AAFX TRADING

Daily Market Lookup

  • Asian shares stumbled in holiday-thinned trading on Monday as China's decision to cancel talks with the United States sparked fears of a protracted trade war, while oil rallied as Saudi Arabia ruled out increasing supplies to cool crude prices. Share markets in major Asian centres Japan, China and South Korea were closed for a holiday on Monday, while currency markets were subdued as banks in those countries were shut. Investors were squarely focused on the Sino-U.S. trade war as China added $60bn of U.S. products to its import tariff list, retaliating against U.S. duties on $200 billion of Chinese goods. China also cancelled mid-level trade talks with the United States, as well as a proposed visit to Washington by Vice Premier Liu He which had been scheduled for this week, the Wall Street Journal reported. The intensifying dispute between the world's two biggest economies has spooked financial markets worried about the impact on global growth. Britain's negotiation with European Union will be another key issue for investors, with risks of a 'no deal' or 'hard Brexit' shooting up again. Late last week, the dollar was hammered as investors ramped up bets that the U.S. Federal Reserve will be near the end of its rate-hike cycle after an expected increase this week.
  • During this bull market which in August broke the record as the longest ever, interest rates were so low that most fixed income assets other than junk bonds yielded less than the inflation rate or the dividend yield on the S&P 500. This drove yield-hungry investors to stocks, the one asset that delivered a real rate of return, or return on investment adjusted for inflation. The Fed ended its regime of rate suppression when it stopped expanding its balance sheet and then began raising interest rates in late 2015. Since then, bonds have slowly returned to delivering real returns relative to inflation. With next week’s anticipated rate action, cash will join the party. A broad array of money market assets should finally regain a real return versus inflation. It will be the first time since early 2008 that money market assets will deliver a real return. Equity mutual funds posted outflows of more than $1bn in the week ended Sept. 19, marking the group’s 13th consecutive week of net outflows, according to Lipper data. At the same time, investors have been pouring money into ultra-short obligation funds, in a sign of increased allure of investments with shorter maturities.
  • The Japanese yen edged up on Monday as China cancelled its planned trade talks with the U.S. The dollar also gained following the news. The dollar was under pressure late last week as investors believed that the U.S. Federal Reserve is likely to hike interest rates for the third time this year, with analysts expecting another one in December. Gold prices could hit $1,350 an ounce in 2019, Francisco Blanch, head of global commodities and derivatives research, said in a phone interview with Bloomberg last week. “We’re still pretty constructive longer term on gold,” because of worries over the future of the U.S. economy even though it’s performing relatively well right now, said Blanch. “In the short run, the effects of strong dollar, higher rates dominate. But in the long run, a huge U.S. government budget deficit is pretty positive for gold,” he said. U.S. President Donald Trump hinted earlier that the trade war won’t end any time soon, and said in an interview with Fox News that it’s time to “take a stand on China.” “Eventually the trade wars are going to come back to bite the U.S.,” said Blanch. “It could take longer, it could take shorter, eventually it’s going to happen, but maybe the Fed acknowledges it sooner, which is what people are going to be looking for in terms of getting more bullish on gold. We know that trade wars are not good for the economy.” Oil prices rose about 2 percent on Monday as markets tightened ahead of Washington's new sanctions against Iran, with some traders forecasting a spike in crude to $100 per barrel. Amid a tightening market, U.S. commercial crude oil inventories are at their lowest level since early 2015. And while output remains around the record of 11 mn bpd, recent subdued U.S. drilling activity points towards a slowdown. J.P. Morgan expects sanctions could lead to a loss of 1.5 million bpd, while Mercuria warned that as much as 2 million bpd could be knocked out of the market. The Middle East dominated OPEC as well as top producer Russia are discussing raising output to counter falling supply from Iran, although no decision has been made public yet. J.P. Morgan said in its latest market outlook, published on Friday, that "a spike to $90 per barrel is likely" for oil prices in the coming months due to the Iran sanctions. The bank said it expects Brent and WTI to average $85 and $76 per barrel, respectively, over the next six months. Struggling with high feedstock crude prices and record lows for the rupee against the dollar , Indian refiners are preparing to cut back crude imports and instead use up commercial inventories.

 

 
Intraday RESISTANCE LEVELS
24th September 2018 R1 R2 R3
GOLD-XAU 1,207-1,214 1,220 1,227-1,235
Silver-XAG 14.40-14.80 15.10 15.50-16.40
Crude Oil 72.00 73.00-73.90 74.50
EURO/USD 1.1760-1.1800 1.1850 1.1800
GBP/USD 1.3100-1.3140 1.3250-1.3320 1.3250-1.3320
USD/JPY 112.50-113.20 114.00 114.70

Intraday SUPPORTS LEVELS
24th September 2018 S1 S2 S3
GOLD-XAU 1,191-1,182 1,174 1,166
Silver-XAG 14.00-13.61 13.00 12.40
Crude Oil 71.40 70.60-70.00 69.00
EURO/USD 1.1690-1.1660 1.1610 1.1540-1.1510
GBP/USD 1.3060 1.2990-1.2950 1.2890
USD/JPY 112.00-111.50 111.00 110.70-110.20

Intra-Day Strategy (24th 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$1211.00/oz and low of US$1191.79/oz. Gold down by 0.639% at US$1199.31/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 1200-1235 keeping stop loss closing above 1235, targeting 1196-1189-1180 and 1172-1166. Buy above 1196-1172with risk below 1172, targeting 1207-1214 and 1220-1227-1235.

 
Intraday Support Levels
S1     1,191-1,182
S2     1,174
S3     1,166
Intraday Resistance Levels
R1     1,207-1,214
R2     1,220
R3     1,227-1,235

Technical Indicators

Name   Value Action
14DRSI  

47.165

Buy
20-DMA   1199.22 Sell
50-DMA  

1212.34

Sell
100-DMA   1251.16 Sell
200-DMA   1285.31 Sell
STOCH(5,3)   75.423 Buy
MACD(12,26,9)   -2.756 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$14.41/oz and low of US$14.13/oz. Silver settled down by 0.0489% at US$14.28/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 14.00-12.40 targeting 14.40-14.90-15.10 and 15.60-16.35; stop breakage below 13.00. Sell below 14.50-17.00 with stop loss above17.00; targeting 14.50-13.90 and 13.50-13.30.

 
Intraday  Support Levels
S1     14.00-13.61
S2     13.00
S3     12.40

Intraday  Resistance Levels
R1     14.40-14.80
R2     15.10
R3     15.50-16.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.407 Buy
20-DMA   14.35 Sell
50-DMA   14.91 Sell
100-DMA   15.65 Sell
200-DMA   16.14 Sell
STOCH(5,3)   48.461 Buy
MACD(12,26,9)   -0.238 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$71.70/bbl, intraday low of US$69.89/bbl and settled up by 0.798% to close at US$70.67/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 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 72.00-74.50 with stop loss at 73.90; targeting 71.40-70.60-70.00 and 69.00-68.50. Buy above 71.40-68.50 with risk daily closing below 68.50 and targeting 71.40-72.00 and 73.00-73.90.

 
Intraday Support Levels
S1     71.40
S2     70.60-70.00
S3     69.00

Intraday Resistance Levels
R1     72.00
R2     73.00-73.90
R3     74.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.084 Sell
20-DMA   69.30 Buy
50-DMA   68.14 Buy
100-DMA   68.61 Buy
200-DMA   65.97 Buy
STOCH(5,3)   78.538 Buy
MACD(12,26,9)   0.744 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1732/EUR, high of US$1.1802/EUR and settled the day down by 0.229% to close at US$1.1748/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 1.1660-1.1450 with risk below 1.1450, targeting 1.1690-1.1760 and 1.1800-1.1850. Sell below 1.1690-1.1850 targeting 1.1660-1.1610-1.1540 and 1.1450-1.1400 with stop-loss at daily closing above 1.1850.

 
Intraday Support Levels
S1     1.1690-1.1660
S2     1.1610
S3     1.1540-1.1510

Intraday  Resistance Levels
R1     1.1760-1.1800
R2     1.1850
R3     1.1800

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.031 Buy
20-DMA   1.1651 Sell
50-DMA   1.1608 Sell
100-DMA   1.1661 Sell
200-DMA   1.1944 Sell
STOCH(5,3)   75.712 Sell
MACD(12,26,9)   -0.0035 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3053/GBP, high of US$1.3275/GBP and settled the day down by 1.433% to close at US$1.3068/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 1.3100-1.3310 with targets at 1.3060-1.2990 and 1.2950-1.2870-1.2800. Buy above 1.3060-1.2800 with targets 1.3100-1.3140-1.3200 and 1.3250-1.3300 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.3060
S2     1.2990-1.2950
S3     1.2890

Intraday Resistance Levels
R1     1.3100-1.3140
R2     1.3250-1.3320
R3     1.3250-1.3320

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

54.112

Buy
20-DMA   1.3022 Buy
50-DMA   1.2978 Buy
100-DMA   1.3149 Buy
200-DMA   1.3514 Buy
STOCH(5,3)   33.946 Sell
MACD(12,26,9)   0.0053 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY112.41/USD and made an intraday high of JPY112.87/USD and settled the day up by 0.0977% at JPY112.59/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 112.50-114.70 with risk above 114.70 targeting 111.00-110.70-110.20 and 109.80-109.00. Long positions above 112.00-109.40 with targets of 112.00-112.50 and 113.50-114.00 with stop below 107.00.

 
Intraday Support Levels
S1     112.00-111.50
S2     111.00
S3     110.70-110.20

INTRADAY RESISTANCE LEVELS
R1     112.50-113.20
R2     114.00
R3     114.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.266 Buy
20-DMA   111.63 Buy
50-DMA   111.39 Buy
100-DMA   110.82 Buy
200-DMA   109.74 Buy
STOCH(9,6)   79.063 Buy
MACD(12,26,9)   0.370 Sell

AAFX TRADING
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