AAFX TRADING

Daily Market Lookup

  • A rebound in battered Chinese stock markets on Monday helped lift Asian equities, which also drew support from earnings-led gains on Wall Street in a welcome relief for investors grappling with an intensifying Sino-U.S. trade conflict. Chinese equities were expected to remain volatile as Beijing's trade feud with Washington showed little signs of de-escalation. Some analysts see the trade conflict benefiting the U.S. dollar as the nation's economy is better placed to handle protectionism than emerging markets, and as tariffs may narrow the U.S. trade deficit. Weakness in its peers further bolstered the dollar. The euro fell to a five-week low of $1.1530 overnight, weighed down by worries that Italy could ramp up spending and challenge European Union budget regulations and by a drop in June German industrial orders. The single currency last traded at $1.1556. A big mover was the Turkish lira, which struggled near a record low plumbed on Monday after Washington said it was reviewing Ankara's duty-free access to the U.S. market as tensions between the two NATO allies ramped up.
  • While US dollar remains positive in broad market with support from Sino-U.S trade war and positive earning in stock market, intensifying trade wars has put investors in state of caution which has resulted in US Dollar seeing a bearish set back. Traders believe recent trade tensions between the U.S. and China may be supporting the dollar, as tariffs may narrow the U.S. trade deficit. The central bank noted that it left its policy unchanged because low rates continued to support the local economy. It also added that it expects inflation to be higher in 2019 and 2020. Elsewhere, the Japanese yen also strengthened agaisnt the dollar. Looking ahead, The U.S. and Japan are expected to have bilateral trade talks in Washington on Thursday. The GBP/USD is trading above 1.2960 heading into Tuesday’s London market session after slipping from the 1.30 major handle on Monday amid fresh concerns regarding the UK’s ability to avert a hard Brexit. The UK’s efforts to split from the European Union are back in focus this week, with Brexit negotiations set to begin again this month with Prime Minister Theresa May at the helm of trade talks. Fears that the UK will be heading into the official Brexit day next March are on the rise, taking the GBP down the charts for four straight weeks, with the UK’s own trade secretary Liam Fox putting odds of a hard Brexit at 60-40. Little meaningful data exists on the calendar today for the GBP/USD, and traders will be forced to face the full brunt of bearish Brexit winds; monthly and quarterly Halifax Housing Prices are due at 07:30 GMT, with the m/m index expected to slip from 0.3% to 0.2% while the quarterly/yearly number is forecast to bump upwards to 2.6% over the previous 1.8%. The pound remains fragile on Tuesday after falling to an 11-month low against the dollar overnight on worries over a ‘hard’ Brexit from the European Union, while simmering U.S.-China trade tensions provided support to the greenback. The pair hit intra-day low of 1.29197 overnight, it’s lowest since early September.
  • Oil prices rose on Tuesday as the United States reintroduced sanctions against major crude exporter Iran, tightening global markets. U.S. sanctions against Iran, which shipped out almost 3 million barrels per day (bpd) of crude in July, officially came into effect at 12:01 a.m. U.S. Eastern time (0401 GMT) on Tuesday. Many countries, including U.S. allies in Europe as well as China and India oppose the sanctions, but the U.S. government said it wants as many countries as possible to stop buying Iranian oil. French bank Societe Generale (PA:SOGN) said there was currently a "comfortable supply" in physical crude markets, but noted "Iran sanctions will take another 1 million bpd off the markets. This would leave markets with little spare capacity to deal with unforeseen disruptions, it said. The main oil market price drivers of recent months have been output levels by top producers Russia, Saudi Arabia and the United States, renewed Iran sanctions, the U.S.-China trade dispute, and unplanned supply disruptions. Some analysts warned that a global heat wave could also now affect oil demand. Much of the northern hemisphere has been gripped by extreme heat this summer, pushing up demand for industrial and residential cooling. This mostly impacts demand for power fuels such as thermal coal and natural gas. But U.S. bank JPMorgan (NYSE:JPM) said a warmer-than-usual fourth quarter could stem from a potential El Niño weather pattern that "can cause droughts, flooding and other natural disasters across the globe, including heatwaves in the U.S. that affect commodities".

 

 
Intraday RESISTANCE LEVELS
7th August 2018 R1 R2 R3
GOLD-XAU 1,214-1,220 1,228 1,236-1,240
Silver-XAG 15.50 16.40-16.60 17.00
Crude Oil 69.00 69.50 70.20-71.00
EURO/USD 1.1660-1.1720 1.1770 1.1820-1.1900
GBP/USD 1.2990 1.3040 1.3090-1.3145
USD/JPY 112.10 112.70-113.50 114.20

Intraday SUPPORTS LEVELS
7th August 2018 S1 S2 S3
GOLD-XAU 1,202 1,194 1,189-1,180
Silver-XAG 15.10-14.80 14.50 13.90
Crude Oil 68.20 67.60 67.00-66.50
EURO/USD 1.1570 1.1510 1.1450-1.1400
GBP/USD 1.2950 1.2900-1.2840 1.2770
USD/JPY 111.40 111.00 110.60-109.80

Intra-Day Strategy (7th 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 Monday made its intraday high of US$1217.76/oz and low of US$1206.50/oz. Gold down by 0.518% at US$1207.24/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 1214-1240 keeping stop loss closing above 1240 and targeting 1203-1194 and 1189-1180. Buy above 1204-1180 with risk below 1180, targeting 1214-1220 and 1236-1240-1251.

 
Intraday Support Levels
S1     1,202
S2     1,194
S3     1,189-1,180
Intraday Resistance Levels
R1     1,214-1,220
R2     1,228
R3     1,236-1,240

Technical Indicators

Name   Value Action
14DRSI  

28.292

Buy
20-DMA   1225.96 Sell
50-DMA  

1249.90

Sell
100-DMA   1272.08 Sell
200-DMA   1283.40 Sell
STOCH(5,3)   28.452 Sell
MACD(12,26,9)   -12.664 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$15.46/oz and low of US$15.27/oz. Silver settled down by 0.455% at US$15.27/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 15.10-13.90 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     15.10-14.80
S2     14.50
S3     13.90

Intraday  Resistance Levels
R1     15.50
R2     16.40-16.60
R3     17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.911 Buy
20-DMA   15.57 Sell
50-DMA   15.91 Sell
100-DMA   16.18 Sell
200-DMA   16.43 Sell
STOCH(5,3)   9.528 Buy
MACD(12,26,9)   -0.209 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$69.13/bbl, intraday low of US$67.75/bbl and settled up by 0.427% to close at US$68.18/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 69.00-71.00 with stop loss at 71.00; targeting 68.20-67.60-67.00 and 66.50-66.00. Buy above 68.20-66.50 with risk daily closing below 66.50 and targeting 69.00-69.50 and 70.20-71.00.

 
Intraday Support Levels
S1     68.20
S2     67.60
S3     67.00-66.50

Intraday Resistance Levels
R1     69.00
R2     69.50
R3     70.20-71.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.915 Sell
20-DMA   68.56 Buy
50-DMA   68.53 Buy
100-DMA   67.26 Buy
200-DMA   63.90 Buy
STOCH(5,3)   58.109 Sell
MACD(12,26,9)   -0.285 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1529/EUR, high of US$1.1570/EUR and settled the day down by 0.634% to close at US$1.1552/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 1.1570-1.1400 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     1.1570
S2     1.1510
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   40.620 Buy
20-DMA   1.1662 Sell
50-DMA   1.1717 Sell
100-DMA   1.1819 Sell
200-DMA   1.1840 Sell
STOCH(5,3)   10.530 Buy
MACD(12,26,9)   -0.0017 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2919/GBP, high of US$1.3008/GBP and settled the day down by 0438% to close at US$1.2942/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 1.2990-1.3145 with targets at 1.2950-1.2900 and 1.2840-1.2770. Buy above 1.2950-1.2770 with targets 1.2990-1.3040-1.3090 and 1.3145-1.3200 with stop loss closing below 1.2700.

 
Intraday Support Levels
S1     1.2950
S2     1.2900-1.2840
S3     1.2770

Intraday Resistance Levels
R1     1.2990
R2     1.3040
R3     1.3090-1.3145

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

36.305

Buy
20-DMA   1.3096 Buy
50-DMA   1.3224 Buy
100-DMA   1.3376 Buy
200-DMA   1.3427 Buy
STOCH(5,3)   15.032 Buy
MACD(12,26,9)   -0.0063 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY111.15/USD and made an intraday high of JPY111.52/USD and settled the day up by% at JPY111.39/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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