AAFX TRADING

Daily Market Lookup

  • Asian shares took a sudden turn for the worse on Tuesday as mounting concerns about a new strain of corona virus in China sent a ripple of risk aversion through markets. Safe-haven bonds and the yen edged higher as investors were reminded of the economic damage done by the SARS virus in 2003, particularly given the threat of contagion as hundreds of millions travel for the Lunar New Year holidays. Investors had already been guarded after the International Monetary Fund trimmed its global growth forecasts, mostly due to a surprisingly sharp slowdown in India and other emerging markets. There had been some relief as U.S. President Donald Trump and French President Emmanuel Macron seemed to have struck a truce over a proposed digital tax. The two agreed to hold off on a potential tariffs war until the end of the year, a French diplomatic source said. Trump is due to deliver a speech at the World Economic Forum in Davos later on Tuesday, and trade and tariffs could be on the agenda. The Bank of Japan cited lessened trade risks when nudging up forecasts for economic growth after holding a policy meeting on Tuesday. As widely expected, the BOJ maintained its short-term interest rate target at -0.1% and a pledge to guide 10-year government bond yields around 0%, by a 7-2 vote. The outbreak was particularly badly timed as the tourism industry has been mauled already by bushfires sweeping the country.
  • The U.S. dollar was largely flat in European trading Monday, with the U.S. holiday providing little incentive for traders to take risks. That said, the greenback still looks strong against its main competitors. Figures released by the Commerce Department on Friday showed U.S. housing starts in December were well above economists' estimates for 1.38 million and were the biggest gain in 13 years. Retail sales were also on the rise and a gauge of manufacturing activity rebounded to its highest in eight months. The positive data reduced chances that the Federal Reserve would slash rates when it meets later this month. The European Central Bank and the Bank of Japan are also not expected to make any changes in their first policy meetings of the year this week, but the Bank of England is widely expected to cut rates in the near future. The yen pulled ahead and the yuan fell against the dollar on Tuesday as the spread of a pneumonia-like virus in China sparked a sudden bout of risk aversion and sent Asian stocks skidding. The yuan slipped against the U.S. currency in onshore and offshore trade after a Chinese health expert said the virus can pass from person to person as the fourth death from the illness was confirmed. The outbreak of the disease, which has spread from the central city of Wuhan, is still in its early stages. However, it comes right before the peak travel season during the Lunar New Year holidays, raising risks that it could spread further. The yen remained higher after the Bank of Japan kept its short-term interest rate target at minus 0.1% and its pledge to guide 10-year government bond yields around zero. The BOJ also nudged up its growth forecasts, but traders will scrutinize governor Haruhiko Kuroda's remarks at a press conference later on Tuesday. The euro was locked in a narrow range before a ECB meeting on Thursday where it is expected to launch a comprehensive review of central bank strategy, including the ECB's inflation target. The ECB's first meeting of the year is most likely to launch a rethink of an inflation goal the bank has failed to meet since 2013. The scope and scale of the review will be a key focus for markets given the far-reaching implications for monetary policy. A slightly brighter tone to data means the ECB's assessment of the economic outlook will also be watched closely by investors on Thursday.
  • Oil prices eased on Tuesday as investors appeared to shrug off earlier supply concerns following a force majeure declared by Libya on two major oilfields amid a military blockade. Two major oilfields in southwest Libya began shutting down on Sunday after a pipeline was closed off, potentially reducing national output to a fraction of its normal level, the country's National Oil Corp (NOC) said. A document sent to oil traders and seen by Reuters on Monday said the NOC had declared force majeure - a waiver on contractual obligations - on crude loadings from El Sharara and El Feel oilfields in Libya's southwest. If Libyan exports are halted for any sustained period, storage tanks will fill within days and production will slow to 72K bpd, an NOC spokesman said. Libya has been producing around 1.2 mn bpd recently. Anti-government unrest in Iraq, another major oil producer, also had initially supported oil prices, but officials later said production in southern oilfields has not been affected by the unrest. Any supply disruptions could be offset by increased output from the OPEC, which could limit the impact on global oil markets, the head of Japan's petroleum industry body said. Another factor reassuring the market is OPEC spare capacity, which stands in excess of 3 mn bpd, of which the bulk sits in Saudi Arabia, analysts from ING Economics said in a note Adding to supply, Guyana exported its first-ever shipment of crude on Monday, marking the tiny South American nation's debut as an oil exporter. Meanwhile, Bank of America Global Research raised its 2020 oil price forecasts on Monday, citing risks to supply from the Middle East, an improving demand outlook and higher OPEC+ compliance to deepen output cuts.

 

 
Intraday RESISTANCE LEVELS
21st January 2020 R1 R2 R3
GOLD-XAU 1,571-1,578 1,590 1,600-1,610
Silver-XAG 18.10-18.25 18.50 18.70-19.00
Crude Oil 58.60-59.50 60.30 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 110.70 111.20 112.00-112.40

Intraday SUPPORTS LEVELS
21st January 2020 S1 S2 S3
GOLD-XAU 1.564-1,556 1,542 1,536-1.527
Silver-XAG 17.90-17.10 16.60 16.25-16.00
Crude Oil 57.80 56.90 56.00-55.20
EURO/USD 1.1090-1.1060 1.0980 1.0930-1.0890
GBP/USD 1.2980 1.2930 1.2850-1.2800
USD/JPY 109.90-109.50 109.00 108.50-107.80

Intra-Day Strategy (21st 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 Monday made its intraday high of US$1562.66/oz and low of US$1556.26/oz. Gold up 0.220% at US$1560.51/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 1564-1527 with risk below 1520, targeting 1571-1578 and 1584-1590-1600. Sell below 1571-1590 keeping stop loss closing above 1600, targeting 1564-1556-1542 and 1536-1527.

 
Intraday Support Levels
S1     1.564-1,556
S2     1,542
S3     1,536-1.527
Intraday Resistance Levels
R1     1,571-1,578
R2     1,590
R3     1,600-1,610

Technical Indicators

Name   Value Action
14DRSI  

68.804

Buy
20-DMA   1540.91 Buy
50-DMA  

1496.86

Buy
100-DMA   1498.10 Buy
200-DMA   1437.72 Buy
STOCH(5,3)   88.621 Buy
MACD(12,26,9)   19.161 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$18.11/oz and low of US$17.98/oz settled up by 0.227% at US$18.05/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     17.90-17.10
S2     16.60
S3     16.25-16.00

Intraday  Resistance Levels
R1     18.10-18.25
R2     18.50
R3     18.70-19.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.226 Buy
20-DMA   17.90 Buy
50-DMA   17.31 Buy
100-DMA   17.57 Buy
200-DMA   16.55 Buy
STOCH(5,3)   70.268 Buy
MACD(12,26,9)   0.274 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US59.61/bbl, intraday low of US$58.54/bbl and settled down by 1.042% to close at US$58.85/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 54.50 and targeting 58.60-59.50-60.30 and 61.40-62.00. Sell in between 58.60-63.00 with stop loss at 63.00; targeting 57.80-56.90 and 56.00-55.20.

 
Intraday Support Levels
S1     57.80
S2     56.90
S3     56.00-55.20

Intraday Resistance Levels
R1     58.60-59.50
R2     60.30
R3     60.80-61.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.971 Sell
20-DMA   60.16 Sell
50-DMA   58.93 Sell
100-DMA   57.19 Buy
200-DMA   57.58 Buy
STOCH(5,3)   59.130 Sell
MACD(12,26,9)   0.179 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.1075/EUR, high of US$1.1101/EUR and settled the day up by 0.0171% to close at US$1.1094/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 1.1090-1.0890 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     1.1090-1.1060
S2     1.0980
S3     1.0930-1.0890

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.085 Buy
20-DMA   1.1134 Buy
50-DMA   1.1092 Buy
100-DMA   1.1065 Buy
200-DMA   1.1135 Buy
STOCH(5,3)   26.758 Buy
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2961/GBP, high of US$1.3013/GBP and settled the day up by 0.129% to close at US$1.3006/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
S3     1.2850-1.2800

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

46.909

Buy
20-DMA   1.3059 Sell
50-DMA   1.3028 Sell
100-DMA   1.2790 Buy
200-DMA   1.2687 Buy
STOCH(5,3)   33.940 Sell
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY110.21/USD and made an intraday high of JPY110.21/USD and settled the day up by 0.090% at JPY110.17/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 110.70-112.70 with risk above 112.70 targeting 110.00-109.50-109.00 and 108.50-107.80-107.00. Long positions above 110.00-107.00 with targets of 110.70-111.30 and 112.40-113.00 with stop below 107.00.

 
Intraday Support Levels
S1     109.90-109.50
S2     109.00
S3     108.50-107.80

INTRADAY RESISTANCE LEVELS
R1     110.70
R2     111.20
R3     112.00-112.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.402 Buy
20-DMA   109.29 Buy
50-DMA   109.04 Buy
100-DMA   108.38 Buy
200-DMA   108.59 Buy
STOCH(9,6)   83.253 Sell
MACD(12,26,9)   0.1886 Buy

AAFX TRADING
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