AAFX TRADING

Daily Market Lookup

  • Asian shares held their ground on Friday as trade slowed for the Lunar New Year, despite investors fears that a new coronavirus in China could spread faster as millions of people would be traveling over the week-long holiday. Markets had steadied overnight, as investors took some solace from the World Health Organisation labeling the outbreak an emergency for China, where 25 people have died and at least 800 have been infected, but not, as yet, for the rest of the world. Indeed, National Australia Bank’s research team tentatively estimated China’s GDP growth for the first quarter could be hit by around 1% point by this deadly coronavirus outbreak. The stance taken by WHO over epidemic provided enough relief for U.S. markets to advance further. In the currency market, the concerns about the virus supported the safe-haven yen. The euro fell to a seven-week low versus the dollar of $1.1036 overnight after the European Central Bank left its policy rates unchanged but President Christine Lagarde struck a slightly dovish tone than some had expected.
  • The Euro was unchanged against the U.S. dollar on Friday in Asia after the European Central Bank (ECB) launched a broad review of its policy and held rates steady. In the review, the ECB also signaled that loose monetary policy would continue at least until the end of the year Lagarde also said risks to the central bank’s growth outlook remained "tilted to the downside." In other news, the World Health Organization said the new coronavirus remains a local crisis for now, stopped short of calling the virus a global health emergency. Yet many investors were anxious as the epidemic spreads within China, killing 25 people in China and infecting more than 800. China issued restrictions on travel and public gatherings in Wuhan, the city in China where the virus was first detected, earlier this week. The euro hovered near a seven-week low against the dollar on Friday after the European Central Bank was seen as more cautious than expected, while anxiety over China's coronavirus outbreak propped up the safe-haven yen. The ECB launched a broad review of its policy, seeking to redefine its main goal and how to achieve it, as years of the central bank's experiment with negative interest rates and quantitative easing have failed to deliver targeted inflation levels. ECB President Christine Lagarde told a news conference that risks to growth in the euro zone remained tilted to the downside and traders took her overall tone as dovish. Riksbank, the central bank of Sweden, ended five years of negative interest rates last month, despite a slowdown in the Swedish economy, a decision which many investors thought was made to allay concerns about side-effects such as housing bubble damages to pension funds. Purchasing Managers' Index (PMI) data from Germany and the euro zone due later on Friday is the next focus for the currency. The common currency was also undermined by the coronavirus threat in China because some countries in the bloc, notably Germany, have big trade exposures to the Asian economic giant. Concerns about the spread of the new disease bolstered the yen, which traded at 109.45 yen to the dollar , having risen to a two-week high of 109.26 on Thursday. The World Health Organisation (WHO) said on Thursday it was "a bit too early" to declare the new virus a global health emergency, providing financial markets with some relief. Yet many investors were anxious as the epidemic spreads within China, killing 25 people in China and infecting more than 800. Chinese financial markets will be closed through Thursday. Many other markets in the region will be shut on Monday. Elsewhere, sterling traded at $1.3121 , little changed on the day but up 0.9% so far this week as solid UK economic data prompted traders to wind back expectations of a rate cut by the Bank of England at its policy meeting next week. UK PMI data, due at 9:30 a.m. local time (0930GMT) on Friday, will be closely watched for any clues on the BoE's next policy decision on Jan. 30.
  • Oil prices edged up on Friday, helped by a decline in U.S. crude stockpiles, but were on track for to fall up to 5% for the week on worries that the China coronavirus that has killed 25 so far may spread, curbing travel, fuel demand and economic prospects. The virus has infected more than 800 so far in China, with 25 dead as of Thursday, according to China's National Health Commission. The World Health Organisation has declared the situation an emergency, but stopped short of declaring the epidemic of international concern. Most of the cases are in the central Chinese city of Wuhan, where the virus is believed to have originated late last year, though cases have now been found in at least seven other countries. Offering some support for prices was news that U.S. crude oil and distillate inventories fell last week, the Energy Information Administration said on Thursday. Though they failed to match analysts' expectations in a Reuters poll of a 1 million barrel drop, crude inventories did decline by 405,000 barrels in the week to Jan. 17, government data showed. Elsewhere, refined fuel exports from India jumped in December as its slowing economy crimped domestic demand India's refined fuel exports rose 24.2% in December year-on-year to 6.46 million tonnes, the fastest growth since October 2016, official data released on Thursday

 

 
Intraday RESISTANCE LEVELS
24th 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 1.3290-1.3350 1.3290-1.3350
USD/JPY 109.90-110.70 111.20 112.00-112.40

Intraday SUPPORTS LEVELS
24th 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 1.1040-1.0980 1.0930 1.0890-1.0850
GBP/USD 1.3100-1.3060 1.3010 1.2850-1.27701.2980-1.2930
USD/JPY 109.50 109.00 108.50-107.80

Intra-Day Strategy (24th 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$1567.85/oz and low of US$1551.81/oz. Gold up 0.245% at US$1562.58/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  

65.804

Buy
20-DMA   1549.87 Buy
50-DMA  

1502.86

Buy
100-DMA   1498.25 Buy
200-DMA   1440.72 Buy
STOCH(5,3)   61.621 Sell
MACD(12,26,9)   17.161 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$17.90/oz and low of US$17.59/oz settled down by 0.106% 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     17.50-17.10
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   51.226 Buy
20-DMA   17.95 Buy
50-DMA   17.37 Buy
100-DMA   17.55 Buy
200-DMA   16.59 Buy
STOCH(5,3)   33.268 Sell
MACD(12,26,9)   0.2 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US56.24/bbl, intraday low of US$54.77/bbl and settled down by 0.855% to close at US$55.64/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 Thursday an intraday low of US$1.1035/EUR, high of US$1.1108/EUR and settled the day down by 0.347% to close at US$1.1053/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     1.1040-1.0980
S2     1.0930
S3     1.0890-1.0850

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.085 Buy
20-DMA   1.1130 Buy
50-DMA   1.1096 Buy
100-DMA   1.1068 Buy
200-DMA   1.1131 Buy
STOCH(5,3)   18.758 Buy
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3096/GBP, high of US$1.3150/GBP and settled the day down by 0.124% to close at US$1.3122/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     1.2850-1.27701.2980-1.2930

Intraday Resistance Levels
R1     1.3150-1.3200
R2     1.3290-1.3350
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 Thursday 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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