AAFX TRADING

Daily Market Lookup

  • The dollar stood tall over the languishing euro and heavily sold exporter currencies on Wednesday, as investors reckoned with a deepening economic fallout from the coronavirus. The new coronavirus has caused 2,004 deaths in China and infected more than 74,000 people, while measures to contain it have paralyzed the economy and the supply chains it feeds. The yield curve between U.S. three-month bills and 10-year notes inverted overnight, a bearish economic signal, and German investor confidence slumped as its economy stagnates, sending the euro cheaper than $1.08 for the first time since 2017. Both Antipodean currencies are heavily exposed to China, and both have lost roughly 5% against the dollar this year . Norway's krone, sensitive to the global growth outlook via oil exports, has shed 6% in 2020 and slumped to an 18-year low overnight . China says figures indicating a slowdown in new cases in recent days show the aggressive steps it has taken to curb travel and commerce are slowing the spread of the disease beyond central Hubei province and its capital, Wuhan. That has not stopped worries mounting, with hedge funds turning to proxies from railway movements to port activity and air pollution to try and gauge how much production remains offline. Investors are looking to the minutes from the Federal Reserve's January meeting, due to be released at 1900 GMT, for insight in to the Fed's thinking about virus risks. European purchasing managers index numbers and part-month Korean export figures, both due on Friday, are also going to be closely watched for the first hard signs of economic impact. The euro moved off three-year lows against the dollar Tuesday, but remained under pressure amid ongoing signs of weakness in Germany, the euro zone's largest economy. Investor sentiment in Germany deteriorated more than expected in February, adding to concerns about the ongoing weakness in the euro zone. The ongoing worries about the impact of the coronavirus on global growth is expected to maintain demand for the dollar against its rivals. The advance in the dollar comes amid mixed U.S. economic data as a regional manufacturing survey topped forecasts but housing data disappointed. The Empire State manufacturing index rose 8.1 points in February to a reading of 12.90, the New York Federal Reserve said Tuesday. The National Association of Home Builders/Wells Fargo Housing Market Index fell one point to 74 in February, missing economists' forecasts of 75. The pound, meanwhile, was roughly unchanged against the dollar after giving up gains as traders weighed up mixed jobs data against growing expectations that the U.K. will unveil fiscal measures intended to boost growth. Britain's new finance minister Rishi Sunak said he would deliver the budget as planned in three weeks.
  • Asian shares and U.S. stock futures edged cautiously higher on Wednesday, as investors tried to shake off worries about the coronavirus epidemic after a slight decline in the number of new cases. The euro languished at a three-year low versus the dollar as disappointing data from Germany, Europe’s largest economy, has stoked fears that the euro zone is more vulnerable to external shocks than previously thought The Treasury curve remained inverted on Wednesday as yields on three-month bills traded above yields on 10-year notes in a sign that some investors remain cautious about the outlook. China, the world’s second-largest economy, is still struggling to get its manufacturing sector back online after imposing severe travel restrictions to contain a virus that emerged in the central Chinese province of Hubei late last year. Many investors view Chinese data on the virus, dubbed SARS-CoV-2, with a great deal of scepticism, but there are hopes that officials will roll out more stimulus to support the world’s second-largest economy Mainland China had 1,749 new confirmed cases of coronavirus infections on Tuesday, the country’s National Health Commission said on Wednesday, down from 1,886 cases a day earlier and the lowest since Jan. 29. The death toll in China has topped more than 2,000 from the flu-like illness which has already spread to 24 other countries The People’s Bank of China cut the interest rate on its medium-term lending on Monday, which is expected to pave the way for a reduction in the country’s benchmark loan prime rate on Thursday, as policymakers try to ease financial strains caused by the virus. In the currency market, the euro was quoted at $1.0804. The common currency managed to reclaim the closely-watched $1.08 level which it broke through on Wednesday but was still close to its lowest since April 2017. Sentiment remained weak after a survey showed a sharp deterioration in German investor sentiment due to the coronavirus.
  • Oil prices gained more than 1% on Wednesday in Asia despite ongoing concerns surrounding the coronavirus outbreak. Reports that the U.S. imposed sanctions on a unit of Rosneft, Russia’s largest oil producer, were cited as a tail wind for oil markets today. The restrictions come with a three-month wind-down period that expires May 20. Washington said Rosneft have maintained ties with Venezuela’s Nicolas Maduro and its state-run oil company, while the Russian producer called the sanctions illegal and ungrounded. In other news, OPEC+ are due to meet in Vienna on March 5-6 to discuss next steps on rescuing the market from the impact of Covid-19. Prices have also been supported by hopes that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will deepen supply cuts. The grouping, known as OPEC+, has been withholding supply to support prices and meets next month to decide a response to the downturn in demand resulting from the coronavirus epidemic. OPEC+ wants to "prevent the emergence of a large supply overhang caused by slumping demand amid the health crisis centered in China, the world's biggest importer of crude oil," Eurasia Group said in a note.

 

 
Intraday RESISTANCE LEVELS
19th February 2020 R1 R2 R3
GOLD-XAU 1,601-1,611 1,620 1,628-1,635
Silver-XAG 18.25-18.50 18.70 19.10-19.50
Crude Oil 53.80 54.50-55.00 56.15
EURO/USD 1.0810-1.0850 1.0930 1.0980-1.1010
GBP/USD 1.3020-1.3070 1.3120 1.3190-1.3270
USD/JPY 110.00-110.30 110.70 111.20-111.50

Intraday SUPPORTS LEVELS
19th February 2020 S1 S2 S3
GOLD-XAU 1,590-1,580 1,571 1.560-1,548
Silver-XAG 17.90-17.40 17.10 16.60-16.25
Crude Oil 52.70-52.20 51.70 51.00-50.20
EURO/USD 1.0770 1.0710 1.0650-1.0580
GBP/USD 1.2980 1.2930 1.2870-1.2840
USD/JPY 109.50-108.90 108.50 107.80-107.00

Intra-Day Strategy (19th 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$1605.00/oz and low of US$1582.08/oz. Gold up 1.210% at US$1601.23/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 1590-1548 with risk below 1536, targeting 1601-1611-1620 and 1628-1635. Sell below 1584-1620 keeping stop loss closing above 1620, targeting 1590-1580-1571 and 1560-1548-1542.

 
Intraday Support Levels
S1     1,590-1,580
S2     1,571
S3     1.560-1,548
Intraday Resistance Levels
R1     1,601-1,611
R2     1,620
R3     1,628-1,635

Technical Indicators

Name   Value Action
14DRSI  

67.362

Buy
20-DMA   1574.71 Buy
50-DMA  

1542.62

Buy
100-DMA   1511.92 Buy
200-DMA   1466.48 Buy
STOCH(5,3)   89.621 Buy
MACD(12,26,9)   9.161 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$18.21/oz and low of US$17.77/oz settled up by 2.04% at US$18.15/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 18.10-16.00 targeting 18.25-18.50 and 18.70-19.10; stop breakage below 16.00. Sell below 18.30-20.10 with stop loss above 20.10; targeting 17.90-17.50-17.00 and 16.25-16.00.

 
Intraday  Support Levels
S1     17.90-17.40
S2     17.10
S3     16.60-16.25

Intraday  Resistance Levels
R1     18.25-18.50
R2     18.70
R3     19.10-19.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.397 Buy
20-DMA   17.77 Sell
50-DMA   17.69 Buy
100-DMA   17.50 Buy
200-DMA   16.87 Buy
STOCH(5,3)   90.268 Buy
MACD(12,26,9)   0.0035 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US52.43/bbl, intraday low of US$51.14/bbl and settled up by 0.0477% to close at US$52.34/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 52.70-50.20 with risk daily closing below 50.20 and targeting 53.80-54.50-55.00 and 56.15-57.00. Sell in between 53.80-57.00 with stop loss at 57.00; targeting 52.70-52.20-51.70 and 51.00-50.20-49.40.

 
Intraday Support Levels
S1     52.70-52.20
S2     51.70
S3     51.00-50.20

Intraday Resistance Levels
R1     53.80
R2     54.50-55.00
R3     56.15

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.112 Sell
20-DMA   52.00 Sell
50-DMA   56.75 Sell
100-DMA   56.24 Sell
200-DMA   56.41 Sell
STOCH(5,3)   94.130 Buy
MACD(12,26,9)   -1.617 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.10784/EUR, high of US$1.0837/EUR and settled the day down by 0.397% to close at US$1.0791/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 1.0770-1.0580 with risk below 1.0580, targeting 1.0850-1.0930-1.0980 and 1.10110-1.1050. Sell below 1.0810-1.1050 targeting 1.0850-1.0890-1.0810 and 1.0780-1.0710 with stop-loss at daily closing above 1.1250.

 
Intraday Support Levels
S1     1.0770
S2     1.0710
S3     1.0650-1.0580

Intraday  Resistance Levels
R1     1.0810-1.0850
R2     1.0930
R3     1.0980-1.1010

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$1.2969/GBP, high of US$1.3048/GBP and settled the day down by 0.0607% to close at US$1.2995/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.2924) 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 1.3020-1.3270 with targets at 1.2980-1.2930 and 1.2870-1.2840-1.2760 stop-loss should be below 1.3200. Buy above 1.2980-1.2750 with targets 1.3070-1.3120-1.3190 and 1.3270-1.3300 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.2980
S2     1.2930
S3     1.2870-1.2840

Intraday Resistance Levels
R1     1.3020-1.3070
R2     1.3120
R3     1.3190-1.3270

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

48.909

Buy
20-DMA   1.3023 Sell
50-DMA   1.3064 Sell
100-DMA   1.2924 Buy
200-DMA   1.2688 Buy
STOCH(5,3)   67.940 Sell
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY109.65/USD and made an intraday high of JPY109.94/USD and settled the day up by 0.00% at JPY109.86/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   58.402 Buy
20-DMA   109.48 Buy
50-DMA   109.39 Buy
100-DMA   108.96 Buy
200-DMA   108.38 Buy
STOCH(9,6)   60.253 Sell
MACD(12,26,9)   -0.126 Buy

AAFX TRADING
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