AAFX TRADING

Daily Market Lookup

  • Asian shares and U.S. stocks fell on Thursday as investors remained anxious about the spread of a new flu-like virus in China just as millions prepared to travel for the Lunar New Year. Oil futures tumbled to seven-week lows as the contagion was expected to hit airline travel, while the International Energy Agency’s warning of an oil surplus and a larger-than-expected increase in U.S. crude inventories re-kindled fears of excess supply. However, there are fears the virus could spread rapidly, because millions of Chinese travel domestically and abroad during the week-long Lunar New Year holidays, which start on Friday. The American Petroleum Institute said U.S. crude inventories rose 1.6 million barrels last week, compared with analysts’ expectations for 1 million-barrel draw. Markets took Republican U.S. President Donald Trump’s impeachment trial in stride, as he is widely expected to be acquitted in the Republican-controlled Senate. Democrats accused Trump at the start of his impeachment trial on Wednesday of a corrupt scheme to pressure Ukraine to help him get re-elected. Trump told reporters in Switzerland the Democrats did not have enough evidence to find him guilty and remove him from office.
  • The dollar edged higher against its rivals Wednesday, as bullish housing data strengthened expectations that the U.S. economy will remain on solid footing. The National Association of Realtors said pending home sales rose 3.6% to a 5.54 million annual rate. That was the strongest pace of growth since February 2018. Lawrence Yun, chief economist at the National Association of Realtors, attributed the higher level of housing activity to strong job creation, high consumer confidence and low mortgage rates. A sharp uptick in the pound, meanwhile, kept the dollar on the backfoot as positive U.K. economy data cooled expectations that the Bank of England will cut rates at the end of the month. But some analysts see limited upside for cable, arguing that seasonal factors will likely weigh on the sterling. With just a day ago until the European Central Bank meeting, the euro was largely flat against the dollar at $1.109. The loonie was also knocked by a fall in oil prices after the International Energy Agency warned of a surplus in oil supplies by 1 million barrels per day in the first half of this year. The U.S. dollar edged higher Wednesday as traders took a calmer view of the emergence of the pneumonia-like virus in China, but its gains were minimal and caution was still abundant. As of early Wednesday, 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. Looking ahead, the Bank of Canada holds a rate-setting meeting later Wednesday, markets are widely expecting no changes in the policy rate However, the Canadian dollar has downside risk on the back of this meeting, according to Francesco Pesole, an analyst at ING, in a research note.
  • Oil prices slumped on Thursday in Asia after the American Petroleum Institute (API) reported that crude inventories rose last week. Oil inventories gained by 1.6 million for the week ended Jan. 17, according to the weekly report published by the API. The Energy Information Administration (EIA) will report its weekly inventory numbers tomorrow at 11:00 AM ET, slightly later than usual due to the Martin Luther King Day Holiday on Monday. The EIA is expected to report that crude stockpiles fell by 1 million barrels last week, extending the previous week’s drop of 2.5 million barrels. Gasoline stockpiles gained by 3.1 million barrels, the EIA is likely to say, adding to the previous week’s rise of 6.7 million barrels. On distillates inventories, traders expect the agency to report a 900,0000-barrel build, compared with the previous week’s 8.2-million-barrel jump. Also weighing on oil prices was fear that the mysteries coronavirus that killed at least 17 people and infected hundreds of people in China will continue to spread to other countries. So far, there have been more two “preliminary positive” reports of the pneumonia-causing virus in Hong Kong, one diagnosis in the U.S. and Macau, and patients under examination in Japan, Mexico and Russia. On Thursday, China’ state broadcast CCTV reported that Beijing has issued a travel suspension in Wuhan, a city of 11 million. Oil prices fell to their lowest in seven weeks on Thursday, sliding more than 1% on concern that the spread of a respiratory virus from China may lower fuel demand if it stunts economic growth in an echo of the SARS epidemic nearly 20 years ago The so-called novel coronavirus has killed 17 people through respiratory illness since it emerged late last year in Wuhan, a city of 11 million people in central China. Nearly 600 cases have been confirmed and city authorities have shut transport networks, urging residents not to leave to prevent the contagion spreading. The potential for a pandemic has stirred memories of the Sudden Acute Respiratory Syndrome epidemic in 2002-2003, which also started in China, and dented economic growth and led to a slump in travel. Overseas airlines, along with rail operators from Hong Kong and elsewhere have also started shutting down connections to Wuhan, essentially now in lockdown. Elsewhere, amid all the concern about hits to demand, supply remains plentiful. U.S. crude stockpiles rose last week by 1.6 million barrels, against expectations of a drop, the American Petroleum Institute said late on Tuesday. Meanwhile China released data on Thursday showing its gasoline exports are surging, rising nearly a third last year as more new refineries are opened.

 

 
Intraday RESISTANCE LEVELS
23rd January 2020 R1 R2 R3
GOLD-XAU 1.564 1,571 1,578-1,590
Silver-XAG 18.10 18.25 18.50-18.70
Crude Oil 56.00-56.90 57.80 58.60-59.50
EURO/USD 1.1190-1.1230 1.1280 1.1350-1.1400
GBP/USD 1.3150-1.3200 1.3250 1.3290-1.3350
USD/JPY 109.90-110.70 111.20 112.00-112.40

Intraday SUPPORTS LEVELS
23rd January 2020 S1 S2 S3
GOLD-XAU 1,548-1,542 1,536 1.527-1,519
Silver-XAG 17.50-17.10 16.60 16.25-16.00
Crude Oil 55.20-54.70 53.80 53.00-52.40
EURO/USD 1.1070 1.0980 1.0930-1.0890
GBP/USD 1.3100-1.3060 1.3010 1.2980-1.2930
USD/JPY 109.50 109.00 108.50-107.80

Intra-Day Strategy (23rd 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 Wednesday made its intraday high of US$1559.16/oz and low of US$1550.08/oz. Gold down 0.044% at US$1558.81/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 1554-1527 with risk below 1520, targeting 1564-1571-1578 and 1584-1590-1600. Sell below 1564-1590 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     1.564
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 Wednesday made its intraday high of US$17.91/oz and low of US$17.61/oz settled up by 0.541% at US$17.82/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     17.50-17.10
S2     16.60
S3     16.25-16.00

Intraday  Resistance Levels
R1     18.10
R2     18.25
R3     18.50-18.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.226 Buy
20-DMA   17.95 Buy
50-DMA   17.37 Buy
100-DMA   17.55 Buy
200-DMA   16.59 Buy
STOCH(5,3)   31.268 Sell
MACD(12,26,9)   0.2 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US58.34/bbl, intraday low of US$56.04/bbl and settled up by 3.67% to close at US$56.08/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 55.20-52.50 with risk daily closing below 52.50 and targeting 56.00-56.90-57.80 and 58.60-59.50. Sell in between 56.00-60.00 with stop loss at 60.00; targeting 57.80-56.90 and 56.00-55.20.

 
Intraday Support Levels
S1     55.20-54.70
S2     53.80
S3     53.00-52.40

Intraday Resistance Levels
R1     56.00-56.90
R2     57.80
R3     58.60-59.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   30.971 Sell
20-DMA   59.67 Sell
50-DMA   58.89 Sell
100-DMA   57.23 Buy
200-DMA   57.50 Buy
STOCH(5,3)   11.130 Sell
MACD(12,26,9)   0.179 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday an intraday low of US$1.1069/EUR, high of US$1.1097/EUR and settled the day up by 0.0974% to close at US$1.1092/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 Wednesday made an intra‐day low of US$1.3034/GBP, high of US$1.3152/GBP and settled the day up by 0.712% to close at US$1.3139/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     1.3100-1.3060
S2     1.3010
S3     1.2980-1.2930

Intraday Resistance Levels
R1     1.3150-1.3200
R2     1.3250
R3     1.3290-1.3350

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.909

Buy
20-DMA   1.3080 Sell
50-DMA   1.3041 Sell
100-DMA   1.2812 Buy
200-DMA   1.2688 Buy
STOCH(5,3)   79.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY109.82/USD and made an intraday high of JPY110.21/USD and settled the day down by 0.0236% at JPY109.83/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 109.90-112.70 with risk above 112.70 targeting 109.50-109.00 and 108.50-107.80-107.00. Long positions above 109.50-107.00 with targets of 109.50-110.70-111.30 and 112.40-113.00 with stop below 107.00.

 
Intraday Support Levels
S1     109.50
S2     109.00
S3     108.50-107.80

INTRADAY RESISTANCE LEVELS
R1     109.90-110.70
R2     111.20
R3     112.00-112.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.402 Buy
20-DMA   109.38 Buy
50-DMA   109.15 Buy
100-DMA   108.61 Buy
200-DMA   108.54 Buy
STOCH(9,6)   10.253 Sell
MACD(12,26,9)   0.296 Buy

AAFX TRADING
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