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Daily Market Lookup

  • Asian shares moved higher on Monday as investors welcomed a trade agreement between Beijing and Washington over the weekend, but enthusiasm was capped by lingering scepticism about the deal and ongoing relations between China and the United States. U.S. Trade Representative Robert Lighthizer on Sunday said a deal was “totally done”, notwithstanding some needed revisions, and would nearly double U.S. exports to China over the next two years. But Chinese investors had a more tepid reaction, pulling the benchmark Shanghai Composite index down 0.16% as investors took profits following a 1.8% gain on Friday. The small decline came despite data showing the country’s industrial output growth and retail sales jumped more than expected in November. The “phase one” agreement suspended a threatened round of U.S. tariffs on a $160 billion list of Chinese imports that was scheduled to take effect on Sunday. The United States also agreed to halve the tariff rate, to 7.5%, on $120 billion worth of Chinese goods. Ryan Felsman, senior economist at CommSec in Sydney, said the deal was a positive factor in the market, but investors awaited further details. The reduction in U.S. tariffs may have also disappointed some investors looking for more aggressive action, he added. The 17-month-old trade dispute has between the world’s two largest economies has roiled financial markets and taken a toll on world economic growth. U.S. shares had struck a cautious note on Friday, paring initial gains to end barely higher as weary investors awaited signs of a concrete deal. Sterling, which jumped last week after the UK general election produced a strong Conservative majority.
  • The Chinese yuan and the U.S. dollar both fell on Monday in Asia as the trade deal roller-coaster ride continued. Under the deal, U.S. President Donald Trump vowed not to pursue a new round of tariffs set for Sunday. In return, Beijing said it would substantially increase agricultural purchases, although it did not specify how much. While Trump said on Twitter that "phase two" trade talks would start immediately, Beijing made it clear that moving to the next stage of the trade negotiations would depend on implementing phase one first Lighthizer also said there is no timetable set for the next phase of talks Meanwhile, Investors will pay attention to remarks from several Fed officials in the coming days after the Fed decided to hold rates steady last week. Dallas Fed President Robert Kaplan, New York Fed President John Williams and Eric Rosengren of the Boston Fed are all due to speak on Tuesday, while Chicago Fed President Charles Evans is scheduled to speak a day later. Fed Chairman Jerome Powell has said the banks view of the economy remains favourable. On the data front, updates on U.S. industrial production, housing, consumer sentiment, personal income and spending are all due this week. The Chinese yuan and the Australian dollar hovered below four-month highs touched last week in early Monday trade as investors pored over the U.S.-China trade deal, while sterling stayed strong after a decisive UK general election. Washington and Beijing cooled their trade war last week, reducing some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of American farm products and other goods. The last-minute agreement that averted additional tariffs on Chinese goods totaling $160 billion had lifted the yuan and the Australian dollar and had pushed down the safe-haven yen and the dollar last week, before profit-taking set in. Some analysts also noted investors may need to read the fine print of the deal, which has yet to be officially signed. U.S. Trade Representative Robert Lighthizer said on Sunday the deal will nearly double U.S. exports to China over the next two years and is "totally done" despite the need for translation and revisions to its text. A date for senior U.S. and Chinese officials to formally sign the agreement is still being determined, he added. Many traders were also skeptical whether there will be any another deal after the latest one, which the Trump administration has called "phase one", given the fundamental differences over key issues such as intellectual property rights. It has risen to $1.3516 on Friday, a high last seen in May last year, after British Prime Minister Boris Johnson won a commanding election victory last week, enabling him to end three years of deadlock over Brexit. Johnson's government is expected to bring the Withdrawal Agreement Bill back to parliament before Christmas, to allow Britain to exit the European Union by Jan. 31.
  • Oil prices on Monday slid off near three-month highs hit last week as investors searched for clarity beyond the initial impact of a trade deal between the United States and China that's expected to boost flows between the top two global economies. The United States and China cooled long-simmering trade tensions on Friday, announcing a "phase one" agreement that reduces some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of American farm products and other goods The Friday agreement averted additional tariffs on Chinese goods totaling $160 billion that the United States was set to impose over the weekend, but investors remained cautious as they awaited precise details of how the trade deal would work. U.S. Trade Representative Robert Lighthizer said on Sunday the deal will nearly double U.S. exports to China over the next two years and is "totally done" despite the need for translation and revisions to its text. China's State Council's customs tariff commission said on Sunday that it has suspended additional tariffs on some U.S. goods that were meant to be implemented on Dec. 15. Data from China on Monday that showed industrial output and retail sales growth accelerating more than expected in November did offer some support for oil prices. Still, investors remained cautious as growth in China is expected to slow further next year, with the government likely to set its economic growth target at around 6% in 2020 compared with this year's 6-6.5%. The alliance, known as OPEC+, has agreed to lower supply a further 500,000 barrels per day as of Jan. 1, which could boost oil prices.

 

 
Intraday RESISTANCE LEVELS
16th December 2019 R1 R2 R3
GOLD-XAU 1,478 1,494 1,500-1.509
Silver-XAG 17.00-17.30 17.60 17.80-18.10
Crude Oil 59.70 60.30 60.70-61.25
EURO/USD 1.1150-1.1200 1.1280-1.1350 1.1280-1.1350
GBP/USD 1.3400-1.3510 1.3590 1.3630-1.3705
USD/JPY 109.50-110.00 110.70 111.50-111.90

Intraday SUPPORTS LEVELS
16th December 2019 S1 S2 S3
GOLD-XAU 1,466-1,458 1,452 1,442-1,436
Silver-XAG 16.75-16.50 15.90 15.50-14.90
Crude Oil 59.00-58.65 57.80 57.20-56.00
EURO/USD 1.1110 1.1060 1.0980-1.0930
GBP/USD 1.3350-1.3300 1.3200-1.3100 1.3200-1.3100
USD/JPY 109.00 108.50 107.80-107.00

Intra-Day Strategy (16th December 2019)
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$1477.98/oz and low of US$1461.74/oz. Gold up 0.450% at US$1475.63/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 neutral 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 1466-1442 with risk below 1442, targeting 1478-1489 and 1500-1509. Sell below 1478-1509 keeping stop loss closing above 1510, targeting 1468-1458 and 1452-1442-1438.

 
Intraday Support Levels
S1     1,466-1,458
S2     1,452
S3     1,442-1,436
Intraday Resistance Levels
R1     1,478
R2     1,494
R3     1,500-1.509

Technical Indicators

Name   Value Action
14DRSI  

48.882

Buy
20-DMA   1466.95 Sell
50-DMA  

1478.19

Sell
100-DMA   1489.40 Sell
200-DMA   1410.31 Buy
STOCH(5,3)   51.621 Buy
MACD(12,26,9)   -2.241 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$17.02/oz and low of US$16.82/oz settled up by 0.355% at US$16.93/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (17.15), breakage above will lead to 17.61. 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 neutral region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 16.75-14.90 targeting 17.00-17.30-17.60 and 17.80-18.50; stop breakage below 14.90. Sell below 16.75-19.30 with stop loss above 19.00; targeting 16.25-16.00 and 15.70-14.90.

 
Intraday  Support Levels
S1     16.75-16.50
S2     15.90
S3     15.50-14.90

Intraday  Resistance Levels
R1     17.00-17.30
R2     17.60
R3     17.80-18.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.313 Buy
20-DMA   16.91 Sell
50-DMA   17.25 Sell
100-DMA   17.41 Sell
200-DMA   16.26 Buy
STOCH(5,3)   67.268 Buy
MACD(12,26,9)   -0.113 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$60.34/bbl, intraday low of US$59.13/bbl and settled up by 0.742% to close at US$59.66/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 200DMA i.e. 56.35 which is a resistance level and breakage above will call for 57.00-58.00. MACD is above zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving positive crossover for confirmation of bullish 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 59.00-56.10 with risk daily closing below 56.10 and targeting 59.70-60.30 and 60.70-61.25-61.90. Sell below 59.70-61.25 with stop loss at 61.20; targeting 59.00-58.50-57.80 and 57.20-56.00.

 
Intraday Support Levels
S1     59.00-58.65
S2     57.80
S3     57.20-56.00

Intraday Resistance Levels
R1     59.70
R2     60.30
R3     60.70-61.25

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.638 Sell
20-DMA   57.89 Sell
50-DMA   56.37 Buy
100-DMA   55.95 Buy
200-DMA   57.63 Sell
STOCH(5,3)   70.130 Sell
MACD(12,26,9)   0.791 Sell

EUR/USD

AAFX TRADING

EUR/USD of Friday an intraday low of US$1.1100/EUR, high of US$1.1198/EUR and settled the day down by 0.065% to close at US$1.1121/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 1.1110-1.0900 with risk below 1.0900, targeting 1.1150-1.1200-1.1230 and 1.1230-1.1280. Sell below 1.1200-1.1420 targeting 1.1110-1.1060-1.1030 and 1.0960-1.0860 with stop-loss at daily closing above 1.1300.

 
Intraday Support Levels
S1     1.1110
S2     1.1060
S3     1.0980-1.0930

Intraday  Resistance Levels
R1     1.1150-1.1200
R2     1.1280-1.1350
R3     1.1280-1.1350

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.357 Buy
20-DMA   1.1067 Sell
50-DMA   1.1070 Sell
100-DMA   1.1063 Sell
200-DMA   1.1152 Sell
STOCH(5,3)   57.958 Sell
MACD(12,26,9)   -0.005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3148/GBP, high of US$1.3512/GBP and settled the day up by 1.323% to close at US$1.3339/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 1.3400-1.3705 with targets at 1.3350-1.3300-1.3250 and 1.3100-1.3040 stop-loss should be below 1.3705. Buy above 1.3350-1.3200 with targets 1.3400-1.3510-1.3590 and 1.3630-1.3705 with stop loss closing below 1.3100.

 
Intraday Support Levels
S1     1.3350-1.3300
S2     1.3200-1.3100
S3     1.3200-1.3100

Intraday Resistance Levels
R1     1.3400-1.3510
R2     1.3590
R3     1.3630-1.3705

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

79.940

Buy
20-DMA   1.3041 Buy
50-DMA   1.2896 Buy
100-DMA   1.2573 Buy
200-DMA   1.2697 Buy
STOCH(5,3)   66.191 Sell
MACD(12,26,9)   0.0012 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY108.83/USD and made an intraday high of JPY109.70/USD and settled the day up by 0.042% at JPY109.33/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 109.50-111.70 with risk above 111.90 targeting 109.00-108.50-107.80 and 107.00-106.50. Long positions above 109.10-107.00 with targets of 109.50-110.00 and 110.70-111.30 with stop below 107.00.

 
Intraday Support Levels
S1     109.00
S2     108.50
S3     107.80-107.00

INTRADAY RESISTANCE LEVELS
R1     109.50-110.00
R2     110.70
R3     111.50-111.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.367 Buy
20-DMA   108.90 Sell
50-DMA   108.68 Buy
100-DMA   107.83 Buy
200-DMA   108.42 Sell
STOCH(9,6)   78.253 Buy
MACD(12,26,9)   0.206 Buy

AAFX TRADING
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