AAFX TRADING

Daily Market Lookup

  • The dollar held to gains against the yen and euro on Tuesday, supported by a rise in Treasury yields following a report that U.S. President Donald Trump was favoring a policy hawk as the next head of the Federal Reserve Treasury yields bounced from two-week lows and rose on Monday after a report that President Trump was favoring Stanford economist John Taylor, seen as more hawkish than current Chair Janet Yellen, to head the Fed. "The dollar was under pressure as Treasury yields declined last week. But it was allowed to rebound as a stronger Wall Street, good U.S. data and the report about Taylor all came into place to stop the yield decline," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo. The New York Fed's business conditions index published on Monday showed its highest reading since September 2014. "The euro likely holds the key to whether the dollar can remain firm. The European Central Bank is now considered less hawkish than the market had initially thought last month, pushing German bund yields lower and in turn favoring the dollar against the euro," Ishikawa at IG Securities said. Ten-year bond yields in Germany hit one-month lows overnight, extending moves seen late last week on reports that ECB policymakers broadly agree on extending asset purchases at a lower volume at their Oct. 26 meeting with views converging on a nine-month extension. U.S. President Donald Trump will meet with Federal Reserve Chair Janet Yellen on Thursday as part of his search for a new candidate for her position, a source familiar with the planned meeting said. On Thursday, a White House official said Trump had met with Stanford University economist John Taylor to discuss the job. Trump is working from a short list that also includes Jerome Powell, a Fed governor; Kevin Warsh, a former Fed governor; Trump’s top economic adviser Gary Cohn; and Yellen, whose term expires in February, sources have said. White House chief of staff John Kelly said on Thursday Trump is “some time away” from a decision on who should chair the Federal Reserve. A new Fed chair would take the helm as the central bank eases well away from crisis-era policies in response to a strengthening economy and falling unemployment, though inflation still lingers below the Fed’s 2 percent goal. Under Yellen, the Fed has raised interest rates and launched a plan to shrink its $4.5 trillion balance sheet, much of which was accumulated through a bond-buying program that Yellen said helped the economy avert an even deeper downturn.
  • Crude oil prices fell in Asia on Tuesday on profit taking after sharp gains on geopolitical tensions in Iraq and Iran stoked buying. Later Tuesday the American Petroleum Institute (API) will release its estimates of U.S. crude and refined product stocks to be followed by official data on Wednesday from the Energy Information Administration (EIA). Crude oil inventories are seen down by 4.750 million barrels, while gasoline stocks are seen down by 1.0 million barrels and distillates off by 1.5 million barrels. The API and EIA figures often diverge. Overnight, crude oil prices settled higher on Monday as conflict between Iraqi and Kurdish forces broke out in the oil-rich city of Kirkuk raising concerns over supply disruptions in the region. Oil prices surged on the back of concerns over supply disruptions in Iraq – the second largest Opec producer – after Iraqi forces marched into the oil-rich city of Kirkuk amid rising tensions between Baghdad and the Kurdistan Regional Government (KRG). The show of force from Iraqi forces comes after weeks of unrest in the region which followed the KRG’s vote for independence in a Sept. 25 referendum. Kirkuk accounts for 200,000 barrels per day (bpd) of the roughly 600,000 bpd of oil produced in the KRG region. Also supporting an uptick in crude oil prices were concerns over renewed U.S. sanctions against Iran after President Donald Trump on Friday refuse to certify to Congress that Tehran is complying with the 2015 Iran nuclear agreement. Under the agreement, Iran agreed to restrict its nuclear programme for at least 10 years in exchange for lighter economic sanctions that had crippled its economy, wiping out nearly 1 million bpd of Iranian oil exports from the market. The potential threat of supply disruptions in the region has prompted analysts to raise their forecast on oil prices for the quarter. Analysts at Bank of America forecast Brent to average $54 this quarter.

 

 
Intraday RESISTANCE LEVELS
17th October 2017 R1 R2 R3
GOLD-XAU 1,300 1,312-1,321 1,329
Silver-XAG 17.50 18.00-18.35 18.60
Crude Oil 52.00 52.50-53.00 53.70
EURO/USD 1.1800 1.1850-1.1875 1.1925
GBP/USD 1.3360-1.3400 1.3360-1.3400 1.3450
USD/JPY 112.30-113.00 113.60 114.50

Intraday SUPPORTS LEVELS
17th October 2017 S1 S2 S3
GOLD-XAU 1,288 1,279 1,273-1,266
Silver-XAG 17.00 16.70 16.35-16.00
Crude Oil 51.50-50.90 50.10 49.00-47.80
EURO/USD 1.1770 1.1700 1.1660-1.1610
GBP/USD 1.3150 1.3150 1.3100-1.3015
USD/JPY 110.70 110.70 109.80

Intra-Day Strategy (17th October 2017)
GOLD-XAU Neutral
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Sell
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Monday made its intraday high of US$1305.94/oz and low of US$1290.28/oz. Gold was down by 0.719% at US$1294.96/oz.

Technicals in Focus:

In daily charts, prices are below 50DMA (1300) and breakage above will call for 1312-1321. MACD is below zero line and histograms are increasing trend and it will bring upward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1300-1329 keeping stop loss closing above 1329 and targeting 1294-1288 and 1279-1273-1263. Buy above 1288-1266 with risk below 1266, targeting 1300-1311 and 1320-1329.

 
Intraday Support Levels
S1     1,288
S2     1,279
S3     1,273-1,266
Intraday Resistance Levels
R1     1,300
R2     1,312-1,321
R3     1,329

Technical Indicators

Name   Value Action
14DRSI  

50.170

Buy
20-DMA   1287.63 Buy
50-DMA  

1299.67

Sell
100-DMA   1275.33 Buy
200-DMA   1256.36 Buy
STOCH(5,3)   67.086 Sell
MACD(12,26,9)   -2.271 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$17.44/oz and low of US$17.08/oz. Silver settled down by 0.864% at US$17.20/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 200DMA (17.16), breakage below will lead to 16.70-16.35. 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 overbought region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 17.00-15.00 targeting 17.50-17.70 and 18.00-18.60; stop breakage below 15.00. Sell below 17.50-18.60 with stop loss above 18.60; targeting 17.20-16.80-16.50 and 16.00-15.60.

 
Intraday  Support Levels
S1     17.00
S2     16.70
S3     16.35-16.00

Intraday  Resistance Levels
R1     17.50
R2     18.00-18.35
R3     18.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.271 Buy
20-DMA   16.93 Buy
50-DMA   17.19 Buy
100-DMA   16.87 Buy
200-DMA   17.16 Buy
STOCH(5,3)   68.170 Sell
MACD(12,26,9)   -0.008 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$52.35/bbl, intraday low of US$51.34/bbl and settled up by 0.933% to close at US$51.90/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 49.60 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 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 52.00-53.70 with stop loss at 53.70; targeting and 51.50-50.90-50.10 and 49.00- 47.80. Buy above 51.50-47.80 with risk daily closing below 47.80 and targeting 52.00- 52.50 and 53.00-53.70.

 
Intraday Support Levels
S1     51.50-50.90
S2     50.10
S3     49.00-47.80

Intraday Resistance Levels
R1     52.00
R2     52.50-53.00
R3     53.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.865 Sell
20-DMA   50.96 Buy
50-DMA   49.29 Buy
100-DMA   47.85 Buy
200-DMA   49.45 Sell
STOCH(5,3)   82.437 Sell
MACD(12,26,9)   0.546 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1779/EUR, high of US$1.1818/EUR and settled the day down by 0.143% to close at US$1.1795/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.1937), which become immediate support level, break below will target 1.1700-1.1600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral 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 1.1800-1.1981 targeting 1.1770-1.1700-1.1660 and 1.1610-1.1555 with stop-loss at daily closing above 1.1925. Buy above 1.1770-1.1500 with risk below 1.1500 targeting 1.1825-1.1875 and 1.1930-1.1980.

 
Intraday Support Levels
S1     1.1770
S2     1.1700
S3     1.1660-1.1610

Intraday  Resistance Levels
R1     1.1800
R2     1.1850-1.1875
R3     1.1925

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.225 Buy
20-DMA   1.1803 Buy
50-DMA   1.1845 Buy
100-DMA   1.1636 Buy
200-DMA   1.1199 Buy
STOCH(5,3)   40.655 Sell
MACD(12,26,9)   -0.0015 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3310/GBP, high of US$1.3224/GBP and settled the day by down by 0.323% to close at US$1.3249/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.3306) 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 1.3300-1.3450 with targets at 1.3260-1.3200 and 1.3150-1.3100-1.3020. Buy above 1.3260-1.3015 with stop loss closing below 1.3000 targeting 1.3300-1.3360 and 1.3400-1.3450.

 
Intraday Support Levels
S1     1.3150
S2     1.3150
S3     1.3100-1.3015

Intraday Resistance Levels
R1     1.3360-1.3400
R2     1.3360-1.3400
R3     1.3450

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

53.443

Buy
20-DMA   1.3381 Buy
50-DMA   1.3140 Buy
100-DMA   1.3030 Buy
200-DMA   1.2791 Buy
STOCH(5,3)   89.644 Sell
MACD(12,26,9)   0.0004 Buy

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY111.64/USD and made an intraday high of JPY112.28/USD and settled the day up by 0.375% at JPY111.75/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (112.15), 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 sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 112.30-114.50 with risk above 114.50 targeting 111.50-111.0-110.70 and 110.35-109.80. Long positions above 111.50-109.80 with targets of 112.30-113.00-113.60 and 114.00-114.50 with stop below 109.80

 
Intraday Support Levels
S1     110.70
S2     110.70
S3     109.80

INTRADAY RESISTANCE LEVELS
R1     112.30-113.00
R2     113.60
R3     114.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.396 Buy
20-DMA   112.39 Buy
50-DMA   110.78 Buy
100-DMA   111.13 Buy
200-DMA   111.76 Sell
STOCH(9,6)   32.174 Sell
MACD(12,26,9)   0.358 Sell

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