AAFX TRADING

Daily Market Lookup

  • Asian stocks camped out at 18-month peaks on Wednesday having climbed for five straight sessions, while the British pound was licking fresh wounds as revived Brexit fears came back to haunt it. Upbeat economic news had helped the S&P 500 reach a record for the fourth straight session, building on its 27% gain this year. U.S. housing starts were surprisingly strong in November, and building permits rose to the highest level since May 2007. Manufacturing output picked up more than expected as a strike at General Motors Co (GM.N) ended. A run of better data recently has helped calm fears of recession while the “phase one” Sino-U.S. deal on trade seems to have lifted some of the uncertainty on the global outlook. The sea change was clear in BofA Global Research’s latest survey of fund managers with recession concerns diving 33 percentage points to a net 68% of investors saying a recession is now unlikely in 2020. Global growth expectations jumped 22 percentage points, marking the biggest 2-month rise on record. As a result, funds’ allocation to global equities climbed 10 percentage points to a net 31% overweight, the highest level in a year. The threat of a hard exit sent shivers through sterling, which slid 1.5% in its largest one-day fall this year.
  • The British pound fell on Wednesday in Asia as Brexit risks blew up again. Risks of a no-deal Brexit resurfaced again after reports in the U.K. said Prime Minister Boris Johnson will change the law to ensure that the transitional phase of relations between the U.K. and EU ends as scheduled on Dec. 31. That would leave little time to reach a trade deal with the European Union. The USD/JPY was little changed at 109.43 against the U.S. dollar following the release of data that showed Japan’s export fell 7.9% in November from a year earlier, which is its 12th straight month of decline. Imports also fell 15.7%. The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.1% to 96.873. Overnight, Dallas Fed President Robert Kaplan reiterated that interest rates will be kept on hold unless there is a huge change in the U.S. economic outlook. “I’ve already got baked into my outlook, we’re going to have weak manufacturing next year, sluggish global growth, pretty sluggish business investment, but with a strong consumer,” “I’d been worried that weak business investment and weak manufacturing would seep into other parts of the economy. We haven’t seen that yet,” he said. “We’ve got a very tight jobs market, and there’s no evidence I see that the jobs market is doing anything but getting tighter. That’s a pretty good tailwind for the consumer,” he said. “So, unless something changes, that causes the employment picture to change, the consumer is going to be solid for next year.” The U.S. dollar rose modestly on Tuesday, lifted by a dramatic slide in the pound after British Prime Minister Boris Johnson put a no-deal exit from the European Union back on the table. Britain on Tuesday set a hard deadline of December 2020 to reach a new trade deal with the EU, trying to pressure Brussels to move more quickly to seal an accord. Johnson will use his control of parliament to outlaw any extention of the Brexit transition period beyond 2020. It was his boldest move since winning a large majority in last Thursday's election, and it spooked financial markets. Fitch ratings agency said the deal eased U.S.-China tensions but that renewed escalation remains a significant risk, with the issue of technology posing an obstacle to full resolution.
  • Oil prices traded lower on Wednesday in Asia after the American Petroleum Institute (API) reported a large build of weekly crude inventories. Oil inventories rose by 4.7 million barrels in its snapshot of stockpiles for the week ended Dec. 13, the API said. U.S. government data is forecast to show a drawdown of 1.3 million barrels when the U.S. Energy Information Administration(EIA) reports its weekly numbers tomorrow morning. In the previous week to Dec. 6, the EIA reported a crude inventory rise of 822,000 barrels versus market expectations for a drop of 2.76 million barrels. Oil prices received some support earlier in the day after data showed U.S.’s November manufacturing output and housing figures both outperformed expectations. Sino-U.S. trade optimism were said to be limiting losses of oil prices today. A phase one trade deal was agreed between the U.S. and China last week, easing some concerns over the economic impact of a prolonged dispute between the world’s two biggest oil importers. However, some traders remained cautious amid the lack of enthusiasm from Beijing. Analysts said while China promised to purchase more American agricultural products, it is unclear how much they will actually buy. It is also unclear when the two nations will begin the phase two negotiations. Oil retreated on Wednesday after rising more than 1% in the previous session as U.S. industry data showed a surprise build in crude stocks, but hopes for firmer demand next year checked a deeper fall in prices.A "phase one" U.S.-China trade deal announced last week has helped ward off some pressure from the oil market, dampened by worries over the economic impact of a prolonged dispute between the world's two biggest oil consumers. The OPEC+, which has cut production by 1.2 million barrels per day (bpd) since Jan. 1 this year, will make a further oil supply cut of 500,000 bpd from Jan. 1, 2020 to support the market.

 

 
Intraday RESISTANCE LEVELS
18th December 2019 R1 R2 R3
GOLD-XAU 1,478-1,486 1,494 1,500-1,509
Silver-XAG 17.30 17.60 17.80-18.10
Crude Oil 60.90-61.40 62.00 62.60-63.10
EURO/USD 1.1150-1.1200 1.1230 1.1280-1.1350
GBP/USD 1.3100-1.3200 1.3250 1.3300-1.3350
USD/JPY 109.50-110.00 110.70 111.50-111.90

Intraday SUPPORTS LEVELS
18th December 2019 S1 S2 S3
GOLD-XAU 1,468-1,458 1,452 1,442-1,436
Silver-XAG 16.90-16.50 15.90 15.50-14.90
Crude Oil 60.30-59.70 59.00 58.65-57.80
EURO/USD 1.1110 1.1060 1.0980-1.0930
GBP/USD 1.3060-1.3010 1.2930 1.2850-1.2770
USD/JPY 109.00 108.50 107.80-107.00

Intra-Day Strategy (18th 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 Tuesday made its intraday high of US$1480.43/oz and low of US$1474.15/oz. Gold up 0.0027% at US$1476.05/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 1468-1442 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     1,478-1,486
R2     1,494
R3     1,500-1,509

Technical Indicators

Name   Value Action
14DRSI  

53.882

Buy
20-DMA   1467.00 Sell
50-DMA  

1477.63

Sell
100-DMA   1491.07 Sell
200-DMA   1412.03 Buy
STOCH(5,3)   58.621 Buy
MACD(12,26,9)   -0.073 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$17.09/oz and low of US$16.94/oz settled down by 0.0705% at US$16.99/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 16.90-14.90 targeting 17.30-17.60 and 17.80-18.50; stop breakage below 14.90. Sell below 17.30-19.30 with stop loss above 19.00; targeting 16.90-16.25-16.00 and 15.70-14.90.

 
Intraday  Support Levels
S1     16.90-16.50
S2     15.90
S3     15.50-14.90

Intraday  Resistance Levels
R1     17.30
R2     17.60
R3     17.80-18.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.313 Buy
20-DMA   16.90 Sell
50-DMA   17.22 Sell
100-DMA   17.42 Sell
200-DMA   16.28 Buy
STOCH(5,3)   78.268 Buy
MACD(12,26,9)   -0.113 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$60.92/bbl, intraday low of US$59.93/bbl and settled up by 0.549% to close at US$60.43/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 60.30-56.10 with risk daily closing below 56.10 and targeting 60.90-61.45 and 61.90-62.50-63.10. Sell below 60.90-63.10 with stop loss at 63.20; targeting 60.30-59.70-59.00 and 58.50-57.80-57.20.

 
Intraday Support Levels
S1     60.30-59.70
S2     59.00
S3     58.65-57.80

Intraday Resistance Levels
R1     60.90-61.40
R2     62.00
R3     62.60-63.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.638 Sell
20-DMA   58.34 Buy
50-DMA   56.69 Buy
100-DMA   56.09 Buy
200-DMA   57.66 Sell
STOCH(5,3)   83.130 Buy
MACD(12,26,9)   0.791 Sell

EUR/USD

AAFX TRADING

EUR/USD of Tuesday an intraday low of US$1.1128/EUR, high of US$1.1173/EUR and settled the day up by 0.0565% to close at US$1.1149/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 neutral 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 1.1110-1.0900 with risk below 1.0900, targeting 1.1150-1.1200-1.1230 and 1.1230-1.1280. Sell below 1.1200-1.1420 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
S2     1.1060
S3     1.0980-1.0930

Intraday  Resistance Levels
R1     1.1150-1.1200
R2     1.1230
R3     1.1280-1.1350

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.357 Buy
20-DMA   1.1074 Sell
50-DMA   1.1077 Sell
100-DMA   1.1064 Sell
200-DMA   1.1150 Sell
STOCH(5,3)   53.958 Sell
MACD(12,26,9)   -0.005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3098/GBP, high of US$1.3335/GBP and settled the day down by 1.528% to close at US$1.3128/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 1.3100-1.3350 with targets at 1.3060-1.3010-1.2930 and 1.2850-1.2770 stop-loss should be below 1.3705. Buy above 1.3060-1.3200 with targets 1.3400-1.3510-1.3590 and 1.3630-1.3705 with stop loss closing below 1.3100.

 
Intraday Support Levels
S1     1.3060-1.3010
S2     1.2930
S3     1.2850-1.2770

Intraday Resistance Levels
R1     1.3100-1.3200
R2     1.3250
R3     1.3300-1.3350

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

54.940

Buy
20-DMA   1.3056 Buy
50-DMA   1.2931 Buy
100-DMA   1.2591 Buy
200-DMA   1.2696 Buy
STOCH(5,3)   29.191 Sell
MACD(12,26,9)   0.0012 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY109.43/USD and made an intraday high of JPY109.62/USD and settled the day down by 0.052% at JPY109.47/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 109.00-108.50-107.80 and 107.00-106.50. Long positions above 109.10-107.00 with targets of 109.50-110.00 and 110.70-111.30 with stop below 107.00.

 
Intraday Support Levels
S1     109.00
S2     108.50
S3     107.80-107.00

INTRADAY RESISTANCE LEVELS
R1     109.50-110.00
R2     110.70
R3     111.50-111.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.367 Buy
20-DMA   108.90 Sell
50-DMA   108.68 Buy
100-DMA   107.83 Buy
200-DMA   108.42 Sell
STOCH(9,6)   78.253 Buy
MACD(12,26,9)   0.206 Buy

AAFX TRADING
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