AAFX TRADING

Daily Market Lookup

  • Asia stocks struggled on Tuesday as a fresh round of U.S.-China tariffs and a surge in oil prices to near four-year highs added to worries about risks to global growth. China and the United States imposed new tariffs on each other’s goods on Monday and neither side looks to be in the mood to compromise, raising the risk of a protracted battle that could chill investment and disrupt global trade. The tense backdrop added to the general caution ahead of an expected interest rate hike by the Federal Reserve this week and uncertainty over the future of U.S. Deputy Attorney General Rod Rosenstein. Rosenstein oversees the special counsel investigation into Russia’s role in the 2016 presidential election [.N] The Fed begins its two-day policy meeting later on Tuesday. U.S. equities had made strong gains last week as investors had hoped the United States and China would find a way out of the trade impasse. ECB chief Mario Draghi said he sees a vigorous pickup in euro zone inflation, backing moves toward unwinding an ECB asset-purchase program meant to stimulate the economy. Oil prices had rallied after OPEC leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, ruled out on Sunday any immediate, additional increase in crude output, effectively rebuffing U.S. President Donald Trump’s calls for action to cool the market. Furthermore, the United States from November will target Iran’s oil exports with sanctions, and Washington is putting pressure on governments and companies around the world to fall in line and cut purchases from Tehran.
  • The dollar was largely steady against its major peers on Tuesday as investors looked to policy clues from the U.S. Federal Reserve, which is widely expected to hike rates this week, as financial markets fret over a heated Sino-U.S. trade dispute. The euro kept some of its gains made overnight when it hit a 3-1/2-month high after European Central Bank chief Mario Draghi expressed confidence in eurozone inflation and wages growth. Markets around the world have been sideswiped in the past few months as the intensifying trade row between China and the United States stoked uncertainty about the outlook for global growth and broader monetary policy for some developed and emerging market economies. On Monday, the United States and China imposed a new round of tariffs on each other's goods with no sign either side is willing to back down. Fed begins its two-day policy meeting later on Tuesday at which it is expected to raise interest rates for the eight time since late 2015. Markets are also betting on another rate hike before year-end, though the outlook for 2019 is less clear. Speculators have ramped up bets that interest rate differentials between the United States and other major economies, including Japan and Australia, will increase. The common currency rose after ECB's Draghi on Monday described an acceleration in underlying inflation in the euro zone as "relatively vigorous" and expressed confidence that a pick-up in wage growth would continue But Draghi reaffirmed the ECB's pledge to keep rates at their current, rock-bottom level "through the summer" of next year, effectively rebuffing calls from some policymakers to tighten policy more quickly.
  • Oil benchmark Brent rose for a second day on Tuesday, remaining within range of a four-year high reached during the previous session. Looming U.S. sanctions against Iran and the unwillingness or inability of the OPEC and top oil producer Russia to raise output to offset the loss of Iranian supply have spurred prices higher. The United States from Nov. 4 will target Iran's oil exports with sanctions, and Washington is putting pressure on governments and companies around the world to fall in line and cut purchases from Tehran. While Britain, China, France, Germany, Russia and Iran on Tuesday said they were determined to develop payment mechanisms to continue trading despite the sanctions by the United States, most analysts expect Washington's actions to knock between 1 million and 1.5 mn bpd of crude oil supplies out of market. U.S. President Donald Trump has demanded that OPEC and Russia increase their supplies to make up for the expected fall in Iranian exports. Iran is the third-largest producer in OPEC. Ashley Kelty, oil analyst at financial services firm Cantor Fitzgerald said crude could soon hit $90 per barrel. Bank of America Merrill Lynch has lifted its average Brent price forecast for 2019 from $75 per barrel to $80, while it increased its WTI crude oil forecast by $2 to $71 per barrel in 2019. The bank said "the Iran factor may dominate the market near-term and cause a (crude price) spike," although it added that emerging market "demand concerns could reappear thereafter." Indian refiners - struggling from high crude feedstock prices and a sliding rupee - are planning to reduce oil imports in what could be a first sign that high prices are starting to hurt demand. And despite the tight market outlook for the coming months, some traders said more oil would be hitting markets in 2019. Commodity trading giant Vitol said on Tuesday that non-OPEC producers, especially the United States, may insert up to 2 million bpd of new crude into the market in 2019.

 

 
Intraday RESISTANCE LEVELS
25th 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 73.00-73.90 74.50 75.60
EURO/USD 1.1760-1.1800 1.1850 1.1800
GBP/USD 1.3140 1.3200 1.3250-1.3320
USD/JPY 113.20-114.00 114.70 115.50

Intraday SUPPORTS LEVELS
25th 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 72.00 71.40 70.60-70.00
EURO/USD 1.1690-1.1660 1.1610 1.1540-1.1510
GBP/USD 1.3100-1.3060 1.2990 1.2950-1.2890
USD/JPY 112.50-112.00 111.50 111.00-110.70

Intra-Day Strategy (25th 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 Monday made its intraday high of US$1204.09/oz and low of US$1194.36/oz. Gold down by 0.005% at US$1198.71/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  

47.417

Buy
20-DMA   1199.69 Sell
50-DMA  

1204.86

Sell
100-DMA   1242.11 Sell
200-DMA   1283.20 Sell
STOCH(5,3)   36.456 Buy
MACD(12,26,9)   -1.436 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$14.37/oz and low of US$14.18/oz. Silver settled down by 0.210% at US$14.24/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   40.810 Buy
20-DMA   14.25 Sell
50-DMA   14.79 Sell
100-DMA   15.57 Sell
200-DMA   16.11 Sell
STOCH(5,3)   51.714 Buy
MACD(12,26,9)   -0.167 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$72.59/bbl, intraday low of US$71.09/bbl and settled up by 1.448% to close at US$72.13/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 overbought 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 73.00-75.60 with stop loss at 75.60; targeting 72.00-71.40-70.60 and 70.00-69.00. Buy above 72.00-68.50 with risk daily closing below 68.50 and targeting 73.00-73.90 and 74.50-75.60.

 
Intraday Support Levels
S1     72.00
S2     71.40
S3     70.60-70.00

Intraday Resistance Levels
R1     73.00-73.90
R2     74.50
R3     75.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.836 Sell
20-DMA   69.50 Buy
50-DMA   68.26 Buy
100-DMA   68.63 Buy
200-DMA   66.05 Buy
STOCH(5,3)   82.212 Buy
MACD(12,26,9)   0.744 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1723/EUR, high of US$1.1814/EUR and settled the day up by 0.025% to close at US$1.1746/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 Monday made an intra‐day low of US$1.3062/GBP, high of US$1.3166/GBP and settled the day up by 0.367% to close at US$1.3116/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 negative crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Buy

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 negative crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to downward movement.

 
Intraday Support Levels
S1     1.3100-1.3060
S2     1.2990
S3     1.2950-1.2890

Intraday Resistance Levels
R1     1.3140
R2     1.3200
R3     1.3250-1.3320

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

54.972

Buy
20-DMA   1.3035 Buy
50-DMA   1.2979 Buy
100-DMA   1.3145 Buy
200-DMA   1.3513 Buy
STOCH(5,3)   17.207 Sell
MACD(12,26,9)   0.0053 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY112.40/USD and made an intraday high of JPY112.83/USD and settled the day up by 0.302% at JPY112.76/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 113.20-115.50 with risk above 115.50 targeting 112.50-112.00-111.00 and 110.70-110.20. Long positions above 112.50-110.00 with targets of 113.20-114.00 and 114.70-115.50 with stop below 110.00.

 
Intraday Support Levels
S1     112.50-112.00
S2     111.50
S3     111.00-110.70

INTRADAY RESISTANCE LEVELS
R1     113.20-114.00
R2     114.70
R3     115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.293 Buy
20-DMA   111.72 Buy
50-DMA   111.39 Buy
100-DMA   110.86 Buy
200-DMA   109.74 Buy
STOCH(9,6)   84.556 Buy
MACD(12,26,9)   0.424 Sell

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