AAFX TRADING

Daily Market Lookup

  • The dollar looked set to post its best week in two months on Friday, buoyed by easing Middle East tensions and upbeat U.S. economic data. The prospect of war in the Middle East ebbed on Wednesday as the United States and Iran backed away from further confrontation following a U.S. drone strike that killed a top Iranian military commander, and an Iranian attack on U.S. forces in Iraq in response. The yields on U.S. government debt are now above where they were before the Jan. 3 drone strike that sparked fears of a broader conflagration. Higher bond yields support currency prices by attracting capital flows. Meanwhile there has been a slew of strong economic signals, with data showing a pick-up in the U.S. service sector, falling joblessness claims and solid private hiring Its next move will likely be determined by December job-market data due at 1330 GMT. The consensus forecast is for 164,000 extra jobs in December, following a bumper 266,000 added in November. Alongside the yen, the Australian dollar has been among the week's worst performers, shedding 1.1% against the greenback as investors begin to bet that bushfires raking the continent could dent the economy and drive interest rate cuts. Futures pricing implies a roughly 40% chance the Reserve Bank of Australia will cut rates when it meets on Feb. 4, up from about a one-third chance priced in late last year. The U.S. dollar inched higher Thursday, on improved risk sentiment amid optimism that the U.S-China trade war may be nearing an end and easing tensions in the Middle East. China's commerce ministry said on Thursday that Vice Premier Liu He is set to sign the phase one trade deal in Washington next week, stoking hopes that the partial deal will eventually pave a path for both nations to end their months-long trade war. As well as positive trade news, de-escalating tensions in the Middle East kept safe-haven currencies on the back foot, underpinning the move higher in the greenback. The pound, meanwhile, continued to wobble after Bank of England Governor Mark Carney suggested the central bank was mulling near-term stimulus as its economic forecasts may have been somewhat lofty. The outcome of the vote was largely expected, however, following the ruling Conservative party's commanding win in the general election last month.
  • The world’s shares hit a record high on Friday as a relief over de-escalation of U.S.-Iranian tensions quickly prompted investors to bet on faster global growth, especially in the technology sector. Investors welcomed the report as a prelude to the upcoming visit by China’s Vice Premier Liu He, head of the country’s negotiation team in Sino-U.S. trade talks, to Washington next week to sign a trade deal with the United States. Global shares quickly erased losses that followed missile attacks from Iran targeting U.S. forces in Iraq, as the two countries moved to defuse the tension. While analysts expect slight declines in profits for S&P 500 companies in the last quarter, they see a solid recovery this year. Waning worries about all-out war in the Middle East pushed down gold, safe-harbor currencies and oil. Sterling fell to a near two-week low against the U.S. dollar after Bank of England Governor Mark Carney said there could be a “relatively prompt response” from the bank if the current spell of economic weakness persisted.
  • Oil prices dropped on Friday extending days of losses as the threat of war in the Middle East receded and investors switched attention to economic growth prospects and the rise in U.S. crude oil and product inventories. Oil is now below where it was before a U.S. drone strike killed a top Iranian general on Jan. 3, with Iran responding with a ballistic missile attack on Iraqi air bases hosting U.S. forces this week that left no casualties. A Ukrainian airliner that crashed in Iran in the early hours of Wednesday after Iran launched the attacks on the bases in Iraq, was likely brought down by an Iranian missile, Canada's Prime Minister Justin Trudeau said on Thursday. All the nearly 180 passengers on board the Ukraine International Airlines flight to Kiev from Tehran died in the crash. Iran denied it was hit by a missile. For now though oil investors are focusing on areas away from the conflict. Crude stocks in the world's biggest producer rose against forecast last week and gasoline inventories were up by the most in a week in four years, the U.S. Energy Information Administration said on Wednesday. The cooling of the U.S.-Iran conflict has dramatically reduced the risk pricing in oil. Even China’s assurance on Thursday that its trade deal with Washington was on couldn’t restart the crude rally, with U.S. benchmark prices trading beneath $60 support. West Texas Intermediate, the U.S. crude benchmark, settled down 5 cents at $59.56 per barrel. This was despite media reports out of Beijing that Vice Premier Liu He will travel to Washington between Jan. 13 and 15 to sign a phase one deal with the White House, just as U.S. President Donald Trump had said. Just weeks ago, a mere tweet from Trump about progress on the China deal would have sent both the U.S. stock and oil markets rallying. Prior to Trump’s decision on Iran, WTI hit an April high of $65.65 on Wednesday, while Brent surged to near four-month highs of $71.28 as traders speculated on an all-out U.S.-Iran war. But as tensions from the conflict eased, adding to the weight on the market was Wednesday’s weekly U.S. oil inventory data showing a surprise rise in crude stockpiles and huge builds in fuel. In Wednesday’s inventory data, the Energy Information Administration said crude stockpiles rose by 1.2 million barrels for the week ended Jan. 3, versus market expectations for a decline of 3.6 million barrels. Gasoline inventories soared by 9.1 million barrels, compared with expectations for a rise of 2.7 million barrels. Distillate stockpiles climbed by 5.3 million barrels, versus forecasts for a build of 3.9 million barrels.

 

 
Intraday RESISTANCE LEVELS
10th January 2020 R1 R2 R3
GOLD-XAU 1,556-1.564 1,571 1,578-1,584
Silver-XAG 18.00-18.25 18.50 18.70-19.00
Crude Oil 60.00-60.80 61.40 62.00-62.60
EURO/USD 1.1280 1.1280 1.1350-1.1400
GBP/USD 1.3100-1.3150 1.3200 1.3250-1.3320
USD/JPY 110.00-110.70 111.20 112.00-112.40

Intraday SUPPORTS LEVELS
10th January 2020 S1 S2 S3
GOLD-XAU 1,542-1,536 1.527 1,520-1,511
Silver-XAG 17.60-17.10 16.60 16.25-16.00
Crude Oil 59.00-58.60 57.80 56.90
EURO/USD 1.1100 1.1060 1.0980-1.0930
GBP/USD 1.3010 1.3010 1.2930-1.2850
USD/JPY 109.50-109.00 108.50 107.80-107.00

Intra-Day Strategy (10th 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$1561.19/oz and low of US$1540.12/oz. Gold down 0.269% at US$1552.11/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 oversold 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 1540-1511 with risk below 1511, targeting 1557-1564-1571 and 1578-1584. Sell below 1550-1600 keeping stop loss closing above 1600, targeting 1536-1527 and 1519-1511.

 
Intraday Support Levels
S1     1,542-1,536
S2     1.527
S3     1,520-1,511
Intraday Resistance Levels
R1     1,556-1.564
R2     1,571
R3     1,578-1,584

Technical Indicators

Name   Value Action
14DRSI  

67.472

Buy
20-DMA   1512.64 Buy
50-DMA  

1487.52

Buy
100-DMA   1495.90 Buy
200-DMA   1428.59 Buy
STOCH(5,3)   28.621 Sell
MACD(12,26,9)   22.161 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$18.19/oz and low of US$17.87/oz settled down by 1.06% at US$17.87/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 100DMA (17.55), breakage below will lead to 17.30. 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 oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 17.60-16.00 targeting 18.00-18.50-18.70 and 19.10-19.65; stop breakage below 16.00. Sell below 18.00-20.10 with stop loss above 20.10; targeting 17.70-17.00 and 16.25-16.00.

 
Intraday  Support Levels
S1     17.60-17.10
S2     16.60
S3     16.25-16.00

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.226 Buy
20-DMA   17.54 Buy
50-DMA   17.28 Buy
100-DMA   17.55 Buy
200-DMA   16.45 Buy
STOCH(5,3)   12.268 Sell
MACD(12,26,9)   0.274 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US60.14/bbl, intraday low of US$58.54/bbl and settled down by 0.585% to close at US$59.44/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 200DMA i.e. 57.76 which is a resistance level and breakage above will call for 58.60. MACD is above zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in oversold region and giving negative crossover for confirmation of bearish 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 59.00-56.90 with risk daily closing below 56.90 and targeting 60.50-61.40-62.00 and 62.60-63.00. Sell in between 60.00-63.00 with stop loss at 63.00; targeting 59.00-58.00 and 57.80-56.90.

 
Intraday Support Levels
S1     59.00-58.60
S2     57.80
S3     56.90

Intraday Resistance Levels
R1     60.00-60.80
R2     61.40
R3     62.00-62.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.971 Sell
20-DMA   60.78 Sell
50-DMA   58.57 Buy
100-DMA   56.97 Buy
200-DMA   57.76 Buy
STOCH(5,3)   12.130 Sell
MACD(12,26,9)   0.778 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.10918/EUR, high of US$1.1119/EUR and settled the day up by 0.0036% to close at US$1.1105/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 oversold 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 1.1100-1.0890 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     1.1100
S2     1.1060
S3     1.0980-1.0930

Intraday  Resistance Levels
R1     1.1280
R2     1.1280
R3     1.1350-1.1400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.742 Buy
20-DMA   1.1135 Buy
50-DMA   1.1090 Buy
100-DMA   1.1063 Buy
200-DMA   9.958 Buy
STOCH(5,3)   9.958 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3012/GBP, high of US$1.3169/GBP and settled the day down by 0.192% to close at US$1.3065/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 1.3100-1.3420 with targets at 1.3060-1.3020 and 1.2930-1.2850 stop-loss should be below 1.3420. Buy above 1.3060-1.2750 with targets 1.3100-1.3150-1.3200 and 1.3250-1.3320 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.3010
S2     1.3010
S3     1.2930-1.2850

Intraday Resistance Levels
R1     1.3100-1.3150
R2     1.3200
R3     1.3250-1.3320

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

49.909

Buy
20-DMA   1.3104 Sell
50-DMA   1.3007 Buy
100-DMA   1.2735 Buy
200-DMA   1.2688 Buy
STOCH(5,3)   25.940 Sell
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY109.00/USD and made an intraday high of JPY109.57/USD and settled the day up by 0.472% at JPY109.51/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 111.70 targeting 109.00-108.50-107.80 and 107.00-106.50-106.00. 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     109.50-109.00
S2     108.50
S3     107.80-107.00

INTRADAY RESISTANCE LEVELS
R1     110.00-110.70
R2     111.20
R3     112.00-112.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.402 Buy
20-DMA   109.14 Sell
50-DMA   108.94 Buy
100-DMA   108.26 Buy
200-DMA   108.61 Sell
STOCH(9,6)   95.253 Buy
MACD(12,26,9)   0.0239 Buy

AAFX TRADING
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