AAFX TRADING

Daily Market Lookup

  • Asian stocks clawed up from 20-month lows on Wednesday amid pledges by China to support its markets, but investor confidence was brittle after equity markets bled trillions of dollars in a grim October. A confluence of factors ranging from Sino-U.S. trade tensions to worries about global economic growth, higher U.S. interest rates and company earnings have spurred volatility in financial markets in the past few weeks. MSCI's broadest index of Asia-Pacific shares outside Japan rose 1 percent, drawing support from gains on Wall Street overnight. Yet it was on track to fall around 11 percent this month, which would be its worst monthly performance since September 2011. The index had dropped to its lowest level since February 2017 on Monday as worries over corporate profits weighed heavily on U.S. equities. U.S. President Donald Trump said during an interview with Fox News late on Monday that he thought there could be an agreement with China on trade. But he also said he had billions of dollars worth of new tariffs ready to be imposed if a deal was not possible. The yuan has been pressured by worries about slowing Chinese economic growth and a potential sharp escalation in the U.S.-China trade war. Data on Wednesday showed China's manufacturing sector expanded at its weakest pace in more than two years in October, and showed a deepening slump in export orders.
  • The Japanese yen edged lower against the dollar on Wednesday after the Bank of Japan signaled it was a long way off from exiting crisis-era stimulus, while the greenback scaled 16-month highs versus its key rivals on continued strength in the U.S. economy. The Bank of Japan kept monetary policy steady on Wednesday and cut its price forecasts, reinforcing market expectations that subdued inflation will force it to maintain its massive stimulus program for the time being. n a widely expected move, the BOJ maintained its short-term interest rate target at minus 0.1 percent and a pledge to guide 10-year government bond yields around zero percent. The U.S. currency benefited from stronger than expected U.S. economic data as well as deteriorating fundamentals for the euro, which makes up around 58 percent of the index. U.S. consumer confidence rose to an 18-year high in October, driven largely a robust labor market, suggesting strong economic growth could persist in the near term. That follows last week's data which showed the U.S. economy slowed less than expected in the third quarter. Political uncertainty in Germany, following chancellor Angela Merkel’s decision to step down in 2021, is also pressuring the single currency. Moreover, the stand-off between Rome and Brussels over Italy's free spending budget, which is in breach of the European Union's fiscal rules, has weighed on the euro. Some immediate catalysts for the sterling traders could come from the Bank of England's monetary policy meeting on Thursday, when it is expected to keep interest rates on hold and detail conditions necessary for policy tightening. With no sign of a let-up in the Sino-U.S. trade war, investors are betting on more weakness ahead and expect authorities will eventually allow the yuan to breach the key 7 to the dollar level for the first time since the global financial crisis.
  • Gold prices slid to almost two-week lows on Wednesday, pressured lower by a firmer dollar. Upbeat U.S. economic data was said to be driving global equities and the dollar higher this week, as Chinese and Japanese stocks rose more than 1% on Wednesday, while the dollar traded 0.5% higher against a basket of other currencies. The White House upped the ante against China this week, warning that it could impose by early December tariffs on all remaining Chinese goods entering the U.S. if talks next month between President Donald Trump and his Chinese counterpart Xi Jinping fail to ease their trade war. Washington has already imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of U.S. imports.
  • Oil prices climbed for the first time in three days on Wednesday, rising around 1 percent ahead of the start of U.S. sanctions against Iran next week and as stock markets clawed back some of the losses they racked up this month. Traders said oil received some support from stock markets, which pulled back from 20-month lows on Wednesday amid pledges by China to support its markets. Analysts said oil prices were also supported by the upcoming U.S. sanctions against Iran's crude exports that will start on Nov. 4. Imports of Iranian crude oil by major buyers in Asia hit a 32-month low in September, as China, South Korea and Japan sharply cut their purchases ahead of the sanctions on Tehran, government and ship-tracking data showed. Oil has been caught in the global financial market slump this month, with equities under pressure from the trade scrap between the world's two largest economies, the United States and China. The United States has already imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of U.S. goods. In a bearish signal, the American Petroleum Institute reported U.S. crude inventories rose 5.7 million barrels last week, more than analyst forecasts for a 4.1 million barrel build. Investors will look to official government data on U.S. inventories due on Wednesday.

 

 
Intraday RESISTANCE LEVELS
31st October 2018 R1 R2 R3
GOLD-XAU 1,221 1,230 1,238-1,246
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 67.70 68.10 68.50-69.05
EURO/USD 1.1430-1.1490 1.1540 1.1610-1.1690
GBP/USD 1.2840-1.2900 1.2950 1.3000-1.3060
USD/JPY 113.50 114.00 114.70-115.50

Intraday SUPPORTS LEVELS
31st October 2018 S1 S2 S3
GOLD-XAU 1,214-1,207 1,200 1,189
Silver-XAG 14.30-14.00 13.61 13.00-12.40
Crude Oil 67.10 66.10-65.70 65.10
EURO/USD 1.1340 1.1300 1.2960-1.2900
GBP/USD 1.2790-1.2750 1.2700 1.2660
USD/JPY 113.00 112.10 111.50-111.20

Intra-Day Strategy (31st 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$1230.65/oz and low of US$1219.95/oz. Gold down by 0.608% at US$1222.66/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 1230-1254 keeping stop loss closing above 1254, targeting 1221-1214 and 1207-1200. Buy above 1230-1194 with risk below 1194, targeting 1238-1244 and 1250-1256.

 
Intraday Support Levels
S1     1,214-1,207
S2     1,200
S3     1,189
Intraday Resistance Levels
R1     1,221
R2     1,230
R3     1,238-1,246

Technical Indicators

Name   Value Action
14DRSI  

57.309

Buy
20-DMA   1217.18 Sell
50-DMA  

1205.97

Sell
100-DMA   1220.39 Sell
200-DMA   1271.58 Sell
STOCH(5,3)   57.554 Buy
MACD(12,26,9)   7.949 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$14.53/oz and low of US$14.38/oz. Silver settled down by 0.172% at US$14.46/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 14.35-12.40 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   47.718 Buy
20-DMA   14.56 Sell
50-DMA   14.45 Sell
100-DMA   15.07 Sell
200-DMA   15.83 Sell
STOCH(5,3)   28.104 Sell
MACD(12,26,9)   -0.044 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$67.16/bbl, intraday low of US$65.29/bbl and settled down by 0.270% to close at US$66.40/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 67.10-69.60 with stop loss at 69.60; targeting 66.10-65.70 and 65.10-64.50. Buy above 66.10-64.50 with risk daily closing below 64.50 and targeting 67.10-67.70-68.10 and 69.00-69.60.

 
Intraday Support Levels
S1     67.10
S2     66.10-65.70
S3     65.10

Intraday Resistance Levels
R1     67.70
R2     68.10
R3     68.50-69.05

TECHNICAL INDICATORS
Name   Value Action
14DRSI   22.330 Sell
20-DMA   71.27 Buy
50-DMA   70.11 Buy
100-DMA   69.21 Buy
200-DMA   67.24 Buy
STOCH(5,3)   22.330 Buy
MACD(12,26,9)   -0.1145 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1388/EUR, high of US$1.1341/EUR and settled the day down by 0.263% to close at US$1.1345/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1621), 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 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 1.1340-1.1290 with risk below 1.1290, targeting 1.1430-1.1490-1.1540 and 1.1610-1.1690. Sell below 1.1430-1.1690 targeting 1.1380-1.1340-1.1300 and 1.2960-1.2900 with stop-loss at daily closing above 1.1750.

 
Intraday Support Levels
S1     1.1340
S2     1.1300
S3     1.2960-1.2900

Intraday  Resistance Levels
R1     1.1430-1.1490
R2     1.1540
R3     1.1610-1.1690

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.645 Buy
20-DMA   1.1481 Sell
50-DMA   1.1580 Sell
100-DMA   1.1597 Sell
200-DMA   1.1878 Sell
STOCH(5,3)   28.396 Sell
MACD(12,26,9)   -0.0057 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2697/GBP, high of US$1.2812/GBP and settled the day down by 0.726% to close at US$1.2708/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 1.2900-1.3100 with targets at 1.2870-1.2840-1.2790 and 1.2750-1.2700. Buy above 1.2840-1.2700 with targets 1.2900-1.2950-1.3000 and 1.3060-1.3100 with stop loss closing below 1.2870.

 
Intraday Support Levels
S1     1.2790-1.2750
S2     1.2700
S3     1.2660

Intraday Resistance Levels
R1     1.2840-1.2900
R2     1.2950
R3     1.3000-1.3060

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

35.548

Buy
20-DMA   1.3043 Buy
50-DMA   1.3018 Buy
100-DMA   1.3063 Buy
200-DMA   1.3455 Buy
STOCH(5,3)   5.3660 Sell
MACD(12,26,9)   -0.0046 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY112.31/USD and made an intraday high of JPY113.17/USD and settled the day up by 0.65% at JPY113.07/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 112-115.50 with risk above 115.50 targeting 112.00-111.50 and 111.20-110.70. Long positions above 112.00-110.70 with targets of 112.50-113.00-114.00 and 114.70-115.50 with stop below 111.00.

 
Intraday Support Levels
S1     113.00
S2     112.10
S3     111.50-111.20

INTRADAY RESISTANCE LEVELS
R1     113.50
R2     114.00
R3     114.70-115.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.644 Buy
20-DMA   112.65 Sell
50-DMA   112.20 Sell
100-DMA   111.60 Buy
200-DMA   109.83 Buy
STOCH(9,6)   65.228 Buy
MACD(12,26,9)   0.023 Sell

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