AAFX TRADING

Daily Market Lookup

  • Asian currencies arrested their slide on Friday as confidence from the World Health Organization in China's response to a new virus and upbeat data from the world's second biggest economy tempered worries over a jump in new infections. The WHO said late Thursday the outbreak was a global emergency, but China's response so far will "reverse the tide" of the virus' spread. Together with official data showing Chinese services activity picking up this month, was enough to pause selling from investors who are waiting for more information about the virus to judge its likely human and economic costs. Some 60 million people in the epicenter of the outbreak, Hubei province, are living under virtual lockdown. Several global airlines have stopped flying to mainland China and economists are slashing their forecasts for Chinese growth. The yen and dollar have been beneficiaries of the resulting flight to safety. Separately, relief the Bank of England held rates steady sent the British pound up 0.7% to a week high. Britain's market watchdog, however, is investigating the move because it began just before the bank's announcement. The dollar struggled to find its footing Thursday, amid mixed U.S. economic data and a sharp decline against the pound after the Bank of England held rates steady in the wake of firmer economic data.
  • The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.18% to 97.64 . Gross domestic product increased at a 2.1% pace in the fourth quarter of last year, the Commerce Department said in its advance estimate on Thursday, in line with forecasts. But the growth was supported by a collapse in imports and final private domestic sales rose at an annualized rate of only 1.4% in the quarter, the slowest rate in four years. The U.S. economy has been underpinned by strong consumer spending offsetting weakness in other areas like business investment and manufacturing. On the labor front, initial jobless claims fell by 7,000 to a seasonally adjusted 216,000, slightly missing economists' forecast for a drop to 215,000. The greenback was also pressure by a surge in the pound as the Bank of England left its benchmark rate at 0.75%. But some analysts have suggested that a future rate cut is not completely off the table should the recent run of positive U.K. economic data fade. Safe-haven demand, meanwhile, continued to underpin the yen and Swiss franc as the death toll from the corona virus outbreak rose to 170, raising fears about the potential impact of the disease on global growth. Fears of a pandemic intensified somewhat after Centers for Disease Control reported the first person-to-person transmission of the corona virus in the U.S., which now has six confirmed cases.
  • The U.S. economy missed the Trump administration’s 3% growth target for a second straight year, posting its slowest annual growth in three years in 2019 as the slump in business investment deepened amid damaging trade tensions. The 2.3% expansion last year reported by the Commerce Department on Thursday suggested the White House and Republicans’ massive $1.5 trillion tax cut package, which President Donald Trump had predicted would lift growth above 3%, had provided the economy only a temporary boost. Moderate growth undercuts the argument by Trump and his fellow Republicans that strong growth would pay for the tax cuts, which are expected to help push the federal budget deficit to $1.02 trillion this year. Growth last year was the slowest since 2016 and followed the 2.9% notched in 2018. White House economic adviser Larry Kudlow shrugged off the 2019 performance, telling Fox Business Network “it is a fundamentally healthy economy,” and expressed confidence that activity will accelerate this year, a view not widely shared outside the administration. While Thursday’s snapshot of gross domestic product showed the economy maintaining a moderate pace of growth in the fourth quarter, which was in part because of a smaller import bill, which has since swelled as the year ended. Consumer spending cooled considerably last quarter and scope for a rebound looks limited as wage growth appears to have stalled. Gross domestic product increased at a 2.1% annualized rate in the fourth quarter, matching the third-quarter pace, also as lower borrowing costs encouraged purchases of houses. Growth was also supported by increased government spending on defense.
  • Oil prices rebounded on Friday in Asia after the World Health Organization (WHO) said it had confidence China could control the virus outbreak. So far, the new virus has killed 213 people and infected 9,692 in China and spread to at least 18 other countries. However, the WHO said restrictions on commerce weren’t necessary and that there’s no need for travel and trade bans due to the coronavirus. In other news, Saudi Arabia has reportedly opened a discussion about moving an upcoming output policy meeting to early February from March following the recent slide in oil prices. Oil prices jumped on Friday following sharp losses this week, as the World Health Organization (WHO) came out against travel and trade restrictions in declaring a global emergency over the spread of a coronavirus that originated in China last year. Driven largely by a drop in Chinese domestic and international transport activity, world oil demand was adjusted lower by 500,000 barrels per day in the first quarter of 2020, according to estimates from Wood Mackenzie consultant Yujiao Lei. Prices were also buoyed by reports that Saudi Arabia has opened a discussion about moving an upcoming output policy meeting to early February from March following the recent slide in oil prices.

 

 
Intraday RESISTANCE LEVELS
31st January 2020 R1 R2 R3
GOLD-XAU 1,580 1,590 1,600-1,611
Silver-XAG 17.90-18.25 18.50 18.70-19.10
Crude Oil 53.80-54.70 55.20 56.00-56.90
EURO/USD 1.1040-1.1190 1.1230 1.1280-1.1350
GBP/USD 1.3060-1.3100 1.3150 1.3200-1.3250
USD/JPY 109.50-109.90 110.70 111.20-112.00

Intraday SUPPORTS LEVELS
31st January 2020 S1 S2 S3
GOLD-XAU 1,571-1.564 1,548 1,542-1,536
Silver-XAG 17.40-17.10 16.60 16.25-15.90
Crude Oil 52.70-52.20 51.50 51.00-50.20
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 108.90 108.50-107.80 107.00

Intra-Day Strategy (31st 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$1577.98/oz and low of US$1572.30/oz. Gold up 0.169% at US$1574.07/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     1,571-1.564
S2     1,548
S3     1,542-1,536
Intraday Resistance Levels
R1     1,580
R2     1,590
R3     1,600-1,611

Technical Indicators

Name   Value Action
14DRSI  

64.614

Buy
20-DMA   1562.83 Buy
50-DMA  

1513.48

Buy
100-DMA   1502.60 Buy
200-DMA   1449.91 Buy
STOCH(5,3)   57.621 Sell
MACD(12,26,9)   16.161 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$18.02/oz and low of US$17.44/oz settled up by 2.16% 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 17.40-15.90 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 Thursday made an intra‐day high of US53.20/bbl, intraday low of US$51.64/bbl and settled down by 0.282% to close at US$52.93/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 52.70-50.40 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 and 51.50-51.00.

 
Intraday Support Levels
S1     52.70-52.20
S2     51.50
S3     51.00-50.20

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   27.112 Sell
20-DMA   57.65 Sell
50-DMA   58.53 Sell
100-DMA   57.05 Buy
200-DMA   57.22 Buy
STOCH(5,3)   24.130 Sell
MACD(12,26,9)   -1.505 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.1006/EUR, high of US$1.1038/EUR and settled the day up by 0.195% to close at US$1.1030/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     1.1230
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 Thursday made an intra‐day low of US$1.2977/GBP, high of US$1.3109/GBP and settled the day up by 0.564% to close at US$1.3091/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 1.3060-1.3300 with targets at 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 Thursday made intra‐day low of JPY108.57/USD and made an intraday high of JPY109.05/USD and settled the day down by 0.055% at JPY108.94/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     108.90
S2     108.50-107.80
S3     107.00

INTRADAY RESISTANCE LEVELS
R1     109.50-109.90
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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