AAFX TRADING

Daily Market Lookup

  • The dollar seesawed versus the euro and yen in a volatile session as traders scanned U.S. midterm election results for early insights into the prospect of Congressional gridlock. The Democratic Party is expected to win control of the U.S. House of Representatives, with the Republicans seen likely to keep their majority in the Senate. A split Congress may hurt the dollar temporarily: a Democratic win in one or both chambers is likely to be seen as a repudiation of President Donald Trump and the policies which have boosted corporate growth. The greenback has outperformed most of its key rivals this year, benefiting from a robust domestic economy and higher interest rates, with investors focused on whether the mid-terms could disrupt this stellar run. The dollar is also likely to be supported by minutes of the last FOMC meeting due out on Thursday, in which the Fed is seen likely to reaffirm its intention to lift its policy rate above 3 percent over the next year. The election results are being closely watched by forex traders as indications of future U.S. economic and political policy. A split Congress usually hurts the dollar temporarily, as a democratic win in one or both chambers is likely to repudiate President Donald Trump, which may, in turn, push emerging market currencies higher. The greenback has outperformed most of its key rivals so far this year thanks to the better-than-expected economic data and higher interest rates. German industrial output rose slightly more than expected in September, data showed on Wednesday, offering some reassurance about the health of Europe’s largest economy in the third quarter. Data from the ministry showed industrial output rose by 0.2 percent, just overshooting a Reuters forecast for an increase of 0.1 percent. The figure for August was revised up to a rise of 0.1 percent from a previously reported decrease of 0.3 percent.
  • Wall Street stock futures and Asian shares lost steam on Wednesday after Democrats won control of the U.S. House of Representatives, boosting the party’s ability to block President Donald Trump’s political and economic agenda. The Democrats’ House win creates a hurdle for Republicans to easily pass legislation through both chambers of Congress, clouding the outlook for some of Trump’s key economic proposals. Major U.S. broadcasters projected the Democrats were headed to a gain of more than 30 seats, well beyond the 23 they needed to claim their first majority in the House in eight years, while the Republicans were seen gaining a few more seats in the Senate. While both outcomes were broadly in line with market expectations, a reason markets did not sell off, the prospect of political gridlock creates some uncertainty for investors. The dollar weakened against most of its major counterparts. In addition, the newly empowered House Democrats will have the ability to investigate Trump’s tax returns, possible business conflicts of interest and allegations involving his 2016 campaign’s links to Russia. Market sentiment had been volatile in Asian trade with stocks and the dollar swinging on the Republicans’ fluctuating prospects of retaining the House. While a split Congress would put a brake on Trump’s agenda, such as tax cuts or deregulation, some investors think the Democrats may agree to more spending. On the other hand, many investors expect Trump to continue to take a hard line on tariffs, which he can impose without Congressional approval, and foreign policy. That keeps alive worries about a trade war between China and the United States. Trump’s massive tax cut, enacted in December, and a spending agreement reached in Congress in February have helped lift the U.S. economy, but they have also widened the federal budget deficit. As a result, Treasury supply has been growing, pushing U.S. bond yields higher. Stocks rally peters out as trade, Fed worries dominate Sterling extended gains made the previous day on hopes of a Brexit deal breakthrough after Brexit Secretary Dominic Raab said “Thumbs Up” on his way out of a cabinet meeting. That helped sterling recover losses following remarks from a senior member of the Northern Irish Democratic Unionist Party earlier that it looked like Britain would exit the EU without a deal.
  • Oil prices slipped on Wednesday, extending their rout from October after the API was said to report a larger-than-expected U.S. crude inventories. The API said U.S. crude stockpiles expanded by 7.83 million barrels last week, representing the biggest build in five weeks, compared with an average 2 million-barrel increase in a Bloomberg survey. Oil prices were under pressure this week after Washington re-imposed sanctions against Iran’s oil exports, but granted waivers to eight importers, including China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey, to allow them to continue buying from the Islamic Republic “temporarily.” The U.S. midterm elections took centre stage in Asia as multiple networks including Fox, NBC, CNN, and 538 said the Democrats had won control of the House of Representatives, splitting Congress, as many had previously anticipated. The Republicans were expected to keep their majority in the Senate. Output from the world's top-three producers Russia, the United States and Saudi Arabia, broke through 33 million bpd for the first time in October. These three countries now meet more than a third of global consumption. Iraq, second-largest producer in the OPEC, plans to raise output to 5 million bpd in 2019, from 4.6 million bpd currently. Eyeing the wave of new supply, Morgan Stanley lowered its year-end and first-half 2019 Brent price forecast from $85 per barrel to $77.50.

 

 
Intraday RESISTANCE LEVELS
7th 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 1.1490 1.1540 1.1610-1.1690
GBP/USD 1.3150-1.3200 1.3250 1.3300
USD/JPY 113.50 114.00 114.70-115.50

Intraday SUPPORTS LEVELS
7th 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 1.1430-1.1340 1.1300 1.1260
GBP/USD 1.3100-1.3060 1.3000 1.2950-1.2900
USD/JPY 113.00 112.10 111.50-111.20

Intra-Day Strategy (7th 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 Tuesday made its intraday high of US$1235.88/oz and low of US$1223.42/oz. Gold down by 0.380% at US$1226.62/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 Tuesday made its intraday high of US$14.69/oz and low of US$14.47/oz. Silver settled down by 0.752% at US$14.51/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 Tuesday made an intra‐day high of US$63.18/bbl, intraday low of US$61.38/bbl and settled down by 0.194% to close at US$61.79/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 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 Tuesday made an intraday low of US$1.1390/EUR, high of US$1.1437/EUR and settled the day up by 0.0017% to close at US$1.1425/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 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 1.1430-1.1290 with risk below 1.1290, targeting 1.1430-1.1490-1.1540 and 1.1610-1.1690. Sell below 1.1490-1.1690 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     1.1430-1.1340
S2     1.1300
S3     1.1260

Intraday  Resistance Levels
R1     1.1490
R2     1.1540
R3     1.1610-1.1690

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.799 Buy
20-DMA   1.1448 Sell
50-DMA   1.1550 Sell
100-DMA   1.1583 Sell
200-DMA   1.1848 Sell
STOCH(5,3)   79.011 Buy
MACD(12,26,9)   -0.0057 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2963/GBP, high of US$1.3054/GBP and settled the day up by 0.429% to close at US$1.3095/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 1.3150-1.3300 with targets at 1.3100-1.3060-1.3000 and 1.2950-1.2900. Buy above 1.3100-1.2900 with targets 1.3150-1.3300 with stop loss closing below 1.2900.

 
Intraday Support Levels
S1     1.3100-1.3060
S2     1.3000
S3     1.2950-1.2900

Intraday Resistance Levels
R1     1.3150-1.3200
R2     1.3250
R3     1.3300

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 Wednesday made intra‐day low of JPY113.09/USD and made an intraday high of JPY113.49/USD and settled the day up by 0.203% at JPY113.41/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   55.906 Buy
20-DMA   112.57 Sell
50-DMA   112.44 Sell
100-DMA   111.77 Buy
200-DMA   109.96 Buy
STOCH(9,6)   73.315 Buy
MACD(12,26,9)   0.184 Sell

AAFX TRADING
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