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Daily Market Lookup

  • Stocks slipped in Asian trade on Wednesday as investors awaited the signing of an initial U.S.-China trade deal, with sentiment somewhat dented by comments from the U.S. Treasury Secretary that tariffs would remain in place for now. Treasury Secretary Steven Mnuchin said late on Tuesday that the United States would keep in place tariffs on Chinese goods until the completion of a second phase of a U.S.-China trade agreement, triggering some profit-taking in risk assets. The news came hours before the signing of a preliminary trade agreement to ease an 18-month-old trade war between the world’s two largest economies. Wall Street stocks dipped on Tuesday, reversing earlier intraday record highs, after media reported the United States would likely maintain tariffs on Chinese goods past November’s presidential election. He added that Mnuchin’s comment didn’t come as a total surprise to the market and the underlying sentiment should remain intact. Markets were also weighing the impact of the U.S. government nearing publication of a rule that would vastly expand its powers to block shipments of foreign-made goods to China’s Huawei, as it seeks to squeeze the blacklisted telecoms company, two sources said. In the currency market, the Japanese yen, often perceived as a safe haven, reversed earlier losses against the dollar as news U.S. tariffs would remain on Chinese goods through the U.S. election hurt risk sentiment. China’s central bank extended fresh short- and medium-term loans on Wednesday but kept the borrowing cost unchanged, as it seeks to maintain adequate liquidity in a slowing economy. Concerns about increasing supply also pressured prices after a government report on Tuesday said that output from the United States will increase in 2020 by more than previously forecast.
  • The U.S. dollar was flat Tuesday, as sentiment on risk was hurt slightly on a report that U.S. tariffs on Chinese goods will remain in place through the 2020 election despite both sides expected to wrap up the phase one trade deal on Wednesday. The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.01% 97.34. Gains in the greenback were also kept in check by tamer U.S. inflation data that strengthened expectations the Federal Reserve will keep interest rates lower for longer. The Labor Department reported that its consumer price index rose 0.2% last month, missing economists' forecasts of 0.3%. The sluggish pace of consumer price pressures has continued despite the lengthy U.S.-China trade war, with overall prices held back by declines in cars and household utilities, and only modest gains in housing, BMO said. Given that some of the other inflationary indicators - particularly the core PCE – have remained sluggish somewhat, it will "take a more consistent, broad move upward to spark more interest from the Fed," the bank added. Citing expectations for subdued inflation to continue, Kansas Federal Reserve president Esther George suggested would be appropriate for the Fed to keep rates on hold. The pound rebounded from lows, meanwhile, even as speculation mounts that the Bank of England will cut interest rates should U.K. economic growth remain sluggish. The purchasing managers' surveys on Jan. 24 will serve as the first sign of how the U.K.'s economy performed following December's general election, Swissquote Bank said. The safe-haven yen held firm and riskier Asian currencies softened a little on Wednesday, as currency investors awaited the signing of the U.S.-China trade deal with trepidation. The formal agreement is aimed at drawing a line underneath 18 months of tit-for-tat tariff hikes that have hurt global growth. But hopes that it may herald warmer relations between the world's top two economies were dented late Tuesday when U.S. Treasury Secretary Steven Mnuchin said that current tariffs on Chinese goods would stay, pending further talks. That toppled China's trade-sensitive yuan from a six-month peak and lifted the yen from a seven-month trough. But moves in morning trade were slight as markets wait to see the deal inked. U.S. President Donald Trump is slated to sign the trade agreement with Chinese Vice Premier Liu He at the White House at 1630 GMT. Washington has agreed to suspend tariffs on $160 billion of some Chinese-made electronics, and to halve existing tariffs on $120 billion of other goods to 7.5%. A source told Reuters that China has pledged to buy almost $80 billion of additional manufactured goods from the United States over the next two years under the deal, although some U.S. trade experts called that unrealistic. Mnuchin said deal documents will be released on Wednesday. Elsewhere the British pound trod water at $1.3023, ahead of inflation data due at 0930 GMT The consensus expectation is for core annual inflation to hold steady at 1.7%. However several recent hints at rate cuts from Bank of England policymakers have investors on edge that a miss on the downside may strengthen the case for monetary easing. Money markets are now pricing in a 43% chance for a 25 basis point cut in rates at the end of this month.
  • Oil prices slipped on Wednesday on concerns that the pending Phase 1 trade deal between the United States and China, the world's biggest oil users, may not boost demand as the U.S. intends to keep tariffs on Chinese goods until a second phase. U.S. Treasury Secretary Steven Mnuchin said late on Tuesday that tariffs on Chinese goods will remain in place until the completion of a second phase of a U.S.-China trade agreement, even as both sides are expected to sign an interim deal later on Wednesday. U.S. President Donald Trump is slated to sign the Phase 1 agreement with Chinese Vice Premier Liu He at the White House on Wednesday. That agreement is expected to include provisions for China to buy up to $50 billion more in U.S. energy supplies. Adding to worries over U.S.-China trade relations, the U.S. government is nearing publication of a rule that would vastly expand its powers to block shipments of foreign-made goods to Chinese technology giant Huawei, according to two sources. Meanwhile, U.S. crude inventories rose by 1.1 million barrels, data from the American Petroleum Institute showed, countering expectations for a draw.

 

 
Intraday RESISTANCE LEVELS
15th January 2020 R1 R2 R3
GOLD-XAU 1,556 1.564 1,571-1,578
Silver-XAG 18.00-18.25 18.50 18.70-19.00
Crude Oil 58.60-59.00 60.00 60.80-61.40
EURO/USD 1.1180-1.1230 1.1280 1.1350-1.1400
GBP/USD 1.3060-1.3100 1.3150 1.3200-1.3250
USD/JPY 110.00-110.70 111.20 112.00-112.40

Intraday SUPPORTS LEVELS
15th January 2020 S1 S2 S3
GOLD-XAU 1,542-1,536 1.527 1,520-1,511
Silver-XAG 17.70-17.10 16.60 16.25-16.00
Crude Oil 57.80-56.90 56.00 55.20-54.
EURO/USD 1.1100 1.1060 1.0980-1.0930
GBP/USD 1.2980 1.2930-1.2850 1.2800
USD/JPY 109.50 109.00 108.50-107.80

Intra-Day Strategy (15th 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 Tuesday made its intraday high of US$1548.75/oz and low of US$1535.82/oz. Gold down 0.0891% at US$1546.23/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 1545-1511 with risk below 1511, targeting 1552-1557 and 1564-1571-1578. Sell below 1556-1578 keeping stop loss closing above 1580, targeting 1542-1536-1527 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
R2     1.564
R3     1,571-1,578

Technical Indicators

Name   Value Action
14DRSI  

65.442

Buy
20-DMA   1524.27 Buy
50-DMA  

1490.06

Buy
100-DMA   1496.98 Buy
200-DMA   1432.53 Buy
STOCH(5,3)   19.621 Sell
MACD(12,26,9)   20.161 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$17.96/oz and low of US$17.66/oz settled down by 1.018% at US$17.78/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     17.70-17.10
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   53.226 Buy
20-DMA   17.70 Buy
50-DMA   17.28 Buy
100-DMA   17.58 Buy
200-DMA   16.49 Buy
STOCH(5,3)   15.268 Sell
MACD(12,26,9)   0.274 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US58.70/bbl, intraday low of US$57.71/bbl and settled up by 0.0361% to close at US$58.10/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 57.80-54.50 with risk daily closing below 56.90 and targeting 58.60-60.00 and 61.40-62.00-62.60. Sell in between 58.60-63.00 with stop loss at 63.00; targeting 57.80-56.90-56.00 and 55.20-54.50.

 
Intraday Support Levels
S1     57.80-56.90
S2     56.00
S3     55.20-54.

Intraday Resistance Levels
R1     58.60-59.00
R2     60.00
R3     60.80-61.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.971 Sell
20-DMA   60.65 Sell
50-DMA   58.77 Sell
100-DMA   57.03 Buy
200-DMA   57.72 Buy
STOCH(5,3)   3.130 Sell
MACD(12,26,9)   0.101 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1103/EUR, high of US$1.1143/EUR and settled the day down by 0.059% to close at US$1.1126/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     1.1180-1.1230
R2     1.1280
R3     1.1350-1.1400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.085 Buy
20-DMA   1.1137 Buy
50-DMA   1.1089 Buy
100-DMA   1.1063 Buy
200-DMA   1.1138 Buy
STOCH(5,3)   42.958 Buy
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2953/GBP, high of US$1.3032/GBP and settled the day up by 0.234% to close at US$1.3018/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 1.3060-1.3420 with targets at 1.3020-1.2930 and 1.2850-1.2800 stop-loss should be below 1.3420. Buy above 1.3010-1.2750 with targets 1.3060-1.3100-1.3150 and 1.3200-1.3250-1.3320 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.2980
S2     1.2930-1.2850
S3     1.2800

Intraday Resistance Levels
R1     1.3060-1.3100
R2     1.3150
R3     1.3200-1.3250

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

45.909

Buy
20-DMA   1.3078 Sell
50-DMA   1.3009 Sell
100-DMA   1.2749 Buy
200-DMA   1.2688 Buy
STOCH(5,3)   15.940 Sell
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY109.84/USD and made an intraday high of JPY110.20/USD and settled the day up by 0.0391% at JPY109.98/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 110.00-112.70 with risk above 112.70 targeting 109.50-109.00-108.50 and 107.80-107.00-106.50. Long positions above 109.50-107.00 with targets of 109.50-110.00 and 110.70-111.30-112.40 with stop below 107.00.

 
Intraday Support Levels
S1     109.50
S2     109.00
S3     108.50-107.80

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.402 Buy
20-DMA   109.22 Buy
50-DMA   109.04 Buy
100-DMA   108.38 Buy
200-DMA   108.59 Buy
STOCH(9,6)   91.253 Sell
MACD(12,26,9)   0.1886 Buy

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