AAFX TRADING

Daily Market Lookup

  • Asian shares reversed earlier losses on Monday and moved back toward a three-week top as Chinese efforts to cushion the blow from a coronavirus outbreak cheered investors, although Japanese stocks faltered amid growing recession risks. Trading is expected to be light as U.S. stocks and bond markets will be shut on Monday for a public holiday The gains were helped largely by Chinese shares with the blue-chip index adding 0.4% after the country’s central bank lowered one of its key interest rates and injected more liquidity into the system. Also whetting risk appetite was an announcement by China’s Finance Minister on Sunday that Beijing would roll out targeted and phased tax and fee cuts Fears about the jolt to the world economy from the coronavirus still lingered though as the number of reported new cases in China rose to 2,048 as on Sunday from 2,009 the previous day. Restrictions were tightened further in Hubei on Sunday with most vehicles banned from the roads and companies told to stay shut until further notice. The hit to the world’s third-largest economy comes amid fresh concerns about weakness in the current quarter, as the coronavirus damages output and tourism, stoking fears Japan may be on the cusp of a recession. Trade-dependent Singapore downgraded its 2020 economic growth forecast due to the coronavirus, while China’s economy is also widely expected to take a sharp hit. Talk of a U.S. middle class tax cut and a proposal to encourage everyday Americans to invest in the equities market boosted share market sentiment late last week, Betashares chief economist David Bassanese said. Bassanese had misgivings about the plan, saying it reminded him of former U.S. President George Bush encouraging Americans to buy a home during a housing boom. Later in the week, flash manufacturing activity data for February are due for the Eurozone, the United Kingdom and the United States, which is likely to capture at least some of the early impact of the viral epidemic.
  • The yen traded slightly lower on Monday in Asia after Japan reported a much deeper economic contraction than expected. The USD/JPY pair inched up 0.1% 109.81 after the Cabinet Office reported today that Japan’s GDP in the December quarter fell an annualized 6.3%, faster than the expected 3.7% contraction. The drop, which followed a revised 0.5% gain in July-September, was the biggest since a 7.4% decline marked in April-June 2014. On Sunday, China reported 1,933 new confirmed cases of the coronavirus, down from 2,009 the previous day, and 100 new deaths, down one from 142 the previous day. The economic impact of the epidemic is still unknown. Some analysts have estimated that China's annual growth could slow to between 4% and 5%, down from the 6% annual growth estimated by the government. The U.K. will release a slew of data this week, including the December jobs report and the latest inflation figures. Reports on retail sales, manufacturing and services PMI data for February are also due. The euro fell to its lowest level against the U.S. dollar since April 2017 last Friday after Germany, the eurozone’s largest economy, reported that GDP growth stagnated at the end of 2019. The European Central Bank is scheduled to publish the minutes of its January meeting on Thursday. Financial markets on stateside will be closed on Monday for Presidents Day. The Federal Reserve is due to release the minutes of its January meeting on Wednesday. There are also several Fed policymakers scheduled to speak during the week, including Minneapolis Fed President Neel Kashkari, Dallas Fed head Robert Kaplan and Fed Governors Lael Brainard and Richard Clarida. The euro was on the back foot on Monday, as concerns mounted about weakening economic growth in Europe at a time financial markets and policymakers fret about a new threat to the global economy from a fast spreading coronavirus in China. The German economy stagnated in the fourth quarter due to weaker private consumption and state spending, data showed on Friday, renewing fears of a recession at a time Chancellor Angela Merkel's conservatives are preoccupied with a search for a new leader. Europe's biggest economy posted zero growth from the previous quarter while separate data showed euro zone gross domestic product grew 0.1% quarter-on-quarter in the fourth quarter, in line with forecasts but the weakest since 2014. Most market players expect stronger growth in the United States although data published on Friday provided a mixed picture. U.S. core retail sales were flat last month, lagging expectations of 0.3% growth while its rise in December was revised down to 0.2% from a previously reported 0.5%. Industrial production also shrank more than expected by 0.3%. Japan's economy was also under increasing strain, with GDP figures released on Monday coming in far below economist' forecasts, hitting Tokyo shares even though reaction in the currency market was muted.
  • Oil prices were little changed on Monday as concerns of falling fuel demand caused by the economic fallout from the coronavirus outbreak in China was offset by expectations that output cuts from major producers will tighten crude supply. Japan, the world's fourth-largest oil consumer, reported an economic contraction of 6.3% for the October to December period and there is an expectation of a further contraction in the January to March quarter because of the contagion. Singapore, whose trade-dependent economy is a barometer for the region, also warned of the potential for a recession this quarter because of the outbreak. IEA said last week the virus is set to cause oil demand to fall by 435,000 barrels per day (bpd) in the first quarter of 2020 from the same period a year ago, in what would be the first quarterly drop since the financial crisis in 2009. Analysts at Capital Economics said over the weekend that it is too soon to start assessing the longer-term economic fallout from the epidemic and investors will be looking for February manufacturing data, particularly in Asia, for an early indication of how significantly the virus is affecting global manufacturing supply chains. Oil did rise last week for the first time since early January on optimism that Chinese economic stimulus measures amid the outbreak could lead to a recovery in oil demand in the world's largest importing country. There are some indications of prompt demand for oil as the front-month Brent futures market has shifted to a backwardation, when near-term prices are higher than later-dated prices, from a contango. The April to May spread is now at a premium of 19 cents a barrel after reaching a discount of as low as 33 cents on Feb. 7. Investors are also anticipating that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, will approve a proposal to deepen production cuts to tighten global supplies and support prices.

 

 
Intraday RESISTANCE LEVELS
17th February 2020 R1 R2 R3
GOLD-XAU 1,590-1,600 1,610 1,620
Silver-XAG 17.90-18.25 18.50 18.70-19.10
Crude Oil 52.70-53.80 54.50 55.00-56.20
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
17th February 2020 S1 S2 S3
GOLD-XAU 1,580-1,571 1.560 1,548-1,542
Silver-XAG 17.40-17.10 16.60 16.25-15.90
Crude Oil 52.20-51.70 51.00 50.20-49.40
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 (17th 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 Friday made its intraday high of US$1584.94/oz and low of US$1573.00/oz. Gold up 0.505% at US$1583.98/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 1580-1536 with risk below 1536, targeting 1584-1590 and 1600-1610. Sell below 1584-1620 keeping stop loss closing above 1620, targeting 1580-1571-1560 and 1548-1542-1536.

 
Intraday Support Levels
S1     1,580-1,571
S2     1.560
S3     1,548-1,542
Intraday Resistance Levels
R1     1,590-1,600
R2     1,610
R3     1,620

Technical Indicators

Name   Value Action
14DRSI  

61.367

Buy
20-DMA   1570.50 Buy
50-DMA  

1537.03

Buy
100-DMA   1509.61 Buy
200-DMA   1465.40 Buy
STOCH(5,3)   91.621 Buy
MACD(12,26,9)   9.161 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$17.79/oz and low of US$17.60/oz settled up by 0.561% at US$17.73/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   53.397 Buy
20-DMA   17.74 Sell
50-DMA   17.62 Buy
100-DMA   17.48 Buy
200-DMA   16.84 Buy
STOCH(5,3)   73.268 Buy
MACD(12,26,9)   0.0035 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US52.53/bbl, intraday low of US$51.53/bbl and settled up by 1.288% to close at US$5.43/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     52.20-51.70
S2     51.00
S3     50.20-49.40

Intraday Resistance Levels
R1     52.70-53.80
R2     54.50
R3     55.00-56.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.112 Sell
20-DMA   52.44 Sell
50-DMA   57.00 Sell
100-DMA   56.29 Sell
200-DMA   56.50 Sell
STOCH(5,3)   90.130 Buy
MACD(12,26,9)   -1.617 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.10826/EUR, high of US$1.0860/EUR and settled the day down by 0.0728% to close at US$1.0830/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 Friday made an intra‐day low of US$1.3000/GBP, high of US$1.3062/GBP and settled the day up by 0.0421% to close at US$1.3046/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

AAFX TRADING
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