AAFX TRADING

Daily Market Lookup

  • Financial markets were roiled on Wednesday after Iran fired missiles at U.S. forces in Iraq, sending Asian stocks and U.S. Treasury yields sliding and jolting oil prices higher as investors feared a wider conflict in the Middle East. Iran’s missile attacks on the Ain Al-Asad air base and another in Erbil, Iraq, early in the day came hours after the funeral of an Iranian commander whose killing in a U.S. drone strike has intensified tensions in the region. Early reports of the attacks sparked a sudden rise in risk aversion on worries over how the United States would respond. But by early afternoon, Asian equities had trimmed losses, the yen had stabilized somewhat and U.S. bonds tempered their rally as investors paused for breath. U.S. President Donald Trump said in a tweet late on Tuesday that an assessment of casualties and damage from the strikes was under way and that he would make a statement on Wednesday morning. Trump said that “All is well!” and “So far, so good!”. A U.S. official said the United States was not aware of any casualties from the strikes. Rob Carnell, Asia-Pacific chief economist at ING in Singapore, said possible further escalation of tensions between Iran and the United States could still provoke a prolonged negative market reaction.
  • The U.S. dollar gave up some of its gains overnight on Wednesday in Asia following the release of better-than-expected non-manufacturing data. ISM nonmanufacturing data for December showed a reading of 55, beating forecasts of 54.5. The services sector is a critical component of the U.S. economy, accounting for roughly 80% of U.S. private-sector gross domestic product (GDP). The greenback gained 0.3% overnight, but gave up its gains in morning trade in Asia amid growing concerns of Middle East tensions. On Wednesday, Iran fired a series of rockets at two U.S.-Iraqi airbases as its first response to the killing of General Qassem Soleimani by a U.S. airstrike last week. Following the attack, Iran vowed to retaliate and said it was assessing 13 possible ways to inflict a “historic nightmare” on America.' U.S. President Donald Trump has been briefed on the attack in Iraq and was monitoring the situation, White House spokeswoman Stephanie Grisham said. The U.S. dollar gave up some of its gains overnight on Wednesday in Asia following the release of better-than-expected non-manufacturing data. On Wednesday, Iran fired a series of rockets at two U.S.-Iraqi airbases as its first response to the killing of General Qassem Soleimani by a U.S. airstrike last week. Following the attack, Iran vowed to retaliate and said it was assessing 13 possible ways to inflict a “historic nightmare” on America.' U.S. President Donald Trump has been briefed on the attack in Iraq and was monitoring the situation, White House spokeswoman Stephanie Grisham said.
  • Oil markets calmed after on Wednesday after prices had jumped to their highest in months in the wake of a rocket attack by Iran on American forces in Iraq that raised the specter of a spiraling conflict and disrupted crude supplies. Tweets by U.S. President Donald Trump and Iran's foreign minister also appeared to signal a period of calm - for now. Iran's missile attack on U.S.-led forces in Iraq came early on Wednesday, hours after the funeral of Qassem Soleimani, the commander of the country's elite Quds Force killed in a U.S. drone stroke on Jan. 3. Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting U.S.-led coalition personnel, the U.S. military said on Tuesday. Stock, currency and gold markets were also roiled by the attacks. Trump said in a tweet that an assessment of casualties and damage from the strikes was under way and that he would make a statement on Wednesday morning U.S. time. "All is well!" Trump said in the Twitter post. Analysts said oil markets remained focused for now on the precise nature of the targets in the attack. Iranian news agency Mehr said Iran's Islamic Revolutionary Guard Corps had targeted the base. Tehran had vowed retaliation for the killing of military commander Soleimani. The missiles hit their intended U.S. targets in Iraq on Wednesday, Iran's English-language Press TV quoted an unnamed source as saying. Meanwhile news of a jet crash in Tehran didn't disturb the return to calmer trading. Iran's official news agency IRNA reported a Ukrainian airliner with at least 170 people on board crashed on Wednesday due to technical problems soon after taking off from Tehran's Imam Khomeini airport. Oil prices jumped on Wednesday in Asia after Iran attacked two U.S.-Iraqi airbases in response to a U.S. airstrike that killed a top Iranian general last week, sparking worries of intensifying conflict in the Middle East. Overnight, the Pentagon said missile strikes were launched from Iran and targeted the Ayn al-Asad base in western Iraq and another facility in Erbil. Supply worries resulting from deepening conflict between the U.S. and Iran were cited as tailwind for oil markets since the beginning of the year as a U.S. airstrike killed general Qassem Soleimani last week. Following the attack, Iran vowed to retaliate and said it was assessing 13 possible ways to inflict a “historic nightmare” on America.' Meanwhile, the American Petroleum Institute reported that crude stockpiles dropped by 5.9 million barrels for the week ended Jan. 3, compared with a plunge of about 11.5 million barrels reported for the week before. The EIA is expected to report a drop of about 3.6 million barrels when it issues official numbers tomorrow, according to analysts’ forecasts compiled by Investing.com. While not a directional driver, the U.S. reported better-than-expected data in the non-manufacturing sector overnight. The ISM Non-Manufacturing PMI Index registered growth in December, with the Composite Index coming in at 55.0 Tuesday, a four-month high, versus the expected 54.5 and 53.9 the previous month. Developments on the Sino-U.S. trade front also remained as focus. The two nations were reportedly going to sign a phase one trade deal on Jan. 15. A Chinese trade delegation led by Vice-Premier Liu He will travel to Washington for the signing of the deal, although Chinese President Xi Jinping is not expected to be present, according to South China Morning Post, which cited Chinese state media.

 

 
Intraday RESISTANCE LEVELS
8th January 2020 R1 R2 R3
GOLD-XAU 1,600-1,611 1,622 1,630
Silver-XAG 18.70-19.00 19.65 20.10
Crude Oil 63.70--64.20 64.70 65.50-66.00
EURO/USD 1.1180-1.1230 1.1280 1.1350-1.1400
GBP/USD 1.3150 1.3200 1.3250-1.3320
USD/JPY 109.50 109.50 110.00-110.70

Intraday SUPPORTS LEVELS
8th January 2020 S1 S2 S3
GOLD-XAU 1,584-1,578 1,571 1,564-1,557
Silver-XAG 18.50-18.25 18.00 17.60-17.00
Crude Oil 63.00 62.60 62.00-61.40
EURO/USD 1.1110 1.1060 1.0980-1.0930
GBP/USD 1.3100-1.3060 1.3010 1.2930-1.2850
USD/JPY 106.50 106.50 106.00-105.70

Intra-Day Strategy (8th 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 Friday made its intraday high of US$1577.17/oz and low of US$1555.21/oz. Gold up 0.549% at US$1573.89/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 1584-1555 with risk below 1536, targeting 1600-1611 and 1622-1630. Sell below 1600-1630 keeping stop loss closing above 1630, targeting 1784-1578-1571 and 1564-1556.

 
Intraday Support Levels
S1     1,584-1,578
S2     1,571
S3     1,564-1,557
Intraday Resistance Levels
R1     1,600-1,611
R2     1,622
R3     1,630

Technical Indicators

Name   Value Action
14DRSI  

88.472

Buy
20-DMA   1506.09 Buy
50-DMA  

1485.97

Buy
100-DMA   1493.35 Buy
200-DMA   1426.17 Buy
STOCH(5,3)   80.621 Buy
MACD(12,26,9)   25.185 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$18.42/oz and low of US$17.93/oz settled up by 1.502% at US$18.37/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 18.50-16.00 targeting 18.70-19.10 and 19.65-201.10; stop breakage below 16.00. Sell below 18.70-20.10 with stop loss above 20.10; targeting 18.50-18.25-17.60 and 17.00-16.25-16.00.

 
Intraday  Support Levels
S1     18.50-18.25
S2     18.00
S3     17.60-17.00

Intraday  Resistance Levels
R1     18.70-19.00
R2     19.65
R3     20.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   76.226 Buy
20-DMA   17.33 Buy
50-DMA   17.27 Buy
100-DMA   17.53 Buy
200-DMA   16.41 Buy
STOCH(5,3)   72.268 Buy
MACD(12,26,9)   0.286 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US62.96/bbl, intraday low of US$63.89/bbl and settled down by 0.300% to close at US$62.51/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 63.70-61.00 with risk daily closing below 61.00 and targeting 64.20-64.70-65.50 and 66.00-66.60. Sell below 63.70-66.60 with stop loss at 66.60; targeting 63.00-62.60 and 62.00-61.40-60.90.

 
Intraday Support Levels
S1     63.00
S2     62.60
S3     62.00-61.40

Intraday Resistance Levels
R1     63.70--64.20
R2     64.70
R3     65.50-66.00

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 Tuesday an intraday low of US$1.1132/EUR, high of US$1.1196/EUR and settled the day down by 0.393% to close at US$1.1151/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 1.1110-1.0890 with risk below 1.0890, targeting 1.1180-1.1230-1.1280 and 1.1350-1.1400. Sell below 1.1180-1.1350 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   53.742 Buy
20-DMA   1.1138 Buy
50-DMA   1.1092 Buy
100-DMA   1.1063 Buy
200-DMA   1.1140 Buy
STOCH(5,3)   44.958 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3094/GBP, high of US$1.3211/GBP and settled the day down by 0.366% to close at US$1.3119/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 1.3100-1.2750 with targets 1.3150-1.3200 and 1.3250-1.3320 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.3100-1.3060
S2     1.3010
S3     1.2930-1.2850

Intraday Resistance Levels
R1     1.3150
R2     1.3200
R3     1.3250-1.3320

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

51.642

Buy
20-DMA   1.3117 Sell
50-DMA   1.3000 Buy
100-DMA   1.2717 Buy
200-DMA   1.2689 Buy
STOCH(5,3)   40.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY108.25/USD and made an intraday high of JPY108.62/USD and settled the day up by 0.0692% at JPY108.43/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     106.50
S2     106.50
S3     106.00-105.70

INTRADAY RESISTANCE LEVELS
R1     109.50
R2     109.50
R3     110.00-110.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.367 Buy
20-DMA   109.02 Sell
50-DMA   108.91 Buy
100-DMA   108.15 Buy
200-DMA   108.65 Sell
STOCH(9,6)   18.253 Buy
MACD(12,26,9)   -0.121 Buy

AAFX TRADING
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