AAFX TRADING

Daily Market Lookup

  • Asian share markets were mostly firmer on Wednesday as a bullish outlook from the head of the U.S. central bank buoyed the dollar, lifted Tokyo shares to a one-month top and sent gold to a one-year trough. Federal Reserve Chairman Jerome Powell stuck with an upbeat assessment on the U.S. economy while downplaying the impact of global trade risks on the outlook for rate rises. BofA Merrill Lynch's latest fund manager survey showed a trade war remained the biggest threat cited by no less than 60 percent of respondents. For now, U.S. companies seem to be profiting mightily from tax cuts as the earnings season shifts into high gear. The pound suffered another bout of Brexit blues after British Prime Minister Theresa May only just cleared the latest parliamentary hurdle to her leaving plans. Wednesday's edition of the Times reported May threatened rebel lawmakers in her own party with a general election they defeated the bill. Bank of England Governor Mark Carney warned a no-deal Brexit would have "big" economic consequences and force a review of plans to raise interest rates.
  • Federal Reserve Chairman Jerome Powell said on Tuesday he sees the United States on track for years more of steady growth, but was challenged in a congressional hearing by senators worried the Trump administration’s trade policies were already damaging businesses in their districts. Powell in written testimony to the Senate Banking Committee and in his response to questions about a possible “trade war” largely discounted the risks and said there would be a positive outcome if the administration’s bargaining ultimately produced a world of lower tariffs. While Powell steered clear of direct criticism of President Donald Trump’s slapping of tariffs on goods, particularly from China but also from U.S. allies in Europe and elsewhere, he acknowledged that tariffs were “absolutely” the wrong approach and said the United States “would feel it at the national level” if levies remained in place for too long. The Fed’s regional bank presidents have increasingly cited local business concerns about the administration’s trade tactics, with higher input costs and uncertainty over the future offsetting the recent corporate tax cut and pushing firms to reconsider or delay investment plans. Federal Reserve Chairman Jerome Powell gives his semiannual testimony on the economy and monetary policy before the Senate Banking Committee in Washington July 17, 2018. Powell did not offer his individual views on the appropriate pace of tightening or whether he thinks, as some of his colleagues have argued, that the Fed should pause its rate hike cycle sometime next year if inflation remains under control. But markets expect the central bank to raise rates two more times this year from the current target level of between 1.75 and 2 percent.
  • The European Central Bank’s 2.6 trillion euro bond purchase scheme may have reduced income inequality, fresh research by ECB economists showed, disputing critics who argue that lavish stimulus mainly benefited the wealthiest of households. Pushing up economic growth, the stimulus fueled job creation, benefiting households among the poorest 20 percent of people by compressing income distribution and temporarily halting a widening of the gap between rich and poor, the paper, which is not necessarily the ECB’s opinion, argued. Critics of the ECB scheme, devised to generate inflation, argue that it robs the poor and ordinary savers while benefiting the wealthy with ample financial assets and households with big mortgages. Quantitative easing, as the bond-buying program is known, is set to run until the end of the year. But the ECB is expected to hang on to its pile of bonds for years, which should help hold borrowing costs at rock-bottom levels to keep the recovery going. Oil prices declined on Wednesday after a slight increase in the previous session amid a surprise surge in US crude inventories reported last week. After rising to over $72 per barrel yesterday, Brent oil went back on the dropping track, as the American Petroleum Institute revealed a rise of over 600,000 barrels in US crude stockpiles last week. Meanwhile, Libya reopened its ports and started exporting oil again after the closures of its oil field. The country’s National Oil Corporation announced its force majeure on exports from Zawiya oil terminal on Tuesday, in a bid to boosting national production. The organisation’s Chairman Mustafa Sanalla said, “We have to prioritize local demand for fuel. For the time being all, Sharara production will go to the refinery.” Iran, the world’s fifth largest oil producer, filed a lawsuit at the International Court of Justice against sanctions imposed by the U.S. in May, alleging that they violated a 1955 bilateral treaty between the two countries. The Islamic country asked the sanctions to be lifted provisionally. On Monday, the US Treasury Secretary Steven Mnuchin said Washington might grant waivers to Iran oil purchases. Official numbers from the U.S. Department of Energy's EIA are due at 10:30AMET (14:30 GMT) on Wednesday.

 

 
Intraday RESISTANCE LEVELS
18th July 2018 R1 R2 R3
GOLD-XAU 1,236-1,240 1,251 1,260-1,265
Silver-XAG 15.60 16.40-16.60 17.00
Crude Oil 67.00 67.60-68.00 68.90
EURO/USD 1.1660 1.1770 1.1820-1.1900
GBP/USD 1.3145-1.3200 1.3300 1.3390
USD/JPY 113.50 114.00 114.90-115.50

Intraday SUPPORTS LEVELS
18th July 2018 S1 S2 S3
GOLD-XAU 1,220-1,214 1,202 1,194
Silver-XAG 15.30-14.80 14.50 13.90
Crude Oil 66.50-66.00 65.20 64.50
EURO/USD 1.1600 1.1500-1.1450 1.1400
GBP/USD 1.3050-1.3000 1.2950 1.2890
USD/JPY 112.70-112.00 111.40 110.90-109.80

Intra-Day Strategy (18th July 2018)
GOLD-XAU Sell on Strength
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Tuesday made its intraday high of US$1244.86/oz and low of US$1225.77/oz. Gold down by 1.0647% at US$1227.51/oz.

Technicals in Focus:

In daily charts, prices are below 50DMA (1284) and breakage above will call for 1296-1300. 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 overbought territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Sell on Strength

Based on the charts and explanations above; sell below 1230-1265 keeping stop loss closing above 1265 and targeting 1220-1213 and 1203-1194. Buy above 1220-1194 with risk below 1194, targeting 1236-1240-1251 and 1260-1265.

 
Intraday Support Levels
S1     1,220-1,214
S2     1,202
S3     1,194
Intraday Resistance Levels
R1     1,236-1,240
R2     1,251
R3     1,260-1,265

Technical Indicators

Name   Value Action
14DRSI  

25.481

Buy
20-DMA   1251.46 Sell
50-DMA  

1272.93

Sell
100-DMA   1289.00 Sell
200-DMA   1292.92 Sell
STOCH(5,3)   10.260 Sell
MACD(12,26,9)   -13.195 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$15.97/oz and low of US$15.72/oz. Silver settled down by 1.268% at US$15.92/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (16.69), breakage above will lead to 17.25-17.70. 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 positive crossover to show upside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 16.00-14.90 targeting 16.35-16.60-17.00 and 17.75-18.20; stop breakage below 15.00. Sell below 16.60-18.20 with stop loss above 18.20; targeting 16.60-16.30-16.00 and 15.60-15.00.

 
Intraday  Support Levels
S1     15.30-14.80
S2     14.50
S3     13.90

Intraday  Resistance Levels
R1     15.60
R2     16.40-16.60
R3     17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   30.720 Buy
20-DMA   15.97 Sell
50-DMA   16.22 Sell
100-DMA   16.38 Sell
200-DMA   16.56 Sell
STOCH(5,3)   10.338 Buy
MACD(12,26,9)   -0.210 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$67.58/bbl, intraday low of US$66.35/bbl and settled down by 0.655% to close at US$66.64/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 61.15 which is a major resistance and breakage above will call for 62.20-62.80. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in oversold 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 67.00-68.90 with stop loss at 69.00; targeting 66.50-66.00 and 65.20-64.50. Buy above 66.50-64.00 with risk daily closing below 64.00 and targeting 67.00-67.60 and 68.00-68.90.

 
Intraday Support Levels
S1     66.50-66.00
S2     65.20
S3     64.50

Intraday Resistance Levels
R1     67.00
R2     67.60-68.00
R3     68.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.136 Sell
20-DMA   70.35 Buy
50-DMA   68.89 Buy
100-DMA   66.86 Buy
200-DMA   63.06 Buy
STOCH(5,3)   34.876 Sell
MACD(12,26,9)   1.003 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1648/EUR, high of US$1.1648/EUR and settled the day down by 0.418% to close at US$1.1660/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.2164), which become immediate resistance level, break below will target 1.2150-1.2000. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider buy.

Trading Strategy: Neutral to Buy

Buy above 1.1600-1.1400 with risk below 1.1400, targeting 1.1660-1.1720-1.1800 and 1.1900-1.1950. Sell below 1.1660-1.1950 targeting 1.1660-1.1600 and 1.1490-1.1450 with stop-loss at daily closing above 1.1950.

 
Intraday Support Levels
S1     1.1600
S2     1.1500-1.1450
S3     1.1400

Intraday  Resistance Levels
R1     1.1660
R2     1.1770
R3     1.1820-1.1900

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.324 Buy
20-DMA   1.1677 Sell
50-DMA   1.1751 Sell
100-DMA   1.1862 Sell
200-DMA   1.1863 Sell
STOCH(5,3)   38.875 Buy
MACD(12,26,9)   -0.0010 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3068/GBP, high of US$1.3268/GBP and settled the day down by 0.906% to close at US$1.3113/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.3953) 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 Buy

Based on the charts and explanations above; short positions below 1.3145-1.3390 with targets at 1.3060-1.3000 and 12950-1.2890. Buy above 1.3050-1.2890 with targets 1.3145-1.3200 and 1.3310-1.3360 1.3450 with stop loss closing below 1.2920.

 
Intraday Support Levels
S1     1.3050-1.3000
S2     1.2950
S3     1.2890

Intraday Resistance Levels
R1     1.3145-1.3200
R2     1.3300
R3     1.3390

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

38.2155

Buy
20-DMA   1.3226 Buy
50-DMA   1.3348 Buy
100-DMA   1.3482 Buy
200-DMA   1.3484 Buy
STOCH(5,3)   45.361 Buy
MACD(12,26,9)   -0.0036 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY112.21/USD and made an intraday high of JPY112.92/USD and settled the day up by 0.534% at JPY112.87/USD.

Technicals in Focus:

In daily charts, JPY is sustaining below 200DMA (109.62), which is major resistance on the daily chart. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases 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 113.50-115.50 with risk above 115.50 targeting 112.70-111.40-110.90 and 110.90-109.80-109.00. Long positions above 112.70-109.80 with targets of 113.50-114.00 and 114.90-115.50 with stop below 107.00.

 
Intraday Support Levels
S1     112.70-112.00
S2     111.40
S3     110.90-109.80

INTRADAY RESISTANCE LEVELS
R1     113.50
R2     114.00
R3     114.90-115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.7677 Buy
20-DMA   111.38 Buy
50-DMA   110.43 Buy
100-DMA   109.85 Sell
200-DMA   109.92 Sell
STOCH(9,6)   87.68 Sell
MACD(12,26,9)   0.718 Sell

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