AAFX TRADING

Daily Market Lookup

  • The dollar held firm on Tuesday after a key U.S. manufacturing survey showed a surprise recovery, while concerns about a widening coronavirus outbreak in China kept the yuan and the Australian dollar subdued. It was boosted by a report from the Institute for Supply Management (ISM) reported that U.S. factory activity unexpectedly rebounded in January after contracting for five straight months amid a surge in new orders. The euro stood at $1.1062 (EUR=), having slipped 0.3% on Monday. In Asia, coronavirus remained in focus as the number of cases and deaths showed little sign of slowdown. Although most investors expect the RBA to keep rates on hold at this month's meeting, a cut has not been completely ruled out, with markets pricing in a 100% chance of such a move by May Elsewhere, sterling fetched $1.2999 , having lost 1.54% on Monday on renewed worries about Britain's relations with the European Union. Prime Minister Boris Johnson set out tough terms for Brexit talks with the European Union, rekindling fears Britain would reach the end of an 11-month transition period without agreeing a trade deal. Traders are also casting an eye on the U.S. state of Iowa, where Democrats are kicking off a process to choose a challenger to President Donald Trump. Market players say a victory by a progressive candidate such Senator Bernie Sanders and Elizabeth Warren could hurt shares and lift safe-haven currencies as some of their policies are thought to be not in best interests of Wall Street.
  • Gold prices fell on Tuesday as Asian stocks rebounded. Asian stocks trade mostly higher today, with Chinese equities up more than 1%. The gains came even after Hong Kong today reported its first death from the coronavirus, the second fatality outside mainland China from an outbreak that has killed 425 people. The People’s Bank of China flooded the economy with cash today to support the country’s economy hit by the widening coronavirus. The central bank injected 400 billion yuan ($57 billion) into the banking system through reverse repurchase agreements. It was the largest single-day addition in more than a year. The U.S. Dollar Index, which usually moves in directions opposite to gold, traded higher earlier in the day after a key U.S. manufacturing survey showed a surprise rebound.
  • The dollar climbed Monday, on data showing manufacturing activity expanded in January for the first time in six months, while a slump in the pound also boosted the greenback amid fears the U.K and European Union could clash on trade. The ISM manufacturing index for January showed an uptick to 50.9, beating expectations of 48.5. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the U.S. economy. Still, many expect that the turnaround in manufacturing is unlikely to be repeated. The weaker data did little to knock the dollar's advance thanks to a sharp decline in the pound GBP/USD fell 1.56% to $1.2994 as the U.K. and EU expressed opposing views on a future relationship, raising fears Britain risks leaving the economic bloc at the end of the transition period, Dec. 31, without a deal. EU chief negotiator Michel Barnier said the EU was prepared to make a wide-ranging free trade agreement but stressed it would be conditional on the U.K. retaining various EU rules to ensure a "level playing field." But U.K. Prime Minister Boris Johnson said he was unwilling to adopt EU standards as means to secure a free trade deal.The bid in safe havens faded somewhat, inflicting damage on the yen and Swiss franc, despite ongoing concerns about the impact of the coronavirus outbreak on global growth.
  • Oil prices rose on Tuesday in Asia as OPEC and its allies meet to assess Asia’s coronavirus’ impact on oil demand Technical experts from OPEC+ will meet at the cartel’s Vienna headquarters later in the day to study the disease’s impact, Bloomberg reported, which noted that fuel consumption in China, the world’s biggest oil importer, has slumped by about 3 million barrels a day, or 20% of total consumption. The officials from OPEC+ are considering to convene an emergency ministerial meeting later this month to consider new production cuts, according to the report. Oil prices fell to their lowest level in the previous session as China’s coronavirus crisis entered its second month, threatening to further drain demand for China. In the latest tally, China said its total death toll from the virus stood at 425 and cases rose to more than 20,000. Asian equities and other risky assets recovered today, with Chinese stocks gaining more than 1% after closing down 8.7% on Monday. Oil prices rose on Tuesday, matching moves in other financial markets as investors regained calm after Monday's sharp sell-off on fears of the impact of the China coronavirus on demand for fuel sent crude to its lowest level in more than a year. She said recovery was also helped by the Organization of the Petroleum Exporting Countries (OPEC) and its allies considering further supply cuts amid concerns that the virus will dampen the outlook for global energy demand. Three OPEC+ sources and an industry source familiar with discussions told Reuters on Monday OPEC and its allies including Russia, known as OPEC+, were considering cutting their oil output by a further 500,000 barrels per day (bpd) due to the impact on oil demand from the coronavirus.

 

 
Intraday RESISTANCE LEVELS
4th February 2020 R1 R2 R3
GOLD-XAU 1,580-1,590 1,600 1,611-1,620
Silver-XAG 17.90-18.25 18.50 18.70-19.10
Crude Oil 51.50-51.00 52.20 52.70-53.80
EURO/USD 1.1100-1.1190 1.1230 1.1280-1.1350
GBP/USD 1.3060-1.3100 1.3160 1.3200-1.3250
USD/JPY 108.90-109.50 109.90 110.70-111.20

Intraday SUPPORTS LEVELS
4th February 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 50.20-49.40 48.50 48.00-47.50
EURO/USD 1.1050-1.1010 1.0980 1.0930-1.0890
GBP/USD 1.3010-1.2980 1.2930 1.2870-1.2840
USD/JPY 108.50-107.80 107.00 106.50-106.00

Intra-Day Strategy (4th February 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$1593.60/oz and low of US$1569.77/oz. Gold up 1.038% at US$1576.54/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 and 1600-1611-1620. Sell below 1584-1620 keeping stop loss closing above 1620, targeting 15780-1564-1556 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  

60.614

Buy
20-DMA   1564.83 Buy
50-DMA  

1518.48

Buy
100-DMA   1504.60 Buy
200-DMA   1452.91 Buy
STOCH(5,3)   57.621 Buy
MACD(12,26,9)   16.161 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$18.01/oz and low of US$17.58/oz settled down by 2.355% at US$17.66/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   49.397 Buy
20-DMA   17.87 Buy
50-DMA   17.49 Buy
100-DMA   17.51 Buy
200-DMA   16.71 Buy
STOCH(5,3)   55.268 Sell
MACD(12,26,9)   0.0035 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US51.98/bbl, intraday low of US$49.85/bbl and settled down by 2.47% to close at US$49.93/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 50.20-47.40 with risk daily closing below 47.50 and targeting 51.00-51.50-52.20 and 52.70-53.80. Sell in between 51.00-53.80 with stop loss at 53.80; targeting 50.20-49.40 and 48.50-48.00-47.50.

 
Intraday Support Levels
S1     50.20-49.40
S2     48.50
S3     48.00-47.50

Intraday Resistance Levels
R1     51.50-51.00
R2     52.20
R3     52.70-53.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   26.112 Sell
20-DMA   55.87 Sell
50-DMA   58.12 Sell
100-DMA   56.92 Sell
200-DMA   57.01 Buy
STOCH(5,3)   23.130 Sell
MACD(12,26,9)   -2.004 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.10350/EUR, high of US$1.1093/EUR and settled the day down by 0.312% to close at US$1.1058/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 1.1060-1.0890 with risk below 1.0890, targeting 1.1100-1.1180-1.1230 and 1.1280-1.1350. Sell below 1.1100-1.1350 targeting 1.1020-1.0980 and 1.0930-1.0860 with stop-loss at daily closing above 1.1350.

 
Intraday Support Levels
S1     1.1050-1.1010
S2     1.0980
S3     1.0930-1.0890

Intraday  Resistance Levels
R1     1.1100-1.1190
R2     1.1230
R3     1.1280-1.1350

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.673 Buy
20-DMA   1.1079 Sell
50-DMA   1.1094 Sell
100-DMA   1.1068 Sell
200-DMA   1.1125 Sell
STOCH(5,3)   75.758 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2980/GBP, high of US$1.3183/GBP and settled the day up by 1.417% to close at US$1.2989/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 1.3010-1.2750 with targets 1.3060-1.3100-1.3150 and 1.3200-1.3250 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.3010-1.2980
S2     1.2930
S3     1.2870-1.2840

Intraday Resistance Levels
R1     1.3060-1.3100
R2     1.3160
R3     1.3200-1.3250

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

46.909

Buy
20-DMA   1.3056 Sell
50-DMA   1.3066 Sell
100-DMA   1.2870 Buy
200-DMA   1.2692 Buy
STOCH(5,3)   39.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY108.31/USD and made an intraday high of JPY108.79/USD and settled the day up by 0.545% at JPY108.66/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 108.90-112.70 with risk above 112.70 targeting 108.50-107.80-107.00 and 106.50-106.00. Long positions above 108.50-106.00 with targets of 108.90-109.50-110.70 and 111.30-112.40-113.00 with stop below 107.00.

 
Intraday Support Levels
S1     108.50-107.80
S2     107.00
S3     106.50-106.00

INTRADAY RESISTANCE LEVELS
R1     108.90-109.50
R2     109.90
R3     110.70-111.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.402 Buy
20-DMA   109.40 Buy
50-DMA   109.18 Buy
100-DMA   108.72 Buy
200-DMA   108.43 Buy
STOCH(9,6)   22.253 Sell
MACD(12,26,9)   -0.126 Buy

AAFX TRADING
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