AAFX TRADING

Daily Market Lookup

  • Global bond markets were tense on Tuesday amid talk of central bank tightening and the risk of a robust reading on U.S. economic growth later in the week, though stellar results from internet giant Alphabet supported tech stocks in Asia. Bond bulls were still smarting from speculation that the Bank of Japan is close to announcing measures to scale back its massive monetary stimulus, a risk that lifted long-term borrowing costs globally. Markets were worried that Japanese investors would have less incentive to hunt offshore for yield, said ANZ economist Felicity Emmett. Part of the shift in yields was because of chatter that data on second-quarter U.S. economic growth (GDP) due on Friday would easily top current forecasts of 4.1 percent. Dealers noted some media reports President Donald Trump himself was predicting an outcome of 4.8 percent. That would not be out of bounds given the much-watched Atlanta Fed GDP tracker puts growth at an annualized 4.5 percent. Such a strong outcome would only add to the risk of faster rate hikes from the Federal Reserve and underpin the dollar.
  • The dollar ticked up slightly on Tuesday, adding to gains made in overnight trade after U.S. Treasury yields rose on expectations the Federal Reserve would persist with its rate hikes this year. A jump in benchmark 10-year U.S. Treasury yields to a five-week high had provided support to the dollar in U.S. trade on Monday. The surge in yields came despite criticism from President Donald Trump about the impact of the strength of the greenback and Federal Reserve interest rate rises on the economy. CNBC had reported on Friday that Trump was concerned that the U.S. central bank would raise interest rates two more times this year. Trump had earlier questioned the Fed’s expected pace of hikes in posts on Twitter, saying it takes away from the United States’ “big competitive edge” and could hurt the U.S. economy. However, the dollar was slightly lower against Japan’s yen, which found support on expectations its central bank might be a step closer to scaling back some its aggressive monetary stimulus. Market participants said the yen also firmed against the dollar and the euro as Japanese exporters converted their foreign earnings into the local currency. Small exporting firms typically buy yen as the end of month approaches.
  • Gold prices were trading slightly lower on Tuesday as the dollar edged up after a sharp decline in the previous session. Trade tensions received some residual focus after China’s ambassador to Brazil Li Jinzhang said on Tuesday that the country wants a “long-last relationship” with Brazil in terms of trade in agricultural goods and other products amid an escalation of trade war with the U.S. The two countries are ready to take their trade relationship “to new levels”, Li said, adding that they should take advantage of the multilateral mechanisms, such as the WTO to strengthen trade ties between China and Brazil that began “some 200 years ago.” Meanwhile, the dollar steadied on Tuesday after a sharp decline in the previous session as Trump told CNBC last Friday that he was “not thrilled” about the Federal Reserve’s decision on raising interest rates.  A stronger greenback makes dollar-priced gold more expensive for buyers using other currencies and thus less attractive to investors.
  • Oil prices fell on Tuesday despite a late-night response from U.S. President Donald Trump that threatened severe consequences for Iran. Iran’s leader warned over the weekend that it might shut the Strait of Hormuz, the world’s most important seaborne transit lane for oil The comments have seemingly angered Trump, who tweeted on Monday night “To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS! While most analysts believed oil prices would jump if Iran shuts down the Strait of Hormuz or engages in military conflict with the U.S., oil prices seemed to have seen little impact on Tuesday from the development thus far. Iran has been under increasing pressure from the United States, with Trump's administration pushing countries to cut all imports of Iranian oil from November. Saudi Arabia and large producers are ramping up output to offset losses that are likely to come as the November deadline approaches. Meanwhile, U.S. crude inventories at the delivery hub at Cushing, Oklahoma gained in the four days to Friday, according to information supplier Genscape, traders said. On a weekly basis, stockpiles at the hub were expected to fall for the 10th consecutive week, traders said. The market has also been dented by concerns about the impact on global economic growth and energy demand of escalating disputes over global trade. G20 finance leaders on the weekend voiced concern about the risk to global growth from trade tensions between the United States and China, among others.

 

 
Intraday RESISTANCE LEVELS
24th 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 68.10-68.90 69.50
EURO/USD 1.1660 1.1770 1.1820-1.1900
GBP/USD 1.3145 1.3200-1.3300 1.3360
USD/JPY 111.40-112.00 112.70 113.50-114.00

Intraday SUPPORTS LEVELS
24th 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 65.10
EURO/USD 1.1600 1.1500-1.1450 1.1500-1.1450
GBP/USD 1.3090-1.3040 1.2950-1.2890 1.2950-1.2890
USD/JPY 110.90-110.60 109.80 109.20

Intra-Day Strategy (24th 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 Monday made its intraday high of US$1235.00/oz and low of US$1222.23/oz. Gold down by 0.549% at US$1224.40/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 Monday made its intraday high of US$15.54/oz and low of US$15.34/oz. Silver settled down by 0.646% at US$15.36/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 Monday made an intra‐day high of US$68.97/bbl, intraday low of US$67.34/bbl and settled up by 0.368% to close at US$67.56/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     67.00
S2     66.50-66.00
S3     65.10

Intraday Resistance Levels
R1     67.60
R2     68.10-68.90
R3     69.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.901 Sell
20-DMA   69.05 Buy
50-DMA   68.62 Buy
100-DMA   66.98 Buy
200-DMA   63.38 Buy
STOCH(5,3)   43.754 Sell
MACD(12,26,9)   -0.300 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1683/EUR, high of US$1.1750/EUR and settled the day down by 0.289% to close at US$1.1691/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     1.1500-1.1450

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 Monday made an intra‐day low of US$1.3081/GBP, high of US$1.3157/GBP and settled the day down by 0.182% to close at US$1.3096/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 1.3100-1.3040-1.3000 and 1.2950- 1.2890. Buy above 1.3000-1.2800 with targets 1.3145-1.3200 and 1.3310-1.3360 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.3090-1.3040
S2     1.2950-1.2890
S3     1.2950-1.2890

Intraday Resistance Levels
R1     1.3145
R2     1.3200-1.3300
R3     1.3360

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 Friday made intra‐day low of JPY111.37/USD and made an intraday high of JPY112.61/USD and settled the day down by 0.880% at JPY111.45/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 111.40-114.00 with risk above 114.00 targeting 110.90-110.60 and 109.80-109.00. Long positions above 110.90-109.820 with targets of 111.40-112.00 and 113.50-114.00-114.90 with stop below 107.00.

 
Intraday Support Levels
S1     110.90-110.60
S2     109.80
S3     109.20

INTRADAY RESISTANCE LEVELS
R1     111.40-112.00
R2     112.70
R3     113.50-114.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.904 Buy
20-DMA   111.42 Buy
50-DMA   110.56 Buy
100-DMA   109.58 Sell
200-DMA   109.96 Sell
STOCH(9,6)   13.760 Sell
MACD(12,26,9)   0.492 Sell

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