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Daily Market Lookup

  • The dollar edged higher on Monday as China followed an easing in domestic policy by allowing its yuan to fall, though the drop was not as sharp as some had feared. Moves were limited by a lack of liquidity with Japan on holiday and the U.S. bond market on a break. A sudden and steep rise in Treasury yields had underpinned the dollar for much of last week. China's central bank moved on Sunday to support the economy by slashing the level of cash that banks must hold as reserves. It was the fourth cut this year and comes as the economy struggles with the drag from an escalating trade dispute with the United States. Any drop in the yuan tends to undermine other emerging currencies as they need to depreciate to keep exports competitive. That in turn supports the safe-haven yen and the dollar, particularly when U.S. yields are rising. Italian politics remained a drag as the European Commission warned the country's budget deficit breached past commitments, leading Rome to insist it would "not retreat" from its spending plans. EU Brexit negotiators believe a deal with Britain on leaving the bloc is "very close", sources said, in a sign a compromise on a major sticking point - the future Irish border - might be in the making. Brazil's real was a shade firmer at 3.8364 per dollar after polls in the Presidential election showed right-wing Congressman Jair Bolsonaro was heading toward a second-round runoff against leftist Fernando Haddad.
  • With a fairly light week on the economic calendar investors will continue to monitor the effects of rising U.S. government bond yields on markets, when U.S. bond markets reopen on Tuesday after Monday’s Columbus Day holiday. Concerns over Italy’s rising debts and strains in emerging markets will also remain in focus as markets continue to digest Friday’s mixed U.S. non-farm payrolls report. The Labor Department reported Friday that the rate of job creation slowed sharply in September, likely due to the effects of Hurricane Florence, while wage growth also eased. The U.S. economy added 134,000 jobs last month, the fewest in a year, though the figure for August was revised up to 270,000 from 201,000. While jobs growth slowed the unemployment rate fell to a near 49-year low of 3.7%, down from 3.9% in August. The report did little to alter expectations that the Federal Reserve will press on with plans to raise interest rates again in December and beyond. The dollar slipped lower following the report, with the U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, slipping 0.13% to 95.31 late Friday. The index ended the week up 0.6%, its second straight weekly gain. Hawkish Fed speakers and strong U.S. economic reports have supported the greenback in recent weeks. The single currency has been pressured lower by worries that the Italian government’s spending plans could trigger another round of the country’s debt crisis.
  • Oil prices fell slightly on Monday morning in Asia on reports that Washington is considering granting waivers to sanctions against Iran’s oil exports that take effect in November. A U.S. official said on Friday that Washington would consider exemptions for countries that showed efforts to reduce their imports of Iranian oil, easing market concerns over tighter crude supply next month. The White House will impose crude sanctions on the oil exporter in November and the Trump administration put pressure on governments and companies to slash their imports from Iran to zero. The U.S. also urged oil producers to raise their output to compensate the shortfall from Iran, which Saudi Arabia is said to replace.Saudi Crown Prince Mohammed bin Salman told Bloomberg on Friday that “Iran reduced their exports by 700,000 barrels a day, if I’m not mistaken. And Saudi Arabia and OPEC and non-OPEC countries, they’ve produced 1.5 million barrels a day. So we export as much as 2 barrels for any barrel that disappeared from Iran recently.” He believes that the recent rise in oil prices has little to do with the Iran sanctions. Qatar’s Energy Minister Mohammed al-Sada went further to say on Sunday that the oil market is balanced in terms of supply and demand, and that “geopolitical changes” are cited for the reasons for the rise in crude prices. “There are developments in the oil market including supply and the increase in global demand, and these considerations will be taken into account at the next meeting of OPEC,” he said. On the supply side, the U.S. oil drilling rig count fell for a third consecutive week to 861 in the week to Oct. 5, according to energy firm Baker Hughes on Friday.

 

 
Intraday RESISTANCE LEVELS
8th 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 74.50 75.60-76.50 77.00
EURO/USD 1.1540-1.1610 1.1690 1.1750
GBP/USD 1.3140-1.3200 1.3290 1.3350
USD/JPY 114.00 114.70-115.50 116.00

Intraday SUPPORTS LEVELS
8th October 2018 S1 S2 S3
GOLD-XAU 1,194 1,182-1,174 1,166
Silver-XAG 14.40-14.00 13.61 13.00-12.40
Crude Oil 73.90-73.00 72.60 72.00
EURO/USD 1.1500 1.1460-1.1432 1.1380
GBP/USD 1.3060 1.2990 1.2950-1.2890
USD/JPY 113.20 112.50 112.00-111.50

Intra-Day Strategy (8th 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 Friday made its intraday high of US$1205.73/oz and low of US$1197.16/oz. Gold up by 0.254% at US$1202.66/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 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     1,194
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  

52.346

Buy
20-DMA   1198.19 Sell
50-DMA  

1199.96

Sell
100-DMA   1233.43 Sell
200-DMA   1280.24 Sell
STOCH(5,3)   67.631 Sell
MACD(12,26,9)   -1.247 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$14.70/oz and low of US$14.50/oz. Silver settled up by 0.549% at US$14.63/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 14.40-12.40 targeting 14.90-15.10 and 15.60-16.35; stop breakage below 12.40. Sell below 14.90-17.00 with stop loss above 17.00; targeting 14.40-13.90 and 13.50-13.00.

 
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 Friday made an intra‐day high of US$75.14/bbl, intraday low of US$73.82/bbl and settled down by 0.429% to close at US$74.23/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 negative crossover for confirmation of bearish 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 74.50-77.00 with stop loss at 77.00; targeting 73.90-73.00 and 72.00-71.40. Buy above 73.90-71.40 with risk daily closing below 71.40 and targeting 74.50-75.60-76.50 and 77.00-78.00.

 
Intraday Support Levels
S1     73.90-73.00
S2     72.60
S3     72.00

Intraday Resistance Levels
R1     74.50
R2     75.60-76.50
R3     77.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.089 Sell
20-DMA   71.54 Buy
50-DMA   69.18 Buy
100-DMA   68.86 Buy
200-DMA   66.45 Buy
STOCH(5,3)   61.051 Sell
MACD(12,26,9)   1.742 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1483/EUR, high of US$1.1549/EUR and settled the day up by 0.0955% to close at US$1.1523/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 1.1460-1.1300 with risk below 1.1300, targeting 1.1500-1.1610-1.1690 and 1.1760-1.1800. Sell below 1.1500-1.1700 targeting 1.1460-1.1430 and 1.1380-1.1300 with stop-loss at daily closing above 1.1700.

 
Intraday Support Levels
S1     1.1500
S2     1.1460-1.1432
S3     1.1380

Intraday  Resistance Levels
R1     1.1540-1.1610
R2     1.1690
R3     1.1750

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.367 Buy
20-DMA   1.1640 Sell
50-DMA   1.1597 Sell
100-DMA   1.1639 Sell
200-DMA   1.1934 Sell
STOCH(5,3)   10.207 Sell
MACD(12,26,9)   0.0003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3002/GBP, high of US$1.3122/GBP and settled the day up by 0.729% to close at US$1.3116/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2970) 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 neutral territory and giving positive crossover to confirm bullish 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     1.3060
S2     1.2990
S3     1.2950-1.2890

Intraday Resistance Levels
R1     1.3140-1.3200
R2     1.3290
R3     1.3350

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.174

Buy
20-DMA   1.3083 Buy
50-DMA   1.2970 Buy
100-DMA   1.3108 Buy
200-DMA   1.3500 Buy
STOCH(5,3)   46.942 Buy
MACD(12,26,9)   0.0001 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY113.55/USD and made an intraday high of JPY114.09/USD and settled the day down by 0.131% at JPY113.71/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 114.50-116.50 with risk above 116.50 targeting 114.00-113.20-112.50 and 112.00-111.00. Long positions above 114.00-111.00 with targets of 114.70-115.50 and 116.00-116.50 with stop below 111.00.

 
Intraday Support Levels
S1     113.20
S2     112.50
S3     112.00-111.50

INTRADAY RESISTANCE LEVELS
R1     114.00
R2     114.70-115.50
R3     116.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   91.745 Buy
20-DMA   112.17 Buy
50-DMA   111.50 Buy
100-DMA   111.01 Buy
200-DMA   109.75 Buy
STOCH(9,6)   91.748 Buy
MACD(12,26,9)   0.612 Sell

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