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Daily Market Lookup

  • Shares in Asia inched higher on Friday, following gains on Wall Street overnight after news of robust U.S. economic growth, with the chairman of the Federal Reserve saying the United States does not face a large chance of near-term recession. After the Fed raised rates on Wednesday, the third time this year, Fed Chairman Jerome Powell said on Thursday that the U.S. does not face a large chance of a recession in the next two years and the Federal Reserve plans to keep gradually raising interest rates. But Citi analysts cautioned in a note that not all data was reassuring. Italy’s government on Thursday defied EU requirements that it cut its deficit, targeting a budget deficit at 2.4% of GDP for the next three years. Markets had expected Italy’s economy minister, Giovanni Tria, to resist a spending push by Italy’s coalition government, which took power in June. Federal Reserve Chairman Jerome Powell has a new message for financial markets: watch the data on jobs, wages and inflation for signals on monetary policy - not the U.S. central bank’s words or forecasts. That’s a big change for the Fed, which for most of the past decade has done what it could to steer markets on its policy intentions as it nursed a fragile economy to recovery after the financial crisis. Noting the U.S. economy is having a “particularly bright moment,” with unemployment expected to remain low, inflation stable, and no recession in sight, Powell said in a press conference on Wednesday that the removal of the “accommodative” wording was not a policy signal at all. The Fed on Wednesday announced a widely expected rate increase, its third of the year, bringing its target range for its benchmark overnight lending rate to between 2% and 2.25%. Fresh economic forecasts also released on Wednesday showed most policymakers expect the central bank to raise rates five more times before stopping some time in 2020. But Powell, in effect, said not to put too much store in those forecasts because they could change with incoming data. He noted that he is unsure when the rate increases he and his colleagues expect to deliver in the next year or two will start to bite into economic growth, or whether the economy’s underlying momentum has sped up enough to offset any such drag.
  • New orders for key U.S.-made capital goods fell in August after four straight months of strong gains and the goods trade deficit widened sharply, prompting some economists to significantly lower their economic growth estimates for the third quarter. The so-called core capital goods orders rose 1.5% in July. Economists polled by Reuters had forecast orders for these goods rising 0.4% last month. Core capital goods orders increased 7.4 percent on a year-on-year basis. Shipments of core capital goods edged up 0.1% last month after jumping 1.1% in July. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement. The Commerce Department confirmed in a second report on Thursday that the economy grew at a 4.2% annualized rate in the second quarter. That was the fastest in nearly four years and almost double the 2.2% pace set in the first quarter. A third report from the Commerce Department showed the goods trade deficit rose $3.8 bn to $75.8 bn in August. Exports of goods fell 1.6 percent to $137.9 bn, weighed down by a 9.5% plunge in shipments of food, feeds and beverages. That likely reflected a continued reversal of soybean exports after farmers front-loaded shipments of the crop in April and May to China before Beijing’s retaliatory tariffs came into effect in early July.
  • Oil prices inched up on Friday, with investors trying to gauge the potential impact on supply from looming U.S. sanctions on Iran's crude exports. The sanctions kick in on Nov. 4, with Washington asking buyers of Iranian oil to cut imports to zero to force Tehran to negotiate a new nuclear agreement and to curb its influence in the Middle East. Saudi Arabia is expected to quietly add extra oil to the market over the next couple of months to offset the drop in Iranian production, but is worried it might need to limit output next year to balance global supply and demand as the United States pumps more crude. Two sources familiar with OPEC policy said Saudi Arabia and other producers discussed a possible production increase of about 500K bpd among the OPEC and non-OPEC allies. However, ANZ said in a note on Friday that major suppliers were unlikely to offset losses due to the sanctions estimated at 1.5 mn bpd. At its 2018-peak in May, Iran exported 2.71 mn bpd, nearly 3% of daily global crude consumption. The nation is OPEC's third-largest producer. Meanwhile, looming supply from the United States and stable output from Libya were dragging on oil prices, said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.

 

 
Intraday RESISTANCE LEVELS
28th September 2018 R1 R2 R3
GOLD-XAU 1,191 1,207-1,214 1,220
Silver-XAG 14.40-14.80 15.10 15.50-16.40
Crude Oil 73.00-73.90 74.50 75.60
EURO/USD 1.1690 1.1760-1.1800 1.1850
GBP/USD 1.3140 1.3200 1.3250-1.3320
USD/JPY 114.00-114.70 115.50 116.00

Intraday SUPPORTS LEVELS
28th September 2018 S1 S2 S3
GOLD-XAU 1,182-1,174 1,166 1,159
Silver-XAG 14.00-13.61 13.00 12.40
Crude Oil 72.00 71.40 70.60-70.00
EURO/USD 1.1610 1.1540-1.1500 1.1432
GBP/USD 1.3060 1.2990 1.2950-1.2890
USD/JPY 113.20-112.50 112.00 111.50-111.00

Intra-Day Strategy (28th 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 Thursday made its intraday high of US$1198.54/oz and low of US$1181.83/oz. Gold down by % at US$1182.66/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 1191-1227 keeping stop loss closing above 1227, targeting 1180-1172 and 1166-1159. Buy above 1182-1159 with risk below 1159, targeting 1191-1207-1214 and 1220-1227.

 
Intraday Support Levels
S1     1,182-1,174
S2     1,166
S3     1,159
Intraday Resistance Levels
R1     1,191
R2     1,207-1,214
R3     1,220

Technical Indicators

Name   Value Action
14DRSI  

39.636

Buy
20-DMA   1197.54 Sell
50-DMA  

1202.51

Sell
100-DMA   1238.23 Sell
200-DMA   1282.13 Sell
STOCH(5,3)   10.297 Sell
MACD(12,26,9)   -3.623 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$14.44/oz and low of US$14.16/oz. Silver settled down by 0.559% at US$14.23/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 Thursday made an intra‐day high of US$72.50/bbl, intraday low of US$71.63/bbl and settled up by 0.222% to close at US$72.09/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   64.160 Sell
20-DMA   69.62 Buy
50-DMA   68.34 Buy
100-DMA   68.64 Buy
200-DMA   66.12 Buy
STOCH(5,3)   83.253 Buy
MACD(12,26,9)   0.954 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1638/EUR, high of US$1.1756/EUR and settled the day down by 0.809% to close at US$1.1739/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 1.1610-1.1450 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     1.1610
S2     1.1540-1.1500
S3     1.1432

Intraday  Resistance Levels
R1     1.1690
R2     1.1760-1.1800
R3     1.1850

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.871 Buy
20-DMA   1.1660 Sell
50-DMA   1.1611 Sell
100-DMA   1.1652 Sell
200-DMA   1.1941 Sell
STOCH(5,3)   16.233 Sell
MACD(12,26,9)   -0.0027 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3072/GBP, high of US$1.3177/GBP and settled the day down by 0.682% to close at US$1.3072/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

Based on the charts and explanations above; sell below 1.3200-1.3400 with targets at 1.3140-1.3060-1.2990 and 1.2950-1.2870. Buy above 1.3140-1.2800 with targets 1.3200-1.3250 and 1.3300-1.3400 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     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  

51.851

Buy
20-DMA   1.3055 Buy
50-DMA   1.2982 Buy
100-DMA   1.3133 Buy
200-DMA   1.3509 Buy
STOCH(5,3)   22.990 Sell
MACD(12,26,9)   0.0046 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY112.55/USD and made an intraday high of JPY113.46/USD and settled the day up by 0.576% at JPY113.34/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 114.00-116.00 with risk above 116.00 targeting 113.20-112.50-112.00-111.00 and 110.70-110.20. Long positions above 113.20-110.00 with targets of 114.00-114.70 and 115.50-116.00 with stop below 110.00.

 
Intraday Support Levels
S1     113.20-112.50
S2     112.00
S3     111.50-111.00

INTRADAY RESISTANCE LEVELS
R1     114.00-114.70
R2     115.50
R3     116.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.001 Buy
20-DMA   112.02 Buy
50-DMA   111.45 Buy
100-DMA   110.97 Buy
200-DMA   109.75 Buy
STOCH(9,6)   80.632 Buy
MACD(12,26,9)   0.424 Sell

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