AAFX TRADING

Daily Market Lookup

  • Most Asian shares crept higher on Wednesday following a firm Wall Street finish, but gains were curbed by weak data in the region and intensifying fears over volatile Sino-U.S. trade relations. Global markets had inched higher on Tuesday, helped by a Bloomberg report that the United States and China were seeking to resume trade talks to defuse a battle over import tariffs. However, later reports that the U.S. plans tariffs of 25 percent on $200 billion in Chinese imports injected some uncertainty back into financial markets, with the offshore yuan and the Australian dollar lower, and China shares down. A source told Reuters that an announcement on Washington's tariff plans for China could come as early as Wednesday. The seemingly contradictory signals on U.S.-China trade are puzzling for investors, said Ryan Felsman, senior economist at CommSec in Sydney. But shares in mainland China dropped, erasing early gains, with trade war fears and newly released manufacturing data pointing to a cloudy economic outlook China's manufacturing sector grew at its slowest pace in eight months in July, dragged down by declining export orders, a private survey showed on Wednesday. Data from Australia also showed a slowdown in manufacturing activity in July, with the Commonwealth Bank/Markit purchasing managers index at its lowest level in nearly two years. Policy meetings of the U.S. Federal Reserve on Wednesday and the Bank of England on Thursday will also keep some investors on the sidelines, although the U.S. central bank is expected to keep rates unchanged. Meanwhile, oil prices fell on industry data showing an unexpected rise in U.S. crude stockpiles. The slump in crude prices comes after their largest monthly decline in two years in July.
  • U.S. dollar edged up against the yuan and growth-leveraged currencies on Wednesday after a source familiar with the Trump administration's plans said the White House was about to propose higher tariffs on $200 billion in Chinese imports. The news came as a survey showed China's factory sector grew at the slowest pace in eight months in July as export orders declined yet again. The yuan has now fallen for four months in a row and China's central bank on Wednesday set the currency at its weakest since May last year. The dollar was also holding the whip hand against the yen after Tuesday's pledge by the Bank of Japan to keep rates extremely low for an extended period. In contrast, solid U.S. economic growth is likely to keep the Federal Reserve on track for another two hikes this year as it concludes its policy meeting later in the day. Data out Tuesday showed U.S. consumer spending increased solidly in June even as wage growth stayed restrained. The core PCE index, the Fed's preferred inflation measure, rose 1.9 percent from a year earlier for a third straight month, near the Fed's two-percent inflation target. The BoE holds its policy meeting on Thursday and markets are pricing in a near-90 percent chance of a quarter-point hike in rates.
  • Oil prices fell on Wednesday after industry data showed U.S. stockpiles of crude unexpectedly rose, and as economic growth slowed, especially in Asia, amid the escalating trade dispute between the United States and China. Brent fell more than 6 percent in July, while U.S. crude futures slumped about 7 percent, the biggest monthly declines for both benchmarks since July 2016. Weighing on prices was a report by the American Petroleum Institute (API) that showed domestic crude inventories rose by 5.6 million barrels last week. A Reuters poll had forecast a fall of 2.8 million barrels. Official data from the U.S. EIA is due later on Wednesday. Signs that a supply disruption in the Bab al-Mandeb Strait in the Red Sea could be resolved also weighed on prices. Yemen's Houthi group said it was ready to halt attacks in the Red Sea to support peace efforts. Saudi Arabia suspended oil shipments through the strait last week after the Houthis attacked two Saudi oil tankers. Prices are also falling in the physical market, where top oil exporter Saudi Arabia is expected to cut prices for all crude grades going to Asia in August, according to several market participants on Wednesday. Markets are also being pulled lower by concerns over slowing economic growth because of the trade dispute that is still ramping up between the United States and China. Last month, China and the United States slapped tariffs on $34 billion of each other's goods, and another round of U.S. tariffs on $16 billion in Chinese goods is expected in August. The trade spat may escalate further as U.S. President Donald Trump's administration is poised to propose 25 percent tariffs on a further $200 billion of imports, up from an initial proposal of 10 percent. With the world's two biggest economies at loggerheads, growth is slowing down. Manufacturing across Asia slowed in July, deepening concerns about the region's economic outlook as the U.S.-China trade conflict sent shudders through their trading partners. This slowdown is starting to show in the container market, in which the vast majority of finished goods are imported and exported.

 

 
Intraday RESISTANCE LEVELS
1st August 2018 R1 R2 R3
GOLD-XAU 1,236-1,240 1,248 1,255-1,260
Silver-XAG 15.60 16.40-16.60 17.00
Crude Oil 68.20-69.00 69.50 70.20
EURO/USD 1.1720 1.1770 1.1820-1.1900
GBP/USD 1.3145 1.3200-1.3300 1.3360
USD/JPY 112.10 112.70-113.50 114.20

Intraday SUPPORTS LEVELS
1st August 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 65.40
EURO/USD 1.1660-1.1600 1.1500 1.1450-1.1400
GBP/USD 1.3090 1.3040 1.3000-1.2950
USD/JPY 111.40 111.00 110.60-109.80

Intra-Day Strategy (1st August 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$1228.52/oz and low of US$1213.91/oz. Gold down by 0.181% at US$1223.62/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     1,248
R3     1,255-1,260

Technical Indicators

Name   Value Action
14DRSI  

33.671

Buy
20-DMA   1235.51 Sell
50-DMA  

1258.42

Sell
100-DMA   1278.46 Sell
200-DMA   1288.41 Sell
STOCH(5,3)   26.026 Sell
MACD(12,26,9)   -12.248 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$15.59/oz and low of US$15.34/oz. Silver settled up by 0.258% at US$15.50/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 15.30-13.90 targeting 15.60-16.35-17.00 and 17.75-18.20; stop breakage below 15.00. Sell below 15.60-17.00 with stop loss above 17.00; targeting 15.30-14.80 and 14.50-13.90.

 
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   40.354 Buy
20-DMA   15.75 Sell
50-DMA   16.04 Sell
100-DMA   16.30 Sell
200-DMA   16.51 Sell
STOCH(5,3)   58.317 Buy
MACD(12,26,9)   -0.2315 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$69.61/bbl, intraday low of US$67.50/bbl and settled up by 2.27% to close at US$67.87/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 68.20-71.00 with stop loss at 71.00; targeting 67.60-67.00 and 66.50-66.00. Buy above 68.10-66.00 with risk daily closing below 66.00 and targeting 68.90-69.50 and 70.20-71.00.

 
Intraday Support Levels
S1     67.60
S2     67.00-66.50
S3     65.40

Intraday Resistance Levels
R1     68.20-69.00
R2     69.50
R3     70.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.139 Sell
20-DMA   68.80 Buy
50-DMA   68.61 Buy
100-DMA   67.19 Buy
200-DMA   63.73 Buy
STOCH(5,3)   40.350 Sell
MACD(12,26,9)   -0.260 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1683/EUR, high of US$1.1745/EUR and settled the day up by 0.119% to close at US$1.1687/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 1.1660-1.1400 with risk below 1.1400, targeting 1.1660-1.1750-1.1820 and 1.1900-1.1960. Sell below 1.1660-1.1900 targeting 1.1600-1.1500 and 1.1450-1.1400 with stop-loss at daily closing above 1.1960.

 
Intraday Support Levels
S1     1.1660-1.1600
S2     1.1500
S3     1.1450-1.1400

Intraday  Resistance Levels
R1     1.1720
R2     1.1770
R3     1.1820-1.1900

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.803 Buy
20-DMA   1.1684 Sell
50-DMA   1.1731 Sell
100-DMA   1.1833 Sell
200-DMA   1.1847 Sell
STOCH(5,3)   57.902 Buy
MACD(12,26,9)   -0.0006 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3088/GBP, high of US$1.3172/GBP and settled the day down by 0.0685% to close at US$1.3119/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 1.3145-1.3360 with targets at 1.3090-1.3040 and 1.3000- 1.2950. Buy above 1.3090-1.2950 with targets 1.3145-1.3200-1.3310 and 1.3360-1.3400 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.3090
S2     1.3040
S3     1.3000-1.2950

Intraday Resistance Levels
R1     1.3145
R2     1.3200-1.3300
R3     1.3360

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

49.447

Buy
20-DMA   1.3177 Buy
50-DMA   1.3293 Buy
100-DMA   1.3434 Buy
200-DMA   1.3459 Buy
STOCH(5,3)   93.025 Buy
MACD(12,26,9)   -0.0037 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY110.73/USD and made an intraday high of JPY110.73/USD and settled the day up by 0.009% at JPY111.80/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 buy as it has given positive crossover to confirm bullish stance.

Trading Strategy: Neutral to Sell

Sell below 112.00-114.20 with risk above 114.20 targeting 111.40-111.00-110.60 and 109.80-109.00. Long positions above 111.40-109.820 with targets of 111.40-112.00 and 113.50-114.00-114.90 with stop below 107.00.

 
Intraday Support Levels
S1     111.40
S2     111.00
S3     110.60-109.80

INTRADAY RESISTANCE LEVELS
R1     112.10
R2     112.70-113.50
R3     114.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.661 Buy
20-DMA   111.42 Buy
50-DMA   110.76 Buy
100-DMA   110.14 Buy
200-DMA   110.06 Buy
STOCH(9,6)   83.377 Buy
MACD(12,26,9)   0.239 Sell

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