AAFX TRADING

Daily Market Lookup

  • Japanese shares jumped on a weaker yen on Monday as an election win for Shinzo Abe’s ruling bloc gave a green light for more super-easy policy stimulus, while the euro eased as Spain’s constitutional crisis aggravated concerns about political unity in the region. The U.S. dollar was the major beneficiary as President Donald Trump and Republicans took a small step toward tax cuts, boosting Wall Street stocks and lifting bond yields. Investors assumed the victory would allow the Bank of Japan to continue with massive monetary easing that depresses bond yields and the yen, even as the U.S. Federal Reserve seems determined to hike rates again in December. The yen even slipped against the euro EURJPY=, which was having its own troubles as the Spanish government urged Catalans to accept its decision to dismiss their secessionist leadership and to take control of the restive region. The nation’s biggest political crisis in decades enters a decisive week as Madrid tries to impose its control, although investors have so far assumed the political strife would not spread elsewhere in the European Union. It faces another hurdle on Thursday when the European Central Bank meets amid much talk it will cut back the amount of assets it buys every month, but also extend the program.
  • The dollar edged up to a three-month high against the yen on Monday, with an emphatic election victory for Japan’s ruling party keeping yen-weakening reflationary measures at the heart of government policy. The election outcome added extra lift to a dollar already on a bullish footing thanks to progress on U.S. tax reform. Prime Minister Shinzo Abe’s ruling party scored a big win in Sunday’s election with his coalition keeping its two-thirds “super majority” in the lower house, local media said. Abe’s victory eased fears that the economic steps implemented under his leadership - such as the Bank of Japan’s super easy monetary policy - would be disrupted and halt the yen’s depreciation against the dollar. The greenback had already gained about 0.9 percent on Friday after the U.S. Senate approved a budget blueprint for the 2018 fiscal year, clearing a critical hurdle for Republicans to pursue a tax-cut package without Democratic support. The dollar was supported as U.S. yields rose, with the two-year yield hitting a nine-year high, as the progress in tax reforms boosted expectations of increased U.S. Government borrowing and a possible pickup in inflation.
  • Gold prices fell on Friday, pressured lower by the stronger U.S. dollar which was boosted after President Donald Trump's plans to overhaul the tax code cleared a critical hurdle. The dollar rose on Friday, making gold more expensive for holders of other currencies, after Senate Republicans approved a budget measure that will allow them to pursue tax cuts without support from the Democratic Party. Investors expect a fiscal boost to push up inflation, adding pressure on the U.S. Federal Reserve to raise interest rates, known as the "Trumpflation" trade. But Republicans have yet to produce a tax reform bill amid divisions over what cuts to make and how to pay for them and analysts have warned that the White House still faces a long battle to push through its agenda. In the week ahead, investors will be watching the European Central Bank meeting for further details on plans to scale back its massive stimulus program. Markets will keep an eye on a preliminary reading of third-quarter U.S. growth to further assess the impact of recent hurricanes on economic activity and how it could affect the Federal Reserve’s view on monetary policy.
  • Oil prices rose on Monday over supply concerns in the Middle East and as the U.S. market showed further signs of tightening while demand in Asia keeps rising. The amount of U.S. oil rigs drilling for new production fell by seven to 736 in the week to Oct. 20, the lowest level since June, General Electric Co’s (GE.N) Baker Hughes energy services firm said on Friday. Much will depend on demand to guide prices, with the U.S. market tightening, flows from Iraq reduced due to fighting between government forces and Kurdish militant groups, and production still being withheld as part of a pact between the OPEC and non-OPEC producers to tighten the market. In the main growth areas of Asia, consumption remains strong especially in China and India, the world’s number one and three importers. China’s oil demand remains voracious, hitting a January to September average of 8.5 mn barrels per day (bpd). India’s fuel thirst is also increasing. India imported a record 4.83 million barrels per day (bpd) of oil in September as several refiners resumed operations after extensive maintenance to meet rising local fuel demand. The country’s September imports stood 4.2 percent above this time last year and about 19 percent more than in August, ship-tracking data from industry sources and Thomson Reuters Analytics showed. Given the tightening oil market conditions, many analysts expect prices to rise further.

 

 
Intraday RESISTANCE LEVELS
23rd October 2017 R1 R2 R3
GOLD-XAU 1,279-1,288 1,300 1,312-1,321
Silver-XAG 17.10 17.50-18.00 18.60
Crude Oil 52.00-53.00 53.70 53.70 54.60
EURO/USD 1.1800 1.1800-1.1875 1.1925
GBP/USD 1.3190 1.3260-1.3300 1.3460
USD/JPY 114.00-114.50 115.00 115.60

Intraday SUPPORTS LEVELS
23rd October 2017 S1 S2 S3
GOLD-XAU 1,273-1,266 1,260 1,251
Silver-XAG 16.70 16.35-16.00 15.60
Crude Oil 50.90 50.90 50.10-49.00
EURO/USD 1.1750 1.1700 1.1660-1.1610
GBP/USD 1.3150 1.3100 1.3190
USD/JPY 113.60 113.00-112.30 111.50

Intra-Day Strategy (23rd 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 Friday made its intraday high of US$1290.95/oz and low of US$1277.88/oz. Gold was down by 0.757% at US$1280.19/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 positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1279-1321 keeping stop loss closing above 1321 and targeting 1273-1268 and 1263-1251. Buy above 1271-1251 with risk below 1251, targeting 1279-1288-1300 and 1311-1320.

 
Intraday Support Levels
S1     1,273-1,266
S2     1,260
S3     1,251
Intraday Resistance Levels
R1     1,279-1,288
R2     1,300
R3     1,312-1,321

Technical Indicators

Name   Value Action
14DRSI  

42.410

Buy
20-DMA   1283.54 Sell
50-DMA  

1299.35

Sell
100-DMA   1275.58 Buy
200-DMA   1258.10 Buy
STOCH(5,3)   22.175 Sell
MACD(12,26,9)   -4.112 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$17.27/oz and low of US$16.91/oz. Silver settled down by 1.161% at US$16.02/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

Based on the charts and explanations above, buy above 16.70-15.00 targeting 17.10-17.50-17.70 and 18.00-18.60; stop breakage below 15.00. Sell below 17.10-19.00 with stop loss above 19.00; targeting 16.80-16.50 and 16.00-15.60.

 
Intraday  Support Levels
S1     16.70
S2     16.35-16.00
S3     15.60

Intraday  Resistance Levels
R1     17.10
R2     17.50-18.00
R3     18.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.173 Buy
20-DMA   16.91 Buy
50-DMA   17.19 Buy
100-DMA   16.86 Buy
200-DMA   17.17 Buy
STOCH(5,3)   36.029 Buy
MACD(12,26,9)   -0.013 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$52.04/bbl, intraday low of US$50.85/bbl and settled up by 0.911% to close at US$52.03/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 52.0-54.60 with stop loss at 54.60; targeting and 51.50-50.90-50.10 and 49.00-48.40. Buy above 51.50-49.00 with risk daily closing below 49.00 and targeting 52.00-52.50 and 53.00-53.70-54.60.

 
Intraday Support Levels
S1     50.90
S2     50.90
S3     50.10-49.00

Intraday Resistance Levels
R1     52.00-53.00 53.70
R2     53.70
R3     54.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.044 Sell
20-DMA   51.18 Buy
50-DMA   49.57 Buy
100-DMA   48.02 Buy
200-DMA   49.45 Sell
STOCH(5,3)   61.439 Sell
MACD(12,26,9)   0.638 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1761/EUR, high of US$1.1857/EUR and settled the day down by 0.270% to close at US$1.1783/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 1.1800-1.1925 targeting 1.1750-1.1700-1.1660 and 1.1610-1.1555 with stop-loss at daily closing above 1.1925. Buy above 1.1750-1.1610 with risk below 1.1610 targeting 1.1800-1.1875 and 1.1930-1.1980.

 
Intraday Support Levels
S1     1.1750
S2     1.1700
S3     1.1660-1.1610

Intraday  Resistance Levels
R1     1.1800
R2     1.1800-1.1875
R3     1.1925

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.631 Buy
20-DMA   1.1780 Buy
50-DMA   1.1846 Buy
100-DMA   1.1658 Buy
200-DMA   52.621 Buy
STOCH(5,3)   52.621 Sell
MACD(12,26,9)   -0.0013 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3086/GBP, high of US$1.3200/GBP and settled the day by up by 0.205% to close at US$1.3184/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 oversold territory and giving positive crossover to confirm bullish 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 1.3150-1.3300 with targets at 1.3100-1.3020 and 1.2950-1.2900. Buy above 1.3150-1.2950 with stop loss closing below 1.2950 targeting 1.3190-1.3260-1.3300 and 1.3360-1.3450.

 
Intraday Support Levels
S1     1.3150
S2     1.3100
S3     1.3190

Intraday Resistance Levels
R1     1.3190
R2     1.3260-1.3300
R3     1.3460

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

46.541

Buy
20-DMA   1.3244 Buy
50-DMA   1.3163 Buy
100-DMA   1.3049 Buy
200-DMA   1.2822 Buy
STOCH(5,3)   35.273 Buy
MACD(12,26,9)   -0.0014 Buy

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY112.50/USD and made an intraday high of JPY113.56/USD and settled the day up by 0.888% at JPY113.51/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 114.00-115.60 with risk above 115.60 targeting 113.60-112.30-111.50 and 111.0-110.70. Long positions above 113.60-111.50 with targets of 114.00-114.60 and 115.00-115.60 with stop below 111.50.

 
Intraday Support Levels
S1     113.60
S2     113.00-112.30
S3     111.50

INTRADAY RESISTANCE LEVELS
R1     114.00-114.50
R2     115.00
R3     115.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.313 Buy
20-DMA   112.61 Buy
50-DMA   111.08 Buy
100-DMA   111.23 Buy
200-DMA   111.73 Sell
STOCH(9,6)   82.722 Buy
MACD(12,26,9)   0.509 Sell

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