AAFX TRADING

Daily Market Lookup

  • The Chinese yuan skidded to one-year lows on Friday, unnerving investors in Asian stock markets and stoking concerns Beijing's currency management could become the next flash point in a fierce trade dispute with the United States. Most equity markets in the region were shaken by the yuan's continued slide. MSCI's broadest index of Asia-Pacific shares outside Japan was last up 0.1 percent in volatile trade. Traders said the amount of dollar selling was not huge, and appeared to be aimed at controlling the pace of depreciation of the yuan, which has been battered over the past several weeks by the heated Sino-U.S. trade dispute. Worries about a full-blown global trade war are likely to persist as officials from the EU Trade Commission, due to arrive in Washington next week for trade talks, are said to be preparing a list of tit-for-tat actions in response to proposed U.S. tariffs on EU cars. In currencies, the dollar was on the defensive following U.S. President Donald Trump's criticism of Federal Reserve policy. Trump on Thursday criticized Fed policy and expressed concern about the potential impact of rising rates and a stronger dollar on the U.S. economy and American corporate competitiveness. The dollar had reached that high after Federal Reserve Chairman Jerome Powell expressed confidence in the U.S. economy and affirmed expectations that the central bank was on track to keep hiking interest rates gradually.
  • The yuan slumped further on Friday after the China’s central bank weakened its daily reference rate by the most since June 2016. Investors are concerned with the PBOC’s seeming comfort with the yuan’s slide. On July 3, Chinese central bankers pledged to keep their currency stable and to not use it as a weapon in the trade conflict with the U.S. That effort helped the yuan reverse some of its plunge earlier this month. Nomura Holdings Inc. said in a note on Thursday that the decline in the yuan could soon turn to boom should the People’s Bank of China shift toward stimulus mode in the world’s no. 2 economy. Meanwhile, the U.S. Dollar Index, which tracks the greenback against a basket of other currencies, slipped 0.06% to 94.92 on Friday after U.S. President Donald Trump criticized the Federal Reserve for raising interest rates.   Trump said he is “not thrilled” with the Fed’s plan to raise rates four times this year and expressed concerns that the work he has done would be nullified.   Fed officials, including Chairman Jerome Powell, have raised interest rates twice this year so far and have pointed to two more before the end of 2018.
  • Gold prices dropped to a one-year low on Friday. Despite a stock market and dollar index dip after U.S. President Donald Trump criticised the central bank’s decision in raising interest rate, which would normally signal a move higher for the yellow metal, gold prices also headed down. “I am not thrilled,” said Trump in an interview with CNBC on Thursday. “Because we go up and every time you go up they want to raise rates again. I don’t really – I am not happy about it. But at the same time I’m letting them do what they feel is best. In other news, the EU is expected to retaliate against the U.S. after the latter imposed tariffs on European steel and aluminum in June. The EU has already imposed import tariffs on 2.8 billion euros (US$3.8 billion) worth of US products. Cecilia Malmstrom, the EU’s trade commissioner, said, “We are preparing together with our member states a list of rebalancing measures there as well. And this we have made that clear to our American partners.” Oil prices edged higher on Friday as comments that Saudi Arabia’s exports would fall in August renewed expectations for a global shortage in crude supplies. Saudi Arabia's OPEC Governor Adeeb Al-Aama said in a statement that the kingdom expects crude exports to fall by about 100,000 barrels per day in August as it limits excess production. Oil prices were also boosted on forecasts that inventories at the U.S. oil delivery hub in Cushing, Oklahoma fell 1.8 million barrels, through Tuesday, traders said, citing energy information provider Genscape. Despite today’s gains, oil prices were set to drop for the week amid trade conflict between the U.S. and China, the world’s two biggest oil users. The Chinese yuan slumped further on Friday after the China’s central bank weakened its daily reference rate by the most since June 2016. Investors are concerned with the PBOC’s seeming comfort with the yuan’s slide. On July 3, Chinese central bankers pledged to keep their currency stable and to not use it as a weapon in the trade conflict with the U.S. That effort helped the yuan reverse some of its plunge earlier this month. Traders remained concerned that lower oil demand in the U.S. and China caused by an economic slowdown from their trade war would have significant impacts on the market. The U.S. accounted for 20.2% of global oil demand in 2017 while China consumed 13% of the world's oil last year.

 

 
Intraday RESISTANCE LEVELS
20th 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 68.10-68.90 69.50 70.10
EURO/USD 1.1660 1.1770 1.1820-1.1900
GBP/USD 1.3040-1.3100 1.3145 1.3200-1.3300
USD/JPY 112.70-113.50 114.00 114.90-115.50

Intraday SUPPORTS LEVELS
20th 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 67.60 67.00 66.50-66.00
EURO/USD 1.1600 1.1500-1.1450 1.1400
GBP/USD 1.3000-1.2950 1.2890 1.2850
USD/JPY 112.00 111.40 110.90-109.80

Intra-Day Strategy (20th 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 Thursday made its intraday high of US$1228.85/oz and low of US$1211.41/oz. Gold down by 0.377% at US$1222.64/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 1236-1265 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  

24.672

Buy
20-DMA   1246.44 Sell
50-DMA  

1269.15

Sell
100-DMA   1289.44 Sell
200-DMA   1291.56 Sell
STOCH(5,3)   28.163 Sell
MACD(12,26,9)   -14.155 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$15.55/oz and low of US$15.16/oz. Silver settled down by 2.319% at US$15.29/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

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$68.61/bbl, intraday low of US$66.47/bbl and settled up by 0.044% 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 68.10-70.10 with stop loss at 70.00; targeting 67.60-67.00 and 66.50-66.00-65.20. Buy above 67.60-66.00 with risk daily closing below 66.00 and targeting 68.00-68.90 and 69.50-70.10.

 
Intraday Support Levels
S1     67.60
S2     67.00
S3     66.50-66.00

Intraday Resistance Levels
R1     68.10-68.90
R2     69.50
R3     70.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.372 Sell
20-DMA   69.20 Buy
50-DMA   68.66 Buy
100-DMA   66.97 Buy
200-DMA   63.34 Buy
STOCH(5,3)   44.386 Sell
MACD(12,26,9)   -0.157 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1601/EUR, high of US$1.1677/EUR and settled the day up by 0.025% to close at US$1.1640/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 Thursday made an intra‐day low of US$1.2956/GBP, high of US$1.3082/GBP and settled the day down by 0.405% to close at US$1.3012/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 1.3040-1.3390 with targets at 1.300-1.2950 and 1.2890-1.2850-1.2800. Buy above 1.3000-1.2800 with targets 1.3040-1.3100-1.3145 and 1.3200-1.3310-1.3360 with stop loss closing below 1.2920.

 
Intraday Support Levels
S1     1.3000-1.2950
S2     1.2890
S3     1.2850

Intraday Resistance Levels
R1     1.3040-1.3100
R2     1.3145
R3     1.3200-1.3300

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 Thursday made intra‐day low of JPY112.04/USD and made an intraday high of JPY113.16/USD and settled the day down by 0.345% at JPY112.44/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 112.70-115.50 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     112.00
S2     111.40
S3     110.90-109.80

INTRADAY RESISTANCE LEVELS
R1     112.70-113.50
R2     114.00
R3     114.90-115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.395 Buy
20-DMA   111.54 Buy
50-DMA   110.58 Buy
100-DMA   109.95 Sell
200-DMA   109.96 Sell
STOCH(9,6)   46.414 Sell
MACD(12,26,9)   0.618 Sell

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