AAFX TRADING

Daily Market Lookup

  • The dollar held near a two-week high versus the yen on Friday on upbeat U.S. economic data ahead of a key jobs report, while the yuan eased and financial markets remained on tenterhooks as the death toll from a new coronavirus in China jumped yet again. Sterling traded near a six-week low against the greenback and nursed losses versus the euro, dogged by persistent worries about negotiations between Britain and the European union for a post-Brexit trade deal. Recent upbeat U.S. economic data and China's stimulus steps gave traders some respite from heightened concerns about the new virus, though the uncertainty about the impact of the epidemic on global growth looks set to keep most investors risk-averse - at least in the short run. For the week, the onshore yuan fell 0.6% as Chinese financial markets took a battering after resuming trade on Monday following an extended Lunar New Year holiday. In contrast, the offshore yuan was on course for a 0.3% gain this week, supported by central bank stimulus and Thursday's surprise Chinese announcement of tariff cuts on U.S. imports. For now, the focus has shifted to the closely-watched U.S. nonfarm payrolls report due later on Friday, which is forecast to show job creation accelerated in January. The mood for the dollar improved on Thursday after unemployment benefits dropped to a nine-month low and worker productivity rose. Data earlier this week showing a rebound in U.S. manufacturing had also boosted the dollar's fortunes. The U.S. optimism contrasts starkly with the jitters in Asia as investors count the human toll of the virus and try to measure how travel restrictions and business closures will impact activity in the world's second-largest economy. The yen and the Swiss franc, two currencies sought as safe-havens, initially gained as the coronavirus epidemic unfolded last month, but both currencies reversed course this week Sterling found itself on the backfoot as concerns about Britain's relationship with the EU following its exit from the bloc returned. Investors are nervous that British Prime Minister Boris Johnson is taking a hard line in trade talks with the EU, which need to conclude before the end of the year to avoid a potentially disruptive break in trading relations. The U.K. and EU are slated to get trade talks underway only in March, but tough rhetoric from both sides has raised fears that rough negotiations lie ahead, keeping the pound on the back foot against the dollar on Thursday. The dollar was also helped by better-than-expected labor market data, underpinning investor hopes for a robust nonfarm payrolls report due Friday. The U.S. Department of Labor reported Thursday that initial jobless claims dropped by 15,000 to a seasonally adjusted 202,000, beating economists' forecast for a drop to 215,000. EUR/USD fell 0.20% to $1.0975 as European Central Bank Governor Christine Lagarde reinforced expectations that the central bank's ultra-loose monetary measures will remain in place at least until the year.
  • Gold prices slipped on Friday in Asia ahead of the release of the much-anticipated job report data due later in the day. The fall in gold prices came even after Asian equities traded mostly lower today, with Hong Kong’s stocks losing about 0.5%. The coronavirus outbreak continued to spread today, as China reported this morning that the death toll climbed to 636. Meanwhile, reports that Chinese President Xi Jinping and his U.S. counterpart Donald Trump held a conversation and reaffirmed their commitment to implementing Phase 1 of the trade deal were cited as a headwind for the safe-haven metal. On Thursday, China has moved to lower tariffs on $75 billion in U.S. imports, as part of its recent partial trade agreement with the U.S.
  • Oil prices gained on Friday in Asia but is set to record their fifth straight weekly loss amid worries surrounding the recent coronavirus outbreak in China. Meanwhile, international Brent Oil Futures climbed 0.4% to $55.16. It is down about 5% this week, set for the longest losing streak since November. The gains today came after Reuters cited three unnamed sources and reported that OPEC+ might provisionally slash output by 600,000 barrels per day. The OPEC+ currently pumps more than 40% of the world’s oil. However, gains of the oil prices were limited as death toll related to the coronavirus in China continued to rise. The number of deaths from the coronavirus in China reached 636, with those affected topping 31,000, prompting the World Health Organization to warn that it was "too early" to declare a peak in the spread of the new disease. Oil prices advanced on Friday after Russia said it backs a recommendation for OPEC and other producers to cut their output further amid falling demand for crude as China battles the coronavirus epidemic. Prices came off earlier highs in the session after China's central bank governor said the world's second-biggest economy may experience disruptions in the first quarter, while Japan announced a big jump in confirmed coronavirus cases among thousands of passengers confined to a cruise liner off its coast. A panel advising OPEC and allies led by Russia, known as the OPEC+ group, suggested provisionally cutting output by 600K bpd, three sources told Reuters on Thursday. The OPEC+ group, which pumps more than 40% of the world's oil, has been withholding supply and agreed to deepen the cuts by 500K bpd from the start of this year, to 1.7 million bpd, nearly 2% of global demand. Stimulus measures by the People's Bank of China (PBOC) are also supporting prices, Shaw said. The PBOC has pumped hundreds of billions of dollars into the financial sector this week to help steady markets and boost the economy, along with other measures. Eurasia group said it estimates a contraction in oil demand in China, the world's biggest importer of crude, of as much 3 million bpd in the first quarter from 2019 levels. Oil prices have fallen by more than a fifth since the outbreak of the virus in the city of Wuhan in China.

 

 
Intraday RESISTANCE LEVELS
7th February 2020 R1 R2 R3
GOLD-XAU 1,571 1,580 1,590-1,600
Silver-XAG 17.90-18.25 18.50 18.70-19.10
Crude Oil 51.50-52.20 52.70 53.80-54.50
EURO/USD 1.0980--1.1010 1.1050 1.1100-1.1190
GBP/USD 1.2980-1.3010 1.3060 1.3100-1.3160
USD/JPY 110.00-110.30 110.70 111.20-111.50

Intraday SUPPORTS LEVELS
7th February 2020 S1 S2 S3
GOLD-XAU 1.560-1,548 1,542 1,536-1,530
Silver-XAG 17.40-17.10 16.60 16.25-15.90
Crude Oil 51.00 50.20 49.40-48.50
EURO/USD 1.0930-1.0890 1.0810 1.0780-1.0710
GBP/USD 1.2930 1.2870-1.2840 1.2760
USD/JPY 109.50-108.90 108.50 107.80-107.00

Intra-Day Strategy (7th 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 Thursday made its intraday high of US$1569.07/oz and low of US$1564.79/oz. Gold up 0.672% at US$1567.64/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 1560-1520 with risk below 1520, targeting 1571-1578 and 1584-1590. Sell below 1571-1600 keeping stop loss closing above 1600, targeting 1560-1548-1542 and 1536- 1528.

 
Intraday Support Levels
S1     1.560-1,548
S2     1,542
S3     1,536-1,530
Intraday Resistance Levels
R1     1,571
R2     1,580
R3     1,590-1,600

Technical Indicators

Name   Value Action
14DRSI  

54.678

Buy
20-DMA   1563.77 Buy
50-DMA  

1524.48

Buy
100-DMA   1505.48 Buy
200-DMA   1456.52 Buy
STOCH(5,3)   51.621 Buy
MACD(12,26,9)   10.161 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$17.87/oz and low of US$17.58/oz settled up by 1.268% at US$17.80/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   17.83 Sell
50-DMA   17.52 Buy
100-DMA   17.52 Buy
200-DMA   16.73 Buy
STOCH(5,3)   29.268 Sell
MACD(12,26,9)   0.0035 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US52.26/bbl, intraday low of US$50.34/bbl and settled down by 0.210% to close at US$51.20/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 51.00-47.40 with risk daily closing below 47.50 and targeting 51.60-52.20-52.70 and 53.80-54.50-55.00. Sell in between 51.50-55.00 with stop loss at 55.00; targeting 51.50-51.00-50.20 and 49.40-48.00.

 
Intraday Support Levels
S1     51.00
S2     50.20
S3     49.40-48.50

Intraday Resistance Levels
R1     51.50-52.20
R2     52.70
R3     53.80-54.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   26.112 Sell
20-DMA   55.01 Sell
50-DMA   57.84 Sell
100-DMA   56.74 Sell
200-DMA   56.89 Sell
STOCH(5,3)   35.130 Buy
MACD(12,26,9)   -2.004 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.10963/EUR, high of US$1.1013/EUR and settled the day down by 0.151% to close at US$1.0981/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 1.0930-1.0710 with risk below 1.0710, targeting 1.0980-1.10110-1.1050 and 1.1100-1.1190. Sell below 1.0980-1.1250 targeting 1.0930-1.0890 and 1.0810-1.0780-1.0710 with stop-loss at daily closing above 1.1350.

 
Intraday Support Levels
S1     1.0930-1.0890
S2     1.0810
S3     1.0780-1.0710

Intraday  Resistance Levels
R1     1.0980--1.1010
R2     1.1050
R3     1.1100-1.1190

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.673 Buy
20-DMA   1.1060 Sell
50-DMA   1.1092 Sell
100-DMA   1.1066 Sell
200-DMA   1.1122 Sell
STOCH(5,3)   8.758 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2920/GBP, high of US$1.3000/GBP and settled the day down by 0.563% to close at US$1.2926/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 1.2980-1.3200 with targets at 1.2930-1.2870-1.2840 and 1.2760-1.2700 stop-loss should be below 1.3200. Buy above 1.2930-1.2750 with targets 1.2980-1.3010-1.3060 and 1.3100-1.3150-1.3200 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.2930
S2     1.2870-1.2840
S3     1.2760

Intraday Resistance Levels
R1     1.2980-1.3010
R2     1.3060
R3     1.3100-1.3160

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

42.909

Buy
20-DMA   1.3039 Sell
50-DMA   1.3070 Sell
100-DMA   1.2884 Buy
200-DMA   1.2691 Buy
STOCH(5,3)   23.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY109.77/USD and made an intraday high of JPY109.99/USD and settled the day up by 0.156% at JPY109.98/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 110.00-112.70 with risk above 112.70 targeting 109.50-108.90-108.50 and 107.80-107.00-106.50. Long positions above 109.50-107.00 with targets of 110.00-110.70 and 111.30-112.40-113.00 with stop below 107.00.

 
Intraday Support Levels
S1     109.50-108.90
S2     108.50
S3     107.80-107.00

INTRADAY RESISTANCE LEVELS
R1     110.00-110.30
R2     110.70
R3     111.20-111.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.402 Buy
20-DMA   109.52 Buy
50-DMA   109.23 Buy
100-DMA   108.77 Buy
200-DMA   108.40 Buy
STOCH(9,6)   97.253 Sell
MACD(12,26,9)   -0.126 Buy

AAFX TRADING
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