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Daily Market Lookup

  • Asian shares fell on Friday, erasing early gains, while oil prices spiked after U.S. air strikes in Iraq killed a top Iranian commander, heightening geopolitical tensions. Iranian Major-General Qassem Soleimani, head of the elite Quds Force and top Iraqi militia commander Abu Mahdi al-Muhandis were killed early on Friday in a U.S. air strike on their convoy at Baghdad airport, the Pentagon said. Middle Eastern tensions upset a rally for the MSCI index, which finished at its highest close in more than 18 months on Thursday. It had been lifted by a New Year’s Day announcement from China’s central bank that it would cut the amount of cash that banks must hold as reserves, releasing around 800 billion yuan ($114.87 billion). Against the backdrop of a thaw in trade relations between the United States and China, global markets had seen renewed appetite for risk assets. Shares had received further support from data on Thursday showing factory activity in China continued to grow at a solid pace in December, and that business confidence improved. South Korean factory activity also improved in December, returning to growth after seven straight months of contraction, which analysts saw as a positive sign for global growth. News of the strikes came after U.S. Defense Secretary Mark Esper said on Thursday there were indications Iran or forces it backs may be planning additional attacks after Iranian-backed demonstrators hurled rocks at the U.S. embassy in Baghdad following American strikes on Sunday against bases of the Tehran-backed Kataib Hezbollah group.
  • The number of Americans filing claims for jobless benefits edged lower last week, a positive signal for the U.S. labor market amid recent signs that new claims may be trending slightly higher. Initial claims for state unemployment benefits decreased 2,000 to a seasonally adjusted 222,000 for the week ended Dec. 28, the Labor Department said on Thursday. Economists polled by Reuters had expected 225,000 new claims last week. While claims have been volatile in recent weeks around the U.S. holiday season and end of the year, longer-term averages suggest the strength in claims data may have ebbed slightly in recent months. In the latest week, the four-week moving average of initial claims rose by 4,750 to 233,250, the highest level since January 2018. Still, the underlying trend in claims remains consistent with a labor market that is resisting signs of weakness in other parts of the economy, such as a slowdown in U.S. manufacturing and lackluster business investment. In November, claims were near a 50-year low. U.S. stock futures were little changed following the release of the jobless claims data, holding onto gains spurred earlier in the day by fresh economic stimulus from Beijing and optimism around easing trade tensions. Economists have attributed the weakness in U.S. manufacturing and investment to uncertainty around a U.S.-China trade war launched under U.S. President Donald Trump. The drop in claims in the latest week unwound a surge in new claims three weeks earlier that appeared to reflect a late Thanksgiving Day this year compared to 2018. By the end of the latest week, the number of new claims was at its lowest since the Nov. 30 week. Labor market strength is underpinning consumer spending, keeping the economy on a moderate growth path despite headwinds from trade tensions and slowing global growth that have weighed on manufacturing. In November, the U.S. unemployment rate fell back to 3.5%, the lowest in nearly half a century. Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid rose 5,000 to 1.73 million for the week ended Dec. 21. The number of Americans filing claims for jobless benefits edged lower last week, a positive signal for the U.S. labor market amid recent signs that new claims may be trending slightly higher. While claims have been volatile in recent weeks around the U.S. holiday season and end of the year, longer-term averages suggest the strength in claims data may have ebbed slightly in recent months. Still, the underlying trend in claims remains consistent with a labor market that is resisting signs of weakness in other parts of the economy, such as a slowdown in U.S. manufacturing and lackluster business investment. U.S. stock futures were little changed following the release of the jobless claims data, holding onto gains spurred earlier in the day by fresh economic stimulus from Beijing and optimism around easing trade tensions. Economists have attributed the weakness in U.S. manufacturing and investment to uncertainty around a U.S.-China trade war launched under U.S. President Donald Trump. The drop in claims in the latest week unwound a surge in new claims three weeks earlier that appeared to reflect a late Thanksgiving Day this year compared to 2018.
  • Brent crude futures jumped nearly $3 on Friday to their highest since September after a U.S. air strike killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies. An air strike at the Baghdad International Airport early on Friday killed Iranian Major-General Qassem Soleimani, head of the elite Quds Force, and Iraqi militia commander Abu Mahdi al-Muhandis, an Iraqi militia spokesman told Reuters. Soleimani's killing marks a dramatic escalation in the regional "shadow war" between Iran and the United States and its allies. Iranian Supreme Leader Ayatollah Ali Khamenei vowed harsh revenge. Iraq, the second largest producer among the Organization of the Petroleum Exporting Countries, exports about 3.4 million barrels per day of crude mostly from southern Basra port. Oil prices were also lifted by China's central bank saying on Wednesday it was cutting the amount of cash that banks must hold in reserve, releasing around 800 billion yuan ($115 billion) in funds to shore up the slowing Chinese economy. This came shortly after data showed China's production continued to grow at a solid pace and business confidence shot up.

 

 
Intraday RESISTANCE LEVELS
3rd January 2020 R1 R2 R3
GOLD-XAU 1,546-1,557 1.564 1,571-1,578
Silver-XAG 18.25 18.50 18.70-19.00
Crude Oil 63.00-63.70 64.20 64.70-65.
EURO/USD 1.1180-1.1230 1.1280 1.1350-1.1400
GBP/USD 1.3150-1.3200 1.3250 1.3320-1.3420
USD/JPY 108.50-109.00 109.50 110.00-110.70

Intraday SUPPORTS LEVELS
3rd January 2020 S1 S2 S3
GOLD-XAU 1,536-1,530 1,519 1,508-1,500
Silver-XAG 18.00-17.60 17.00 16.50-16.00
Crude Oil 62.60-62.00 61.40 60.90-59.
EURO/USD 1.1110 1.1060 1.0980-1.0930
GBP/USD 1.3100 1.3060 1.3010-1.2930
USD/JPY 107.80-107.00 106.50 106.00-105.70

Intra-Day Strategy (3rd 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 Thursday made its intraday high of US$1531.28/oz and low of US$1518.42/oz. Gold up 0.574% at US$1528.95/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 1536-1500 with risk below 1500, targeting 1546-1557-1564 and 1571-1578. Sell below 1546-1578 keeping stop loss closing above 1578, targeting 1536-1528-1519 and 1508-1500.

 
Intraday Support Levels
S1     1,536-1,530
S2     1,519
S3     1,508-1,500
Intraday Resistance Levels
R1     1,546-1,557
R2     1.564
R3     1,571-1,578

Technical Indicators

Name   Value Action
14DRSI  

80.938

Buy
20-DMA   1488.90 Buy
50-DMA  

1481.16

Buy
100-DMA   1493.26 Buy
200-DMA   1421.92 Buy
STOCH(5,3)   91.621 Buy
MACD(12,26,9)   14.185 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$18.08/oz and low of US$17.82/oz settled up by 0.845% at US$18.00/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     18.00-17.60
S2     17.00
S3     16.50-16.00

Intraday  Resistance Levels
R1     18.25
R2     18.50
R3     18.70-19.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   73.117 Buy
20-DMA   17.27 Buy
50-DMA   17.26 Buy
100-DMA   17.52 Buy
200-DMA   16.39 Buy
STOCH(5,3)   73.268 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 62.50-58.60 with risk daily closing below 58.60 and targeting 63.00-63.70-64.20 and 64.70-65.50. Sell below 63.00-65.50 with stop loss at 65.50; targeting 662.60-62.00-61.40 and 60.90-59.70.

 
Intraday Support Levels
S1     62.60-62.00
S2     61.40
S3     60.90-59.

Intraday Resistance Levels
R1     63.00-63.70
R2     64.20
R3     64.70-65.

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.298 Sell
20-DMA   60.29 Buy
50-DMA   58.15 Buy
100-DMA   56.70 Buy
200-DMA   57.76 Buy
STOCH(5,3)   53.130 Sell
MACD(12,26,9)   1.147 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.1162/EUR, high of US$1.1214/EUR and settled the day down by 0.371% to close at US$1.1171/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     1.1110
S2     1.1060
S3     1.0980-1.0930

Intraday  Resistance Levels
R1     1.1180-1.1230
R2     1.1280
R3     1.1350-1.1400

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 Thursday made an intra‐day low of US$1.3114/GBP, high of US$1.3229/GBP and settled the day down by 0.539% to close at US$1.3137/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 1.3150-1.3420 with targets at 1.3100-1.3060-1.3020 and 1.2930-1.2850 stop-loss should be below 1.3420. Buy above 1.3100-1.2900 with targets 1.3200-1.3250 and 1.3320-1.3400 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.3100
S2     1.3060
S3     1.3010-1.2930

Intraday Resistance Levels
R1     1.3150-1.3200
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 Thursday made intra‐day low of JPY108.20/USD and made an intraday high of JPY108.85/USD and settled the day down by 0.167% at JPY108.56/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 108.50-111.70 with risk above 111.70 targeting 107.80-107.00-106.50 and 106.00-105.70. Long positions above 107.80-105.70 with targets of 108.90-109.50-110.00 and 110.70-111.30 with stop below 105.50.

 
Intraday Support Levels
S1     107.80-107.00
S2     106.50
S3     106.00-105.70

INTRADAY RESISTANCE LEVELS
R1     108.50-109.00
R2     109.50
R3     110.00-110.70

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

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