AAFX TRADING

Daily Market Lookup

  • Asian stocks skidded on Monday as fears of faster rate hikes in the United States and uncertainty around the Sino-U.S. trade war deterred investment in riskier assets, while sterling briefly jumped to a two-week high on hopes of an orderly Brexit Markets are expected to be skittish ahead of U.S. congressional midterm elections on Tuesday. Opinion polls show a strong chance that the Democratic Party could win control of the House of Representatives after two years of wielding no practical political power in Washington, with President Donald Trump's Republican Party likely to hold the Senate. Also clouding the outlook for world shares is the prospect of even tighter monetary policy in the United States, given robust economic data in recent months. The United States reported solid jobs growth for October, with annual wage gains at 9-1/2-year highs, further boosting expectations for a December rate rise. A similarly upbeat number back in February had sent global financial markets in a tailspin with a massive sell-off in bonds and equities, particularly in emerging markets, and a strong rally in the U.S. dollar. Markets are now pricing in a higher probability of a December rate hike with further tightening to 2.75-3.00 percent seen through 2019. With just five months to go until Britain exits the European Union divorce talks are at an impasse, a Sunday Times report that an all-UK customs deal will be written into the agreement governing Britain's withdrawal from the European Union was enough to send the pound to $1.3062, its highest since Oct. 22.
  • The dollar held steady against most of its major peers on Monday, supported by expectations of tighter U.S. monetary policy, while sterling gave up nearly all its recent gains as investors sought clarity around Brexit. Analysts are bullish on the greenback, supported by strong economic growth and see the Federal Reserve on track to raise interest rates in December, followed by another two hikes by mid-2019. Data out on Friday showed that U.S. jobs growth rebounded sharply in October and wages recorded their largest annual gain in 9-1/2 years. Currency traders will also be focusing on U.S. midterm elections on Tuesday U.S. time. Opinion polls show a strong chance that the Democratic Party could win control of the House of Representatives after two years of wielding no practical political power in Washington, with President Donald Trump's Republican Party likely to hold the Senate. Despite Brexit relief supporting risk appetite in currency markets, the UK's Telegraph newspaper reported that significant hurdles still remain to be overcome. Offshore-traded yuan gained versus the greenback in the last two sessions, supported by rising hopes that trade tension between China and the United States will ease. Bank of Japan Governor Haruhiko Kuroda ruled out the chance of a near-term interest rate hike, arguing that doing so now would only add to strains for financial institutions by threatening to derail the country’s economic recovery. While Kuroda said the BOJ would be more mindful of the rising cost of prolonged stimulus, he saw “no reason” now to follow in the footsteps of its U.S. counterpart in normalizing policy with inflation still distant from its 2 percent target. Kuroda conceded that Japan’s regional banks could see their business environment worsen further five to 10 years ahead, as they run out of assets to sell to make up for shrinking profits from core lending operations. But their plight had less to do with the BOJ’s policy than to structural problems like a dwindling population and a lack of funding demand, Kuroda said.
  • Oil prices fell on Monday as the start to U.S. sanctions against Iran's fuel exports was softened by waivers that will allow major buyers to still import Iranian crude, at least temporarily. Both Brent and WTI have lost more than 15 percent in value since early October, in part as hedge funds have cut their bullish wagers on crude to a one-year low, data showed on Friday. Washington re-introduced sanctions against Iran on Monday, restoring measures lifted under a 2015 nuclear deal negotiated by the administration of President Barack Obama, and adding 300 new designations including Iran's oil, shipping, insurance and banking sectors. Despite this, oil prices came under pressure as Washington will allow several countries to continue importing crude from Iran despite the sanctions. Washington has so far not named the eight, referred to as "jurisdictions", a term that might include Taiwan which the United States does not regard as a country. China, India, South Korea, Turkey, Italy, the United Arab Emirates and Japan have been the top importers of Iran's oil, while Taiwan occasionally buys Iranian crude. South Korea said on Monday it has been granted a waiver to at least temporarily continue to import condensate, a super-light form of crude oil, from Iran and also still continue financial transactions with the Middle East country. Japan said on Monday it was in close communication with the United States. While Chief Cabinet Secretary Yoshihide Suga declined to detail any potential sanction waivers, he said his government had asked Washington that sanctions should not have an adverse impact on Japanese companies. On the demand side, Bell warned that consumption may be slowing due to an economic slowdown, as seen in a sharp drop in refining profits. Joint output from the world's top producers - Russia, the United States and Saudi Arabia - in October rose above 33 million bpd for the first time, up 10 million bpd since 2010.

 

 
Intraday RESISTANCE LEVELS
5th November 2018 R1 R2 R3
GOLD-XAU 1,238 1,246 1,253-1,260
Silver-XAG 14.80 15.10 15.50-16.40
Crude Oil 63.30-63.80 64.30 65.10-65.70
EURO/USD 1.1430-1.1490 1.1540 1.1610-1.1690
GBP/USD 1.3000-1.3060 1.3100 1.3150
USD/JPY 113.50 114.00 114.70-115.50

Intraday SUPPORTS LEVELS
5th November 2018 S1 S2 S3
GOLD-XAU 1,230-1,221 1,214 1,207-1,200
Silver-XAG 14.30-14.00 13.61 13.00-12.40
Crude Oil 62.70-62.05 61.50 61.00
EURO/USD 1.1340 1.1300 1.2960-1.2900
GBP/USD 1.2950-1.2900 1.2840 1.2790-1.2750
USD/JPY 113.00 112.10 111.50-111.20

Intra-Day Strategy (5th November 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$1236.35/oz and low of US$1229.65/oz. Gold down by 0.0405% at US$1232.75/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 1238-1266 keeping stop loss closing above 1266, targeting 1230-1221-1214 and 1207-1200. Buy above 1230-1194 with risk below 1194, targeting 1238-1244 and 1250-1256.

 
Intraday Support Levels
S1     1,230-1,221
S2     1,214
S3     1,207-1,200
Intraday Resistance Levels
R1     1,238
R2     1,246
R3     1,253-1,260

Technical Indicators

Name   Value Action
14DRSI  

58.872

Buy
20-DMA   1219.50 Sell
50-DMA  

1207.22

Sell
100-DMA   1218.80 Sell
200-DMA   1270.30 Sell
STOCH(5,3)   30.234 Buy
MACD(12,26,9)   7.949 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$14.89/oz and low of US$14.63/oz. Silver settled up by 0.135% at US$14.73/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   55.069 Buy
20-DMA   14.57 Sell
50-DMA   14.44 Sell
100-DMA   14.98 Sell
200-DMA   15.77 Sell
STOCH(5,3)   77.520 Sell
MACD(12,26,9)   -0.033 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$65.44/bbl, intraday low of US$62.69/bbl and settled down by 1.03% to close at US$62.89/bbl.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.

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 63.30-66.30 with stop loss at 66.30; targeting 62.70-62.05 and 61.50-61.00. Buy above 62.70-61.50 with risk daily closing below 61.50 and targeting 63.30-63.80-64.30 and 65.10-65.70.

 
Intraday Support Levels
S1     62.70-62.05
S2     61.50
S3     61.00

Intraday Resistance Levels
R1     63.30-63.80
R2     64.30
R3     65.10-65.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   27.127 Sell
20-DMA   68.21 Buy
50-DMA   69.78 Buy
100-DMA   69.14 Buy
200-DMA   67.24 Buy
STOCH(5,3)   4.949 Buy
MACD(12,26,9)   -2.040 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1371/EUR, high of US$1.1455/EUR and settled the day down by 0.105% to close at US$1.1389/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 Friday made an intra‐day low of US$1.2950/GBP, high of US$1.3040/GBP and settled the day down by 0.192% to close at US$1.2968/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 1.3000-1.3150 with targets at 1.2950-1.2900 and 1.2840-1.2790-1.2750. Buy above 1.2950-1.2750 with targets 1.3000-1.3060 and 1.3100-1.3150 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.2950-1.2900
S2     1.2840
S3     1.2790-1.2750

Intraday Resistance Levels
R1     1.3000-1.3060
R2     1.3100
R3     1.3150

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.790

Buy
20-DMA   1.3002 Buy
50-DMA   1.3018 Buy
100-DMA   1.3039 Buy
200-DMA   1.3455 Buy
STOCH(5,3)   73.660 Sell
MACD(12,26,9)   -0.0052 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY112.54/USD and made an intraday high of JPY113.31/USD and settled the day up by 0.488% at JPY113.19/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 113.50-115.50 with risk above 115.50 targeting 113.00-112.00-111.50 and 111.20-110.70. Long positions above 113.00-110.70 with targets of 113.50-114.00 and 114.70-115.50 with stop below 110.50.

 
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   56.888 Buy
20-DMA   112.50 Sell
50-DMA   112.37 Sell
100-DMA   111.70 Buy
200-DMA   109.91 Buy
STOCH(9,6)   77.650 Buy
MACD(12,26,9)   0.012 Sell

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