AAFX TRADING

Daily Market Lookup

  • Asian shares consolidated recent gains and currencies kept to tight ranges on Wednesday as investors waited to see what policies might emerge from China’s Communist Party conference. The twice-a-decade congress is expected to cement the authority of President Xi Jinping, who kicks off the week-long event with a speech outlining his plans for the next five years. Markets are keen for any direction on economic and financial market reform, though history suggests these events can be light on detail. On Tuesday, the United States again declined to name China as a currency manipulator although it remained critical of the Chinese government’s economic policies ahead of a planned visit to Beijing by President Donald Trump. Recent economic data from the Asian giant has been generally upbeat, fuelling a tide of optimism about global growth that has benefited shares across the region. The bullish mood on equities was evident in the latest fund manager survey from BofA Merrill Lynch. Investors were bearish on bonds with 82 percent of those surveyed expecting yields to rise in the next 12 months and a record 85 percent believing bonds were overvalued. Dealers were wary ahead of speeches by several policymakers from the European Central Bank due later on Wednesday, which includes President Mario Draghi. The biggest mover had been Mexico's peso MXN= which boasted its biggest rise in over four months after trade ministers from the United States, Canada and Mexico extended the deadline on a contentious round of talks.
  • The dollar held an upper hand against other major currencies on Wednesday as investors weigh the possibility that U.S. President Donald Trump will choose a more hawkish Federal Reserve chief with than the current chair, Janet Yellen. With the Federal Reserve expected to raise interest rates for the third time this year in December, markets are now looking to who will lead the Federal Reserve after Yellen’s term expires next February. Trump has a pool of five candidates to choose from for the next chair of the Federal Reserve and is likely to announce his choice before going to Asia in early November, a source familiar with the situation said on Tuesday. The dollar got an extra boost this week after Stanford University economist John Taylor emerged as a major candidate. Taylor is known as a proponent of a rule-based monetary policy and according to his formula, known as the Taylor rule, the Fed funds rate needs to be much higher than the current target of 1.0-1.25 percent. Thus investors bet he could raise interest rates faster. However, the dollar made less headway against the yen, as investors remain hesitant to take big positions ahead of Japan’s election on Sunday. Although Prime Minister Shinzo Abe’s ruling party is expected to maintain a solid majority, the memory of recent election upsets in the United Kingdom and elsewhere has kept investors cautious. The British pound wallowed at $1.3193 having fallen 0.5 percent on Tuesday after comments by Bank of England policymakers were interpreted by markets as dovish. The Bank of England’s new deputy governor distanced himself from the central bank’s majority view that interest rates probably need to rise soon, and another newcomer said her support for that position was “very contingent on the data”
  • Crude oil prices settled flat on Tuesday as expectations of a ramp up in U.S. production weighed on sentiment while easing conflict in Northern Iraq between Iraqi and Kurdish forces lessened concerns over potential supply disruptions in the region. Crude oil prices came under pressure on renewed oversupply concerns following data indicating that U.S. producers will increase output. A monthly report from the Energy Information Administration released Monday showed expectations for a rise of 81,000 barrels a day to 6.12 million barrels a day in shale oil production from seven key U.S. shale regions in November. Also weighing on the crude prices was a fall in geopolitical tensions in Northern Iraq as the threat of ongoing fighting between Iraqi and Kurdish forces eased after Kurdish forces pulled out of disputed areas in region. Crude prices staged a late-session rebound, however, as traders looked ahead to a fresh batch of crude inventory data expected to show a continued draw in crude oil stockpiles. U.S. crude inventory data from the American Petroleum Institute on Tuesday as well as a further report from EIA on Wednesday are expected to show a decrease in U.S. crude inventories for the fourth-straight week. Crude oil inventories fell by 7.130 million barrels, the American Petroleum Institute (API) said oin Tuesday, more than expected as gasoline stocks rose by 1.94 million barrels and distillates gained 1.64 million barrels missing expectations of declines. The oil storage hub at Cushing, Oklahoma, showed a drop of 151,000 barrels. The API estimates will be followed by official data on Wednesday from the Energy Information Administration (EIA). Crude oil inventories were 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.

 

 
Intraday RESISTANCE LEVELS
18th October 2017 R1 R2 R3
GOLD-XAU 1,288 1,300 1,312-1,321
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 1.3200-1.3260 1.3300 1.3360-1.3400
USD/JPY 112.30-113.00 113.60 114.50

Intraday SUPPORTS LEVELS
18th October 2017 S1 S2 S3
GOLD-XAU 1,279 1,273-1,266 1,260
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 1.3100-1.3030 1.2950
USD/JPY 111.50-111.10 110.70 109.80

Intra-Day Strategy (18th 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 Tuesday made its intraday high of US$1296.14/oz and low of US$1281.31/oz. Gold was down by 0.755% at US$1285.01/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 1288-1329 keeping stop loss closing above 1329 and targeting 1279-1273 and 1263-1254. Buy above 1279-1260 with risk below 1260, targeting 1288-1300-1311 and 1320-1329.

 
Intraday Support Levels
S1     1,279
S2     1,273-1,266
S3     1,260
Intraday Resistance Levels
R1     1,288
R2     1,300
R3     1,312-1,321

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 Tuesday made its intraday high of US$17.23/oz and low of US$16.94/oz. Silver settled down by 1.162% at US$17.01/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 Tuesday made an intra‐day high of US$52.23/bbl, intraday low of US$51.20/bbl and settled up by 0.001% to close at US$51.91/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   49.45 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 Monday made an intraday low of US$1.1735/EUR, high of US$1.1799/EUR and settled the day down by 0.245% to close at US$1.1765/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   45.606 Buy
20-DMA   1.1796 Buy
50-DMA   1.1845 Buy
100-DMA   1.1641 Buy
200-DMA   1.1205 Buy
STOCH(5,3)   45.606 Sell
MACD(12,26,9)   -0.0017 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3153/GBP, high of US$1.3286/GBP and settled the day by down by 0.460% to close at US$1.3188/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     1.3100-1.3030
S3     1.2950

Intraday Resistance Levels
R1     1.3200-1.3260
R2     1.3300
R3     1.3360-1.3400

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 Tuesday made intra‐day low of JPY112.02/USD and made an intraday high of JPY112.47/USD and settled the day up by 0.01% at JPY112.18/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     111.50-111.10
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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