AAFX TRADING

Daily Market Lookup

  • Asian shares fell on Tuesday after U.S. President Donald Trump stunned markets by imposing tariffs on imports from Brazil and Argentina, rekindling fears over global trade tensions, while weak U.S. factory data added to the investor gloom. But European shares, which had also slumped following Trump’s tariff announcement, were expected to rise on Tuesday. Contrary to his remarks, both Brazil and Argentina have been trying to strengthen their respective currencies against the dollar. Steven Daghlian, market analyst at CommSec in Sydney, said while the South American tariffs dominated market worries on Tuesday, China’s response to U.S. support for anti-government protesters in Hong Kong has also chilled sentiment. China said on Monday U.S. military ships and aircraft won’t be allowed to visit Hong Kong, and also announced sanctions against several U.S. non-government organisations for encouraging protesters to “engage in extremist, violent and criminal acts.”Worsening the mood, data from the Institute for Supply Management (ISM) showed the U.S. manufacturing sector contracted for a fourth straight month in November as new orders slid. That erased cheer markets had drawn from upbeat Chinese factory surveys released over the past few days. While trade war headlines have been a key driver of markets in recent weeks, sentiment has broadly held up. The U.S. S&P 500 index, the Dow Jones Industrial Average, the Nasdaq Composite and Australia’s S&P/ASX 200 index all touched record highs last week.
  • The dollar climbed, and Asian currencies moved sideways on Tuesday morning in Asia after US President Donald Trump announced plans to reinstate steel and aluminum tariffs on Brazil and Argentina. The announcement followed the release Monday in the US of new data from the Institute of Supply Management (ISM) which noted that manufacturing activity there contracted in November. The ISM Manufacturing Purchasing Managers’ Index fell to 48.1 in November, below expectations. A reading under 50 suggests contraction. The US dollar gained some ground on morning trade in Asia. US-China trade talks remained a focus for traders with uncertainty remaining after Trump said on Monday that the signing last week of two pieces of legislation in the US that support protesters in Hong Kong would not make negotiations easier, but that China still wants a deal. Over the weekend, Global Times, a nationalist English-language tabloid in China, tweeted that a phase one trade deal would require that the US roll back tariffs. The next batch of American tariffs on Chinese goods are due to take effect on Dec. 15. In mainland China, The People’s Bank of China (PBOC) set the reference rate for the yuan, the midpoint around which the currency is allowed to trade, at 7.0223, slightly weaker than the 7.0409 on Monday. The dollar traded near a one-week low versus the yen on Tuesday and near the lowest in almost two weeks against the euro, on concern about weak U.S. manufacturing data and signs of new fronts in the U.S. trade war. Sentiment also took a hit after U.S. President Donald Trump announced tariffs on metal imports from Brazil and Argentina. Recent U.S. economic data had shown signs of improvement, so a fourth consecutive month of shrinking manufacturing activity as well as an unexpected decline in construction spending put a big dent in hopes that the world's largest economy had stabilized. Investors are also worried about how the United States will scale back a 16 month-long trade war with China, while more tariffs on other countries' goods would pose an additional risk to the global economic outlook. On Monday, the U.S. Institute for Supply Management said its index of national factory activity fell 0.2 point to 48.1 in November. A reading below 50 indicates contraction. Economists polled by Reuters had forecast a rise to 49.2 from 48.3 a month prior. Separate data showed construction spending fell in October as investment in private projects tumbled to the lowest level in three years. The data surprised economists who had recently raised U.S. growth forecasts for the forth quarter due to positive data on trade, housing and manufacturing. Meanwhile, Trump surprised policymakers in Brazil and Argentina with tariffs on steel and aluminum imports. In a Monday tweet, Trump said the tariffs, "effective immediately", were necessary because "Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers." The comment came despite both countries actively trying to strengthen their currencies against the dollar.
  • Oil held its gains on Tuesday as Saudi Arabia is reportedly pushing for extended supply cut plans, even as stocks fell across Asia following the announcement of fresh tariffs by US President Donald Trump. Reuters quoted two sources familiar with the matter who said that the Organization of the Petroleum Exporting Countries (OPEC) and its allies are discussing a plan to increase the existing 1.2 million barrels per day (bpd) supply cut by 400,000 bpd and extend it until June. The sources also said Saudi Arabia, the de facto leader of OPEC, is pushing the plan ahead of the listing of state-owned Saudi Aramco. The market is paying close attention to the OPEC meetings this week where the ministers will meet in Vienna this Thursday and the wider OPEC+ group will gather on Friday. The Chinese government will soon publish a list of “unreliable entities” that could lead to sanctions against U.S. companies, according to the country’s state media. The market is getting more and more concerned that a preliminary trade deal may not happen any time soon as disputes over human rights in Hong Kong and Xinjiang keep adding tensions between the two nations. A senior adviser to Trump said on Monday that a deal between China and the US is still possible before the year ends, but talks have been dragging on for weeks. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, are discussing a plan to increase its existing 1.2 million barrels per day (bpd) supply cut by 400,000 bpd and extend the pact until June, two sources familiar with the matter said. Saudi Arabia is pushing the plan to deliver a positive surprise to the market before the listing of state-owned Saudi Aramco, the sources said. OPEC ministers will meet in Vienna on Thursday and the wider OPEC+ group will gather on Friday. Concerns about the inability of the United States and China, the world's two biggest oil users, to come to a preliminary agreement to resolve their 17-month trade dispute also weighed on oil prices, along with discouraging U.S. economic data.

 

 
Intraday RESISTANCE LEVELS
3rd December 2019 R1 R2 R3
GOLD-XAU 1,462-1,470 1,478 1,494-1,500
Silver-XAG 17.30-17.60 17.80 18.10-18.50
Crude Oil 56.50 57.20 57.80--58.65
EURO/USD 1.1110 1.1175 1.1200-1.1230
GBP/USD 1.2970 1.3040 1.3100-1.3150
USD/JPY 109.50-110.00 110.70 111.30-111.90

Intraday SUPPORTS LEVELS
3rd December 2019 S1 S2 S3
GOLD-XAU 1,442-1,438 1,442-1,438 1,430
Silver-XAG 15.90 15.90 15.50
Crude Oil 56.00-55.10 54.50 53.70-52.90
EURO/USD 1.1030-1.0980 1.0930 1.0890-1.0850
GBP/USD 1.2900-1.2840 1.2790 1.2710-1.2650
USD/JPY 109.00-108.80 108.50 107.80-107.00

Intra-Day Strategy (3rd December 2019)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Buy
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$1465.10/oz and low of US$1454.00/oz. Gold up 0.059% at US$1462.72/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1483) and breakage above will call for 1492. MACD is below zero line but histograms are increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought 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; buy above 1459-1438 with risk below 1438, targeting 1478-1489 and 1500-1512. Sell below 1470-1512 keeping stop loss closing above 1512, targeting 1470-1459-1452 and 1442-1438.

 
Intraday Support Levels
S1     1,442-1,438
S2     1,442-1,438
S3     1,430
Intraday Resistance Levels
R1     1,462-1,470
R2     1,478
R3     1,494-1,500

Technical Indicators

Name   Value Action
14DRSI  

41.882

Buy
20-DMA   1475.42 Sell
50-DMA  

1488.58

Sell
100-DMA   1483.32 Sell
200-DMA   1399.26 Buy
STOCH(5,3)   23.621 Sell
MACD(12,26,9)   -8.241 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$16.93/oz and low of US$16.87/oz. settled up by 0.0177% at US$16.91/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (17.15), breakage above will lead to 17.61. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in overbought region, indicating buy signal for now. The Stochastic Oscillator is in neutral 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 16.75-15.50 targeting 17.30-17.60-17.80 and 18.50-18.90; stop breakage below 15.60. Sell below 17.30-19.30 with stop loss above 19.50; targeting 16.90-16.25 and 16.00-15.70.

 
Intraday  Support Levels
S1     15.90
S2     15.90
S3     15.50

Intraday  Resistance Levels
R1     17.30-17.60
R2     17.80
R3     18.10-18.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.313 Buy
20-DMA   17.41 Sell
50-DMA   17.56 Sell
100-DMA   17.20 Sell
200-DMA   16.14 Buy
STOCH(5,3)   86.268 Buy
MACD(12,26,9)   -0.179 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$56.67/bbl, intraday low of US$55.42/bbl and settled up by 0.883% to close at US$55.96/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 200DMA i.e. 56.35 which is a resistance level and breakage above will call for 57.00-58.00. MACD is above zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving positive crossover for confirmation of bullish stance; while the RSI is in neutral region and more downside can be expected to reach the oversold region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 55.10-52.90 with risk daily closing below 52.70 and targeting 56.00-56.50-57.20 and 57.80-58.65-59.40. Sell below 56.00-58.65 with stop loss at 59.00; targeting 55.10-54.50-53.70 and 52.90-52.00.

 
Intraday Support Levels
S1     56.00-55.10
S2     54.50
S3     53.70-52.90

Intraday Resistance Levels
R1     56.50
R2     57.20
R3     57.80--58.65

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.638 Sell
20-DMA   57.10 Sell
50-DMA   55.63 Buy
100-DMA   55.86 Buy
200-DMA   57.52 Sell
STOCH(5,3)   22.130 Sell
MACD(12,26,9)   0.307 Sell

EUR/USD

AAFX TRADING

EUR/USD of Monday an intraday low of US$1.1003/EUR, high of US$1.1090/EUR and settled the day up by 0.517% to close at US$1.1076/EUR.

Technicals in Focus:

EUR/USD of Monday an intraday low of US$1.1003/EUR, high of US$1.1090/EUR and settled the day up by 0.517% to close at US$1.1076/EUR.

Trading Strategy: Neutral to Buy

Buy above 1.0990-1.0850 with risk below 1.0900, targeting 1.1030-1.1060-1.1110 and 1.1170-1.1200. Sell below 1.1030-1.1300 targeting 1.1030-1.0960 and 1.0860-1.0805 with stop-loss at daily closing above 1.1300.

 
Intraday Support Levels
S1     1.1030-1.0980
S2     1.0930
S3     1.0890-1.0850

Intraday  Resistance Levels
R1     1.1110
R2     1.1175
R3     1.1200-1.1230

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.357 Buy
20-DMA   1.1055 Sell
50-DMA   1.1040 Sell
100-DMA   1.1079 Sell
200-DMA   1.1167 Sell
STOCH(5,3)   12.958 Sell
MACD(12,26,9)   -0.005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2896/GBP, high of US$1.2949/GBP and settled the day up by 0.224% to close at US$1.2940/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2715) 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 neutral territory and giving positive 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 1.2970-1.3170 with targets at 1.2900-1.2840-1.2790 and 1.2710-1.2650 stop-loss should be below 1.3170. Buy above 1.2840-1.2600 with targets 1.2900-1.2970-1.3040 and 1.3100-1.3150 with stop loss closing below 1.2600.

 
Intraday Support Levels
S1     1.2900-1.2840
S2     1.2790
S3     1.2710-1.2650

Intraday Resistance Levels
R1     1.2970
R2     1.3040
R3     1.3100-1.3150

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

57.878

Buy
20-DMA   1.2893 Buy Buy
50-DMA   1.2715 Buy
100-DMA   1.2494 Buy
200-DMA   1.2698 Buy
STOCH(5,3)   69.191 Buy
MACD(12,26,9)   0.0049 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY108.96/USD and made an intraday high of JPY109.21/USD and settled the day down by 0.100% at JPY109.12/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (107.70), 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 109.50-111.70 with risk above 111.90 targeting 109.30-108.50-107.80 and 107.00-106.50. Long positions above 109.30-107.00 with targets of 109.50-110.00-110.70 and 111.30-111.90 with stop below 107.00.

 
Intraday Support Levels
S1     109.00-108.80
S2     108.50
S3     107.80-107.00

INTRADAY RESISTANCE LEVELS
R1     109.50-110.00
R2     110.70
R3     111.30-111.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.367 Buy
20-DMA   108.93 Buy
50-DMA   108.41 Buy
100-DMA   107.75 Buy
200-DMA   108.91 Sell
STOCH(9,6)   92.253 Buy
MACD(12,26,9)   0.206 Buy

AAFX TRADING
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