AAFX TRADING

Daily Market Lookup

  • Asian shares scaled a two-year top on Thursday as investors wagered policy tightening in the United States would be glacial at best, lifting Wall Street to record peaks and lowering bond yields almost everywhere. Yet the overall mood was one of relief that Federal Reserve Chair Janet Yellen had not sounded more hawkish in her appearance before Congress, a green light for risk taking. Equities were underpinned by a drop in bond yields as Yellen sounded cautious on inflation and noted the Fed would not need to raise rates "all that much further" to reach current low estimates of the neutral funds rate. Indeed, markets doubt even that modest tightening will ensue and imply only a 50-50 chance of a rise by December
  • U.S. economy is healthy enough for the Fed to raise rates and begin winding down its massive bond portfolio, though low inflation and a low neutral rate may leave the central bank with diminished leeway, Fed Chair Janet Yellen said on Wednesday. In what may be one of her last appearances before Congress, Yellen depicted an economy that, while growing slowly, continued to add jobs, benefited from steady household consumption and a recent jump in business investment, and was now being supported by stronger economic conditions abroad. The Fed "continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time," Yellen said in her prepared testimony. Reductions in the Fed's portfolio of more than $4 trillion in securities are likely to begin "this year," she said. But she also noted that given current estimates, the federal funds rate "would not have to rise all that much further" to reach a neutral level that neither encourages nor discourages economic activity. The Fed still feels the economy needs loose, or accommodative, monetary policy, so a lower neutral rate means the Fed may feel compelled to slow the pace of rate hikes down the road. But for now, Yellen told members of the House Committee on Financial Services, the economy remains strong enough for the Fed to continue to gradually tighten policy. In response to questions from lawmakers, she said she expects the gradual run down of the balance sheet will "play out smoothly" in markets. The reduction in the balance sheet, which will begin slowly as the Fed reinvests only a portion of the holdings that mature each month, will mark the final exit from crisis-related policies. Yellen's past appearances before the House panel have sometimes involved sharp exchanges with lawmakers who think the Fed's influence over the economy has grown too strong. Such lawmakers want policymakers to be guided more closely by a mathematical rule for setting interest rates.
  • Gold continued climbing in Asia on Thursday, as investors backed away from the dollar following dovish testimony by US Federal Reserve Chair Janet Yellen and ongoing political concerns in the US. Gold has been rebounding this week, pushed up by a raft of news that pushed the dollar down and sent investors towards the security of gold, which typically moves in the opposite direction to the greenback. Yellen's testimony that the Fed will continue to raise rates but without committing to a timeline and saying it was still unclear whether the US would meet inflation targets send the dollar down. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar. That added to ongoing political concerns associated with President Donald Trump and links to Russia. The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has raised doubts over whether officials will be able to stick to their planned tightening path.
  • Oil prices were stable on Thursday as strong demand from China eased concerns of an ongoing fuel glut. China imported 212 million tonnes of crude oil, or 8.55 million barrels per day (bpd), in the first six months of the year, up 13.8 percent on the same period in 2016, customs data showed on Thursday, making China the world's biggest crude importer ahead of the United States. The strong demand from China eased concerns of an ongoing fuel supply overhang. The OPEC said late on Wednesday that the world would need 32.20 million bpd of crude from its members next year, down 60,000 bpd from this year, as consumers have increasing choices of supply from outside OPEC. Meanwhile, OPEC said its output rose by 393,000 bpd in June to 32.611 million bpd. The gain was led by Nigeria and Libya This came despite a pledge by OPEC to curb output by about 1.2 million bpd between January this year and March 2018, while Russia and other non-OPEC producers say they will hold back half as much. Despite the ongoing supply overhang, there are signs of a gradual reduction in the global glut. In the United States, crude oil inventories last week dropped the most in 10 months. Crude inventories fell 7.6 million barrels in the week to July 7, to 495.35 million barrels. The decline was the biggest since the week ended Sept. 4. While U.S. crude inventories remain far above their five-year average, stocks have fallen 7 percent since record levels from late March.

 

 
Intraday RESISTANCE LEVELS
13th July 2017 R1 R2 R3
GOLD-XAU 1,224-1,231 1,241 1,249
Silver-XAG 16.00 16.40 16.80-17.35
Crude Oil 46.30-46.90 47.50 48.10
EURO/USD 1.1460 1.1540-1.1620 1.1700
GBP/USD 1.2900 1.2990 1.3100-1.3160
USD/JPY 113.95 114.50 115.00-115.50

Intraday SUPPORTS LEVELS
13th July 2017 S1 S2 S3
GOLD-XAU 1,216 1,205-1,194 1,181
Silver-XAG 15.60 15.30-14.90 14.50
Crude Oil 45.22-44.60 43.80 42.90-42.30
EURO/USD 1.1370 1.1290 1.1200-1.1140
GBP/USD 1.2845-1.2790 1.2720 1.2650
USD/JPY 113.00-112.00 111.60 110.90

Intra-Day Strategy (13th July 2017)
GOLD-XAU Neutral
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Sell
GBP/USD Neutral to Sell
USD/JPY Neutral to Buy

Gold – XAU

AAFX TRADING

Gold closed up on Wednesday and made its intraday high of 1225.60/oz and intraday low of US$1213.34/oz. Gold down by 0.252% at US$1220.22/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1231) and breakage below will call for 1234-1224. MACD is below zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is approaching neutral region and more upside is expected before it touched overbought region. Stochastic Oscillator is in oversold territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1224-1249 keeping stop loss closing above 1250 and targeting 1216-1205-1194 and 1181-1170. Buy above 1216-1180 with risk below 1180, targeting 1224-1231 and 1241-1254.

 
Intraday Support Levels
S1     1,216
S2     1,205-1,194
S3     1,181
Intraday Resistance Levels
R1     1,224-1,231
R2     1,241
R3     1,249

Technical Indicators

Name   Value Action
14DRSI  

36.675

Buy
20-DMA   1236.65 Buy
50-DMA  

1247.36

Buy
100-DMA   1248.11 Buy
200-DMA   1231.12 Buy
STOCH(5,3)   50.431 Buy
MACD(12,26,9)   -10.961 Sell

Silver - XAG

AAFX TRADING

Silver closed down wednesday on made its intraday high of US$16.00/oz and intraday low of US$15.71/oz. Silver settled by up by 0.442% at US$15.89/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (17.20), breakage above will lead to 17.80-18.00. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold 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: Neutral

Based on the charts and explanations above, buy above 15.60-14.10 targeting 16.00-16.30 and 16.80-17.35-18.05; stop breakage below 15.30. Sell below 16.00-17.30 with stop loss above 17.30; targeting 15.60-15.30-14.90 and 14.50-14.10.

 
Intraday  Support Levels
S1     15.60
S2     15.30-14.90
S3     14.50

Intraday  Resistance Levels
R1     16.00
R2     16.40
R3     16.80-17.35

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.219 Buy
20-DMA   16.28 Buy
50-DMA   16.68 Sell
100-DMA   17.20 Sell
200-DMA   17.17 Sell
STOCH(5,3)   84.244 Buy
MACD(12,26,9)   -0.302 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US46.44/bl and made an intraday low of US$45.08/bbl and settled up by 0.654% at US$45.41/bbl on session close.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 49.77 which is a major resistance and breakage above will call for 50.30-51.00. MACD is below zero line and histograms are in decreasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in neutral region and giving positive crossover for confirmation of bullish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 46.30-48.10 with stop loss at 48.10; targeting 45.22-44.60 and 43.80-42.90-42.30. Buy above 45.22-42.30 with risk daily closing below 42.30 and targeting 46.30-46.90 and 47.50-48.10.

 
Intraday Support Levels
S1     45.22-44.60
S2     43.80
S3     42.90-42.30

Intraday Resistance Levels
R1     46.30-46.90
R2     47.50
R3     48.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.892 Sell
20-DMA   44.72 Sell
50-DMA   46.69 Sell
100-DMA   48.59 Sell
200-DMA   49.67 Sell
STOCH(5,3)   62.667 Buy
MACD(12,26,9)   -0.285 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1390/EUR and made an intraday high of US$1.1488/EUR and settled the day down by 0.479% at US$1.1410/EUR on session close.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0877), which become immediate support level, break below will target 1.0626-1.0600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving sell crossovers to signal for bearish outlook for intraday. 14D RSI is currently in neutral region and giving upwards directions to consider buy.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.1460-1.1750 targeting 1.1370-1.1290 and 1.1200-1.1140 with stop-loss at daily closing above 1.1090. Buy above 1.1370-1.1140 with risk below 1.1090 targeting 1.1540-1.1620 and 1.1700-1.1750.

 
Intraday Support Levels
S1     1.1370
S2     1.1290
S3     1.1200-1.1140

Intraday  Resistance Levels
R1     1.1460
R2     1.1540-1.1620
R3     1.1700

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.075 Buy
20-DMA   1.1317 Buy
50-DMA   1.1207 Buy
100-DMA   1.0959 Buy
200-DMA   1.0831 Buy
STOCH(5,3)   69.526 Sell
MACD(12,26,9)   0.0071 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2810/GBP and made an intraday high of US$1.2906/GBP and settled the day up by 0.295% at US$1.2882/GBP on session close.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2616) 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 overbought territory and giving negative crossover to confirm bearish stance. MACD is below zero line and histograms are decreasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; short positions below 1.2900-1.3200 with targets at 1.2845-1.2790 and 1.2700-1.2650, breakage above 1.3200 look for further upside with 1.3280 as targets. Buy above 1.2845-1.2650 with stop loss closing below 1.2650 targeting 1.2900-1.2990-1.3050 and 1.3100-1.3160.

 
Intraday Support Levels
S1     1.2845-1.2790
S2     1.2720
S3     1.2650

Intraday Resistance Levels
R1     1.2900
R2     1.2990
R3     1.3100-1.3160

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

49.080

Buy
20-DMA   1.2834 Buy
50-DMA   1.2871 Buy
100-DMA   1.2688 Buy
200-DMA   1.2545 Buy
STOCH(5,3)   13.336 Sell
MACD(12,26,9)   0.0018 Sell

USD/JPY

AAFX TRADING

USD/JPY Wednesday to made intra‐day low of JPY112.91/USD and made an intraday high of JPY113.96/USD and settled the day down by 0.693% at JPY113.14/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.90), which is major support on the daily chart. 14-D RSI is currently is approaching oversold region. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is approaching overbought territory and signaling to buy as it has given positive crossover to confirm bullish stance.

Trading Strategy: Neutral to Buy

Long positions above 113.00-110.90 with targets of 113.95-114.50-115.00 and 115.50-116.00 with stop below 111.60. Sell below 114.00-116.00 with risk above 116.00 targeting 113.00-112.10 and 111.60- 111.05.

 
Intraday Support Levels
S1     113.00-112.00
S2     111.60
S3     110.90

INTRADAY RESISTANCE LEVELS
R1     113.95
R2     114.50
R3     115.00-115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.420 Buy
20-DMA   112.50 Buy
50-DMA   111.88 Buy
100-DMA   111.78 Buy
200-DMA   111.70 Buy
STOCH(9,6)   32.7111 Sell
MACD(12,26,9)   0.629 Sell

AAFX TRADING
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