AAFX TRADING

Daily Market Lookup

  • Asian stocks dropped for the third consecutive session on Monday, hit by worries over further escalation of the U.S-China trade war and unstable emerging market currencies. Trump said last week he was ready to implement the new tariffs as soon as a public comment period on the plan ends on Thursday, which would be a major escalation given the United States has already applied tariffs on $50 billion of exports from China. On the other hand, U.S. stocks - especially technology shares - have fared better, thanks in part to the strength of current economic data and corporate profits. Major economic U.S. data due this week, such as a manufacturing survey on Tuesday and an employment report on Friday, is also expected to show solid conditions, possibly underpinning Wall Street shares - at least for now. Among the G3 currencies, the euro, which is generally positively correlated to risk sentiment, tends to ease on trade worries while the yen tends to gain but the two currencies' reactions have been more qualified. Investors remained wary of emerging market currencies after sharp sell-offs in the Argentine's peso and the Turkish lira last month on worries over their economic management, big current account deficits and inflation. That spilled over to a few other emerging countries that share some of those traits, albeit to a lesser degree.
  • The dollar held near a one-week high on Monday amid concern about global trade after U.S.-Canada trade negotiations reached an impasse. Traders aggressively bought the dollar against the British pound and the Canadian dollar . The dollar's status as the chief reserve currency make the U.S. currency the primary beneficiary of concern over trade conflicts. On Saturday, U.S. President Donald Trump said there was no need to keep Canada in the North American Free Trade Agreement and warned Congress not to meddle with the trade talks or he would terminate the trilateral pact altogether. But gains were muted - safe-haven currencies such as the Swiss franc and the Japanese yen were supported against higher-yielding rivals. The euro (EUR=EBS) weakened 0.1 percent against the dollar after Fitch Ratings left its credit rating for Italy unchanged at "BBB" but revised its outlook to negative on Friday. Sterling was the biggest loser against the dollar after the European Union's chief Brexit negotiator, Michel Barnier, said he is "strongly opposed" to the British government's proposals on future trade ties after it leaves the EU. Trading was quiet with U.S. markets shut for a holiday and before European manufacturing PMI data due shortly.
  • The dollar held near a one-week high on Monday amid concern about global trade after U.S.-Canada trade negotiations reached an impasse. On Saturday, U.S. President Donald Trump said there was no need to keep Canada in the North American Free Trade Agreement and warned Congress not to meddle with the trade talks or he would terminate the trilateral pact altogether. The euro EUR=EBS weakened 0.1 percent against the dollar after Fitch Ratings left its credit rating for Italy unchanged at "BBB" but revised its outlook to negative on Friday. Sterling was the biggest loser against the dollar after the European Union’s chief Brexit negotiator, Michel Barnier, said he is “strongly opposed” to the British government’s proposals on future trade ties after it leaves the EU. Trading was quiet with U.S. markets shut for a holiday and before European manufacturing PMI data due shortly.
  • Oil prices were stable on Monday, weighed down by rising supply from OPEC and the United States but supported by concerns that falling Iranian output will tighten markets once U.S. sanctions bite from November. Output from the producer cartel of the OPEC rose by 220,000 bpd between July and August, to a 2018-high of 32.79 million bpd, a Reuters survey found. Output was boosted by a recovery in Libyan production and as Iraq's southern exports hit a record. Meanwhile, U.S. drillers added oil rigs for the first time in three weeks, energy services firm Baker Hughes reported on Friday, increasing the rig count by 2 units to 862. The high rig count has helped lift U.S. crude oil production by more than 30 percent since mid-2016, to 11 mn bpd. Despite the price dip, Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA said Brent was "supported by the notion that U.S. sanctions on Iranian crude oil exports will eventually lead to constricted markets", which he said would likely push up prices. Many analysts have warned that an economic slowdown because of trade disputes between the United States and other major economies including China and the European Union would drag on oil demand. Amid rising trade tariffs raised by Washington and Beijing, China's manufacturing activity grew at the slowest pace in more than a year in August, with export orders shrinking for a fifth month and employers cutting more staff, a private survey showed on Monday.

 

 
Intraday RESISTANCE LEVELS
3rd September 2018 R1 R2 R3
GOLD-XAU 1,207-1,214 1,220 1,227-1,235
Silver-XAG 14.80-15.10 15.50 16.40-16.60
Crude Oil 70.00-70.70 71.50 72.20
EURO/USD 1.1690-1.1760 1.1800 1.1850
GBP/USD 1.2950-1.2990 1.3060 1.3100-1.3160
USD/JPY 111.40 112.00-112.50 113.20

Intraday SUPPORTS LEVELS
3rd September 2018 S1 S2 S3
GOLD-XAU 1,196-1,189 1,180 1,172
Silver-XAG 14.40-13.90 13.50 13.00
Crude Oil 69.20-68.50 67.60 67.00-66.50
EURO/USD 1.1660-1.1610 1.1540 1.1510-1.1450
GBP/USD 1.2870 1.2800-1.2750 1.2680
USD/JPY 110.70 110.20-109.80 109.30

Intra-Day Strategy (3rd September 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 Friday made its intraday high of US$1208.70/oz and low of US$1198.17/oz. Gold up by 0.808% at US$1200.93/oz.

Technicals in Focus:

In daily charts, prices are below 50DMA (1227) and breakage above will call for1240-1260. 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 neutral 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 1207-1235 keeping stop loss closing above 1235, targeting 1,196-1189-1180 and 1172-1166.Buy above 1196-1172with risk below 1172, targeting1207-1214 and 1220-1227-1235.

 
Intraday Support Levels
S1     1,196-1,189
S2     1,180
S3     1,172
Intraday Resistance Levels
R1     1,207-1,214
R2     1,220
R3     1,227-1,235

Technical Indicators

Name   Value Action
14DRSI  

37.291

Buy
20-DMA   1197.98 Sell
50-DMA  

1220.84

Sell
100-DMA   1261.98 Sell
200-DMA   1288.77 Sell
STOCH(5,3)   37.453 Sell
MACD(12,26,9)   -5.666 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$14.69/oz and low of US$14.47/oz. Silver settled down by 0.482% at US$14.52/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (16.69), breakage above will lead to17.25-17.70. 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 14.50-13.00 targeting 14.90-15.10-15.60 and 16.35-16.60; stop breakage below13.00. Sell below 14.80-17.00with stop loss above17.00; targeting 14.50-13.90 and 13.50-13.30.

 
Intraday  Support Levels
S1     14.40-13.90
S2     13.50
S3     13.00

Intraday  Resistance Levels
R1     14.80-15.10
R2     15.50
R3     16.40-16.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.058 Buy
20-DMA   14.83 Sell
50-DMA   15.35 Sell
100-DMA   15.95 Sell
200-DMA   16.28 Sell
STOCH(5,3)   48.742 Buy
MACD(12,26,9)   -0.223 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$70.11/bbl, intraday low of US$69.38/bbl and settled up by 0.373% to close at US$69.66/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 61.15which is a major resistance and breakage above will call for62.20-62.80. 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 69.20-71.50 with stop loss at 71.50; targeting 68.50-67.60-67.00 and 66.50-65.70.Buy above 68.50-65.00 with risk daily closing below 65.00 and targeting 69.20-70.00 and 70.70.

 
Intraday Support Levels
S1     69.20-68.50
S2     67.60
S3     67.00-66.50

Intraday Resistance Levels
R1     70.00-70.70
R2     71.50
R3     72.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.01 Sell
20-DMA   67.26 Buy
50-DMA   68.76 Buy
100-DMA   68.42 Buy
200-DMA   65.03 Buy
STOCH(5,3)   88.951 Buy
MACD(12,26,9)   -0.237 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1583/EUR, high of US$1.1689/EUR and settled the day down by 0.591% to close at US$1.1601/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 oversold territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider sell.

Trading Strategy: Neutral to Buy

Buy above 1.1540-1.1295with risk below 1.1250, targeting 1.1610-1.1660 and 1.1720-1.1800. Sell below 1.1610-1.1800 targeting 1.1540-1.1450-1.1400 and 1.1360-1.1320with stop-loss at daily closing above 1.1800.

 
Intraday Support Levels
S1     1.1660-1.1610
S2     1.1540
S3     1.1510-1.1450

Intraday  Resistance Levels
R1     1.1690-1.1760
R2     1.1800
R3     1.1850

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.794 Buy
20-DMA   1.1541 Sell
50-DMA   1.1614 Sell
100-DMA   1.1732 Sell
200-DMA   1.1957 Sell
STOCH(5,3)   37.995 Sell
MACD(12,26,9)   -0.0014 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2944/GBP, high of US$1.3028/GBP and settled the day down by 0.384% to close at US$1.2956/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 overbought 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; sell below 1.3060-1.3240 with targets at 1.2990-1.2950 and 1.2870-1.2800-1.2750. Buy above 1.2990-1.2800 with targets 1.3060-1.3100 and 1.3160-1.3240 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.2870
S2     1.2800-1.2750
S3     1.2680

Intraday Resistance Levels
R1     1.2950-1.2990
R2     1.3060
R3     1.3100-1.3160

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

48.653

Buy
20-DMA   1.2853 Buy
50-DMA   1.3040 Buy
100-DMA   1.3297 Buy
200-DMA   1.3545 Buy
STOCH(5,3)   90.244 Buy
MACD(12,26,9)   -0.0075 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY110.67/USD and made an intraday high of JPY111.12/USD and settled the day up by 0.135% at JPY111.10/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 110.70-112.50 with risk above 112.50 targeting 109.80-109.00. Long positions above110.20-109.40with targets of 110.70-111.40-112.00 and 113.50-114.00with stop below 107.00.

 
Intraday Support Levels
S1     110.70
S2     110.20-109.80
S3     109.30

INTRADAY RESISTANCE LEVELS
R1     111.40
R2     112.00-112.50
R3     113.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.458 Buy
20-DMA   110.94 Buy
50-DMA   111.13 Buy
100-DMA   110.32 Buy
200-DMA   109.79 Buy
STOCH(9,6)   41.679 Buy
MACD(12,26,9)   -0.001 Sell

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