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Daily Market Lookup

  • Asian stocks inched up to near decade highs on Thursday, continuing to ride on a global equities rally, while the dollar resumed its rise on the back of a spike in U.S. yields. Trade was cautious, however, as investors waited for third-quarter economic growth data from China at 0200 GMT, which is expected to show its momentum is starting to cool as the government reins in the property market and cracks down on riskier lending. Current Fed Chair Janet Yellen’s term expires in February and investors are keen to see who U.S. President Donald Trump will pick as her replacement. China’s twice-a-decade congress kicked off on Wednesday. The focus is on how much power President Xi Jinping can cement, and whether he will use the extra clout to push through with more extensive but potentially risky economic and financial market reforms. China is expected on Thursday to post a modest slowdown in third quarter economic growth from the previous quarter as the government’s efforts to rein in the property market and debt risks weigh on activity in the world’s second-largest economy. Analysts polled by Reuters expect GDP to have grown 6.8 percent in the July-September period, cooling from the previous quarter’s 6.9 percent expansion. The slowdown projected by analysts, however, is at odds with central bank governor Zhou Xiaochuan’s comment earlier this week that the economy could grow 7 percent in the second half of the year, versus 6.9 percent in the first six months, raising the prospect of an upside surprise in the official numbers.
  • The dollar hit its highest in about two weeks versus the yen on Thursday, supported by this week’s rise in U.S. bond yields, with the near-term focus on U.S. President Donald Trump’s decision on the next chair of the Federal Reserve. This week’s rise in U.S. bond yields have helped lend support to the greenback. The two-year U.S. Treasury yield US2YT=RR rose to their highest since November 2008 on Wednesday on the back of expectations for tighter global monetary policy. With the Federal Reserve expected to raise interest rates for the third time this year in December, markets are now looking for clarity on who will lead the U.S. central bank after Fed Chair Janet Yellen’s term expires next February. President Donald Trump will announce his decision on who will be the chair of the Federal Reserve in the “coming days,” White House spokeswoman Sarah Sanders said on Wednesday. Trump has an interview scheduled on Thursday with current Chair Yellen. She is one of five candidates Trump is considering for the job. The dollar has gained a boost this week after Stanford University economist John Taylor emerged as a major candidate for the next Fed chair. 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 there is speculation that the Fed may start raising interest rates at a faster pace, if Taylor becomes the Fed chief. One focus for the euro is the European Central Bank's policy meeting coming up next week. Later on Thursday, investors will turn their focus to China’s third-quarter gross domestic product data. China is expected on Thursday to post a modest slowdown in third quarter economic growth from the previous quarter as the government’s efforts to rein in the property market and debt risks weigh on activity in the world’s second-largest economy.
  • Oil prices were firm on Thursday, supported by ongoing supply cuts led by OPEC, tensions in the Middle East and lower production in the United States as a result of hurricane-enforced closures. The U.S. EIA said late on Wednesday that crude inventories fell by 5.7 million barrels in the week to Oct. 13, to 456.49 million barrels. U.S. output slumped by 11 percent from the previous week to 8.4 mn bpd, its lowest level since June 2014 as numerous rigs had to be shut because of Hurricane Nate, which hit the U.S. Gulf coast earlier in October. Beyond the drop in U.S. production and tensions in Iraq and between the United States and Iran, analysts expect markets to further tighten as the OPEC and partners, including Russia, are expected to extend a deal to curb production beyond its expiry date at the end of March 2018. "OPEC is desperate to bring the market into equilibrium and mop up as much of the excess stockpiles, which was caused as a result of the free for all production approach over the last few years. I am expecting OPEC and Russia to agree on a further 9-month extension to production cuts," said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers. Political risk consultancy Eurasia Group said Saudi Arabia's plans to list state-owned oil giant Aramco also favored extended production cuts in order to prop up oil prices. "Saudi Arabia will seek a production sharing agreement extension ... as an IPO (of Saudi Aramco) remains part of the long-term plan ... price stability will remain a core part of the strategy ... The government still needs higher oil revenue to support its spending needs and reform program," it said.

 

 
Intraday RESISTANCE LEVELS
19th October 2017 R1 R2 R3
GOLD-XAU 1,279 1,300 1,312-1,321
Silver-XAG 17.10-17.50 18.00 18.60
Crude Oil 52.50-53.00 53.70 54.50
EURO/USD 1.1850-1.1875 1.1925 1.1980
GBP/USD 1.3260 1.3300 1.3360-1.3400
USD/JPY 113.00-113.60 114.00 114.50

Intraday SUPPORTS LEVELS
19th October 2017 S1 S2 S3
GOLD-XAU 1,279 1,260 1,260
Silver-XAG 16.70 16.35-16.00 15.65
Crude Oil 52.00-51.50 50.90 50.10-49.00
EURO/USD 1.1800-1.1770 1.1700 1.1660-1.1610
GBP/USD 1.3190 1.3150-1.3100 1.3030
USD/JPY 112.30 110.70 110.70

Intra-Day Strategy (19th 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 Wednesday made its intraday high of US$1288.76/oz and low of US$1276.86/oz. Gold was down by 0.314% at US$1280.76/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     1,260
S3     1,260
Intraday Resistance Levels
R1     1,279
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 Wednesday made its intraday high of US$17.08/oz and low of US$16.89/oz. Silver settled down by 0.117% at US$16.98/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 oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Neutral

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 oversold region and giving negative crossover to show downside move for the intraday trade.

 
Intraday  Support Levels
S1     16.70
S2     16.35-16.00
S3     15.65

Intraday  Resistance Levels
R1     17.10-17.50
R2     18.00
R3     18.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.629 Buy
20-DMA   16.91 Buy
50-DMA   17.19 Buy
100-DMA   16.87 Buy
200-DMA   17.16 Buy
STOCH(5,3)   15.003 Sell
MACD(12,26,9)   -0.008 Buy Buy

Oil - WTI

AAFX TRADING

low of US$51.67/bbl and settled up by 0.154% to close at US$52.01/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 52.50-54.50 with stop loss at 54.50; targeting and 52.00-51.50 and 50.90-50.10-49.00. Buy above 52.00-49.00 with risk daily closing below 49.00 and targeting 52.50-53.00 and 53.70-54.50.

 
Intraday Support Levels
S1     52.00-51.50
S2     50.90
S3     50.10-49.00

Intraday Resistance Levels
R1     52.50-53.00
R2     53.70
R3     54.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.131 Sell
20-DMA   51.10 Buy
50-DMA   49.41 Buy
100-DMA   47.93 Buy
200-DMA   49.45 Sell
STOCH(5,3)   83.278 Sell
MACD(12,26,9)   0.627 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1729/EUR, high of US$1.1805/EUR and settled the day up by 0.186% to close at US$1.1787

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 1.1850-1.1980 targeting 1.1800-1.1770-1.1700-1.1660 and 1.1610-1.1555 with stop-loss at daily closing above 1.1980. Buy above 1.1790-1.1610 with risk below 1.1610 targeting 1.1830-1.1875 and 1.1930-1.1980.

 
Intraday Support Levels
S1     1.1800-1.1770
S2     1.1700
S3     1.1660-1.1610

Intraday  Resistance Levels
R1     1.1850-1.1875
R2     1.1925
R3     1.1980

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.103 Buy
20-DMA   1.1790 Buy
50-DMA   1.1846 Buy
100-DMA   1.1648 Buy
200-DMA   1.1211 Buy
STOCH(5,3)   36.955 Sell
MACD(12,26,9)   -0.0014 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3139/GBP, high of US$1.3210/GBP and settled the day by up by 0.113% to close at US$1.3203/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 neutral 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 1.3260-1.3450 with targets at 1.3190-1.3150 and 1.3100-1.3020. Buy above 1.3190-1.3015 with stop loss closing below 1.3000 targeting 1.3260-1.3300-1.3360 and 1.3400-1.3450.

 
Intraday Support Levels
S1     1.3190
S2     1.3150-1.3100
S3     1.3030

Intraday Resistance Levels
R1     1.3260
R2     1.3300
R3     1.3360-1.3400

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

47.741

Buy
20-DMA   1.3277 Buy
50-DMA   1.3156 Buy
100-DMA   1.3043 Buy
200-DMA   34.818 Buy
STOCH(5,3)   34.818 Sell
MACD(12,26,9)   0.0006 Buy

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY112.12/USD and made an intraday high of JPY113.04/USD and settled the day up by 0.659% at JPY112.91/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 113.00-114.50 with risk above 114.50 targeting 112.30-111.50-111.0 and 110.70-110.35. Long positions above 112.30-110.70 with targets of 113.00-113.60 and 114.00-114.50 with stop below 110.70.

 
Intraday Support Levels
S1     112.30
S2     110.70
S3     110.70

INTRADAY RESISTANCE LEVELS
R1     113.00-113.60
R2     114.00
R3     114.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.557 Buy
20-DMA   112.45 Buy
50-DMA   110.92 Buy
100-DMA   111.17 Buy
200-DMA   111.74 Sell
STOCH(9,6)   82.170 Buy
MACD(12,26,9)   0.411 Sell

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