AAFX TRADING

Daily Market Lookup

  • The U.S. dollar remains strong Tuesday, as heightened concerns about the spread of the deadly coronavirus in China prompt demand for currencies as safer. The positive tone around the dollar, in combination with global growth concerns amidst the spread of the Chinese virus, have kept EUR/USD under heavy pressure of late. With this in mind, attention is likely to be turned to the start of the Federal Reserve’s two day rate-setting meeting Tuesday, as well as the latest data releases in the U.S. Durable goods orders are due at 8:30 AM ET (1330 GMT), and are expected to have risen 0.3% last month, while at 10:00 AM ET, the January consumer confidence index is expected to come in at 128 from 126.5 in December. Sterling was also weaker early Tuesday in Europe, amid concerns that the country will not be able to reach a trade deal with the EU by the end of the post-Brexit transition period at the end of the year. he Japanese yen was little changed against the U.S. dollar on Thursday in Asia despite heightened concerns surrounding the deadly coronavirus originating in China. The number of confirmed cases of coronavirus in China continued to soar and has overtaken the official number of infections in the country during the SARS epidemic. On Wednesday, the Hong Kong government announced that it will close some border checkpoints and limit transportation from the mainland as an attempt to stop the virus from spreading even further. Meanwhile, the U.S. and U.K. said this week that residents should avoid all non-essential travel to China. Citing unnamed sources, Bloomberg reported today that the White House has told airlines that it may suspend all flights from China to the U.S.
  • The Federal Reserve will conclude its latest policy meeting on Wednesday with interest rates almost certainly to remain on hold but officials likely to discuss possible changes to how they manage the U.S. central bank’s key overnight borrowing rate. Since the Fed cut rates in October, its third and final reduction in borrowing costs in 2019, policymakers have agreed to keep their target policy rate in the current range of 1.50% and 1.75% until there is some significant change in the economic outlook. U.S. data since the Fed’s last policy meeting in December have done little to shift expectations for continued economic growth this year of around 2% and steady, low unemployment. Some risks may have risen - with China’s economic growth now in the spotlight after a corona virus outbreak - and U.S. Treasury bond yields have fallen as a result U.S. President Donald Trump on Tuesday also repeated his call for even lower rates. The Republican president lambasted the Fed and its chief, Jerome Powell, in 2018 and 2019 for maintaining a monetary policy that he regarded as too tight. While investors have increased bets the Fed would cut rates again at some point this year, analysts still were near unanimous that any such decision is months down the road. Ninety-five of 108 economists polled by Reuters recently said they expected the Fed to leave rates on hold at this week’s meeting, and JP Morgan analyst Michael Feroli said it would likely be “one of the least eventful meetings in recent years.” The Fed is due to release its policy statement at 2 p.m. EST (1900 GMT). Powell is scheduled to hold a news conference half an hour later The Fed is expected to soon decide how much longer it will continue its current practice of buying $60 billion a month in U.S. Treasury bonds, how to scale that program back, and what will replace it as a long-term fix for its management of short-term bank funding markets Pumping that extra liquidity into the banking system each month has allowed the Fed to keep short-term interest rates within the target range, addressing an issue that arose last fall when a shortage of bank reserves led that rate to spike. But it is considered less than an ideal fix. It means the Fed each month is adding to its roughly $4 trillion in assets. Some policymakers would prefer the central bank have a smaller balance sheet if possible.
  • Oil prices gained on Thursday in Asia after the American Petroleum Institute (API) reported that stockpiles of U.S. crude fell sharply last week. In its weekly report, the API said that oil inventories posted a drop of 4.3 million for the week ended Jan. 24, compared with build of 1.6 million reported last week. Analysts expect the Energy Information Administration (EIA) to say later today that crude stockpiles rose by 460,000 barrels last week, from a drop of 405,000 during the previous week to Jan. 17. For gasoline stockpiles, the EIA is expected to report a rise of 1.17 million barrels, extending the previous week’s build of 1.74 million. On the distillates front, expectations are that inventories fell by 1.25 million barrels, after the previous week’s drop of 1.19 million.

 

 
Intraday RESISTANCE LEVELS
29th January 2020 R1 R2 R3
GOLD-XAU 1,571-1,580 1,590 1,600-1,611
Silver-XAG 17.90-18.25 18.50 18.70-19.10
Crude Oil 54.70 55.20 56.00-56.90
EURO/USD 1.1040-1.1190 1.1280-1.1350 1.1280-1.1350
GBP/USD 1.3150 1.3150 1.3200-1.3250
USD/JPY 109.50109.90 110.70 111.20-112.00

Intraday SUPPORTS LEVELS
29th January 2020 S1 S2 S3
GOLD-XAU 1.564 1,548 1,542-1,536
Silver-XAG 17.40-17.10 16.60 16.25-15.90
Crude Oil 53.80-52.90 52.20 51.50-51.00
EURO/USD 1.1010-1.0980 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 (29th 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$1582.96/oz and low of US$1565.43/oz. Gold down 0.902% at US$1567.32/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 1564-1536 with risk below 1536, targeting 1571-1584-1590 and 1600-1611-1620. Sell below 1571-1620 keeping stop loss closing above 1620, targeting 1564-1556 and 1542-1536.

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

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 Tuesday made its intraday high of US$18.12/oz and low of US$17.42/oz settled down by 3.663% at US$17.46/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 17.40-15.90 targeting 17.90-18.25-18.50 and 18.70-19.10; stop breakage below 16.00. Sell below 17.90-20.10 with stop loss above 20.10; targeting 17.50-17.00 and 16.25-16.00.

 
Intraday  Support Levels
S1     17.40-17.10
S2     16.60
S3     16.25-15.90

Intraday  Resistance Levels
R1     17.90-18.25
R2     18.50
R3     18.70-19.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.194 Buy
20-DMA   17.93 Buy
50-DMA   17.43 Buy
100-DMA   17.51 Buy
200-DMA   16.65 Buy
STOCH(5,3)   24.268 Sell
MACD(12,26,9)   0.050 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US54.02/bbl, intraday low of US$52.67/bbl and settled up by 2.179% to close at US$53.91/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 53.90-50.40 with risk daily closing below 50.50 and targeting 54.70-55.20 and 56.00-56.90. Sell in between 54.70-56.90 with stop loss at 57.00; targeting 53.80-52.90-52.20 and 51.50-51.00.

 
Intraday Support Levels
S1     53.80-52.90
S2     52.20
S3     51.50-51.00

Intraday Resistance Levels
R1     54.70
R2     55.20
R3     56.00-56.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   25.473 Sell
20-DMA   58.11 Sell
50-DMA   58.60 Sell
100-DMA   57.11 Buy
200-DMA   57.29 Buy
STOCH(5,3)   25.130 Sell
MACD(12,26,9)   -1.505 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.0997/EUR, high of US$1.1024/EUR and settled the day up by 0.0294% to close at US$1.1021/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     1.1010-1.0980
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   35.085 Buy
20-DMA   1.1102 Sell
50-DMA   1.1094 Sell
100-DMA   1.1067 Sell
200-DMA   1.1127 Sell
STOCH(5,3)   15.758 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2974/GBP, high of US$1.3064/GBP and settled the day up by 0.222% to close at US$1.3026/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     1.3150
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 Buy
100-DMA   1.2688 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 Tuesday made intra‐day low of JPY108.75/USD and made an intraday high of JPY109.19/USD and settled the day up by 0.234% at JPY109.14/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     109.00
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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