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  • The U.S. dollar slipped on Thursday in Asia after the Federal Reserve kept interest rates on hold, suggesting that the current path of monetary policy was "appropriate" to support economic growth and would likely remain in place through next year. Overnight, the Federal Open Market Committee (FOMC) left its benchmark rate unchanged in the range of 1.5% to 1.75%. In July, the Fed cut interest rates for the first time since the Financial Crisis, more than a decade ago. Two further rate cuts followed the July cut. “In order to move rates up, I would want to see inflation that’s persistent and that’s significant,”Fed Jerome Powell at a news conference in Washington. "A significant move up in inflation that's also persistent before raising rates to address inflation concerns: That's my view," he said. Powell cautioned, however, that the Fed’s reluctance to hike rates again isn’t a strict, codified rule. “We haven’t tried to turn it into some sort of official forward guidance,” he said. “It happens to be my view that that’s what it would take to want to move interest rates up in order to deal with inflation.” On the Sino-U.S. trade front, investors remained on edge as Sunday’s deadline for the next round of U.S. tariffs on Chinese goods looms. Reuters cited three people familiar with the matter and reported that U.S. President Donald Trump will meet with top advisers on Thursday about the deadline. The article added that it is expected that the tariffs will be enforced. The dollar nursed its steepest losses in weeks on Thursday, after the U.S. Federal Reserve's benign inflation outlook hosed down expectations for a rate hike any time soon, pushing Treasury yields lower Investors also remained on edge as Sunday's deadline for the next round of U.S. tariffs on Chinese goods looms, and ahead of a European Central Bank (ECB) meeting and the UK election later on Thursday. The biggest winners were the Australian and New Zealand dollars, which soared as shorts scrambled to exit their positions. Traders said some had bet on a more hawkish Fed outlook. Fed Chairman Jerome Powell said the economic outlook for the U.S. was favorable as the central bank announced its decision to hold rates steady, as expected, though forecast only moderate and slowing growth through 2020 and 2021. New economic projections showed 13 of 17 Fed policymakers foresee no change in interest rates until at least 2021. Investor focus now shifts to the looming trade deadline, Christine Lagarde's first meeting at the helm of the ECB, and voting in the British election. U.S. President Donald Trump is expected to meet with top advisers on Thursday about the tariff deadline, three people familiar with his plans told Reuters. A fourth person familiar with the administration's thinking said they expected the tariffs to be enforced. Lagarde is all but certain to keep money taps wide open, but investors will be curious to tune in to her first post-meeting press conference to seek clues about a broader policy revamp that could become the cornerstone of her tenure. The pound is priced for a Conservative majority that could control parliament and lead Britain out of the European Union at the end of January, and anything short of that could prompt a slide. The dollar's weakness helped Sterling drift higher to $1.3210 on Thursday. Voting ends at 2200 GMT, with exit polls and early results likely to flow after that and traders expecting an outcome as early as 0300 GMT on Friday. The Labor Department said on Wednesday its consumer price index rose 0.3%, above economists' forecasts for a 0.2% rise. That took the annual pace of inflation for the month to 2.1%, above estimates of 2%. Analysts, however, are not convinced inflation is set to gather steam and remain adamant that the Fed will remain on the sidelines.
  • Oil prices edged higher on Thursday with the market mood switching to relief as OPEC forecast a supply deficit next year, from doom and gloom over data showing a surprise increase in U.S. crude inventories. The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday said it now expected a small deficit in the oil market in the next year, suggesting the market is tighter than previously thought - even before the latest pact with other producers to curb supply takes effect The revised forecast by OPEC marks a further retreat from a prediction of a glut in 2020 as U.S. production growth begins to slow. Still, U.S. inventories are on the rise. Crude stockpiles last week rose unexpectedly, gaining more than 800,000 barrels, compared with a Reuters poll that forecast a 2.8 million barrel decline. Inventories of petroleum products also increased with gasoline stocks surging by more than 5 million barrels and distillates gaining a bit over 4 million barrels - with both more than double expectations. Beyond the balance between inventories and supply, investors are also awaiting news on negotiations between Washington and Beijing to end a long-running trade war and get an agreement before another round of U.S. sanctions kicks in. The lingering battle between the world's two biggest economies has hit global growth, in the process denting demand for crude and oil products. U.S. President Donald Trump is expected to discuss tariffs on Chinese goods set to be imposed on Dec. 15 with top trade advisers as markets brace for fallout in China's reaction. Oil prices traded higher on Thursday in Asia as the Organization of the Petroleum Exporting Countries (OPEC) revised its deficit forecast for next year. In a report released overnight, OPEC said it now expected a small deficit in the oil market in the next year, suggesting the market is tighter than previously thought. The revised forecast by OPEC marks a further retreat from a prediction of a glut in 2020 as U.S. production growth begins to slow. Oil prices were trading lower earlier in the day after the U.S. Energy Information Administration reported that crude inventories rose by 822,000 for the week ended Dec. 6, comparing with a drawdown of 2.76 million barrels, according to analysts’ forecasts compiled by Investing.com. Gasoline inventories soared by 5.4 million barrels, compared with expectations for a rise of about 2.5 million barrels. That was the largest weekly build in gasoline since January, according to EIA records. Distillate inventories, meanwhile, climbed by 4.1 million barrels, versus forecasts for a build of about 1.6 mn barrels.

 

 
Intraday RESISTANCE LEVELS
12th December 2019 R1 R2 R3
GOLD-XAU 1,478 1,494 1,500-1.509
Silver-XAG 17.00-17.30 17.60 17.80-18.10
Crude Oil 59.00-59.70 60.30 60.70-61.25
EURO/USD 1.1150 1.1200-1.1230 1.1280
GBP/USD 1.3170-1.3200 1.3250 1.3300-1.3350
USD/JPY 109.00 109.50 110.00-110.70

Intraday SUPPORTS LEVELS
12th December 2019 S1 S2 S3
GOLD-XAU 1,468-1,458 1,452 1,442-1,436
Silver-XAG 16.75-16.50 15.90 15.50-14.90
Crude Oil 58.65-57.80 57.20 56.00-56.50
EURO/USD 1.1110-1.1060 1.0980 1.0930-1.0890
GBP/USD 1.3100-1.3040 1.2970 1.2900-1.2840
USD/JPY 108.50 107.80-107.00 106.40

Intra-Day Strategy (12th 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$1478.85/oz and low of US$1462.66/oz. Gold up 0.732% at US$1474.69/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 1470-1442 with risk below 1442, targeting 1478-1489 and 1500-1509. Sell below 1478-1509 keeping stop loss closing above 1510, targeting 1468-1458 and 1452-1442-1438.

 
Intraday Support Levels
S1     1,468-1,458
S2     1,452
S3     1,442-1,436
Intraday Resistance Levels
R1     1,478
R2     1,494
R3     1,500-1.509

Technical Indicators

Name   Value Action
14DRSI  

52.882

Buy
20-DMA   1466.44 Sell
50-DMA  

1480.19

Sell
100-DMA   1488.23 Sell
200-DMA   1407.42 Buy
STOCH(5,3)   33.621 Buy
MACD(12,26,9)   -4.241 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$16.95/oz and low of US$16.58/oz settled up by 0.440% at US$16.84/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 16.75-14.90 targeting 17.00-17.30-17.60 and 17.80-18.50; stop breakage below 14.90. Sell below 16.75-19.30 with stop loss above 19.00; targeting 16.25-16.00 and 15.70-14.90.

 
Intraday  Support Levels
S1     16.75-16.50
S2     15.90
S3     15.50-14.90

Intraday  Resistance Levels
R1     17.00-17.30
R2     17.60
R3     17.80-18.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.313 Buy
20-DMA   16.92 Sell
50-DMA   17.27 Sell
100-DMA   17.40 Sell
200-DMA   16.24 Buy
STOCH(5,3)   46.268 Buy
MACD(12,26,9)   -0.170 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$59.08/bbl, intraday low of US$57.99/bbl and settled down by 0.439% to close at US$58.68/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 58.65-56.10 with risk daily closing below 56.10 and targeting 59.00-59.70 and 60.30-60.70-61.25. Sell below 59.00-61.25 with stop loss at 61.20; targeting 58.50-57.80-57.20 and 56.00-55.10-54.50.

 
Intraday Support Levels
S1     58.65-57.80
S2     57.20
S3     56.00-56.50

Intraday Resistance Levels
R1     59.00-59.70
R2     60.30
R3     60.70-61.25

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.638 Sell
20-DMA   57.64 Sell
50-DMA   56.09 Buy
100-DMA   55.89 Buy
200-DMA   57.59 Sell
STOCH(5,3)   63.130 Sell
MACD(12,26,9)   0.307 Sell

EUR/USD

AAFX TRADING

EUR/USD of Wednesday an intraday low of US$1.1069/EUR, high of US$1.1144/EUR and settled the day up by 0.337% to close at US$1.1128/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 1.1110-1.0850 with risk below 1.1060, targeting 1.1150-1.1200 and 1.1230-1.1280. Sell below 1.1150-1.1300 targeting 1.1110-1.1060-1.1030 and 1.0960-1.0860 with stop-loss at daily closing above 1.1300.

 
Intraday Support Levels
S1     1.1110-1.1060
S2     1.0980
S3     1.0930-1.0890

Intraday  Resistance Levels
R1     1.1150
R2     1.1200-1.1230
R3     1.1280

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.357 Buy
20-DMA   1.1061 Sell
50-DMA   1.1063 Sell
100-DMA   1.1064 Sell
200-DMA   1.1155 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$1.3105/GBP, high of US$1.3212/GBP and settled the day up by 0.3078% to close at US$1.3194/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 1.3170-1.3350 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 1.3200-1.3250 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     1.3170-1.3200
R2     1.3250
R3     1.3300-1.3350

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

72.940

Buy
20-DMA   1.2952 Buy
50-DMA   1.2803 Buy
100-DMA   1.2530 Buy
200-DMA   1.2694 Buy
STOCH(5,3)   94.191 Buy
MACD(12,26,9)   0.0049 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY108.45/USD and made an intraday high of JPY108.85/USD and settled the day up by 0.137% at JPY108.55/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     108.50
S2     107.80-107.00
S3     106.40

INTRADAY RESISTANCE LEVELS
R1     109.00
R2     109.50
R3     110.00-110.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.367 Buy
20-DMA   108.82 Sell
50-DMA   108.58 Buy
100-DMA   107.81 Buy
200-DMA   108.85 Sell
STOCH(9,6)   27.253 Buy
MACD(12,26,9)   0.206 Buy

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