AAFX TRADING

Daily Market Lookup

  • Investors ditched shares on Monday and fled to the safety of bonds while the Japanese yen hovered near a six-week high as risk assets fell out of favor on growing fears about a U.S. recession, sending global yields plunging. Historically, an inverted yield curve - where long-term rates fall below short-term - has signaled an upcoming recession. Compounding fears of a more widespread global downturn, manufacturing output data from Germany showed a contraction for the third straight month. And in the United States, preliminary measures of manufacturing and services activity for March showed both sectors grew at a slower pace than in February, according to data from IHS Markit. Much of the concerns around global growth is stemming from Europe and China which are battling separate tariff wars with the United States. A nearly two-year U.S. investigation found no evidence of collusion between Donald Trump’s election team and Russia, in a major political victory for the U.S. President as he prepares for his 2020 re-election battle. Political turmoil in Britain over the country’s exit from the European Union also remains a drag on risk assets. On Sunday, Rupert Murdoch’s Sun newspaper said in a front page editorial British Prime Minister Theresa May must announce on Monday she will stand down as soon as her Brexit deal is approved.
  • The U.S. dollar edged down on Monday in Asia after a closely-watched indicator for recession appeared on Friday. The spread between 3-month Treasury bills and 10-year note yields inverted for the first time since 2007 after U.S. manufacturing data released on Friday missed estimates. This inversion of the yield curve is widely seen as a leading indicator of economic recession. It appeared before each of the last seven recessions, according to the National Bureau of Economic Research. A downgraded economic outlook last week from the U.S. Federal Reserve also added to concerns of a weakening global growth. The Fed kept interest rates on hold and indicated that there would be no further rate hikes this year - after indicating in December that two could take place. Meanwhile, traders continue to await developments in the U.S.-China trade talks. A U.S. trade delegation, headed by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing this week to meet with Chinese Vice-Premier Liu He for further talks aimed at resolving the trade conflict between the world’s two largest economies. Brexit is expected to remain in the spotlight this week after Friday’s deadline for the U.K. to exit the European Union has been pushed back by two weeks to April 12. The delay would give British Prime Minister Theresa May more time to persuade lawmakers to accept the withdrawal deal she negotiated. If lawmakers refuse to approve the deal for a third time a number of options, including a no-deal Brexit, will open up.
  • Chicago Federal Reserve Bank President Charles Evans said on Monday it was understandable for markets to be nervous when the yield curve flattened, though he was still confident about the U.S. economic growth outlook. In what many see as a bad omen for the U.S. economy, yields on benchmark U.S. 10-year treasury notes fell further below three-month rates in Asia on Monday, an inversion that has in the past signaled the risk of economic recession. The yield curve inverted on Friday for the first time since mid-2007. Evans described the inversion as “pretty narrow”. “We have to take into account that there’s been a secular decline in long-term interest rates,” Evans said in comments at the Credit Suisse Asian Investment Conference in Hong Kong, days after the Fed signaled an end to its tightening and abandoned plans for further rate hikes in 2019.. “Some of this is structural, having to do with lower trend growth, lower real interest rates,” he said. “I think, in that environment, it’s probably more natural that yield curves are somewhat flatter than they have been historically.” On the monetary policy outlook, Evans said it was a good time for the U.S. central bank to pause and adopt a cautious stance, adding he did not expect any interest rate hikes until the second half of next year. Softening his tone from a few months ago, Evans, who votes on interest rate policy this year, said monetary policy was neither accommodative, nor restrictive at this point. “I see things impeding inflation a bit, and I want to see inflation get up. So my own path is not to expect a funds rate increase until next year, probably, the second half,” Evans said. In January, he said the Fed could hike interest rates three times in 2019 assuming the U.S. economy remained reasonably strong. Last week, the U.S. central bank left rates steady in a range of 2.25 percent to 2.5 percent. Fresh forecasts showed 11 of 17 Fed policymakers expected no rate change for the rest of the year, up from just two in December. That unexpectedly dovish signal had financial markets quickly pricing in a rate cut next year.
  • Oil prices dropped by almost 1 percent on Monday, with concerns recession could be looming outweighing supply disruptions from OPEC's production cutbacks and from U.S. sanctions on Iran and Venezuela. Concerns about a potential U.S. recession resurfaced late last week after bearish remarks by the U.S. Federal Reserve, with 10-year treasury yields slipping below the three-month rate for the first time since 2007. Adding to the fears of a more widespread global downturn, manufacturing output data from Germany, Europe's biggest economy, shrunk for the third straight month. The Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies such as Russia, together referred to as 'OPEC+', have pledged to withhold around 1.2 million barrels per day (bpd) of oil supply this year to prop up markets, with OPEC's de-facto leader seen to be pushing for a crude price of over $70 per barrel.

 

 
Intraday RESISTANCE LEVELS
25th March 2019 R1 R2 R3
GOLD-XAU 1,316 1,325 1,331-1,338
Silver-XAG 15.60 16.00 16.40-17.00
Crude Oil 59.00-59.50 60.20 61.00-61.64
EURO/USD 1.1305--1.1330 1.1350 1.1380-1.1430
GBP/USD 1.3200-1.3250 1.3300 1.3350-1.3400
USD/JPY 110.02-110.60 111.00 111.40-111.90

Intraday SUPPORTS LEVELS
25th March 2019 S1 S2 S3
GOLD-XAU 1,310-1,300 1,294 1,282-1,276
Silver-XAG 15.30-15.00 14.75 14.50-14.00
Crude Oil 58.00 57.50-57.00 56.30
EURO/USD 1.1200 1.1200 1.1175
GBP/USD 1.3120 1.3075-1.3010 1.2981
USD/JPY 109.55-109.05 108.45 108.00-107.75

Intra-Day Strategy (25th 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 Friday made its intraday high of US$1314.90/oz and low of US$1306.77/oz. Gold up by 0.313% at US$1313.30/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 1316-1338 keeping stop loss closing above 1338, targeting 1300-1294 and 1282-1276. Buy above 1310-1276 with risk below 1276, targeting 1316-1325-1331 and 1338-1346.

 
Intraday Support Levels
S1     1,310-1,300
S2     1,294
S3     1,282-1,276
Intraday Resistance Levels
R1     1,316
R2     1,325
R3     1,331-1,338

Technical Indicators

Name   Value Action
14DRSI  

56.620

Buy
20-DMA   1302.94 Sell
50-DMA  

1306.29

Sell
100-DMA   1275.59 Buy
200-DMA   1247.20 Buy
STOCH(5,3)   67.073 Sell
MACD(12,26,9)   1.309 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$15.53/oz and low of US$15.34/oz. Silver settled down by 0.0323% at US$15.42/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 Friday made an intra‐day high of US$60.08/bbl, intraday low of US$58.31/bbl and settled down by 1.503% to close at US$58.97/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 59.00-61.64 with stop loss at 61.64; targeting 58.00-57.50 and 57.00-56.30. Buy above 58.00-56.30 with risk daily closing below 56.30 and targeting 59.00-59.50-60.20 and 61.00-61.70.

 
Intraday Support Levels
S1     58.00
S2     57.50-57.00
S3     56.30

Intraday Resistance Levels
R1     59.00-59.50
R2     60.20
R3     61.00-61.64

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.608 Sell
20-DMA   57.75 Buy
50-DMA   55.63 Buy
100-DMA   53.92 Buy
200-DMA   61.55 Sell
STOCH(5,3)   42.005 Sell
MACD(12,26,9)   1.126 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1272/EUR, high of US$1.1390/EUR and settled the day down by 0.633% to close at US$1.1300/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 1.1270-1.1175 with risk below 1.1170, targeting 1.1305-1.1330 and 1.1380-1.1430. Sell below 1.1305-1.1430 targeting 1.1270-1.1250 and 1.1200-1.1175 with stop-loss at daily closing above 1.1430.

 
Intraday Support Levels
S1     1.1200
S2     1.1200
S3     1.1175

Intraday  Resistance Levels
R1     1.1305--1.1330
R2     1.1350
R3     1.1380-1.1430

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.168 Buy
20-DMA   1.1321 Sell
50-DMA   1.1347 Sell
100-DMA   1.1363 Sell
200-DMA   1.1476 Sell
STOCH(5,3)   25.157 Sell
MACD(12,26,9)   -0.009 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3080/GBP, high of US$1.3222/GBP and settled the day down by 0.755% to close at US$1.3208/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.3063) 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 approaching oversold territory and giving negative crossover to confirm bearish 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 1.3200-1.3400 with targets at 1.3120-1.3070 and 1.3010-1.2980. Buy above 1.3120-1.2980 with targets 1.3200-1.3250-1.3300and 1.3350-1.3400 with stop loss closing below 1.2950.

 
Intraday Support Levels
S1     1.3120
S2     1.3075-1.3010
S3     1.2981

Intraday Resistance Levels
R1     1.3200-1.3250
R2     1.3300
R3     1.3350-1.3400

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.543

Buy
20-DMA   1.3190 Sell
50-DMA   1.3063 Buy
100-DMA   1.2917 Buy
200-DMA   1.2981 Buy
STOCH(5,3)   36.972 Sell
MACD(12,26,9)   0.0072 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY109.73/USD and made an intraday high of JPY110.89/USD and settled the day down by 0.845% at JPY109.90/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (110.42), 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 in oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 110.02-111.90 with risk above 111.90 targeting 109.55-109.05-108.45 and 108.00-107.75. Long positions above 109.50-107.75 with targets of 110.02-110.60-111.00 and 111.40-112.25 with stop below 107.50.

 
Intraday Support Levels
S1     109.55-109.05
S2     108.45
S3     108.00-107.75

INTRADAY RESISTANCE LEVELS
R1     110.02-110.60
R2     111.00
R3     111.40-111.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.964 Buy
20-DMA   111.20 Buy
50-DMA   110.42 Buy
100-DMA   111.22 Sell
200-DMA   111.44 Sell
STOCH(9,6)   17.080 Sell
MACD(12,26,9)   0.0465 Buy

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