AAFX TRADING

Daily Market Lookup

  • Asian shares on Thursday struggled to hold earlier gains made after upbeat Wall Street earnings, as trade war jitters rattled China's stock and currency markets, with the yuan hitting fresh one-year lows. The dollar was off a three-week high as investors cashed in on gains the currency made after U.S. Federal Reserve Chairman Jerome Powell's two-day testimony reinforced a strong economic outlook but was underpinned by the relative U.S. economic strength. Wall Street was also supported by Powell reiterating that the U.S. economy was healthy, even though he warned that rising world protectionism would over time pose a risk to the global economic expansion. The Fed's Beige book released on Wednesday also highlighted potential risks, saying manufacturers in every one of the central bank's 12 districts expressed concern about the impact of tariffs, even as the U.S. economy continued to expand at a moderate to modest pace. Still, given an absence of hard economic data showing damage from the trade war, investors have been parking funds in U.S. assets, which has supported the dollar. She noted that although the spread between offshore and onshore yuan had widened recently, it was still far from the levels it hit during the Chinese financial market shock in 2015 when the central bank was seen intervening heavily.
  • The dollar held firm against the yen and other major currencies on Thursday, supported by bullish comments from the U.S. Federal Reserve chairman, which affirmed expectations about the central bank's possible interest rate moves this year. In closely watched congressional testimony on Tuesday and Wednesday, Fed Chairman Jerome Powell said he believed the United States was on course for years more of steady growth, and carefully played down the risks to the U.S. economy of an escalating trade conflict. Japan’s exports to the United States fell for the first time in 17 months and Japanese business sentiment soured amid worries about U.S. President Donald Trump’s protectionist trade policies. Exports to the United States dipped 0.9 percent in June from the same period a year ago on waning shipments of cars and semiconductor manufacturing equipment, two of Japan’s most important export products. Thursday’s trade data came on the heels of the Reuters Tankan, which showed business sentiment slipped in July, reflecting companies’ fears about an intensifying trade dispute between the United States and China. The batch of data highlighted concerns among Japanese policymakers who worry Trump may resort to tariffs or other protectionist measures to fix trade imbalances with Japan under his “America first” policy. With American imports down 2.1 percent, Japan’s trade surplus with the United States widened 0.5 percent year-on-year to 590.3 billion yen ($5.24 billion). That could make it a potential target for Trump’s protectionist policies. The Reuters Tankan, which tracks the Bank of Japan’s closely watched quarterly tankan survey, found manufacturers’ sentiment index stood at 25 in July, down one point from June, and the service sector’s mood fell to 34 from 35 in the prior month. The BOJ’s tankan showed earlier this month that big manufacturers’ mood soured for a second straight quarter in the three months to June, hurt by rising input costs and as U.S. trade protectionism clouds the outlook for Japan’s export-dependent economy.
  • Oil prices fell on Thursday after data from the EIA showed an unexpected build in U.S. crude stockpiles amid a surge in imports. Inventories of U.S. crude rose by 5.836 million barrels for the week ended July 13, comparing to expectations for a draw of 3.622 million barrels, according to the data the EIA released on Wednesday. The unexpected build in crude supplies came as imports rose by 1.635 million bpd and output rose to a record 11 million bpd, the EIA said. The build in crude was limited somewhat by increased refinery activity, fuelling larger-than-expected declines in product inventories. Meanwhile, U.S. inventories of gasoline, diesel and heating oil unexpectedly fell last week. Gasoline inventories fell by 3.2 million barrels last week, while distillate stockpiles, which include diesel and heating oil, dropped by 371,000 barrels, according to the EIA. Analysts had previously forecast that gasoline stocks would be unchanged and distillate stockpiles would show a build of around 900,000 barrels. The United States has added nearly 1 million bpd in production since November, thanks to rapid increases in shale drilling. RBC said earlier this week that OPEC countries have limited room to address the potential supply shortage and in the next 12-18 months the market will realize the US can't support the entire market with spare capacity.

 

 
Intraday RESISTANCE LEVELS
19th 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 67.60-68.00 68.90 69.50
EURO/USD 1.1660 1.1770 1.1820-1.1900
GBP/USD 1.3145-1.3200 1.3145-1.3200 1.3300
USD/JPY 113.50 114.00 114.90-115.50

Intraday SUPPORTS LEVELS
19th 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 67.00 66.50-66.00 65.20
EURO/USD 1.1600 1.1500-1.1450 1.1400
GBP/USD 1.3040-1.3000 1.2950 1.2890
USD/JPY 112.70-112.00 111.40 110.90-109.80

Intra-Day Strategy (19th 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 Wednesday made its intraday high of US$1229.01/oz and low of US$1221.01/oz. Gold down by 0.0171% at US$1227.36/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  

26.682

Buy
20-DMA   1251.78 Sell
50-DMA  

1273.05

Sell
100-DMA   1289.06 Sell
200-DMA   1292.95 Sell
STOCH(5,3)   15.203 Sell
MACD(12,26,9)   -12.944 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$15.60/oz and low of US$15.38/oz. Silver settled up by 0.0321% at US$15.53/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   29.860 Buy
20-DMA   15.97 Sell
50-DMA   16.19 Sell
100-DMA   16.37 Sell
200-DMA   16.55 Sell
STOCH(5,3)   12.695 Buy
MACD(12,26,9)   -0.222 Buy Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$67.91/bbl, intraday low of US$65.91/bbl and settled up by 1.832% to close at US$67.81/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     67.00
S2     66.50-66.00
S3     65.20

Intraday Resistance Levels
R1     67.60-68.00
R2     68.90
R3     69.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.757 Sell
20-DMA   69.28 Buy
50-DMA   68.67 Buy
100-DMA   66.94 Buy
200-DMA   63.29 Buy
STOCH(5,3)   23.053 Sell
MACD(12,26,9)   -0.157 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1601/EUR, high of US$1.1664/EUR and settled the day down by 0.171% to close at US$1.1638/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   43.640 Buy
20-DMA   1.1673 Sell
50-DMA   1.1746 Sell
100-DMA   1.1857 Sell
200-DMA   1.1860 Sell
STOCH(5,3)   25.034 Buy
MACD(12,26,9)   -0.0013 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3008/GBP, high of US$1.3116/GBP and settled the day up by 0.350% to close at US$1.3116/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 1.3105-1.3390 with targets at 1.3040-1.3000 and 12950-1.2890. Buy above 1.3040-1.2890 with targets 1.3145-1.3200 and 1.3310-1.3360 1.3450 with stop loss closing below 1.2920.

 
Intraday Support Levels
S1     1.3040-1.3000
S2     1.2950
S3     1.2890

Intraday Resistance Levels
R1     1.3145-1.3200
R2     1.3145-1.3200
R3     1.3300

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

34.338

Buy
20-DMA   1.3195 Buy
50-DMA   1.3325 Buy
100-DMA   1.3465 Buy
200-DMA   1.3475 Buy
STOCH(5,3)   45.361 Buy
MACD(12,26,9)   -0.0036 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY112.70/USD and made an intraday high of JPY113.13/USD and settled the day up by 0.0088% at JPY112.83/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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