AAFX TRADING

Daily Market Lookup

  • Stock markets in Asia inched up on Thursday on the possibility that China and the United States may soon seal a “phase one” deal to end their 17-month trade war, but conflicting messages from U.S. President Donald Trump kept a lid on the advance. Hopes that an agreement would soon emerge stemmed from a Bloomberg report on Wednesday that the two sides were close to a “phase one” deal, and Trump’s remarks that the talks were going “very well” after he had earlier said it might take until late 2020 to reach an accord. As investors tilted towards optimism, riskier assets rose and safe havens such as the Japanese yen weakened. HSBC Global Research said in a note on Wednesday analysts’ consensus estimates of Asian companies’ earnings forecasts were revised up for the first time in 18 months, and that similar turning points in recent years had paved the way for stock market recoveries. But more market turbulence is possible in the short term given Sino-U.S. negotiations are very fluid. If China and the United States cannot reach an agreement soon, the next important date to watch is Dec. 15, when Washington is scheduled to impose even more tariffs on Chinese goods. Traders are also bracing for the closely-watched U.S. non-farm payrolls report due Friday to determine how well the U.S. economy is holding up amid a global slowdown. Trading will likely be thin and there will be little money chasing these unpredictable trade headlines as the year-end approaches, said Robert Carnell, chief economist and head of research for Asia-Pacific at ING in Singapore.
  • The dollar and export-oriented currencies found support on Thursday as upbeat trade comments from U.S. President Donald Trump cheered the market, while New Zealand's softer-than-expected banking reforms pushed the kiwi to a four-month high. The flight to safety seen on Wednesday reversed after Trump said trade talks with China were going "very well," a day after floating the idea that a deal might have to wait until after the 2020 presidential election. Bloomberg also reported that the two sides are moving closer to an agreement, citing people familiar with the talks. That took the shine off the safe-haven yen and Swiss franc, which nursed losses on Thursday. The British pound crossed the $1.31 mark for the first time since May overnight as expectations that Prime Minister Boris Johnson would win a majority at next week's election firmed. The long, seven-year phase-in and modest scale of hiked bank capital rules were seen having a softer impact on lending and growth than expected, reducing the likelihood of deeper monetary easing. The U.S. dollar, which has dominated the currency market for the past couple of years, is likely to maintain its position of strength despite diminishing returns from the most overcrowded trade of the year, a Reuters poll of strategists found. The foreign exchange market will step into a brand new decade with no fresh sense of direction, in part because of little progress by Washington and Beijing in brokering a truce in their prolonged trade spat. After months of collective optimism in the markets over a pending reprieve in trade tensions, U.S. President Donald Trump on Tuesday said he was willing to wait until after the next U.S. presidential election in November 2020 to ink a deal with China. While global equity markets initially reacted sharply to the news, the dollar index measuring the unit against a basket of six currencies, has barely moved. Much of the limited reaction is likely down to still-widespread expectations the U.S. will walk back from its planned imposition on Dec. 15 of fresh tariffs on Chinese goods. Yet volatility, which traders thrive on and is currently at low levels for most major currencies, is not expected in the market any time soon. The dollar and the euro have traded in the tightest range in decades this year. Indeed, a majority of analysts - 38 of 64 - who answered an additional question said current low volatility in most major currencies would last at least another three months. Seven said volatility would return in one month; 19 said it would take up to three months. The U.S. dollar, which has dominated currency markets and provided a sense of direction over the past couple of years, is also showing some signs of slowing down. After gaining over 4% last year, the greenback has only eked gains of less than 2% so far in 2019, suggesting much of the trade deal news has already been baked into the currency and any further gains will be hard to come by. While that is not to say the dollar is bound to weaken, there was no clear consensus among analysts on where the next boost to the world's top reserve currency was going to come from. The euro, which has lost nearly 4% for the year until now, is expected to recover those losses over the next 12 months.
  • Oil prices fell in muted trading ahead of OPEC talks in Vienna later on Thursday, trimming some of the sharp gains made the previous session on both the possibility of producers agreeing further output cuts and a sharp drop in U.S. crude inventories. Prices are now back roughly to the levels of a week ago, before they plunged on a lack of progress on resolving a 17-month-old Sino-U.S. trade war that has hit global growth and demand for oil. U.S. President Donald Trump on Wednesday described trade talks with China as going "very well," a day after saying it could take until after next year's presidential election to complete an agreement. Investor attention has switched to meetings of the OPEC and other producers, including Russia, and the possibility of more production cuts. The so-called OPEC+ group has been curbing output since 2017 to counter surging production from the United States, which is now the world's biggest oil producer. OPEC+ has been withholding about 1.2 mn barrels per day of production. OPEC is aiming to push for deeper reductions in output but needs the agreement of Russia and other oil producers to avoid a supply glut next year, after demand growth slowed in 2019, while many analysts are sceptical of further cuts. OPEC members will meet among themselves on Thursday and be joined on Friday by Russia and the other producers. Oil prices surged on Wednesday after U.S. crude inventories fell by much more than expected, according to official figures. Crude stockpiles fell by 4.9 mn barrels last week, the Energy Information Administration said on Wednesday, compared with expectations in a Reuters poll of a 1.9 mn-barrel decline. Still, gasoline and distillate stocks surged by a similar amount as crude's decline, with refinery runs increasing ahead of winter stockpiling Gasoline stocks were up by 3.4 mn barrel, double expectations in the Reuters poll. Distillate inventories jumped by nearly three times expectations, gaining 3.1 mn barrels.

 

 
Intraday RESISTANCE LEVELS
5th December 2019 R1 R2 R3
GOLD-XAU 1,494-1,500 1.509 1,520-1,536
Silver-XAG 17.30-17.60 17.80 18.10-18.50
Crude Oil 58.65-59.00 60.30 60.70-61.25
EURO/USD 1.1110 1.1175 1.1200-1.1230
GBP/USD 1.3150-1.3200 1.3250 1.3300-1.3350
USD/JPY 109.00-109.50 110.00 110.70-111.30

Intraday SUPPORTS LEVELS
5th December 2019 S1 S2 S3
GOLD-XAU 1,474-1,468 1,462 1,452-1,442
Silver-XAG 16.75-16.25 15.90 15.50
Crude Oil 57.80-57.20 56.00 56.50-55.10
EURO/USD 1.1060-1.0980 1.0930 1.0890-1.0850
GBP/USD 1.3100-1.3040 1.2970 1.2900-1.2840
USD/JPY 108.80 108.50 107.80-107.00

Intra-Day Strategy (5th 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 Wednesday made its intraday high of US$1483.97/oz and low of US$1471.41/oz. Gold down 0.188% at US$1474.42/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 1478-1442 with risk below 1442, targeting 1489-1500-1509 and 1520-1536. Sell below 1489-1520 keeping stop loss closing above 1520, targeting 1470-1459-1452 and 1442-1438.

 
Intraday Support Levels
S1     1,474-1,468
S2     1,462
S3     1,452-1,442
Intraday Resistance Levels
R1     1,494-1,500
R2     1.509
R3     1,520-1,536

Technical Indicators

Name   Value Action
14DRSI  

54.882

Buy
20-DMA   1464.66 Sell
50-DMA  

1482.88

Sell
100-DMA   1486.44 Sell
200-DMA   1403.33 Buy
STOCH(5,3)   87.621 Buy
MACD(12,26,9)   -8.241 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$17.28/oz and low of US$16.80/oz settled down by 1.88% at US$16.83/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     16.75-16.25
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   51.313 Buy
20-DMA   16.98 Sell
50-DMA   17.36 Sell
100-DMA   17.38 Sell
200-DMA   16.14 Buy
STOCH(5,3)   63.268 Buy
MACD(12,26,9)   -0.179 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$58.57/bbl, intraday low of US$56.20/bbl and settled up by 3.35% to close at US$58.23/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 57.80-55.10 with risk daily closing below 55.10 and targeting 58.65-59.40 and 60.30-60.70-61.25. Sell below 58.65-61.25 with stop loss at 61.20; targeting 57.80-57.20-56.00 and 55.10-54.50-53.70.

 
Intraday Support Levels
S1     57.80-57.20
S2     56.00
S3     56.50-55.10

Intraday Resistance Levels
R1     58.65-59.00
R2     60.30
R3     60.70-61.25

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 Wednesday an intraday low of US$1.1065/EUR, high of US$1.1115/EUR and settled the day down by 0.324% to close at US$1.1077/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1040), which become immediate resistance level, break above will target 1.1100. 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 right now.

Trading Strategy: Neutral to Buy

Buy above 1.1060-1.0850 with risk below 1.1060, targeting 1.1110-1.1170 and 1.1200-1.1230. Sell below 1.1110-1.1300 targeting 1.1060-1.1030-1.0960 and 1.0860-1.0805 with stop-loss at daily closing above 1.1300.

 
Intraday Support Levels
S1     1.1060-1.0980
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   54.357 Buy
20-DMA   1.1038 Sell
50-DMA   1.1045 Sell
100-DMA   1.1069 Sell
200-DMA   1.1159 Sell
STOCH(5,3)   87.958 Sell
MACD(12,26,9)   -0.005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2981/GBP, high of US$1.3119/GBP and settled the day up by 0.854% to close at US$1.3108/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2769) 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 1.3150-1.3350 with targets at 1.3100-1.3040-1.2900 and 1.2840-1.2790 stop-loss should be below 1.3170. Buy above 1.3100-1.2840 with targets 1.3150-1.3200-1.3250 and 1.3300-1.3350 with stop loss closing below 1.2600.

 
Intraday Support Levels
S1     1.3100-1.3040
S2     1.2970
S3     1.2900-1.2840

Intraday Resistance Levels
R1     1.3150-1.3200
R2     1.3250
R3     1.3300-1.3350

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

72.878

Buy
20-DMA   1.2917 Buy
50-DMA   1.2769 Buy
100-DMA   1.2517 Buy
200-DMA   1.2694 Buy
STOCH(5,3)   93.191 Buy
MACD(12,26,9)   0.0049 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY108.42/USD and made an intraday high of JPY108.42/USD and settled the day up by 0.209% at JPY108.85/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 109.00-111.70 with risk above 111.90 targeting 108.80-108.50-107.80 and 107.00-106.50. Long positions above 108.80-107.00 with targets of 109.00-109.50-110.00 and 110.70-111.30 with stop below 107.00.

 
Intraday Support Levels
S1     108.80
S2     108.50
S3     107.80-107.00

INTRADAY RESISTANCE LEVELS
R1     109.00-109.50
R2     110.00
R3     110.70-111.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.367 Buy
20-DMA   108.90 Buy
50-DMA   108.51 Buy
100-DMA   107.79 Buy
200-DMA   108.86 Sell
STOCH(9,6)   26.253 Buy
MACD(12,26,9)   0.206 Buy

AAFX TRADING
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