AAFX TRADING

Daily Market Lookup

  • Asian stocks tumbled on Thursday as the latest escalation in the Sino-U.S. trade war hit Chinese shares, while global bond markets were rattled by increased borrowing by Washington and Japan's new tolerance for higher yields. The U.S. administration on Wednesday increased pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports. The Federal Reserve kept interest rates unchanged on Wednesday, as expected, characterizing the U.S. economy as strong and staying on track to increase borrowing costs in September and likely again in December. While that surprised nobody, U.S. bond yields rose, with the benchmark 10-year yields breaking above 3 percent to 2-1/2-month highs, after the U.S. Treasury said it would boost borrowing in the bond market in the coming quarter. Global bond markets were also rattled by sharp rises in Japanese bond yields since the Bank of Japan loosened its grip on long-term yields on Tuesday. Worries that higher yields in Japan may prompt Japanese investors to repatriate funds hit European bonds, boosting German and French yields to seven-week highs on Wednesday.
  • The U.S. dollar held on to gains against a basket of its peers on Thursday, after the Federal Reserve gave an upbeat assessment of the world's biggest economy and stayed on course to gradually lift interest rates. The dollar was already well bid by concerns about a further escalation in the Sino-U.S. trade dispute and higher U.S. Treasury yields. fter ending its two-day policy meeting, the Fed kept interest rates unchanged as widely expected, and said U.S. economic growth has been rising strongly and the job market has continued to strengthen. Global financial markets remained focused on the U.S.-driven international trade war, with U.S. administration officials saying on Wednesday that President Donald Trump is proposing a higher 25 percent tariff on $200 billion worth of Chinese imports. The safety bid for the dollar was further bolstered by higher U.S. Treasury yields. The dollar was under pressure against the yen, as the currency found support on the back of benchmark Japanese government bond yields touching a fresh 1-1/2-year high. The dollar dropped 0.15 percent to 111.56 yen though it still held on to much of its gains made on Tuesday following the Bank of Japan's pledge to keep rates low for an extended period, even as it made a new commitment to allow yields to move more freely. The Japanese central bank decided on Tuesday to add forward guidance communication in its regular policy statements, which it did not do in the past. The British pound was a tad lower, losing 0.2 percent to $1.3105 ahead of the Bank of England's policy meeting later on Thursday, with markets widely expecting interest rates to be raised for the second time since the global financial crisis.
  • Oil prices rose on Thursday, steadying after losses over the past two days from a surprise increase in U.S. crude inventories and renewed concerns over trade friction between the U.S. and China. Oil prices are feeling the effects of ongoing tensions over global trade, with markets concerned about any slowdown in growth around the world. U.S. President Donald Trump has sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports. China said it would hit back if the United States takes further steps on trade. Brent prices fell more than 6 percent in June and U.S. crude slumped about 7 percent, the biggest monthly declines for both benchmarks since July 2016. Tensions between the U.S. and Iran are also supporting the market, Barratt said. The United States believes Iran is preparing to carry out a major exercise in the Gulf in the coming days, apparently moving up the timing of annual drills amid heightened tensions with Washington, U.S. officials told Reuters on Wednesday. U.S. President Donald Trump's decision to pull out of an international nuclear deal and reimpose sanctions on Iran has angered Tehran. Senior Iranian officials have warned the country would not easily yield to a renewed U.S. campaign to strangle Iran's vital oil exports. U.S. crude inventories rose 3.8 million barrels last week as imports jumped, the government's EIA said. Analysts polled by Reuters had expected a decline of 2.8 million barrels. [EIA/S] However, there were some bullish elements in the report. Gasoline stocks declined by 2.5 million barrels, while crude stocks at the Cushing, Oklahoma, delivery hub for WTI futures fell 1.3 million barrels, EIA data showed.

 

 
Intraday RESISTANCE LEVELS
2nd 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 67.60 68.20-69.00 69.50
EURO/USD 1.1660-1.1720 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
2nd 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 67.00-66.50 65.40 64.50
EURO/USD 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 (2nd 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 Wednesday made its intraday high of US$1224.71/oz and low of US$1215.69/oz. Gold down by 0.630% at US$1215.85/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 Wednesday made its intraday high of US$15.52/oz and low of US$15.37/oz. Silver settled up by 0.646% at US$15.37/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     67.00-66.50
S2     65.40
S3     64.50

Intraday Resistance Levels
R1     67.60
R2     68.20-69.00
R3     69.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.305 Sell
20-DMA   68.59 Buy
50-DMA   68.53 Buy
100-DMA   67.18 Buy
200-DMA   63.76 Buy
STOCH(5,3)   38.109 Sell
MACD(12,26,9)   -0.260 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1656/EUR, high of US$1.1699/EUR and settled the day down by 0.265% to close at US$1.1658/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 1.1660-1.1750-1.1820 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     1.1600
S2     1.1500
S3     1.1450-1.1400

Intraday  Resistance Levels
R1     1.1660-1.1720
R2     1.1770
R3     1.1820-1.1900

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.728 Buy
20-DMA   1.1676 Sell
50-DMA   1.1724 Sell
100-DMA   1.1825 Sell
200-DMA   1.1843 Sell
STOCH(5,3)   35.186 Buy
MACD(12,26,9)   -0.0067 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3094/GBP, high of US$1.3143/GBP and settled the day up by 0.060% to close at US$1.3125/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 Wednesday made intra‐day low of JPY111.83/USD and made an intraday high of JPY112.14/USD and settled the day down by 0.715% at JPY111.71/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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