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Daily Market Lookup

  • The U.S. dollar was little changed on Tuesday in Asia ahead of Federal Reserve Chairman Jerome Powell’s speeches due later this week. Powell will testify before Congress on Tuesday on Wednesday. With the global economy bracing for a potential slowdown due to the coronavirus outbreak, traders will focus on Powell’s take on the fallout and see if he would downplay the impact of the coronavirus. The EUR/USD pair was near flat at 1.0909. Yesterday, the euro fell to a four-month low after data showed Euro area investor confidence missed estimates. Investors are worried that the euro area economy will weaken further as the coronavirus continues to spread rapidly. On Monday, the World Health Organization warned that the spread of cases among people who have not been to China could be "the spark that becomes a bigger fire". The disease has claimed 1,016 lives in China so far, Chinese health officials reported on Monday. The pound climbed against the dollar on Monday, but some experts warned further gains will likely be kept in check by ongoing UK-EU trade tensions and steady U.S. interest rates. Market participants should position themselves for a weaker sterling versus the dollar, due to "the likelihood of reduced market expectations for U.S. interest-rate cuts and growing UK-EU trade tensions, RBC said in note. Cable's advance, however, could come under pressure as soon as Tuesday, should Federal Reserve Chairman Jerome Powell deliver a positive assessment of the U.S. economy in his semiannual testimony before Congress, RBC said.
  • Asian share markets followed Wall Street higher on Tuesday as China’s factories struggled to re-open after an extended break, though analysts warned investors might be underestimating how economically damaging the challenge was likely to be. The death toll from the coronavirus epidemic in mainland China climbed past 1,000 on Tuesday, though the number of new confirmed cases fell. Investors seemed to be hoping for the best and MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.9%, with Shanghai blue chips .CSI300 ahead by 0.8%. The gains came even as the World Health Organization (WHO) warned the spread of the virus among people who had not been to China could be “the spark that becomes a bigger fire”. In China, factories were slow in reopening after an extended Lunar New Year break, leading analysts at JPMorgan to again downgrade forecasts for growth this quarter. They assumed the contagion would peak in March and factories would slowly resume opening this month. In this case, growth would brake sharply to around a 1% annualized pace in the first quarter, before rebounding to 9.3% in the second. Should the contagion not peak until April, the economy could contract in the first quarter, with a rebound spread over the second and third quarters, the JPMorgan analysts said. The risks are such that investors are wagering on more stimulus from Beijing — even though conventional measures in such cases can do little to reverse a sharp slump in demand — while a host of other central banks are under pressure to safeguard their economies with cheaper loans. Markets are pricing in almost 40 basis points of easing this year from the Federal Reserve and again slightly inverted the Treasury yield curve to reflect the danger of recession. Fed Chair Jerome Powell appears before Congress on Tuesday to begin two days of testimony and is expected to reiterate that the U.S. economy is doing well but that rates can stay low given subdued inflation. The relative outperformance of the U.S. economy is keeping the dollar well supported, with the euro slipping to a four-month low at $1.0906 EUR=. The British pound GBP= was last at $1.2913 having touched a two-month trough of $1.2870.
  • Oil prices rose more than 1% on Tuesday in sympathy with a rally in equity markets but investors remained jittery over the Wuhan virus that has now killed over 1,000 in China. The number of coronavirus deaths in mainland China have now reached 1,016, its National Health Commission said, and the number of cases has topped 42,600. The virus has also spread to two dozen other countries, with the head of the World Health Organization cautioning on Monday that the cases outside of China could be "the spark that becomes a bigger fire". Traders remain concerned that China's oil demand could take a further hit if the coronavirus cannot be contained. Chinese state refiners have already said they will cut as much as 940,000 barrels per day (bpd) from their crude runs in February due to the virus. "OPEC+ appears to be stuck in a wait-and-see mode ... Russia can live with $40 oil (and) thus might not be so eager to play ball with the other OPEC+ members in delivering another 600,000 bpd in production cuts," Moya said. The OPEC and its allies, a grouping known as OPEC+ and including Russia, proposed the additional cuts last week, but Russia said on Friday it needed more time to decide whether to join in any further output reductions The coronavirus outbreak could trim China's full-year economic growth rate by as much as 1 percentage point in 2020, said the Chinese government think tank National Institute for Finance and Development. U.S. crude oil stocks, meanwhile, were estimated to have risen for a third straight week, by 2.9 million barrels for the week ended on Feb. 7, a preliminary Reuters poll showed on Monday. Oil supplies out of Brazil have also been growing, with Petrobras having hit a new production record in the last quarter of 2019 at more than 3 million barrels of oil equivalent per day.

 

 
Intraday RESISTANCE LEVELS
11th 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 51.00-51.50 52.20 52.70-53.80
EURO/USD 1.0930-1.0980 1.1010 1.1050-1.1100
GBP/USD 1.2930-1.2980 1.3010 1.3060-1.3100
USD/JPY 110.00-110.30 110.70 111.20-111.50

Intraday SUPPORTS LEVELS
11th 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 50.20 49.40-48.50 47.40
EURO/USD 1.0890 1.0810 1.0780-1.0710
GBP/USD 1.2870-1.2840 1.2760 1.2700-1.2650
USD/JPY 109.50-108.90 108.50 107.80-107.00

Intra-Day Strategy (11th 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$1574.00/oz and low of US$1567.90/oz. Gold up 0.0114% at US$1572.05/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  

57.367

Buy
20-DMA   1565.77 Buy
50-DMA  

1526.55

Buy
100-DMA   1506.61 Buy
200-DMA   1458.05 Buy
STOCH(5,3)   52.621 Buy
MACD(12,26,9)   10.161 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$17.82/oz and low of US$17.66/oz settled up by 0.305% at US$17.75/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 Monday made an intra‐day high of US50.65/bbl, intraday low of US$49.56/bbl and settled down by 0.785 to close at US$49.79/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 52.20-47.40 with risk daily closing below 47.50 and targeting 51.00-51.60-52.20 and 52.70-53.80-54.50. Sell in between 51.00-55.00 with stop loss at 55.00; targeting 50.20-49.40 and 48.00-48.50.

 
Intraday Support Levels
S1     50.20
S2     49.40-48.50
S3     47.40

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

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 Monday an intraday low of US$1.10941/EUR, high of US$1.10956/EUR and settled the day down by 0.329% to close at US$1.0910/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 1.0890-1.0710 with risk below 1.0710, targeting 1.0930-1.0980-1.10110 and 1.1050-1.1100. Sell below 1.0930-1.1250 targeting 1.0890-1.0810 and 1.0780-1.0710 with stop-loss at daily closing above 1.1250.

 
Intraday Support Levels
S1     1.0890
S2     1.0810
S3     1.0780-1.0710

Intraday  Resistance Levels
R1     1.0930-1.0980
R2     1.1010
R3     1.1050-1.1100

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.057 Buy
20-DMA   1.1036 Sell
50-DMA   1.1088 Sell
100-DMA   1.1063 Sell
200-DMA   1.1193 Sell
STOCH(5,3)   2.758 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2871/GBP, high of US$1.2945/GBP and settled the day up by 0.115% to close at US$1.2913/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 1.2930-1.3200 with targets at 1.2870-1.2840 and 1.2760-1.2700 stop-loss should be below 1.3200. Buy above 1.2870-1.2750 with targets 1.2930-1.2980-1.3010-1.3060 and 1.3100-1.3150-1.3200 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.2870-1.2840
S2     1.2760
S3     1.2700-1.2650

Intraday Resistance Levels
R1     1.2930-1.2980
R2     1.3010
R3     1.3060-1.3100

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

41.909

Buy
20-DMA   1.3032 Sell
50-DMA   1.3069 Sell
100-DMA   1.2888 Buy
200-DMA   1.2691 Buy
STOCH(5,3)   3.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY109.55/USD and made an intraday high of JPY109.87/USD and settled the day up by 0.218% at JPY109.76/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

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