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  • Asian stocks slipped further on Friday as China posted its weakest economic growth since the global financial crisis, adding to market concerns about trade disputes, rising U.S. interest rates and Italy's free-spending budget. China's economic growth in the third quarter slowed to 6.5%, its weakest pace since 2009 and below expectations, as a campaign to tackle debt risks and the trade war with the United States weighed on the economy. Shares in China, which initially extended losses after the figures were released, rallied as investors digested statements from senior regulators pledging support for private firms and companies facing liquidity problems. The benchmark Shanghai Composite index was 0.5 percent higher at around 0300 GMT, after hitting near four-year lows on Thursday, in part hurt by widespread concern that plunging share prices could lead to a spike in margin calls. Analysts cautioned that China's economy would continue to face difficulties. China's premier said this week that the economy faces increased downward pressure, but that government will take measures to stabilize growth. In the latest trade war volley, the U.S. is requesting that a WTO dispute resolution panel look into tariffs imposed by China, the European Union, Canada and Mexico in retaliation to U.S. tariffs on steel and aluminum. Further fraying market nerves, the European Commission on Thursday said a draft 2019 budget from Italy was in "particularly serious non-compliance" with EU rules, setting the stage for a possible unprecedented rejection of the country's fiscal plan.
  • The euro hovered near a one-week low against the dollar on Friday as the European Commission's criticism of Italy's populist budget sparked fresh concerns about political tensions in the common currency zone. The dollar index (DXY), a gauge of its value against major peers, was 0.05 percent higher at 95.96 on Friday, having closed on Thursday at its highest level since Aug. 21. The index's rise was due to the steep fall in the euro on Thursday, which constitutes around 57 percent of the index. European Commission said Italy's 2019 budget draft is in serious breach of European Union budget rules. The Commission said in a letter to Italian Economy Minister Giovanni Tria, that planned government spending was too high, the structural deficit - excluding one-offs and business cycle effects - would rise instead, not fall, and that Italian public debt would not come down in line with EU rules. This has sparked investor concerns about more political tensions in the EU between Brussels and member states, which has hurt the euro. The gap between Italian and German 10-year bond yield spreads hit its widest level in 5-1/2 years after news of the Commission letter broke. Markets were not cheered by Italy's response as Italy's prime minister defended the nation's free spending budget on Thursday. Traders placed bearish bets on the sterling as a EU-UK summit failed to yield a decision on Britain's exit from the euro zone. British Prime Minister Theresa May, on Thursday said that the European Union's proposal on the Irish border was unacceptable. The greenback lost 0.4 percent of its value to the yen on Thursday, reflecting the global risk-off mood due to rising geopolitical tensions between the U.S. and Saudi Arabia, European political risks arising out of Italy and U.S-Sino trade war tensions.
  • Oil prices nudged higher on Friday but were set for a second weekly drop amid higher U.S. crude inventories, an ongoing Sino-U.S. trade war and concerns over the death of a prominent Saudi journalist. For the week, U.S. crude stocks last week climbed 6.5 million barrels, the fourth straight weekly build, almost triple the amount analysts had forecast, the U.S. EIA said on Wednesday. Inventories rose sharply even as U.S. crude production slipped 300K bpd to 10.9 min bpd last week due to the effects of offshore facilities closing temporarily for Hurricane Michael. President Donald Trump said on Thursday he presumes missing Saudi journalist Jamal Khashoggi is dead and that the U.S. response to Saudi Arabia will likely be "very severe" but that he still wanted to get to the bottom of what exactly happened. The United States and other Western nations are in a dilemma about how to respond because of lucrative business ties, including weapons sales to Riyadh. Meanwhile, Iranian oil exports may have increased in October when compared to the previous month as buyers rush to lift more cargoes ahead of looming U.S. sanctions that kick in on Nov. 4. An unprecedented volume of Iranian crude oil is set to arrive at China's northeast Dalian port this month and in early November before U.S. sanctions on Iran take effect, according to an Iranian shipping source and data on Refinitiv Eikon. So far, a total of 22 million barrels of Iranian crude oil loaded on supertankers owned by the NITC is expected to arrive at Dalian in October and November, the data showed. Dalian typically receives between 1 mn and 3 mn barrels of Iranian oil each month, according to data that dates back to January 2015.

 

 
Intraday RESISTANCE LEVELS
19th October 2018 R1 R2 R3
GOLD-XAU 1,230-1,238 1,246 1,254
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 69.05-69.60 70.10 70.50-71.20
EURO/USD 1.1490 1.1540 1.1610-1.1690
GBP/USD 1.3060 1.3100 1.3150-1.3200
USD/JPY 112.50-113.00112.50-113.00 114.00 114.70-115.50

Intraday SUPPORTS LEVELS
19th October 2018 S1 S2 S3
GOLD-XAU 1,221 1,214-1,207 1,200
Silver-XAG 14.30-14.00 13.61 13.00-12.40
Crude Oil 68.50 68.10 67.70-67.15
EURO/USD 1.1430-1.1380 1.1320 1.1280
GBP/USD 1.3000-1.2950 1.2920 1.2870
USD/JPY 112.10-111.50 111.20 110.70

Intra-Day Strategy (19th 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 Thursday made its intraday high of US$1230.07/oz and low of US$1220.53/oz. Gold up by 0.247% at US$1225.52/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1228) and breakage above will call for 1240-1260. 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 overbought 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 1233-1254 keeping stop loss closing above 1254, targeting 1221-1214-12007 and 1200-1194. Buy above 1214-1194 with risk below 1194, targeting 1228-1238 and 1244-1250.

 
Intraday Support Levels
S1     1,221
S2     1,214-1,207
S3     1,200
Intraday Resistance Levels
R1     1,230-1,238
R2     1,246
R3     1,254

Technical Indicators

Name   Value Action
14DRSI  

61.586

Buy
20-DMA   1201.73 Sell
50-DMA  

1199.26

Sell
100-DMA   1227.29 Sell
200-DMA   1276.61 Sell
STOCH(5,3)   84.046 Buy
MACD(12,26,9)   4.823 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$14.64/oz and low of US$14.43/oz. Silver settled down by 0.068% at US$14.56/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (15.45), breakage above will lead to16.05-16.30. 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 neutral 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 14.30-12.40 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     14.30-14.00
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   53.093 Buy
20-DMA   14.50 Sell
50-DMA   14.47 Sell
100-DMA   15.22 Sell
200-DMA   15.91 Sell
STOCH(5,3)   45.799 Sell
MACD(12,26,9)   -0.035 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$69.93/bbl, intraday low of US$68.53/bbl and settled down by 1.8445% to close at US$68.64/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 50DMA i.e. 69.62 which is a support level and breakage above will call for 62.20-62.80. 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 69.05-72.00 with stop loss at 72.00; targeting 68.60-68.20 and 67.70-67.15. Buy above 69.60-67.15 with risk daily closing below 69.15 and targeting 70.10-70.50-71.20 and 72.00-72.60.

 
Intraday Support Levels
S1     68.50
S2     68.10
S3     67.70-67.15

Intraday Resistance Levels
R1     69.05-69.60
R2     70.10
R3     70.50-71.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.883 Sell
20-DMA   72.53 Buy
50-DMA   69.92 Buy
100-DMA   69.11 Buy
200-DMA   67.16 Buy
STOCH(5,3)   8.645 Buy
MACD(12,26,9)   0.568 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1448/EUR, high of US$1.1526/EUR and settled the day down by 0.417% to close at US$1.1451/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1627), which become immediate resistance level, break below will target 1.1690-1.1730. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider sell.

Trading Strategy: Neutral to Buy

Buy above 1.1430-1.1280 with risk below 1.1280, targeting 1.1490-1.1540-1.1610 and 1.1690-1.1760. Sell below 1.1490-1.1730 targeting 1.1430-1.1380 and 1.1320-1.1280 with stop-loss at daily closing above 1.1700.

 
Intraday Support Levels
S1     1.1430-1.1380
S2     1.1320
S3     1.1280

Intraday  Resistance Levels
R1     1.1490
R2     1.1540
R3     1.1610-1.1690

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.654 Buy
20-DMA   1.1566 Sell
50-DMA   1.1581 Sell
100-DMA   1.1620 Sell
200-DMA   1.1907 Sell
STOCH(5,3)   3.580 Buy
MACD(12,26,9)   -0.0035 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3015/GBP, high of US$1.3130/GBP and settled the day down by 0.739% to close at US$1.3015/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3096) 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 1.3060-1.3200 with targets at 1.2990-1.2950 and 1.2920-1.2870. Buy above 1.3000-1.2870 with targets 1.3060-1.3100-1.3150 and 1.3200-1.3250 with stop loss closing below 1.2870.

 
Intraday Support Levels
S1     1.3000-1.2950
S2     1.2920
S3     1.2870

Intraday Resistance Levels
R1     1.3060
R2     1.3100
R3     1.3150-1.3200

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

45.440

Buy
20-DMA   1.3095 Buy
50-DMA   1.3001 Buy
100-DMA   1.3087 Buy
200-DMA   1.3478 Buy
STOCH(5,3)   6.455 Sell
MACD(12,26,9)   0.0014 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY111.94/USD and made an intraday high of JPY112.72/USD and settled the day down by 0.408% at JPY112.17/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (111.82), which is major support 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 112.50-115.50 with risk above 115.50 targeting 112.00-111.50 and 111.20-110.70. Long positions above 112.00-111.00 with targets of 112.50-113.00-114.00 and 114.70-115.50 with stop below 111.00.

 
Intraday Support Levels
S1     112.10-111.50
S2     111.20
S3     110.70

INTRADAY RESISTANCE LEVELS
R1     112.50-113.00112.50-113.00
R2     114.00
R3     114.70-115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.124 Buy
20-DMA   112.97 Buy
50-DMA   111.92 Buy
100-DMA   111.40 Buy
200-DMA   109.71 Buy
STOCH(9,6)   66.850 Buy
MACD(12,26,9)   0.065 Sell

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