AAFX TRADING

Daily Market Lookup

  • Stocks, bonds and commodities were all on a roll in Asia on Thursday, as bulls scented a softening in the Federal Reserve's confidence on inflation that promised to keep U.S. interest rates low for longer than some had expected. The latest rush for risk came after the Fed left U.S. rates unmoved as expected on Thursday, and tweaked its wording on inflation. The market seized on the fact that the central bank noted that both overall and core inflation had declined, and it removed the qualifier "recently," perhaps suggesting concerns the slowdown might not be temporary. The Fed also said it expected to start winding down its massive holdings of bonds "relatively soon," cementing expectations of a September start. While that would be an effective tightening in financial conditions it might also lessen the need for actual hikes in rates, which matter more for currency valuations. A Reuters poll showed most primary dealers, the banks authorized to trade directly with the Fed, still see the Fed's next rate rise in December. But Fed funds rate futures are pricing in less than 50 percent chance of a hike by then, compared to more than 50 percent before the Fed's meeting. The dollar even fell back against the yen to 110.875, though the damage was somewhat limited by expectations the Bank of Japan would keep its super-easy policies in place longer than most other global central banks.
  • The dollar touched its lowest in more than a year and U.S. Treasury prices rose on Wednesday after the Federal Reserve left interest rates unchanged and signaled it could begin to cut its massive bond portfolio in the coming months. The Federal Reserve kept interest rates unchanged on Wednesday and said it expected to start winding down its massive holdings of bonds "relatively soon" in a sign of confidence in the U.S. economy. The Fed kept its benchmark lending rate in a target range of 1.00 percent to 1.25 percent, as expected, and said it was on track to continue the slow path of monetary tightening that has lifted rates by a percentage point since 2015. In a statement following a two-day policy meeting, the U.S. central bank's rate-setting committee indicated the economy was growing moderately and job gains had been solid. It also noted that both overall inflation and a measure of underlying price gains had declined - trends which have worried some policymakers - but that it expected the economy to continue strengthening. The statement cemented expectations the Fed will announce at its next policy meeting in September the start of its balance sheet reduction plan, marking the end of a controversial tool that drew criticism from Republican lawmakers in Congress.cSteady job creation in the economy has pushed the U.S. unemployment rate to 4.3 percent, near a 16-year low. The Fed had previously signaled it would begin to trim its balance sheet this year. At the same time, a slowdown in inflation has caused jitters among some Fed officials who are concerned inflation has been below the central bank's 2 percent target for five years. The Fed's preferred measure of underlying inflation dropped to 1.4 percent in May from 1.8 percent in February. The Fed had described inflation as being "somewhat" below target in its policy statement in June, but on Wednesday it simply stated that it was below 2 percent.
  • Oil prices rose to near eight-week highs on Wednesday, with Brent crude futures above $50 a barrel, as a much steeper than expected decline in U.S. inventories encouraged hopes the global crude glut would recede. U.S. crude stocks fell last week as refineries hiked output and imports dropped, while gasoline stocks decreased and distillate inventories fell, the Energy Information Administration said. Crude inventories fell 7.2 million barrels in the week ending July 21, far exceeding the 2.6 million barrel forecast. It was the fourth straight weekly decline, bolstering hopes that the long-oversupplied market was moving toward balance. On Monday, Saudi Arabia said it would limit oil exports to 6.6 million bpd in August, down nearly 1 million bpd from a year earlier. The drawdown was a combination of higher exports from the United States, a marginal decline in oil output and a rise in the refinery utilization rate, he said. In Venezuela, an OPEC member producing about 2 million bpd of oil, President Nicolas Maduro's opponents launched a two-day national strike to push him to abandon a weekend election. The United States is considering financial sanctions to halt dollar payments for Venezuelan oil. Nigerian output slipped this week as leaks forced Shell to shut a pipeline exporting some 180,000 bpd of oil. Nigeria, which has been exempted from OPEC-led production curbs, has agreed to cap or cut output when it stabilized at 1.8 million bpd. But analysts said rallying oil prices could encourage more production, particularly from the United States.

 

 
Intraday RESISTANCE LEVELS
27th July 2017 R1 R2 R3
GOLD-XAU 1,270-1,279 1,288 1,296
Silver-XAG 16.80-17.35 17.70 18.10
Crude Oil 49.20-49.70 50.60 52.00
EURO/USD 1.1770-1.1840 1.1900 1.1980
GBP/USD 1.3140-1.3200 1.3300 1.3380
USD/JPY 111.60 112.00 113.00-113.90

Intraday SUPPORTS LEVELS
27th July 2017 S1 S2 S3
GOLD-XAU 1,260 1,249 1,241-1,234
Silver-XAG 16.50-16.00 15.60 15.30-14.90
Crude Oil 48.50 47.50-47.00 46.50
EURO/USD 1.1720-1.1680 1.1620 1.1580-1.1510
GBP/USD 1.3100-1.3050 1.2960 1.2900
USD/JPY 110.90-110.10 109.50 109.00

Intra-Day Strategy (27th 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 down Wednesday on and made its intraday high of 1263.36/oz and intraday low of US$1243.63/oz. Gold up by 0.856% at US$1260.71/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 neutral territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1270-1296 keeping stop loss closing above 1296 and targeting 1260-1249-1241 and 1234-1224. Buy above 1260-1226 with risk below 1226, targeting 1270-1279 and 1288-1296.

 
Intraday Support Levels
S1     1,260
S2     1,249
S3     1,241-1,234
Intraday Resistance Levels
R1     1,270-1,279
R2     1,288
R3     1,296

Technical Indicators

Name   Value Action
14DRSI  

63.952

Buy
20-DMA   1234.60 Buy
50-DMA  

1250.22

Buy
100-DMA   1248.91 Buy
200-DMA   1230.15 Buy
STOCH(5,3)   63.901 Sell
MACD(12,26,9)   3.513 Sell

Silver - XAG

AAFX TRADING

Silver closed down Wednesday on made its intraday high of US$16.67/oz and intraday low of US$16.28/oz. Silver settled up by 1.032% at US$16.63/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 16.50-14.90 targeting 16.80-17.35 and 17.70-18.10; stop breakage below 15.30. Sell below 16.80-18.10 with stop loss above 18.10; targeting 16.30-16.00-15.60 and 15.30-14.90.

 
Intraday  Support Levels
S1     16.50-16.00
S2     15.60
S3     15.30-14.90

Intraday  Resistance Levels
R1     16.80-17.35
R2     17.70
R3     18.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.192 Buy
20-DMA   16.15 Buy
50-DMA   16.66 Sell
100-DMA   17.04 Sell
200-DMA   17.11 Sell
STOCH(5,3)   87.296 Buy
MACD(12,26,9)   -0.003 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US48.84/bbl and made an intraday low of US$47.84/bbl and settled up by 0.453% at US$48.70/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 overbought region and giving negative crossover for confirmation of bearish 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 48.50-50.60 with stop loss at 50.60; targeting 47.50-47.00 and 46.50-45.30-44.60. Buy above 48.00-44.60 with risk daily closing below 44.60 and targeting 48.50-49.70 and 49.70-50.60.

 
Intraday Support Levels
S1     48.50
S2     47.50-47.00
S3     46.50

Intraday Resistance Levels
R1     49.20-49.70
R2     50.60
R3     52.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.829 Sell
20-DMA   46.43 Sell
50-DMA   46.55 Sell
100-DMA   47.99 Sell
200-DMA   49.52 Sell
STOCH(5,3)   95.481 Sell
MACD(12,26,9)   0.590 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1612/EUR and made an intraday high of US$1.1739/EUR and settled the day up by 0.738% at US$1.1732/EUR on session close.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.1283), 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 overbought territory and giving negative 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 1.1770-1.1980 targeting 1.1720-1.1680 and 1.1620-1.1580-1.1510 with stop-loss at daily closing above 1.1980. Buy above 1.1720-1.1500 with risk below 1.1500 targeting 1.1770-1.1840 and 1.1900-1.1980.

 
Intraday Support Levels
S1     1.1720-1.1680
S2     1.1620
S3     1.1580-1.1510

Intraday  Resistance Levels
R1     1.1770-1.1840
R2     1.1900
R3     1.1980

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.641 Buy
20-DMA   1.1501 Buy
50-DMA   1.1332 Buy
100-DMA   1.1068 Buy
200-DMA   1.0861 Buy
STOCH(5,3)   83.462 Sell
MACD(12,26,9)   0.01169 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2999/GBP and made an intraday high of US$1.3122/GBP and settled the day up by 0.737% at US$1.3119/GBP on session close.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2570) 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 1.3140-1.3380 with targets at 1.3100-1.3050-1.2960 and 1.2900-1.2845, breakage above 1.3400 look for further upside with 1.3450 as targets. Buy above 1.3100-1.2900 with stop loss closing below 1.2900 targeting 1.3160-1.3200 and 1.3300-1.3380.

 
Intraday Support Levels
S1     1.3100-1.3050
S2     1.2960
S3     1.2900

Intraday Resistance Levels
R1     1.3140-1.3200
R2     1.3300
R3     1.3380

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

64.748

Buy
20-DMA   1.2984 Buy
50-DMA   1.2896 Buy
100-DMA   1.2768 Buy
200-DMA   1.2587 Buy
STOCH(5,3)   84.168 Buy
MACD(12,26,9)   0.0060 Buy

USD/JPY

AAFX TRADING

USD/JPY Wednesday to made intra‐day low of JPY111.04/USD and made an intraday high of JPY112.18/USD and settled the day down by 0.634% at JPY111.16/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 110.90-109.00 with targets of 111.60-112.00-113.00-113.95 with stop below 109.00. Sell below 111.6-114.00 with risk above 114.00 targeting 110.90-110.10 and 109.5-108.70.

 
Intraday Support Levels
S1     110.90-110.10
S2     109.50
S3     109.00

INTRADAY RESISTANCE LEVELS
R1     111.60
R2     112.00
R3     113.00-113.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.656 Buy
20-DMA   112.55 Sell
50-DMA   111.62 Buy
100-DMA   111.59 Buy
200-DMA   112.10 Sell
STOCH(9,6)   42.5006 Buy
MACD(12,26,9)   -0.191 Sell

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