AAFX TRADING

Daily Market Lookup

  • Asian shares touched a 10-year high on Thursday after the U.S. Federal Reserve expressed optimism about the economy, virtually cementing the case for a year-end rate hike as investors awaited the formal nomination of the next head of the central bank. But investors were nervous as they awaited a tax bill from squabbling Republicans in the U.S. House of Representatives, which was expected later in the session after a one-day delay. The plan is said to include $6 trillion in tax cuts over 10 years but is unlikely to define how these would be offset as Republicans remain split over how to pay for them. Also later on Thursday, the Bank of England was expected to deliver its the first rate hike in more than a decade, following the pattern set by the Fed and to an extent by the European Central Bank, which has said it will start to scale back its years of stimulus. The White House plans to nominate current Fed Governor Jerome Powell as the next chair when Janet Yellen’s term expires in February, a source familiar with the matter said on Wednesday. Powell’s nomination, which would need to be confirmed by the Senate, is expected later on Thursday before President Donald Trump leaves on a trip to Asia. Rising expectations that Trump will tap Powell, who is seen as more dovish on interest rates, have pressured U.S. Treasury yields and kept the dollar on the backfoot this week. On Wednesday, Wall Street posted modest gains after the Fed held policy steady as expected and underscored solid U.S. economic growth as well as a strengthening labor market, while downplaying the impact of recent hurricanes. In addition to the Fed’s encouraging assessment, the ADP National Employment Report showed that private employers hired 235,000 workers in October, the most in seven months. On Friday, the Labor Department’s nonfarm payrolls report is expected to show growth of 303,000 jobs in October, compared to a drop of 40,000 the month before. Total non-farm employment is expected to have increased by 312,000, according to economists polled by Reuters.
  • The Federal Reserve kept interest rates unchanged on Wednesday and pointed to solid U.S. economic growth and a strengthening labor market while playing down the impact of recent hurricanes, a sign it is on track to lift borrowing costs again in December. Investors had all but ruled out a rate hike at the central bank’s policy meeting this week and attention has largely been focused on who will be in charge of monetary policy at the end of Fed Chair Janet Yellen’s first term in February 2018. President Donald Trump is set to announce his nomination on Thursday afternoon with Fed Governor Jerome Powell, a soft-spoken centrist who has supported Yellen’s gradual approach to raising rates, seen as having a lock on the job. In keeping with that encouraging tone, the central bank’s policymakers acknowledged that inflation remained soft but did not downgrade their assessment of pricing expectations. Nevertheless, Yellen and some other key policymakers have said the Fed still expects to continue to gradually raise rates given the strength of the overall economy. In its statement, the central bank reiterated it expects inflation to rise back to its target over the medium term and emphasized that the unemployment rate has declined further. U.S. financial conditions remain loose, strengthening the argument that another rate rise would not slow the current brisk growth. The government reported last week that the economy grew at a 3.0 percent annual rate in the third quarter. A decline in hiring in September has largely been dismissed as a blip caused by the temporary displacement of workers due to Hurricanes Harvey and Irma. That jobs report showed wages growing at an improved pace and the unemployment rate falling to more than a 16-1/2-year low of 4.2 percent. The central bank is scheduled to hold its final policy meeting of the year on Dec. 12-13.
  • Oil prices held steady on Thursday as U.S. crude inventories fell despite a rise in production, while outside the United States an OPEC-led supply cut continued to tighten the market. Traders said oil markets were being supported by falling U.S. commercial crude oil inventories despite rising output. U.S. commercial crude oil inventories fell by 2.4 million barrels in the week to Oct. 27 to 454.9 million barrels, according to data from the EIA on Wednesday. This came despite a 46,000 barrels per day (bpd) increase in production to 9.6 million bpd. U.S. crude output is now up over 13 percent since mid-2016. The EIA said that a record 2.1 million bpd of U.S. crude was exported in the latest week. Traders said this was due to WTI's wide discount to Brent which makes overseas sales profitable. Outside the United States, confident market sentiment has been fueled by an effort this year lead by the OPEC and Russia to hold back about 1.8 mn bpd in oil production to tighten markets. Trade data shows that global oil markets have been slightly undersupplied during the past quarters, resulting in fuel inventory drawdowns. The pact to withhold supplies runs to March 2018, but there is growing consensus to extend the deal to cover all of next year. Despite the generally bullish market sentiment, some analysts warned of too much confidence in higher prices.

 

 
Intraday RESISTANCE LEVELS
2nd November 2017 R1 R2 R3
GOLD-XAU 1,279-1,288 1,300 1,311
Silver-XAG 17.10 17.50-18.00 18.60
Crude Oil 54.60-55.10 55.50 56.30
EURO/USD 1.1660-1.1700 1.1750 1.1800-1.1850
GBP/USD 1.3260-1.3300 1.3360 1.3400
USD/JPY 114.00 114.50-115.00 115.50

Intraday SUPPORTS LEVELS
2nd November 2017 S1 S2 S3
GOLD-XAU 1,266 1,260-1,252 1,244
Silver-XAG 16.70 16.35-16.00 15.60
Crude Oil 53.75-53.00 52.00 51.50-50.90
EURO/USD 1.1600-1.1550 1.1490 1.1400
GBP/USD 1.3190-1.3150 1.3100 1.3030-1.2950
USD/JPY 113.60 113.00-112.30 111.50

Intra-Day Strategy (2nd November 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$1280.77/oz and low of US$1267.85/oz. Gold was up by 0.311% at US$1274.43/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1275) and breakage above will call for 1312-1321. MACD is below zero line and histograms are decreasing trend and it will bring upward stance in the upcoming sessions. RSI is in oversold region and more downside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1279-1311 keeping stop loss closing above 1311 and targeting 1266-1260-1251 and 1244-1235. Buy above 1269-1235 with risk below 1235, targeting 1279-1288 and 1300-1311.

 
Intraday Support Levels
S1     1,266
S2     1,260-1,252
S3     1,244
Intraday Resistance Levels
R1     1,279-1,288
R2     1,300
R3     1,311

Technical Indicators

Name   Value Action
14DRSI  

46.906

Buy
20-DMA   1282.13 Sell
50-DMA  

1297.77

Sell
100-DMA   1275.87 Sell
200-DMA   1260.77 Buy
STOCH(5,3)   58.802 Sell
MACD(12,26,9)   -5.120 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$17.18/oz and low of US$16.65/oz. Silver settled up by 2.639% at US$17.11/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 positive crossover to show upside 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   53.303 Buy
20-DMA   17.01 Buy
50-DMA   17.18 Buy
100-DMA   16.84 Buy
200-DMA   17.16 Buy
STOCH(5,3)   70.370 Sell
MACD(12,26,9)   -0.032 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$55.20/bbl, intraday low of US$53.87/bbl and settled down by 0.622% to close at US$54.27/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 above zero line and histograms are in increasing 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 54.60-56.30 with stop loss at 56.30; targeting and 53.75-53.00 and 52.00-51.50-50.90. Buy above 53.75-51.00 with risk daily closing below 51.00 and targeting 54.60-55.10 and 55.50-56.30.

 
Intraday Support Levels
S1     53.75-53.00
S2     52.00
S3     51.50-50.90

Intraday Resistance Levels
R1     54.60-55.10
R2     55.50
R3     56.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.341 Sell
20-DMA   52.19 Buy
50-DMA   50.51 Buy
100-DMA   48.64 Buy
200-DMA   49.48 Buy
STOCH(5,3)   77.958 Buy
MACD(12,26,9)   1.065 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1605/EUR, high of US$1.1656/EUR and settled the day down by 0.206% to close at US$1.1621/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 1.1660-1.1850 targeting 1.1610-1.1555 and 1.1490-1.1400 with stop-loss at daily closing above 1.1850. Buy above 1.1600-1.1400 with risk below 1.1400 targeting 1.1660-1.1700 and 1.1750-1.1800-1.1850.

 
Intraday Support Levels
S1     1.1600-1.1550
S2     1.1490
S3     1.1400

Intraday  Resistance Levels
R1     1.1660-1.1700
R2     1.1750
R3     1.1800-1.1850

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.636 Buy
20-DMA   1.1745 Buy
50-DMA   1.1830 Buy
100-DMA   1.1695 Buy
200-DMA   1.1261 Buy
STOCH(5,3)   31.924 Sell
MACD(12,26,9)   -0.0048 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3239/GBP, high of US$1.3320/GBP and settled the day down by 0.256% to close at US$1.3248/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 1.3260-1.3400 with targets at 1.3190-1.3100 and 1.3020-1.2950. Buy above 1.3190-1.2900 with stop loss closing below 1.2900 targeting 1.3260-1.3300 and 1.3360-1.3400.

 
Intraday Support Levels
S1     1.3190-1.3150
S2     1.3100
S3     1.3030-1.2950

Intraday Resistance Levels
R1     1.3260-1.3300
R2     1.3360
R3     1.3400

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

54.153

Buy
20-DMA   1.3202 Sell
50-DMA   1.3221 Sell
100-DMA   1.3081 Buy
200-DMA   1.2852 Buy
STOCH(5,3)   54.147 Sell
MACD(12,26,9)   -0.0004 Buy

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY113.59/USD and made an intraday high of JPY114.27/USD and settled the day up by 0.422% at JPY114.12/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (111.73), 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 Sell

Sell below 114.00-116.00 with risk above 116.00 targeting 113.60-113.00 and 112.30-111.50. Long positions above 113.60-111.50 with targets of 114.00-114.60-115.00 and 115.60-116.00 with stop below 116.00.

 
Intraday Support Levels
S1     113.60
S2     113.00-112.30
S3     111.50

INTRADAY RESISTANCE LEVELS
R1     114.00
R2     114.50-115.00
R3     115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.507 Buy
20-DMA   113.05 Buy
50-DMA   111.74 Buy
100-DMA   111.53 Buy
200-DMA   111.72 Buy
STOCH(9,6)   62.311 Buy
MACD(12,26,9)   0.559 Sell

AAFX TRADING
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