AAFX TRADING

Daily Market Lookup

  • Asian shares kicked off the new decade higher on Thursday, after global stocks ended the previous one at record highs, and buoyed by Chinese markets after Beijing eased monetary policy to support slowing growth. Investors also cheered news that the United States and China will sign a trade pact soon after a year of volatile negotiations between the world’s two largest economies. U.S. President Donald Trump said on Tuesday that Phase 1 of trade deal with China would be signed on Jan. 15 at the White House, though uncertainty surrounds details about the agreement. Rising hopes for a resolution to the U.S.-China trade war helped propel global equities to record highs late last year and depress the value of the U.S. dollar. China’s central bank on Wednesday that it would cut the amount of cash that banks must hold as reserves, releasing around 800 billion yuan in funds effective Jan. 6 McCafferty said he expects a memory up-cycle and new handset development prompted by the rollout of 5G mobile technology could help to lift tech-heavy markets like Korea and Taiwan this year. In currency markets on Thursday, the dollar continued to weaken slightly against major peers as investors bet on a better outlook for global growth and trade.
  • The dollar started the new year where it left the old one, on the back foot as investors wagered U.S. economic outperformance might be drawing to a close as optimism on trade brightens the outlook for growth globally. Signs of progress in the Sino-U.S. trade dispute undermined the dollar for much of December, leaving its index (DXY) down 1.9% on the month. It was up just a fraction on Thursday at 96.546 having touched a six-month trough ahead of the holidays. The dollar eased further on the Chinese yuan after shedding 1% last month to stand at 6.9630 . It was also finely poised on the yen at 108.68 , just a whisker from the December lows and major support around 108.40. A survey of Chinese manufacturing out on Thursday showed activity was still expanding in December while confidence shot higher as trade tensions eased. The dollar had benefited from U.S. economic outperformance for much of 2019, but an easing in Sino-U.S. trade concerns has boosted optimism that this year could favor other major nations. While activity was light on Thursday, traders were on watch for any repeat of last January's "flash crash" when massive stop-loss selling swept through an illiquid holiday-hit market. There are fears the same could happen this week with Tokyo off and Japanese retail investors again heavily short of yen and long of risky high-yielding currencies, including the Turkish lira and the South African rand. For liquidity reasons, these positions are usually "legged" through the U.S. dollar - selling yen for dollars and dollars for lira - so any mass unwinding roils more than just the yen crosses. Yet, unlike last year, the authorities are on alert with the Financial Futures Association of Japan warning against wild moves. The Federal Reserve has already averted a squeeze in lending markets as banks took only a small portion of its d $150 billion in year-end funding, leaving repo rates at the lowest since March 2018. The euro, the pound and a clutch of trade-sensitive currencies rallied as the dollar slid to a six-month low on Tuesday, as investor confidence in global growth prospects and the Phase 1 U.S.-China trade deal spurred a risk-on move. U.S. President Donald Trump said on Tuesday that the first phase of an American trade deal with China would be signed on Jan. 15 at the White House. The dollar index (DXY) was down 0.36% to 96.388, its fourth consecutive session in the red and its weakest level since July 1. The Phase 1 trade agreement, which was reached earlier in December, has reduced demand for the safe-haven currency, pulling the dollar down 1.92% in the last month. December's move has undone much of the dollar's strong 2019 thanks to the relative outperformance of the U.S. economy and a long period of uncertainty in the negotiations between Washington and Beijing. On the last trading day of the year, the dollar was up just 0.25% for 2019 compared to 4.4% in 2018. At the end of November, it was up 2.18% for the year. The shift also reflects investor bets that the dollar will weaken further in 2020. Buoyant end-of-year sentiment encouraged investors to buy up currencies linked to trade and global growth, sending the Australian dollar , Chinese yuan and Scandinavian crowns to multi-month or multi-week highs against the greenback. Signs that the euro zone economy may be stabilizing have lifted the common currency in recent weeks as investors unwound short positions. Sterling hit two-week highs against the dollar, although the possibility of a 'no-deal' Brexit at the end of 2020 means the currency is still not close to where it was on Dec. 12, the day Prime Minister Boris Johnson won the British election.
  • Oil prices kicked off the new year higher on Thursday as warming trade relations between the United States and China eased demand concerns, while rising tensions in the Middle East fueled worries about supply. Oil markets were closed on Wednesday for New Year's Day. Both benchmarks ended higher in 2019, posting their biggest annual gains since 2016, buoyed at the end of the year by a thaw in the prolonged trade dispute between the United States and China - the world's two largest economies - and a deeper output cut pledged by the OPEC and its allies. The U.S. military carried out air strikes against Iran-backed Katib Hezbollah militia group over the weekend. Angry at the air strikes, protesters stormed the U.S. Embassy in Baghdad on Wednesday, although they withdrew after the United States deployed extra troops. In 2020, Brent is forecast to average $63.07 a barrel, up from December's estimate of $62.50, while WTI is forecast to average $57.70 a barrel, up from December's estimate of $57.30, as the OPEC-led supply cuts and the expectations of a U.S.-China trade deal boosted analysts' views on the prospects for the year, a Reuters poll showed. U.S. President Donald Trump said on Tuesday the U.S.-China Phase 1 trade deal would be signed on Jan. 15 at the White House. A fall in U.S. crude inventories last week also supported prices. U.S. crude stocks fell 7.8 million barrels in the week ended Dec. 27, compared with analysts' expectations for a decrease of 3.2 million barrels, according to data from the API released on Tuesday.

 

 
Intraday RESISTANCE LEVELS
2nd January 2020 R1 R2 R3
GOLD-XAU 1,530-1,536 1,546 1,557
Silver-XAG 18.00-18.25 18.50 18.70-19.00
Crude Oil 61.40-62.00 62.60 63.00-63.65
EURO/USD 1.1230 1.1280-1.1350 1.1400
GBP/USD 1.3200 1.3250 1.3320-1.3420
USD/JPY 109.00-109.50 110.00 110.70-111.50

Intraday SUPPORTS LEVELS
2nd January 2020 S1 S2 S3
GOLD-XAU 1,519-1,508 1,500 1,494-1,486
Silver-XAG 17.60 17.00 16.50-16.00
Crude Oil 60.90 60.50 59.70-59.00
EURO/USD 1.1180-1.1110 1.1060 1.0980-1.0930
GBP/USD 1.3150-1.3100 1.3060 1.3010-1.2930
USD/JPY 108.50 107.80-107.00 106.50

Intra-Day Strategy (2nd January 2020)
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$1525.23/oz and low of US$1514.55/oz. Gold up 0.361% at US$1520.21/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 1519-1486 with risk below 1478, targeting 1530-1538 and 1546-1557. Sell below 1530-1557 keeping stop loss closing above 1557, targeting 1519-1508-1500 and 1494-1486-1478.

 
Intraday Support Levels
S1     1,519-1,508
S2     1,500
S3     1,494-1,486
Intraday Resistance Levels
R1     1,530-1,536
R2     1,546
R3     1,557

Technical Indicators

Name   Value Action
14DRSI  

72.882

Buy
20-DMA   1475.00 Buy
50-DMA  

1478.59

Buy
100-DMA   1492.62 Buy
200-DMA   1418.72 Buy
STOCH(5,3)   93.621 Buy
MACD(12,26,9)   9.185 Sell1,557

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$18.13/oz and low of US$17.80/oz settled down by 0.100% at US$17.86/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 18.00-14.90 targeting 18.25-18.50 and 18.70-19.10; stop breakage below 14.90. Sell below 18.25-19.60 with stop loss above 19.30; targeting 18.00-17.60-17.00 and 16.25-16.00-15.70.

 
Intraday  Support Levels
S1     17.60
S2     17.00
S3     16.50-16.00

Intraday  Resistance Levels
R1     18.00-18.25
R2     18.50
R3     18.70-19.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.175 Buy
20-DMA   17.19 Buy
50-DMA   17.25 Buy
100-DMA   17.50 Buy
200-DMA   16.36 Buy
STOCH(5,3)   61.268 Buy
MACD(12,26,9)   -0.113 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US61.71/bbl, intraday low of US$60.49/bbl and settled down by 0.456% to close at US$61.21/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 61.40-58.60 with risk daily closing below 58.60 and targeting 61.90-62.50 and 63.00-63.65-63.90. Sell below 61.90-63.90 with stop loss at 64.00; targeting 61.40-60.90-59.70 and 59.00-58.50.

 
Intraday Support Levels
S1     60.90
S2     60.50
S3     59.70-59.00

Intraday Resistance Levels
R1     61.40-62.00
R2     62.60
R3     63.00-63.65

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.369 Sell
20-DMA   60.07 Buy
50-DMA   58.01 Buy
100-DMA   56.62 Buy
200-DMA   57.75 Buy
STOCH(5,3)   48.130 Sell
MACD(12,26,9)   1.147 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.1196/EUR, high of US$1.1238/EUR and settled the day up by 0.216% to close at US$1.1222/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 1.1180-1.0890 with risk below 1.0890, targeting 1.1230-1.1280 and 1.1350-1.1400. 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     1.1180-1.1110
S2     1.1060
S3     1.0980-1.0930

Intraday  Resistance Levels
R1     1.1230
R2     1.1280-1.1350
R3     1.1400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.508 Buy
20-DMA   1.1115 Buy
50-DMA   1.1086 Buy
100-DMA   1.1060 Buy
200-DMA   1.1142 Buy
STOCH(5,3)   87.958 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3104/GBP, high of US$1.3283/GBP and settled the day up by 1.073% to close at US$1.3251/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 1.3200-1.3420 with targets at 1.3150-1.3060-1.3020 and 1.2930-1.2850-1.2770 stop-loss should be below 1.3350. Buy above 1.3150-1.2900 with targets 1.3200-1.3250 and 1.3320-1.3400 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.3150-1.3100
S2     1.3060
S3     1.3010-1.2930

Intraday Resistance Levels
R1     1.3200
R2     1.3250
R3     1.3320-1.3420

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

60.154

Buy
20-DMA   1.3122 Sell
50-DMA   1.2981 Buy
100-DMA   1.2676 Buy
200-DMA   1.2689 Buy
STOCH(5,3)   84.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY108.46/USD and made an intraday high of JPY108.46/USD and settled the day down by 0.125% at JPY108.61/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     108.50
S2     107.80-107.00
S3     106.50

INTRADAY RESISTANCE LEVELS
R1     109.00-109.50
R2     110.00
R3     110.70-111.50

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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