AAFX TRADING

Daily Market Lookup

  • The dollar edged up slightly against the yen on Thursday while risk-sensitive currencies held firm on hopes of easing trade tensions between the United States and China and a pick up in the global growth. Global currency markets remained in holiday mood following Christmas Day on Wednesday and with several centers still closed for Boxing Day on Thursday. However, traders have taken a positive lead after Washington and Beijing struck to an interim agreement on trade earlier this month, which is expected to continue to underpin risk assets. In currency markets, stronger risk appetite usually translates to more selling in safe-haven currencies, such as the yen, against currencies leveraged more to growth, particularly that in China, such as the Australian dollar. China says it is in close touch with the United States on a trade deal signing ceremony, after U.S. President Donald Trump said on Tuesday that he and Chinese President Xi Jinping will have a ceremony to sign the recently struck trade deal.
  • The dollar edged up slightly against the yen on Thursday while risk-sensitive currencies held firm on hopes of easing trade tensions between the United States and China and a pick up in the global growth. Global currency markets remained in holiday mood following Christmas Day on Wednesday and with several centers still closed for Boxing Day on Thursday. However, traders have taken a positive lead after Washington and Beijing struck to an interim agreement on trade earlier this month, which is expected to continue to underpin risk assets. In currency markets, stronger risk appetite usually translates to more selling in safe-haven currencies, such as the yen, against currencies leveraged more to growth, particularly that in China, such as the Australian dollar. China says it is in close touch with the United States on a trade deal signing ceremony, after U.S. President Donald Trump said on Tuesday that he and Chinese President Xi Jinping will have a ceremony to sign the recently struck trade deal. The pound fell for a fifth day against the dollar, set for its longest losing run since May, as resurgent anxiety about a no-deal Brexit weighed in thin trading ahead of year-end holidays. Sterling led declines among major currencies, slipping below its 50-day moving average for the first time in more than two months. While the pound surged after Boris Johnson’s party won a landslide victory in the Dec. 12 election, investor sentiment soon soured as the prime minister was set to use his majority to take a hardline stance in talks with the European Union. The pound fell as much as 0.7% to $1.2905, the lowest since Dec. 2. Its five-day losing streak is the longest since May 17. The currency also weakened by as much as 0.7% to 85.80 pence per euro. U.K. government bonds gained, outperforming German bunds and U.S. Treasuries, with 10-year gilt yields dropping by four basis points to 0.74%.
  • Oil prices rose on Thursday, buoyed by a potential breakthrough in the Sino-U.S. trade war and OPEC-led efforts to constrain supply, although trading was quiet as many markets were in holiday mode. U.S. President Donald Trump said on Tuesday he and Chinese President Xi Jinping will have a signing ceremony for the so-called Phase 1 agreement to end their trade dispute that was put together earlier this month. The roughly 17-month trade war hit global economic growth and demand for oil, leaving prices range-bound for the most of the year. Lower demand also rendered supply cuts by the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia less effective in supporting the market. The so-called OPEC+ grouping agreed earlier in December to extend and deepen production cuts that would take as much as 2.1 million barrels per day (bpd) of supply off the market, or roughly 2% of global demand. U.S. producers, not party to the OPEC+ agreement, have been pumping record amounts of oil, especially shale crude, to fill any supply gaps. Growth in production in the U.S. is forecast by many to slow, however. Still, more supply is coming in the new year with Saudi Arabia and Kuwait earlier this week agreeing to end a dispute over their Neutral Zone, which can supply as much as 500,000 barrels per day of oil, or about 0.5% of global demand.. he year that is drawing to a close has not been good for oil. Despite production caps across OPEC and beyond, and despite the extra-large number and size of production outages, benchmark prices have stubbornly stayed range-bound below what oil-reliant OPEC economies consider a good price for their product. How did this happen? First and foremost, it happened because of the U.S. shale boom, as Bloomberg’s Grant Smith wrote in a recent overview of oil in 2019. The consensus on the role of U.S. shale oil production growth seems to be unchallengeable. All oil price forecasts, including OPEC’s own, now regularly include U.S. oil production growth as the main reason for growth in non-OPEC supply that acts as counterweight to OPEC’s production curb efforts. It was U.S. shale oil production—which hit a record-high this year turning the country into the world’s top oil producer—that caused what can only be called a growing apathy among traders. When OPEC is not the single large source of oil for energy-hungry nations, when there is another country pumping more than 11 million bpd with no risk of disruptions, the mood on the market is very different, and we saw this in 2019 more clearly than ever before. The production outages at Libyan fields moved prices, but only for a few days. Even the biggest production outage in recent history, the drone and missile attacks on Saudi oil infrastructure, could not keep Brent at $70 for more than a few days. Of course, as usual, there was the hypothesizing that it could have spiked to $300 a barrel had the attacks led to an open war in the Middle East, but hypothesizing is part of the oil price game that has little bearing on actual prices. The International Energy Agency said in its latest Oil Market Report that the global oil market will likely be 700,000 bpd in excess of demand in early 2020. That’s despite the efforts of OPEC+ and, yes, thanks to growth in U.S. production. That production, the IEA said, would drive a 2.3-million-bpd growth in non-OPEC supply while growth in the demand for oil will continue to slow. Yet there is still hope for oil bulls. Goldman Sachs and JP Morgan recently revised their oil price forecasts for 2020 and they revised them upward. Goldman upped its outlook for both Brent and WTI, citing its expectations that OPEC+ will successfully cut more barrels from their daily production, shrinking any oversupply. JP Morgan seems to share the sentiment. It also cited OPEC+’s deeper cuts as reason for its price-forecast revision.

 

 
Intraday RESISTANCE LEVELS
26th December 2019 R1 R2 R3
GOLD-XAU 1.508-1519 1,530 1,546-1557
Silver-XAG 18.00 18.40 18.70-19.00
Crude Oil 61.40 62.00-62.60 63.00
EURO/USD 1.1150-1.1200 1.1230 1.1280-1.1350
GBP/USD 1.3010-1.3060 1.3100 1.3200-1.3250
USD/JPY 110.00 110.70 111.50-111.90

Intraday SUPPORTS LEVELS
26th December 2019 S1 S2 S3
GOLD-XAU 1,500-1,494 1,486 1,478-1,468
Silver-XAG 17.60 17.00 16.50-16.00
Crude Oil 60.90-60.50 59.70 59.00-58.65
EURO/USD 1.1080-1.1060 1.0980 1.0930-1.0890
GBP/USD 1.2930-1.2850 1.2770 1.2690-1.2610
USD/JPY 109.50-109.00 108.50 107.80-107.00

Intra-Day Strategy (26th 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$1500.43/oz and low of US$1484.33/oz. Gold up 0.923% at US$1499.04/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 overbought territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1500-1468 with risk below 1468, targeting 1508-1519-1530 and 1546-1557. Sell below 1508-1557 keeping stop loss closing above 1557, targeting 1500-1494-1486 and 1478-1468.

 
Intraday Support Levels
S1     1,500-1,494
S2     1,486
S3     1,478-1,468
Intraday Resistance Levels
R1     1.508-1519
R2     1,530
R3     1,546-1557

Technical Indicators

Name   Value Action
14DRSI  

68.882

Buy
20-DMA   1474.35 Buy
50-DMA  

1477.10

Buy
100-DMA   1492.14 Buy
200-DMA   1416.66 Buy
STOCH(5,3)   95.621 Buy
MACD(12,26,9)   5.185 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$17.77/oz and low of US$17.35/oz settled up by 1.795% at US$17.74/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 17.60-14.90 targeting 18.10-18.50 and 18.70-19.10; stop breakage below 14.90. Sell below 18.00-19.30 with stop loss above 19.30; targeting 17.60-17.00-16.25 and 16.00-15.70.

 
Intraday  Support Levels
S1     17.60
S2     17.00
S3     16.50-16.00

Intraday  Resistance Levels
R1     18.00
R2     18.40
R3     18.70-19.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   94.313 Buy
20-DMA   16.97 Buy
50-DMA   17.21 Sell
100-DMA   17.46 Sell
200-DMA   16.60 Buy
STOCH(5,3)   94.268 Buy
MACD(12,26,9)   -0.113 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$61.03/bbl, intraday low of US$60.38/bbl and settled up by 0.814% to close at US$61.01/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 60.90-58.60 with risk daily closing below 58.60 and targeting 61.45-61.90 and 62.50-63.00. Sell below 61.50-63.10 with stop loss at 63.20; targeting 60.90-59.70-59.00 and 58.50-58.00.

 
Intraday Support Levels
S1     60.90-60.50
S2     59.70
S3     59.00-58.65

Intraday Resistance Levels
R1     61.40
R2     62.00-62.60
R3     63.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.538 Sell
20-DMA   59.05 Buy
50-DMA   57.42 Buy
100-DMA   56.35 Buy
200-DMA   57.71 Buy
STOCH(5,3)   71.130 Buy
MACD(12,26,9)   1.0819 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday an intraday low of US$1.1068/EUR, high of US$1.1093/EUR and settled the day down by 0.0261% to close at US$1.1085/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 1.1080-1.0890 with risk below 1.0890, targeting 1.1150-1.1200-1.1230 and 1.1230-1.1280-1.1350. Sell below 1.1150-1.1350 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     1.1080-1.1060
S2     1.0980
S3     1.0930-1.0890

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.357 Buy
20-DMA   1.1083 Buy
50-DMA   1.1081 Buy
100-DMA   1.1062 Buy
200-DMA   1.1145 Sell
STOCH(5,3)   19.958 Sell
MACD(12,26,9)   -0.005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2921/GBP, high of US$1.2970/GBP and settled the day up by 0.187% to close at US$1.2958/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 1.3010-1.3350 with targets at 1.2930-1.2850-1.2770 and 1.2690-1.2610 stop-loss should be below 1.3350. Buy above 1.2930-1.2610 with targets 1.3010-1.3060-1.3100 and 1.3200-1.3250 with stop loss closing below 1.2610.

 
Intraday Support Levels
S1     1.2930-1.2850
S2     1.2770
S3     1.2690-1.2610

Intraday Resistance Levels
R1     1.3010-1.3060
R2     1.3100
R3     1.3200-1.3250

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

48.018

Buy
20-DMA   1.3079 Sell
50-DMA   1.2962 Buy
100-DMA   1.2689 Buy
200-DMA   1.2689 Buy
STOCH(5,3)   19.191 Buy
MACD(12,26,9)   0.0012 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY109.31/USD and made an intraday high of JPY109.42/USD and settled the day down by 0.0164% at JPY109.37/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     109.50-109.00
S2     108.50
S3     107.80-107.00

INTRADAY RESISTANCE LEVELS
R1     110.00
R2     110.70
R3     111.50-111.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.367 Buy
20-DMA   109.14 Sell
50-DMA   108.89 Buy
100-DMA   107.96 Buy
200-DMA   108.71 Sell
STOCH(9,6)   45.253 Buy
MACD(12,26,9)   0.184 Buy

AAFX TRADING
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