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  • Asian shares reversed early losses while the euro rebounded from six-week lows on reports Italy will cut its budget deficit at a faster pace than expected, raising hopes Rome could stave off a problematic debt blow-out. Italy will reduce its budget deficit to 2 percent of gross domestic product (GDP) by 2020 from the earlier announced 2.4 percent, local newspaper Corriere Della Sera reported, a pledge that boosted the euro. The single currency has been rattled by concerns that a significant increase in the Italian budget will deepen the country's debt and deficit problems, and by extension those of the European Union. Globally, risk appetite was hit after European Union officials expressed concerns about Italy's budget plan, which would widen the deficit significantly. Generally, sentiment was still jittery though even as a new U.S.-Mexico-Canada trade agreement appeared to ease global trade tensions. A controversial clause in the trilateral pact put the focus back on the Sino-U.S. tariff dispute. Chinese markets have taken a hammering this year as investors fretted the trade dispute could put a significant dent on growth.
  • The U.S. dollar and the Japanese yen fell on Wednesday on reports that the Italy government is aiming to cut its budget deficit to 2% of GDP in 2021. The government forecasted a deficit of 2.4% in 2019 and 2.2% in 2020. The country’s debt-to-GDP ratio currently stands at 131%, and the government is hoping to trim the ratio to 127% by 2021, according to reports. Earlier this week, concerns over Italian finances provided some support for both the yen and the U.S. dollar after senior Italian lawmaker Claudio Borghi said most of the country’s problems would be resolved if it readopted a national currency. The euro climbed against other currencies Wednesday on reports Italy may yield ground over a budget stalemate with the European Union. The common currency EURUSD, +0.3464% EURUSD, +0.3464% rose to $1.1584 from $1.1549, making headway during the Asian trading session after a report in Italian daily newspaper Corriere della Sera that the government’s budget deficit target will be set at 2.4% of GDP in 2019, but decline to 2.2% in 2020 and 2.0% in 2021. Italian officials had previously clashed with Brussels over the budget deficit target, which had stoked fears of another crisis in the region and put pressure on Italian stocks and bonds “Brussels still need to approve Italy’s budget plans by the middle of the month, so we could still see some jitters until the ink has dried on that approval,” said Lawler. The start of the week has been marked by back and forth comments between EU and Italian officials, with European Commission President Jean-Claude Juncker at one point warning of a risk of another Greek debt crisis if Italy didn’t dial back its deficit spending plans. Tuesday marked a particularly fraught day for the euro amid budgetary squabbling.
  • Oil steadied near the highest level in almost four years as supply crunch fears outweighed expectations for an increase in American crude inventories. Futures in New York were little changed to trade near $75 a barrel. Supply losses from Iran to Venezuela continued to rattle markets, boosting volatility and driving prices to the highest since November 2014. The ongoing outlook for a tightening of crude markets overshadowed forecasts for a second weekly gain in U.S. stockpiles. Crude has gained more than 20 percent this year on growing concerns the OPEC and its allies’ pledge to pump more won’t be enough to offset losses from American sanctions on Iranian oil. The Persian Gulf state’s exports appear to have declined by more than the market expected, with South Korea, Japan and India already shunning supplies before the sanctions due Nov. 4. While OPEC struggles to fill the void created by Iran and Venezuela, the talks between Saudi Arabia and Kuwait on restarting two oil fields in a neutral zone are said to have stalled again. The start-up could lead to an additional 500K barrels a day in production. Currently, most OPEC producers are pumping at, or close to, full capacity, with only Saudi Arabia able to increase output significantly. In the U.S., crude inventories are estimated to have increased 1.5 mn barrels last week, according to a Bloomberg survey of 13 analysts. The responses varied widely, with one analyst forecasting a 3.65-mn-barrel gain, while some others predict a decrease of 2.5 mn to 3 mn barrels. Meanwhile, the industry-funded American Petroleum Institute was said to report stockpiles rose by 907K barrels last week. The API data also pointed to an increase at the U.S. storage hub of Cushing, Oklahoma, of more than 2 million barrels. That would be the largest net build since March if confirmed by the Energy Information Administration’s figures Wednesday.

 

 
Intraday RESISTANCE LEVELS
3rd October 2018 R1 R2 R3
GOLD-XAU 1,207-1,214 1,220 1,232
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 75.60-76.50 77.00 78.00
EURO/USD 1.1610 1.1690 1.1760-1.1800
GBP/USD 1.3060-1.3140 1.3200 1.3250-1.3320
USD/JPY 114.00-114.70 115.50 116.00

Intraday SUPPORTS LEVELS
3rd October 2018 S1 S2 S3
GOLD-XAU 1,200 1,182-1,174 1,166
Silver-XAG 14.40-14.00 13.61 13.00-12.40
Crude Oil 74.50-73.90 73.00 72.00-71.40
EURO/USD 1.1540-1.1500 1.1432 1.1380
GBP/USD 1.2990 1.2950-1.2890 1.2790
USD/JPY 113.20-112.50 112.00 111.50-111.00

Intra-Day Strategy (3rd October 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 Tuesday made its intraday high of US$1208.15/oz and low of US$1188.38/oz. Gold up by 1.19% at US$1202.69/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 1207-1227 keeping stop loss closing above 1227, targeting 1194-1184-1172 and 1166-1159. Buy above 1194-1159 with risk below 1159, targeting 1191-1207-1214 and 1220-1227.

 
Intraday Support Levels
S1     1,200
S2     1,182-1,174
S3     1,166
Intraday Resistance Levels
R1     1,207-1,214
R2     1,220
R3     1,232

Technical Indicators

Name   Value Action
14DRSI  

55.967

Buy
20-DMA   1198.21 Sell
50-DMA  

1200.95

Sell
100-DMA   1235.31 Sell
200-DMA   1281.11 Sell
STOCH(5,3)   68.248 Sell
MACD(12,26,9)   -1.733 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$14.89/oz and low of US$14.42/oz. Silver settled down by 1.262% at US$14.66/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     14.40-14.00
S2     13.61
S3     13.00-12.40

Intraday  Resistance Levels
R1     14.80
R2     15.10
R3     15.50-16.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.953 Buy
20-DMA   14.29 Sell
50-DMA   14.68 Sell
100-DMA   15.45 Sell
200-DMA   16.06 Sell
STOCH(5,3)   68.02 Buy
MACD(12,26,9)   -0.054 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$75.79/bbl, intraday low of US$74.84/bbl and settled down by 0.491% to close at US$74.93/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 75.60-78.00 with stop loss at 78.00; targeting 74.50-73.90-73.00 and 72.00-71.40. Buy above 74.50-71.40 with risk daily closing below 71.40 and targeting 75.60-76.50 and 77.00-78.00.

 
Intraday Support Levels
S1     74.50-73.90
S2     73.00
S3     72.00-71.40

Intraday Resistance Levels
R1     75.60-76.50
R2     77.00
R3     78.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.990 Sell
20-DMA   70.51 Buy
50-DMA   68.83 Buy
100-DMA   68.76 Buy
200-DMA   66.45 Buy
STOCH(5,3)   94.021 Buy
MACD(12,26,9)   1.593 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1504/EUR, high of US$1.1579/EUR and settled the day down by 0.285% to close at US$1.1504/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 1.1540-1.1380 with risk below 1.1380, targeting 1.1610-1.1690-1.1760 and 1.1800-1.1850. Sell below 1.1610-1.1850 targeting 1.1610-1.1540 and 1.1450-1.1400 with stop-loss at daily closing above 1.1850.

 
Intraday Support Levels
S1     1.1540-1.1500
S2     1.1432
S3     1.1380

Intraday  Resistance Levels
R1     1.1610
R2     1.1690
R3     1.1760-1.1800

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.721 Buy
20-DMA   1.1654 Sell
50-DMA   1.1605 Sell
100-DMA   1.1645 Sell
200-DMA   1.1938 Sell
STOCH(5,3)   6.951 Sell
MACD(12,26,9)   0.0003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2940/GBP, high of US$1.3047/GBP and settled the day down by 0.498% to close at US$1.2976/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2977) 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 1.3060-1.3320 with targets at 1.2990-1.2950 and 1.2890-1.2790. Buy above 1.3000-1.2800 with targets 1.3060-1.3140-1.3200 and 1.3250-1.3320 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.2990
S2     1.2950-1.2890
S3     1.2790

Intraday Resistance Levels
R1     1.3060-1.3140
R2     1.3200
R3     1.3250-1.3320

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

47.756

Buy
20-DMA   1.3069 Buy
50-DMA   1.2977 Buy
100-DMA   1.3122 Buy
200-DMA   1.3506 Buy
STOCH(5,3)   13.493 Sell
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY113.52/USD and made an intraday high of JPY114.00/USD and settled the day down by 0.210% at JPY113.61/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (111.56), which is major resistance on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. 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   70.725 Buy
20-DMA   112.29 Buy
50-DMA   111.56 Buy
100-DMA   111.05 Buy
200-DMA   109.75 Buy
STOCH(9,6)   89.691 Buy
MACD(12,26,9)   0.645 Sell

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