AAFX TRADING

Daily Market Lookup

  • Asian stock markets recovered ground on Wednesday as China’s response to a virus outbreak tempered some fears of a global pandemic, although Shanghai shares initially slipped amid worries about a hit to domestic demand and tourism. Worries about contagion, particularly as millions travel for Lunar New Year festivities, have knocked stocks from record peaks. Yet this time, China’s response and candor - in contrast to the initial cover-up of the SARS outbreak - have helped reassure investors concerned about the possible global fallout. China’s National Health Commission said on Wednesday there were 440 cases of the new virus, with nine deaths so far. Measures are now in place to minimize public gatherings in the most-affected regions. Markets elsewhere advanced, while safe assets such as gold, bonds and the Japanese yen handed back some of Tuesday’s gains.
  • The U.S. dollar and the Chinese yuan were little changed on Wednesday in Asia despite concerns surrounding the coronavirus outbreak in Wuhan. As of Wednesday morning, Chinese authorities confirmed that at least nine people, all in Wuhan, have died after contracting the virus and a total of 15 medical personnel have been infected. The virus, which causes a type of pneumonia, has spread to multiple countries outside China, including the U.S. and Japan. The GBP/USD pair inched up 0.1% to 1.3056 on strong employment data. The number of people in employment rose by 208,000 to 32.90 million in the three months to November, official data showed. It was the biggest increase since the three months to January 2019. The dollar fell slightly Tuesday, pressured by losses against safe-haven currencies as the first case of the deadly Chinese coronavirus was reported in the U.S. The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.07% 97.49. The U.S. Centers for Disease Control and Prevention announced the first case of the coronavirus in the United States, CNN reported, citing a federal source outside the CDC. The news followed earlier reports that the coronavirus in China had spread, raising fears that a widespread outbreak could disrupt tourism and hurt economic growth. EUR/USD fell 0.01% to $1.109 as better January German and eurozone ZEW data signaled that investor confidence was on the mend ahead of a crucial European Central Bank meeting later this week. Some have suggested that euro will continue to lose ground against the dollar this year amid expectations that the European Central Bank will likely cut rates in September. The ECB will likely lower interest rates by 20 basis points and expand its bond-buying program in September while the Fed will leave rates on hold this year, said Hubert de Barochez, economist at Capital Economics.
  • Oil prices dropped on Wednesday in Asia as the International Energy Agency forecasted that there will be market surplus. Goldman Sachs said in a note that oil markets are likely to be impacted by China’s deadly coronavirus, especially if it plays out like the SARS epidemic in 2003. The virus that originated in Wuhan could result in global demand falling by 260,000 barrels a day in 2020, the investment bank said. That would probably lead to a $2.90 a barrel drop in oil prices. Meanwhile, the IEA forecast a market surplus in the first half of the year, further weighing on crude prices. "I see an abundance of energy supply in terms of oil and gas," head of the IEA, Fatih Biro,told the Reuters Global Markets Forum, while he was attending World Economic Forum meeting in Davos, Switzerland. "It's the reason that recent incidents we have seen - with the Iranian general killed, Libya unrest - didn't boost international oil prices," Birol said, referring to the U.S. killing of an Iranian commander and retaliation by Tehran that sent prices briefly soaring earlier this month. Oil prices eased on Wednesday, extending declines as the International Energy Agency (IEA) forecast a market surplus in the first half, helping ease concerns about disruptions that have slashed Libya's crude output. The head of the IEA, Fatih Birol, said on Tuesday he expects the market to be in surplus by a million barrels per day (bpd) in the first half of this year. Libya's National Oil Corp on Monday declared force majeure on the loading of oil from two major oil fields after the latest development in a long-running military conflict. Unless oil facilities quickly return to operation Libya's oil output will be reduced from about 1.2 million barrels per day (bpd) to just 72,000 bpd. Still, U.S. crude production in large shale deposits is expected to rise to record highs in February, although the pace of increase is likely to be the lowest in about year, the U.S. Energy Information Administration (EIA) said on Tuesday. Away from oil fundamentals, markets have been roiled by the emergence of a new strain of a coronavirus out of China amid concern about the impact of a possible pandemic on economic growth.

 

 
Intraday RESISTANCE LEVELS
22nd January 2020 R1 R2 R3
GOLD-XAU 1,556-1.564 1,571 1,578-1,590
Silver-XAG 17.90-18.10 18.25 18.50-18.70
Crude Oil 58.60-59.50 60.30 60.80-61.40
EURO/USD 1.1190-1.1230 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
22nd January 2020 S1 S2 S3
GOLD-XAU 1,548-1,542 1,536 1.527-1,519
Silver-XAG 17.10 16.60 16.25-16.00
Crude Oil 57.80 56.90 56.00-55.20
EURO/USD 1.1070 1.0980 1.0930-1.0890
GBP/USD 1.3010-1.2980 1.2930 1.2850-1.2800
USD/JPY 109.90-109.50 109.00 108.50-107.80

Intra-Day Strategy (22nd 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$1568.48/oz and low of US$1546.24/oz. Gold down 0.163% at US$1558.00/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     1,548-1,542
S2     1,536
S3     1.527-1,519
Intraday Resistance Levels
R1     1,556-1.564
R2     1,571
R3     1,578-1,590

Technical Indicators

Name   Value Action
14DRSI  

61.804

Buy
20-DMA   1543.87 Buy
50-DMA  

1498.86

Buy
100-DMA   1498.25 Buy
200-DMA   1438.72 Buy
STOCH(5,3)   60.621 Buy
MACD(12,26,9)   17.161 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$18.14/oz and low of US$17.61/oz settled down by 1.572% at US$17.77/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     17.10
S2     16.60
S3     16.25-16.00

Intraday  Resistance Levels
R1     17.90-18.10
R2     18.25
R3     18.50-18.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.226 Buy
20-DMA   17.94 Buy
50-DMA   17.35 Buy
100-DMA   17.56 Buy
200-DMA   16.53 Buy
STOCH(5,3)   41.268 Sell
MACD(12,26,9)   0.274 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US58.81/bbl, intraday low of US$57.68/bbl and settled down by 1.02% to close at US$58.19/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 Tuesday an intraday low of US$1.1080/EUR, high of US$1.1117/EUR and settled the day down by 0.113% to close at US$1.1081/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 1.1070-1.0890 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     1.1070
S2     1.0980
S3     1.0930-1.0890

Intraday  Resistance Levels
R1     1.1190-1.1230
R2     1.1280
R3     1.1350-1.1400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.085 Buy
20-DMA   1.1134 Buy
50-DMA   1.1092 Buy
100-DMA   1.1065 Buy
200-DMA   1.1135 Buy
STOCH(5,3)   10.758 Buy
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2994/GBP, high of US$1.3082/GBP and settled the day up by 0.309% to close at US$1.3046/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     1.3010-1.2980
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  

50.909

Buy
20-DMA   1.3067 Sell
50-DMA   1.3033 Sell
100-DMA   1.2801 Buy
200-DMA   1.2687 Buy
STOCH(5,3)   49.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY109.75/USD and made an intraday high of JPY110.21/USD and settled the day down by 0.291% at JPY109.85/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   60.402 Buy
20-DMA   109.38 Buy
50-DMA   109.14 Buy
100-DMA   108.58 Buy
200-DMA   108.89 Buy
STOCH(9,6)   48.253 Sell
MACD(12,26,9)   0.296 Buy

AAFX TRADING
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