AAFX TRADING

Daily Market Lookup

  • Global share markets nudged higher on Wednesday amid hopes the worst of the corona virus in China may have passed, although prevailing uncertainty about the outbreak kept investors wary. Oil futures, which have been in a downtrend since the start of the year, rose in Asia from 13-month lows due to budding optimism about the virus and hopes that output cuts by major producers will support prices. The yuan gained slightly in onshore trade and safe-havens such as Treasuries, the yen and the Swiss franc were marginally weaker in a sign of slowly improving sentiment. The global mood brightened after China’s senior medical adviser said on Tuesday the number of new corona virus cases was falling in some provinces and forecast the epidemic would peak this month. The number of new cases in Hubei, the province at the epicenter of the outbreak, was 1,068 as of Tuesday, down from a peak of over 3,000 new cases on Feb. 4, and the lowest number of new infections since Jan. 31. However, investors will likely need to see more evidence that the virus, which emerged in the central Chinese city of Wuhan late last year and has spread to 24 other countries and territories, is indeed receding before they take on more risk. Concerns that the virus will slow factory activity and consumer spending in the world’s second-largest economy has roiled global stocks and commodities, and many of these markets are still trying to regain their footing. Treasury prices declined on Tuesday after U.S. Federal Reserve Chair Jerome Powell said the U.S. economy is resilient. Powell also said he is closely monitoring the corona virus in China, because it could lead to disruptions that affect the global economy. Chinese firms and factories are struggling to get back to work after the extended Lunar New Year holiday. Some companies say they need loans and are laying off workers as supply chains for global firms from car manufacturers to Smartphone makers ruptured. Saudi Arabia wants global oil producers to agree a quick supply cut in response to the corona virus, sources familiar with the kingdom’s thinking have told Reuters, which is another supportive factor for crude futures.
  • The U.S. dollar was flat Tuesday as traders weighed weaker-than-expected labor data against positive remarks from Federal Reserve Chairman Jerome Powell on the economy. But the Fed chief stopped short of hinting that any imminent action was needed, claiming he wanted to "resist the temptation to speculate" about the potential disruptions from the outbreak. The Fed's current wait-and-see approach has continued to attract criticism, not least from President Donald Trump who continues to call on the central bank to cut rates. Traders are still pricing in a rate cut for the back end of the year. In the lead-up to Powell's testimony, traders had to contend with softer labor market. The U.S. Labor Department's latest Job Openings and Labor Turnover Survey (JOLTS) report, a measure of labor demand, showed job openings in January fell to about 6.43 million, missing expectations of 7 million. The pound, meanwhile, continued to climb, keeping the dollar on the back foot following data showing the U.K. economy did not contract further in the fourth quarter of the year. European Central Bank President Christine Lagarde adding to the chorus of calls for EU members to adopt more supporter fiscal measures. More supportive fiscal measures, particularly from Germany, the powerhouse of the EU, will likely underpin growth in the economic bloc and support the single currency. U.S. job openings dropped for a second straight month in December to hit their lowest level in two years, while hiring increased marginally, suggesting a recent acceleration in job growth was unlikely to be sustained. The report from the Labor Department on Tuesday also showed a pick-up in layoffs at the end of the year. Though job openings remain relatively high, economists said the sharp declines at the end of 2019 were potentially warning signals for the longest economic expansion on record, now in its 11th year. Federal Reserve Chairman Jerome Powell on Tuesday struck an upbeat note on the economy and labor market, telling the U.S. House of Representatives Financial Services Committee that the economy was “in a very good place, performing well.” Job openings, a measure of labor demand, decreased 364,000 to 6.4 million, the lowest reading since December 2017, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS. The second straight monthly decline in job openings followed a 574,000 plunge in November, which was the biggest drop since August 2015. The government reported last week that nonfarm payrolls surged by 225,000 jobs in January after increasing 147,000 in December. The unemployment rate rose one-tenth of a percentage point to 3.6% as more people entered the labor market, a sign of confidence in their job prospects. The job openings rate declined to a two-year low of 4.0% in December from 4.3% in November. Hiring rose to 5.9 million in December from 5.8 million in November. It was lifted by a 69,000 increase in hiring in the accommodation and food services industry. The hiring rate edged up to 3.9% in December from 3.8% in the prior month.
  • Oil prices advanced on Wednesday in Asia after the American Petroleum Institute (API) reported that U.S. crude oil inventories rose sharply last week. In its weekly report, the API said crude stockpiles rose by 6 million barrels for the week ended Feb. 7. The API snapshot serves as guide ahead of the official government inventories numbers, which come out later in the day. The Energy Information Administration to report a rise in inventories of about 3 million barrels. Both U.S. and Brent fell to their lowest levels in 13 months earlier this week amid demand concerns from the outbreak. Despite today’s gains, both benchmarks are down more than 20% from highs reached in January. The U.S. Energy Information Administration (EIA) on Tuesday cut its global oil demand growth forecast for this year by 310,000 bpd as the virus outbreak crimps oil consumption in China. Demand worries flipped the oil market into a contango last week, a market structure where prices for near-term contracts are lower than those for later contracts, indicating ample supplies.

 

 
Intraday RESISTANCE LEVELS
12th 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 1.2980 1.3010 1.3060-1.3100
USD/JPY 110.00-110.30 110.70 111.20-111.50

Intraday SUPPORTS LEVELS
12th 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 1.2930-1.2870 1.2840 1.2760-1.2700
USD/JPY 109.50-108.90 108.50 107.80-107.00

Intra-Day Strategy (12th 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 Tuesday made its intraday high of US$1573.99/oz and low of US$1562.04/oz. Gold down 0.269% at US$1567.70/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 Tuesday made its intraday high of US$17.79/oz and low of US$17.56/oz settled down by 0.715% at US$17.62/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   45.397 Buy
20-DMA   17.78 Sell
50-DMA   17.58 Buy
100-DMA   17.49 Buy
200-DMA   16.79 Buy
STOCH(5,3)   42.268 Sell
MACD(12,26,9)   0.0035 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US50.81/bbl, intraday low of US$49.76/bbl and settled up by 0.610% to close at US$50.08/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 51.00-51.60-52.20 and 52.70-53.80. 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   34.112 Sell
20-DMA   53.37 Sell
50-DMA   57.31 Sell
100-DMA   56.41 Sell
200-DMA   56.64 Sell
STOCH(5,3)   26.130 Buy
MACD(12,26,9)   -2.004 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.10890/EUR, high of US$1.10924/EUR and settled the day up by 0.040% to close at US$1.0914/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 Tuesday made an intra‐day low of US$1.293/GBP, high of US$1.2967/GBP and settled the day up by 0.299% to close at US$1.2951/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 1.2980-1.2750 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     1.2930-1.2870
S2     1.2840
S3     1.2760-1.2700

Intraday Resistance Levels
R1     1.2980
R2     1.3010
R3     1.3060-1.3100

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

45.909

Buy
20-DMA   1.3025 Sell
50-DMA   1.3070 Sell
100-DMA   1.2898 Buy
200-DMA   1.2688 Buy
STOCH(5,3)   39.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY109.72/USD and made an intraday high of JPY109.95/USD and settled the day up by 0.0136% at JPY109.78/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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