AAFX TRADING

Daily Market Lookup

  • Asian stocks took a battering on Tuesday as the death toll from a virus in China climbed, leaving investors fretting over the widening economic fallout from the outbreak and lifting bonds on expectations central banks would need to keep stimulus flowing. Outside of Asia, futures pointed to a positive start for Europe and Wall Street but that followed a hefty sell-off on Monday. As the death toll reached 106 in China, the country extended the Lunar New Year holiday to Feb. 2 nationally, and to Feb. 9 for Shanghai. China’s largest steelmaking city in northern Hebei province, Tangshan, suspended all public transit in an effort to prevent the spread of the virus. With Chinese markets shut investors were selling the offshore yuan and the Australian dollar as a proxy for risk. Oil was also under pressure as fears about the wider fallout from the virus mounted, although futures had bounced from Monday’s lows. Asian shares too pared some of their early losses on Tuesday but were still deep in the red. Chinese authorities also may have limited room to stimulate the country’s economy than it had during the 2002-03 outbreak of the Severe Acute Respiratory Syndrome (SARS) virus, another reason investors were jittery. Many investors were still trying to figure out the potential impact from the coronavirus, though travel and tourism sectors are expected to bear the brunt of the impact. Analysts at JPMorgan said the coronavirus outbreak was an “unexpected risk factor” for markets though they see the contagion as a regional rather than a global shock. Futures imply around 35 basis points of easing by year end. The Federal Reserve is widely expected to stand pat at its policy meeting this week, but markets will be sensitive to any changes to its economic outlook. JPMorgan said they have not yet altered their developed or emerging markets forex forecasts though they were taking profits on their “bullish” EUR/USD positions and remain “considerably long” on Swiss francs which benefits from safe-haven demand.
  • The dollar remained on the back foot Monday, pressured by a surprise fall in new home sales data and a bid in the yen and Swiss franc as worries intensified over the spread of the deadly coronavirus. The Commerce Department said new home sales fell fell 0.4% to a seasonally adjusted annual rate of 694,000 units in December, confounding expectations for a 1.5% rise to 730,000 units. The surprise drop in new home sales did little to steady the greenback against the yen and Swiss franc following a sharp uptick in safe-haven demand on reports of more Chinese deaths from the coronavirus. The weakness in the greenback comes just a day ahead of the Federal Open Market Committee's two-day meeting, which is expected to culminate in an unchanged interest rate decision. EUR/USD slipped 0.02% to $1.1102 as German business confidence unexpectedly slipped in January, denting hopes that the weakness in the manufacturing sector had steadied. he dollar climbed against its rivals Friday as data showing ongoing strength in the U.S. services sector offset a continued slowing in manufacturing to a three-year low. The IHS Markit flash purchasing managers index for manufacturing slipped to a three-month low in January, but the services PMI rose to the highest level since last March. Strength in the greenback was also supported by plunge in the pound and euro. GBP/USD fell 0.29% to $1.308 and more losses could follow when trade negotiations between the U.K. and the EU begin after the U.K. leaves the trading bloc on Jan. 31, said Jane Foley, senior foreign-exchange strategist at Rabobank. The Chinese government extended the week-long new year holiday by three days at the weekend, giving more time for screening and other countermeasures to take effect, but signalling a bigger-than-expected near-term hit to both retail sales and industrial output. Nearly 2,000 people in China had been infected and 56 killed by the disease, Chinese authorities said Sunday, although reports state that the death toll has since increased to 80.
  • Oil futures fell for a sixth session on Tuesday as the spread of a new virus in China and several countries raised concerns about a hit to economic growth and oil demand. The United States warned against travel to China and other countries put out advisories as the death toll from the spreading coronavirus outbreak rose to more than 100 people and left millions of Chinese stranded during the biggest holiday of the year. Oil investors are concerned travel advisories, other restrictions and any sizable impact on growth in the world's second-biggest economy and elsewhere will dampen demand for crude and its products, amid plentiful supply. The bank expects the grouping known as OPEC+ to take further steps to support the market when it meets in March if demand lags its forecast of between 600,000 and 800,000 barrels per day (bpd) in the first quarter of 2020. The Organization of the Petroleum Exporting Countries (OPEC), has been trying to play down the fallout from the virus, while Saudi Arabia, its de-facto leader, said on Monday the group could respond to any changes in demand. OPEC and producers including Russia, known as OPEC+, have been cutting supply to support oil prices for nearly three years and recently agreed to withhold a further 500,000 barrels bpd to 1.7 million bpd through March. Underlining the supply concerns, a Reuters poll forecast U.S. crude stockpiles to have risen last week.

 

 
Intraday RESISTANCE LEVELS
28th January 2020 R1 R2 R3
GOLD-XAU 1,580-1,590 1,600 1,611-1,620
Silver-XAG 18.25 18.50-18.70 19.10
Crude Oil 53.80-54.70 55.20 56.00-56.90
EURO/USD 1.1040-1.1190 1.1280-1.1350 1.1280-1.1350
GBP/USD 1.3060-1.3100 1.3150 1.3200-1.3250
USD/JPY 109.50109.90 110.70 111.20-112.00

Intraday SUPPORTS LEVELS
28th January 2020 S1 S2 S3
GOLD-XAU 1,571-1.564 1,548 1,542-1,536
Silver-XAG 17.90-17.50 17.10 16.60-16.25
Crude Oil 52.90-52.20 51.50 53.80-54.70
EURO/USD 1.0930 1.0930 1.0890-1.0850
GBP/USD 1.3010-1.2980 1.2930 1.2890-1.2820
USD/JPY 109.00 108.50-107.80 107.00

Intra-Day Strategy (28th 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$1588.41/oz and low of US$1575.80/oz. Gold up 0.072% at US$1581.85/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 1571-1536 with risk below 1536, targeting 1584-1590-1600 and 1611-1620. Sell below 1584-1620 keeping stop loss closing above 1620, targeting 1578-1564-1556 and 1542-1536.

 
Intraday Support Levels
S1     1,571-1.564
S2     1,548
S3     1,542-1,536
Intraday Resistance Levels
R1     1,580-1,590
R2     1,600
R3     1,611-1,620

Technical Indicators

Name   Value Action
14DRSI  

72.713

Buy
20-DMA   1553.78 Buy
50-DMA  

1505.22

Buy
100-DMA   1499.26 Buy
200-DMA   1443.40 Buy
STOCH(5,3)   80.621 Sell
MACD(12,26,9)   17.161 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$18.34/oz and low of US$18.03/oz settled down by 0.757% at US$18.07/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 17.90-16.00 targeting 18.25-18.50-18.70 and 19.10-19.65; stop breakage below 16.00. Sell below 18.25-20.10 with stop loss above 20.10; targeting 17.90-17.50-17.00 and 16.25-16.00.

 
Intraday  Support Levels
S1     17.90-17.50
S2     17.10
S3     16.60-16.25

Intraday  Resistance Levels
R1     18.25
R2     18.50-18.70
R3     19.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.226 Buy
20-DMA   17.98 Buy
50-DMA   17.42 Buy
100-DMA   17.53 Buy
200-DMA   16.63 Buy
STOCH(5,3)   68.268 Sell
MACD(12,26,9)   0.145 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US53.53/bbl, intraday low of US$52.12/bbl and settled down by 0.827% to close at US$52.76/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 52.90-50.40 with risk daily closing below 50.50 and targeting 53.80-54.70-55.20 and 56.00-56.90. Sell in between 53.80-56.90 with stop loss at 57.00; targeting 52.90-52.20-51.50 and 51.00-50.40.

 
Intraday Support Levels
S1     52.90-52.20
S2     51.50
S3     53.80-54.70

Intraday Resistance Levels
R1     53.80-54.70
R2     55.20
R3     56.00-56.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   22.971 Sell
20-DMA   59.86 Sell
50-DMA   58.74 Sell
100-DMA   57.18 Buy
200-DMA   57.40 Buy
STOCH(5,3)   11.130 Sell
MACD(12,26,9)   -1.179 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.1008/EUR, high of US$1.1036/EUR and settled the day down by 0.1033% to close at US$1.1018/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 1.1020-1.0850 with risk below 1.0850, targeting 1.1040-1.1180-1.1230 and 1.1280-1.1350. Sell below 1.1040-1.1350 targeting 1.1020-1.0980 and 1.0930-1.0860 with stop-loss at daily closing above 1.1350.

 
Intraday Support Levels
S1     1.0930
S2     1.0930
S3     1.0890-1.0850

Intraday  Resistance Levels
R1     1.1040-1.1190
R2     1.1280-1.1350
R3     1.1280-1.1350

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.085 Buy
20-DMA   1.1121 Sell
50-DMA   1.1096 Sell
100-DMA   1.1068 Sell
200-DMA   1.1129 Sell
STOCH(5,3)   11.758 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3039/GBP, high of US$1.3104/GBP and settled the day down by 0.172% to close at US$1.3056/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 1.3100-1.3300 with targets at 1.3060-1.3020-1.2930 and 1.2850-1.2800 stop-loss should be below 1.3420. Buy above 1.3060-1.2750 with targets 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     1.2890-1.2820

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

47.909

Buy
20-DMA   1.3079 Sell
50-DMA   1.3049 Sell
100-DMA   1.2828 Buy
200-DMA   1.2688 Buy
STOCH(5,3)   59.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY108.72/USD and made an intraday high of JPY109.13/USD and settled the day down by 0.0229% at JPY108.88/USD.

Technicals in Focus:

USD/JPY on Monday made intra‐day low of JPY108.72/USD and made an intraday high of JPY109.13/USD and settled the day down by 0.0229% at JPY108.88/USD.

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     109.00
S2     108.50-107.80
S3     107.00

INTRADAY RESISTANCE LEVELS
R1     109.50109.90
R2     110.70
R3     111.20-112.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.402 Buy
20-DMA   109.33 Buy
50-DMA   109.17 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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