AAFX TRADING

Daily Market Lookup

  • Asian stock markets rallied on Thursday while the dollar dropped and global bond yields plunged, with the 10-year U.S. yield falling below 2%, after the Federal Reserve signaled possible interest rate cuts later this year. Signs that China and the United States are returning to the negotiating table after a six-week hiatus also bolstered risk sentiment. The rally in stocks comes as a host of central banks in Asia and Europe are scheduled to hold policy meetings later in the day, with most expected to flag moves toward looser monetary settings. The Bank of Japan kept monetary policy steady on Thursday, preferring to save its dwindling ammunition, but speculation is rising it may further loosen its ultra-easy stance later this year. The U.S. Federal Reserve on Wednesday signaled interest rate cuts beginning as early as July, saying it is ready to battle growing global and domestic economic risks as it took stock of rising trade tensions and growing concerns about weak inflation. The bulk of Fed policymakers slashed their rate outlook for the rest of the year by roughly half a percentage point and Fed Chairman Jerome Powell said others agree the case for lower rates is building. Many investors viewed the overall tone as more dovish than their expectations, sending the 10-year U.S. Treasuries yield to as low as 1.974%, its lowest level since November 2016. It was as high as 2.8% in January U.S. money market derivatives, such as Fed funds futures and overnight indexed swaps, are fully pricing in a rate cut of 25 basis points at the next policy review on July 30-31, with about one-third chance of a bigger 50 basis point cut. A total of 75 basis points of easing are priced in by the end of year. However, such aggressive rate cuts when the stock prices are so close to record peaks would be rare, if not unprecedented, suggesting market expectations of easing may have gone too far Many investors think rate cut expectations could be rolled back if Washington and Beijing make some headway in their talks. The British pound rebounded 0.35% to $1.2688 from Tuesday’s 5-1/2-month low of $1.2507 as investors trimmed their short bets before the Bank of England’s policy meeting on Thursday where it may strike a more hawkish tone than those of its peers.
  • The U.S. dollar fell on Thursday in Asia after the Federal Reserve signaled it was prepared to lower interest rates as uncertainties in its growth outlook have increased. The Federal Open Market Committee kept the fed funds rate in a range of 2.25% to 2.5% as expected. The central bank ditched "patient" from its policy language and said it would "act as appropriate to sustain the expansion. Meanwhile, the Bank of Japan kept monetary policy steady. The central bank maintained its short-term rate target at -0.1% as expected. The U.S. Federal Reserve on Wednesday signaled interest rate cuts beginning as early as July, saying it is ready to battle growing global and domestic economic risks as it took stock of rising trade tensions and growing concerns about weak inflation. Even as the U.S. central bank left its benchmark interest rate unchanged for now, the shift in sentiment since its last policy meeting was marked. The bulk of Fed policymakers slashed their rate outlook for the rest of the year by roughly half a percentage point, and Fed Chairman Jerome Powell said others agree the case for lower rates is building; the Fed dropped its pledge to be “patient” before rate moves in a sign it was poised to act; and Powell stopped referring to weak inflation as “transient.” The U.S. Federal Reserve on Wednesday signaled interest rate cuts beginning as early as July, saying it is ready to battle growing global and domestic economic risks as it took stock of rising trade tensions and growing concerns about weak inflation. Even as the U.S. central bank left its benchmark interest rate unchanged for now, the shift in sentiment since its last policy meeting was marked. The bulk of Fed policymakers slashed their rate outlook for the rest of the year by roughly half a percentage point, and Fed Chairman Jerome Powell said others agree the case for lower rates is building; the Fed dropped its pledge to be “patient” before rate moves in a sign it was poised to act; and Powell stopped referring to weak inflation as “transient.” But the BOJ stressed anew that global risks were increasing as trade tensions and uncertainty over U.S. economic policies jolt financial markets, signaling that it, too, is leaning more toward ramping up - not whittling down - monetary support. As widely expected, the BOJ maintained its short-term rate target at -0.1% and a pledge to guide 10-year government bond yields around zero percent. It also kept intact a loose pledge to keep buying government bonds so the balance of its holdings increases by roughly 80 trillion yen ($738 bn) per year.
  • Oil prices climbed around 3% on Thursday amid escalating tensions in the Middle East as a U.S. official said one of the country's military drones was shot down by an Iranian missile. The drone was downed in international airspace over the Strait of Hormuz by an Iranian surface-to-air missile, a U.S. official said on Thursday, speaking on condition of anonymity. Earlier, reports out of Iran said the nation's Revolutionary Guards had downed a U.S. "spy" drone in the southern province of Hormozgan. Tensions have been rising in the Middle East after last week's attacks on two tankers near the Strait of Hormuz, a chokepoint for oil supplies. Fears of a confrontation between Iran and the United States have mounted, with Washington blaming Tehran for the tanker attacks and Tehran denying any role. Oil prices had risen earlier in the day supported by signs of improving demand in the United States, an agreement between OPEC and other producers on a date for a meeting to discuss output cuts and signs that the U.S. and China were resuming talks to resolve a trade war that is threatening global growth. After swelling to near two-year highs, U.S. crude stocks fell by 3.1 mn barrels last week, compared with analyst expectations for a draw of 1.1 mn barrels, the EIA said on Wednesday. Refined products also posted surprise drawdown’s as gasoline demand ticked higher on a weekly basis and surged 6.5% from a year earlier. Members of the OPEC agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates. OPEC and its allies will discuss whether to extend a deal on cutting 1.2 mn bpd of production that runs out this month. Momentum for an agreement appeared to be building as the United Arab Emirates' energy minister told Al-Bayan newspaper that an extension is "logical and reasonable". Expectations the U.S. FED could cut interest rates at its next meeting were also supporting oil prices.

 

 
Intraday RESISTANCE LEVELS
20th June 2019 R1 R2 R3
GOLD-XAU 1,392-1,400 1,425 1,433
Silver-XAG 15.30 15.60 16.00-16.20
Crude Oil 56.00-56.60 57.20 58.00-58.70
EURO/USD 1.1280 1.1300 1.1340-1.1390
GBP/USD 1.2750-1.2790 1.2830 1.2870
USD/JPY 108.00-109.05 109.50 110.00-110.60

Intraday SUPPORTS LEVELS
20th June 2019 S1 S2 S3
GOLD-XAU 1,380-1,370 1,362 1,357-1,350
Silver-XAG 15.05-14.60 14.30 13.90-13.50
Crude Oil 55.50-54.80 54.50 54.00-53.50
EURO/USD 1.1220-1.1175 1.1150 1.1130-1.1100
GBP/USD 1.2700-1.2650 1.2600 1.2500-1.2475
USD/JPY 107.60-107.00 106.50 106.00

Intra-Day Strategy (20th 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 Wednesday made its intraday high of US$1362.54/oz and low of US$1341.30/oz. Gold up by 1.014% at US$1360.23/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 overbought region and more upside 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: Buy on Dips

Based on the charts and explanations above; buy above 1380-1350 with risk below 1350, targeting 1392-1400 and 1425-1433. Sell below 1392-1433 keeping stop loss closing above 1433, targeting 1380-1370-1362 and 1357-1350-1344.

 
Intraday Support Levels
S1     1,380-1,370
S2     1,362
S3     1,357-1,350
Intraday Resistance Levels
R1     1,392-1,400
R2     1,425
R3     1,433

Technical Indicators

Name   Value Action
14DRSI  

81.714

Buy
20-DMA   1324.01 Buy
50-DMA  

1298.64

Buy
100-DMA   1302.02 Buy
200-DMA   1270.09 Buy
STOCH(5,3)   80.621 Buy
MACD(12,26,9)   18.975 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$15.16/oz and low of US$14.90/oz. Silver settled up by 1.269% at US$15.14/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 15.05-13.20 targeting 15.30-15.60 and 15.90-16.20; stop breakage below 13.20. Sell below 15.30-16.20 with stop loss above 16.20; targeting 15.05-14.60-14.30 and 13.90-13.50.

 
Intraday  Support Levels
S1     15.05-14.60
S2     14.30
S3     13.90-13.50

Intraday  Resistance Levels
R1     15.30
R2     15.60
R3     16.00-16.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.192 Buy
20-DMA   14.76 Buy
50-DMA   14.78 Buy
100-DMA   15.12 Buy
200-DMA   14.91 Buy
STOCH(5,3)   84.246 Buy
MACD(12,26,9)   0.0964 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$54.61/bbl, intraday low of US$53.48/bbl and settled up by 0.147% to close at US$54.34/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 56.00-58.70 with stop loss at 58.70; targeting 55.50-54.80-54.00 and 53.50-53.00-52.50. Buy above 55.50-53.00 with risk daily closing below 53.00 and targeting 56.00-56.60-57.20 and 58.00-58.70.

 
Intraday Support Levels
S1     55.50-54.80
S2     54.50
S3     54.00-53.50

Intraday Resistance Levels
R1     56.00-56.60
R2     57.20
R3     58.00-58.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.890 Sell
20-DMA   54.50 Sell
50-DMA   59.58 Sell
100-DMA   58.68 Sell
200-DMA   58.96 Sell
STOCH(5,3)   92.130 Buy
MACD(12,26,9)   -1.654 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1186/EUR, high of US$1.1253/EUR and settled the day up by 0.285% to close at US$1.1225/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 1.1220-1.1075 with risk below 1.1075, targeting 1.1280-1.1305 and 1.1350-1.1390. Sell below 1.1280-1.1440 targeting 1.1220-1.1175-1.1130 and 1.1070-1.1020 with stop-loss at daily closing above 1.1440.

 
Intraday Support Levels
S1     1.1220-1.1175
S2     1.1150
S3     1.1130-1.1100

Intraday  Resistance Levels
R1     1.1280
R2     1.1300
R3     1.1340-1.1390

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.751 Buy
20-DMA   1.1230 Buy
50-DMA   1.1215 Buy
100-DMA   1.1260 Buy
200-DMA   1.1353 Sell
STOCH(5,3)   39.157 Buy
MACD(12,26,9)   -0.002 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2541/GBP, high of US$1.2672/GBP and settled the day up by % to close at US$1.2638/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 1.2750-1.2870 with targets at 1.2700-1.2650-1.2600 and 1.2500-1.2475 stop should be below 1.2800. Buy above 1.2700-1.2400 with targets 1.2750-1.2790-1.2830 and 1.2870 with stop loss closing below 1.2400.

 
Intraday Support Levels
S1     1.2700-1.2650
S2     1.2600
S3     1.2500-1.2475

Intraday Resistance Levels
R1     1.2750-1.2790
R2     1.2830
R3     1.2870

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.527

Buy
20-DMA   1.2658 Buy
50-DMA   1.2827 Sell
100-DMA   1.2958 Buy
200-DMA   1.2931 Buy
STOCH(5,3)   59.175 Sell
MACD(12,26,9)   -0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY107.89/USD and made an intraday high of JPY108.61/USD and settled the day down by 0.327% at JPY108.09/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 108.00-113.00 with risk above 113.00 targeting 107.70-107.00 and 106.50-106.00. Long positions above 108.00-106.00 with targets of 108.00-109.05-109.50 and 110.00-110.60-111.5 with stop below 106.00.

 
Intraday Support Levels
S1     107.60-107.00
S2     106.50
S3     106.00

INTRADAY RESISTANCE LEVELS
R1     108.00-109.05
R2     109.50
R3     110.00-110.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.190 Buy
20-DMA   108.59 Sell
50-DMA   109.99 Sell
100-DMA   110.44 Buy
200-DMA   111.18 Sell
STOCH(9,6)   28.955 Sell
MACD(12,26,9)   -0.5704 Buy

AAFX TRADING
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING