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Daily Market Lookup

  • Asian shares hit five-week highs on Wednesday as investors hoped the Federal Reserve would follow the lead of the European Central Bank and open the door to future rate cuts at its policy meeting later in the day. Indeed, ECB President Mario Draghi’s shock about-face on easing fueled talk of a worldwide wave of central bank stimulus, firing up stocks, bonds and commodities. Adding to the cheer was news U.S. President Donald Trump would meet with Chinese President Xi Jinping at the G20 summit later this month, and that trade talks would restart after a recent lull. But most analysts do not expect a decisive breakthrough. All eyes are now upon the Fed which is scheduled to release a statement at 1800 GMT on Wednesday, followed by a press conference by Chairman Jerome Powell shortly after. Yet the heightened anticipation also creates risks the Fed might fail to meet investors’ high expectations. Futures are almost fully priced for a quarter-point easing in July and imply more than 60 basis points of cuts by Christmas. BofA Merrill Lynch’s latest fund manager survey spoke volumes about the sea change in sentiment. Interest rate expectations collapsed, while concerns about a trade war soared to be the top risk for investors, ahead of monetary policy impotence, U.S. politics and a slower China. The shift was clear in bond markets where German yields hit record lows deep in negative territory, while Japanese yields sank to the lowest since august 2016 at -0.145%. The fallout in currencies was significantly less, in large part because it was hard for one to gain when all the major central banks were under pressure to ease. The U.S. dollar and the Euro traded near flat on Wednesday after U.S. President Donald Trump slammed ECB President Mario Draghi, who earlier in the day hinted at more stimulus money and rate cuts. In a tweet, Trump accused Draghi, and also China, of weakening their currencies to gain an economic advantage. The U.S. Federal Reserve will conclude its two-day meeting later in the day. The central bank is not expected to move rates this month, but markets generally believe it will cut rates later this year. The President has been urging the Fed to cut rates, which have risen from 0% to 2.5% in the last three years. On the Sino-U.S. trade front, Trump tweeted that he will meet Xi at the G-20 summit next week, adding that he had a “very good” phone conversation with Xi.
  • The U.S. Federal Reserve concludes its latest two-day policy meeting on Wednesday expected to leave interest rates on hold but flag whether it plans to cut rates later this year as investors expect and the U.S. president has demanded. The central bank may nod to recent weaker-than-expected jobs numbers and softer inflation, and drop from its policy statement a pledge to be “patient” before changing rates - opening the door to a possible rate reduction later. But the level of concern raised around fresh economic risks, and the language Chairman Jerome Powell uses in his post-meeting press conference, will be read by investors and perhaps even more significantly by President Donald Trump as a sign of whether officials are poised to act soon or are still biding their time. The policy statement and new economic projections are to be released at 2 p.m. (1800 GMT), followed by a Powell press conference at 2:30 p.m. (1830 GMT). As Fed officials gathered in Washington on Tuesday, news reports surfaced describing efforts by Trump earlier in the year to determine if he could remove Powell as chairman of the central bank. Powell, as head of an independent agency, is thought to be insulated from such a move by law. Still it was a reminder to policymakers that as Trump gears up his 2020 reelection effort he remains convinced the Fed is hampering an economy whose performance may prove central to his chances at a second term. New projections for the appropriate year-end policy rate are unlikely to match those expectations. To do so would require the bulk of the 17 policymakers to cut their rate outlook by a half a percentage point or more, a large shift by historic standards. Just as unexpected tariff threats sent markets down in early May, the possibility of progress toward a China-U.S. trade deal, which helped markets rally on Tuesday, has led some officials to want to keep their options open.
  • Oil prices extended gains into a second session on Wednesday, buoyed by rekindled hopes for a U.S.-China trade deal and potential economic stimulus from the ECB. Tensions in the Middle East after tanker attacks there last week also supported oil markets. In a post on Twitter, U.S. President Donald Trump said preparations were starting for him to meet Chinese President Xi Jinping at the G20 summit in Osaka, Japan, next week. Talks between the United States and China broke down last month after Washington accused the Chinese of backing away from previously agreed commitments. Interaction between the two sides since then has been limited, and Trump has threatened, repeatedly, to slap more tariffs on Chinese goods. Tensions in the Middle East after last week's tanker attacks remain high, with Trump saying he was prepared to take military action to stop Iran having a nuclear bomb but leaving open whether he would sanction the use of force to protect Gulf oil supplies. Fears of a confrontation between Iran and the United States have mounted since last Thursday's attacks, which Washington has blamed on Tehran. Iran has denied involvement The U.S. is deploying about 1,000 more troops to the Middle East for what Washington said were defensive purposes, citing concerns about a threat from Iran. Market participants are also waiting for a meeting between the OPEC and other producers including Russia, a group known as OPEC+, to decide whether to extend a supply reduction pact that ends this month OPEC and non-OPEC states are discussing holding meetings on July 10-12 in Vienna, a date range proposed by Iran, OPEC sources said on Tuesday. OPEC itself, however, is considering meeting on July 1-2, sources said, although it is still saying the meeting will be held on June 25-26 on its website. U.S. crude stocks also fell by 812K barrels last week to 482 mn, industry group the American Petroleum Institute said on Tuesday. Estimates on crude stockpiles from the government's EiA are due on Wednesday.

 

 
Intraday RESISTANCE LEVELS
19th June 2019 R1 R2 R3
GOLD-XAU 1,350-1,357 1,362 1,370
Silver-XAG 15.05-15.30 15.60 16.00-16.20
Crude Oil 54.50-54.80 55.50 56.00
EURO/USD 1.1220-1.1280 1.1300 1.1340-1.1390
GBP/USD 1.2550--1.2600 1.2650 1.2700-1.2750
USD/JPY 109.05-109.50 110.60-111.50 110.60-111.50

Intraday SUPPORTS LEVELS
19th June 2019 S1 S2 S3
GOLD-XAU 1,340-1,334 1,324 1,316-1,309
Silver-XAG 14.60-14.30 13.90 13.50-13.20
Crude Oil 54.00-53.50 53.00 52.50-51.90
EURO/USD 1.1175 1.1150 1.1130-1.1100
GBP/USD 1.2500 1.2475 1.2450-1.2405
USD/JPY 108.00-107.70 107.00 106.50

Intra-Day Strategy (19th June 2019)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Tuesday made its intraday high of US$1354.60/oz and low of US$1338.58/oz. Gold up by 0.533% at US$1346.53/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1303) and breakage below will call for 1296-1288. MACD is above zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in positive territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1340-1294 with risk below 1294, targeting 1340-1346 and 1350-1357. Sell below 1350-1370 keeping stop loss closing above 1370, targeting 1344-1336-1330 and 1324-1316.

 
Intraday Support Levels
S1     1,340-1,334
S2     1,324
S3     1,316-1,309
Intraday Resistance Levels
R1     1,350-1,357
R2     1,362
R3     1,370

Technical Indicators

Name   Value Action
14DRSI  

70.785

Buy
20-DMA   1318.22 Buy
50-DMA  

1296.81

Buy
100-DMA   1302.22 Buy
200-DMA   1269.09 Buy
STOCH(5,3)   55.621 Sell
MACD(12,26,9)   14.975 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$15.07/oz and low of US$14.80/oz. Silver settled up by 1.269% at US$14.99/oz.

Technicals in Focus:

On daily charts, silver is sustaining below200DMA (14.94), breakage above will lead to 15.60. 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 oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 14.70-13.20 targeting 15.05-15.30 and 15.60-15.90; stop breakage below 13.20. Sell below 15.05-16.00 with stop loss above 16.00; targeting 14.30-13.90 and 13.50-13.20.

 
Intraday  Support Levels
S1     14.60-14.30
S2     13.90
S3     13.50-13.20

Intraday  Resistance Levels
R1     15.05-15.30
R2     15.60
R3     16.00-16.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.192 Buy
20-DMA   14.72 Sell
50-DMA   14.78 Sell
100-DMA   15.16 Sell
200-DMA   14.89 Buy
STOCH(5,3)   37.246 Sell
MACD(12,26,9)   -0.0126 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$54.50/bbl, intraday low of US$51.69/bbl and settled up by 4.057% to close at US$54.23/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 55.88 which is a resistance level and breakage above will call for 59.60. MACD is above zero line and histograms are in decreasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in oversold 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 54.50-56.00 with stop loss at 56.00; targeting 54.00-53.50-53.00 and 52.50-51.90. Buy above 54.50-50.50 with risk daily closing below 50.50 and targeting 54.50-54.80 and 55.50-56.00.

 
Intraday Support Levels
S1     54.00-53.50
S2     53.00
S3     52.50-51.90

Intraday Resistance Levels
R1     54.50-54.80
R2     55.50
R3     56.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.075 Sell
20-DMA   54.62 Sell
50-DMA   59.75 Sell
100-DMA   58.67 Sell
200-DMA   59.02 Sell
STOCH(5,3)   74.130 Buy
MACD(12,26,9)   -1387 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1180/EUR, high of US$1.1242/EUR and settled the day down by 0.213% to close at US$1.1193/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1261), which become immediate resistance level, break above will target 1.1325-1.1410. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider.

Trading Strategy: Neutral to Buy

Buy above 1.1175-1.1075 with risk below 1.1075, targeting 1.1220-1.1280-1.1305 and 1.1350-1.1390. Sell below 1.1280-1.1440 targeting 1.1200-1.1100 and 1.1070-1.1020 with stop-loss at daily closing above 1.1440.

 
Intraday Support Levels
S1     1.1175
S2     1.1150
S3     1.1130-1.1100

Intraday  Resistance Levels
R1     1.1220-1.1280
R2     1.1300
R3     1.1340-1.1390

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.028 Buy
20-DMA   1.1224 Buy
50-DMA   1.1214 Buy
100-DMA   1.1262 Sell
200-DMA   1.1354 Sell
STOCH(5,3)   9.157 Sell
MACD(12,26,9)   -0.002 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2505/GBP, high of US$1.2563/GBP and settled the day up by 0.073% to close at US$1.2555/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2960) 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 oversold territory and giving positive crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.2550-1.2800 with targets at 1.2500-1.2475 and 1.2450-1.2405 stop should be below 1.2800. Buy above 1.2500-1.2400 with targets 1.2550-1.2600-1.2650 and 1.2700-1.2750-1.2800 with stop loss closing below 1.2400.

 
Intraday Support Levels
S1     1.2500
S2     1.2475
S3     1.2450-1.2405

Intraday Resistance Levels
R1     1.2550--1.2600
R2     1.2650
R3     1.2700-1.2750

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

30.527

Buy
20-DMA   1.2651 Buy
50-DMA   1.2832 Sell
100-DMA   1.2961 Buy
200-DMA   1.2932 Buy
STOCH(5,3)   14.175 Sell
MACD(12,26,9)   -0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY108.05/USD and made an intraday high of JPY108.66/USD and settled the day down by 0.073% at JPY108.44/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (110.64), which is initial 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 in oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 109.00-113.00 with risk above 113.00 targeting 108.00-107.70-107.00 and 106.50-106.00. Long positions above 108.05-107.70 with targets of 109.05-109.50 and 110.00-110.60-111.5 with stop below 107.50.

 
Intraday Support Levels
S1     108.00-107.70
S2     107.00
S3     106.50

INTRADAY RESISTANCE LEVELS
R1     109.05-109.50
R2     110.60-111.50
R3     110.60-111.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.317 Buy
20-DMA   109.13 Sell
50-DMA   110.37 Sell
100-DMA   110.51 Buy
200-DMA   111.27 Sell
STOCH(9,6)   69.955 Sell
MACD(12,26,9)   -0.574 Buy

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