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Daily Market Lookup

  • The U.S. dollar edged higher Thursday, supported by firmer U.S. inflation data, but a rise in the pound and yen kept gains in check. The Labor Department said on Thursday its consumer price index rose 0.2%, in line with expectations last month, while the year-on-year CPI rose to 2.5%, topping forecasts for a 2.3% rise. Federal Reserve Chairman Jerome Powell has signaled that a faster pace of inflation would push the central bank off the sidelines. But this latest inflation report is unlikely to shift the Fed's thinking on monetary policy as its preferred inflation gauge, the core personal consumption expenditures price index, remains below the 2% target. A surge in the pound, meanwhile, kept the dollar in check on rising hopes Prime Minister Boris Johnson is eyeing fiscal stimulus after showing U.K. finance minister Sajid Javid the door. Javid reportedly resigned after Johnson asked him to fire his closest advisers in order to keep his position, the Financial Times reported. The euro dropped to more than two-year lows against the dollar on Thursday as concerns about a sharp rise in the number of new cases in the coronavirus outbreak in China led investors to seek out U.S. assets. The United States is better placed to weather the economic impact of the virus than the eurozone. The coronavirus death toll in China's Hubei province increased by a record 242 on Thursday to 1,310, with a sharp rise in confirmed cases after the adoption of new methodology for diagnosis, health officials said. The greenback has benefited against the euro from a popular carry trade, where investors borrow in low-yielding currencies such as the euro and invest in dollars or other higher-yielding currencies Expectations that central banks will hold rates low, and may provide more accommodation if the coronavirus harms the global economy, is supporting risk appetite and may reduce the likelihood of a sharp selloff in stocks. Stocks overcame earlier weakness to hit record highs on Thursday. They have set a record closing high every day this week. U.S. data on Thursday showed that U.S. underlying consumer prices picked up in January as households paid more for rents and clothing, supporting the Federal Reserve's contention that inflation would gradually rise toward its 2% target.
  • The Japanese yen held onto gains against the dollar on Friday, as fresh doubts about the scale of the corona virus outbreak supported demand for safe-haven currencies. The Chinese yuan nursed losses as the flu-like virus, which emerged late last year in China's central Hubei province, slammed the brakes on consumer spending and manufacturing. The euro languished at multi-year lows versus the dollar and the Swiss franc as investors grow more pessimistic about the outlook in the euro zone before the release of gross domestic product data later on Friday. In contrast, the pound rode a wave of optimism into Asia on Friday due to hopes that a British cabinet reshuffle will lead to more expansionary fiscal policy to support growth. Officials in Hubei stunned financial markets on Thursday by announcing a sharp increase in new infections and deaths from the corona virus, reflecting the adoption of a new method to diagnose the illness. Uncertainty about the real extent of the epidemic is likely to discourage investors from taking on excessive risk until there is sufficient evidence that its spread has slowed. Hubei officials on Friday reported 4,823 new cases and 116 new deaths as of Feb. 13, but investors were still reeling after the province reported 14,840 new cases and a record daily increase in deaths on Thursday, using new diagnostic methods to reclassify a backlog of cases. China's economy will grow at its slowest rate since the financial crisis in the current quarter, according to a Reuter’s poll of economists who said the downturn will be short-lived if the outbreak is contained. The corona virus was first detected in Hubei's capital Wuhan, a nerve centre in the global supply chain. It has so far claimed more than 1,300 lives in China and spread to 24 other countries. Sentiment for the euro worsened after data earlier this weak showing a plunge in euro zone manufacturing output reinforced expectations that monetary policy will remain accommodative. The pound was little changed at $1.3046 following a 0.64% gain on Thursday due to expectations that British Prime Minister Boris Johnson's appointment of a new finance minister will lead to more fiscal spending to help Britain weather its transition away from the European Union.
  • Oil prices were steady on Friday but are set for their first weekly gain in six weeks on the assumption major producers will implement deeper output cuts to offset slowing demand in China, the world's second-largest crude user. Crude prices have plunged about 20% from their 2020-peaks on Jan. 8 as oversupply concerns combined with worries about large fuel demand declines in China as the country's quarantine to fight a coronavirus outbreak has halted economic activity. However, the Organization of the Petroleum Exporting Countries and its allied producers, known as OPEC+, are considering cutting output by up to 2.3 mn barrels per day in response to the demand slump. But other analysts caution the demand impact is only limited to China so far. The market is signaling that some near-term demand for oil remains. The spread between the first-month April Brent future and the May contract has narrowed to a discount of only 1 cent a barrel on Friday from a discount of 33 cents a week ago. The narrowing of this contango, when prompt prices are less than later-dated contracts, suggest that demand for oil is improving for Brent-related crude. Still, some concern remains about the impact the Chinese demand slowdown may have. The IEA on Thursday said that first quarter 2020 oil demand is set to fall versus a year earlier for the first time since the financial crisis in 2009 because of the coronavirus outbreak in China. The Chinese economy is expected to grow at its slowest rate since the financial crisis in the current quarter, according to a Reuters poll of economists who said the downturn will be short-lived if the outbreak is contained.

 

 
Intraday RESISTANCE LEVELS
14th February 2020 R1 R2 R3
GOLD-XAU 1,580 1,590-1,600 1,610
Silver-XAG 17.90-18.25 18.50 18.70-19.10
Crude Oil 51.70 52.20 52.70-53.80
EURO/USD 1.0850-1.0930 1.0980 1.1010-1.1050
GBP/USD 1.3070-1.3120 1.3190 1.3270
USD/JPY 110.00-110.30 110.70 111.20-111.50

Intraday SUPPORTS LEVELS
14th February 2020 S1 S2 S3
GOLD-XAU 1,571-1.560 1,548 1,542-1,536
Silver-XAG 17.40-17.10 16.60 16.25-15.90
Crude Oil 51.00-50.20 49.40 48.50-47.40
EURO/USD 1.0810-1.0770 1.0710 1.0650-1.0580
GBP/USD 1.3020-1.2980 1.2930 1.2870-1.2840
USD/JPY 109.50-108.90 108.50 107.80-107.00

Intra-Day Strategy (14th 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$1578.24/oz and low of US$1565.49/oz. Gold up 0.653% at US$1576.02/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 1578-1584-1590 and 1600-1610. Sell below 1580-1620 keeping stop loss closing above 1620, targeting 1571-1560-1548 and 1542-1536.

 
Intraday Support Levels
S1     1,571-1.560
S2     1,548
S3     1,542-1,536
Intraday Resistance Levels
R1     1,580
R2     1,590-1,600
R3     1,610

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 Thursday made its intraday high of US$17.72/oz and low of US$17.43/oz settled up by 1.089% 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 Thursday made an intra‐day high of US52.14/bbl, intraday low of US$50.78/bbl and settled down by 0.335% to close at US$51.71/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 and 52.70-53.80. Sell in between 51.90-55.00 with stop loss at 55.00; targeting 51.00-50.20-49.40 and 48.00-48.50.

 
Intraday Support Levels
S1     51.00-50.20
S2     49.40
S3     48.50-47.40

Intraday Resistance Levels
R1     51.70
R2     52.20
R3     52.70-53.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.112 Sell
20-DMA   53.06 Sell
50-DMA   57.23 Sell
100-DMA   56.37 Sell
200-DMA   56.59 Sell
STOCH(5,3)   56.130 Buy
MACD(12,26,9)   -2.004 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.10833/EUR, high of US$1.0888/EUR and settled the day down by 0.305% to close at US$1.0839/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 1.0810-1.0580 with risk below 1.0580, targeting 1.0850-1.0930-1.0980 and 1.10110-1.1050. Sell below 1.0850-1.1050 targeting 1.0890-1.0810 and 1.0780-1.0710 with stop-loss at daily closing above 1.1250.

 
Intraday Support Levels
S1     1.0810-1.0770
S2     1.0710
S3     1.0650-1.0580

Intraday  Resistance Levels
R1     1.0850-1.0930
R2     1.0980
R3     1.1010-1.1050

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 Thursday made an intra‐day low of US$1.2943/GBP, high of US$1.3068/GBP and settled the day up by 0.642% to close at US$1.3041/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 1.3070-1.3270 with targets at 1.3020-1.2980-1.2930 and 1.2870-1.2840-1.2760 stop-loss should be below 1.3200. Buy above 1.3020-1.2750 with targets 1.3070-1.3120-1.3190 and 1.3270-1.3300 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.3020-1.2980
S2     1.2930
S3     1.2870-1.2840

Intraday Resistance Levels
R1     1.3070-1.3120
R2     1.3190
R3     1.3270

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

51.909

Buy
20-DMA   1.3025 Sell
50-DMA   1.3070 Sell
100-DMA   1.2910 Buy
200-DMA   1.2689 Buy
STOCH(5,3)   81.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY109.61/USD and made an intraday high of JPY110.09/USD and settled the day down by 0.255% at JPY109.80/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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