3200 1.3120 1.3075-1.3010
USD/JPY 111.40-111.00 110.60 110.02-109.90

Intra-Day Strategy (21st 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 Wednesday made its intraday high of US$1316.87/oz and low of US$1298.63/oz. Gold up by 0.491% at US$1312.23/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1270) 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 neutral 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 1325-1346 keeping stop loss closing above 1346, targeting 131-1309-1300 and 1294-1282. Buy above 1316-1282 with risk below 1282, targeting 1325-1331 and 1338-1346.

 
Intraday Support Levels
S1     1.316-1,309
S2     1,300
S3     1,294-1,282
Intraday Resistance Levels
R1     1,325-1,331
R2     1,338
R3     1,346

Technical Indicators

Name   Value Action
14DRSI  

58.274

Buy
20-DMA   1304.73 Sell
50-DMA  

1305.48

Sell
100-DMA   1273.87 Buy
200-DMA   1247.11 Buy
STOCH(5,3)   85.073 Buy
MACD(12,26,9)   -0.672 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$15.54/oz and low of US$15.25/oz. Silver settled up by 0.913% at US$15.46/oz.

Technicals in Focus:

On daily charts, silver is sustaining below200DMA (15.12), 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 15.30-14.00 targeting 15.60-15.90-16.40 and 17.00-17.40; stop breakage below 14.00. Sell below 15.50-17.00 with stop loss above 17.00; targeting 15.10-14.85-14.50 and 14.00.

 
Intraday  Support Levels
S1     15.30-15.00
S2     14.75
S3     14.50-14.00

Intraday  Resistance Levels
R1     15.60
R2     16.00
R3     16.40-17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.064 Buy
20-DMA   15.40 Sell
50-DMA   15.56 Sell
100-DMA   15.11 Buy
200-DMA   15.09 Sell
STOCH(5,3)   78.240 Buy
MACD(12,26,9)   -0.0498 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$60.26/bbl, intraday low of US$58.57/bbl and settled up by 1.163% to close at US$59.98/bl.

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 60.20-62.50 with stop loss at 62.50; targeting 59.50-59.00-58.00 and 57.50-57.00. Buy above 59.50-56.50 with risk daily closing below 56.50 and targeting 60.20-61.00 and 61.70-62.50.

 
Intraday Support Levels
S1     59.50-59.00
S2     58.00
S3     57.50-57.

Intraday Resistance Levels
R1     60.20-61.00
R2     61.64
R3     62.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.949 Sell
20-DMA   57.52 Buy
50-DMA   55.35 Buy
100-DMA   54.03 Buy
200-DMA   61.63 Sell
STOCH(5,3)   87.005 Sell
MACD(12,26,9)   1.297 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1334/EUR, high of US$1.1447/EUR and settled the day up by 0.659% to close at US$1.1423/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1364), 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 1.1380-1.1270 with risk below 1.1270, targeting 1.1430-1.1450 and 1.1480-1.1500. Sell below 1.1430-1.1500 targeting 1.1380-1.1350-1.1330 and 1.1305-1.1270 with stop-loss at daily closing above 1.1500.

 
Intraday Support Levels
S1     1.1380-1.1350
S2     1.1330
S3     1.1305-1.1270

Intraday  Resistance Levels
R1     1.1430
R2     1.1450-1.1480
R3     1.1500

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.243 Buy
20-DMA   1.1329 Sell
50-DMA   1.1354 Sell
100-DMA   1.1365 Sell
200-DMA   1.1480 Sell
STOCH(5,3)   83.157 Buy
MACD(12,26,9)   -0.009 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3145/GBP, high of US$1.3271/GBP and settled the day down by 0.535% to close at US$1.3191/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.3021) 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 1.3250-1.3480 with targets at 1.3200-1.3120 and 1.3075-1.3010. Buy above 1.3200-1.2950 with targets 1.3250-1.3300-1.3350 and 1.3400 with stop loss closing below 1.2900.

 
Intraday Support Levels
S1     1.3200
S2     1.3120
S3     1.3075-1.3010

Intraday Resistance Levels
R1     1.3250-1.3300
R2     1.3350
R3     1.3400-1.3480

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

59.543

Buy
20-DMA   1.3148 Sell
50-DMA   1.3021 Buy
100-DMA   1.2897 Sell
200-DMA   1.2986 Sell
STOCH(5,3)   77.972 Buy
MACD(12,26,9)   0.0072 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY110.53/USD and made an intraday high of JPY111.68/USD and settled the day down by 0.772% at JPY110.63/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (110.15), 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     111.40-111.00
S2     110.60
S3     110.02-109.90

INTRADAY RESISTANCE LEVELS
R1     111.90
R2     112.25
R3     112.90-113.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.063 Buy
20-DMA   111.33 Buy
50-DMA   110.32 Buy
100-DMA   111.31 Sell
200-DMA   111.44 Sell
STOCH(9,6)   48.080 Sell
MACD(12,26,9)   0.274 Buy

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