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  • Factory activity shrank in most Asian countries in June as the simmering U.S.-China trade conflict put further strains on the region’s manufacturing sector, keeping policymakers under pressure to deploy stronger steps to avert a global recession. The raft of manufacturing surveys followed the Group of 20 summit in Osaka, Japan, where leaders on Saturday warned of slowing global growth and intensifying geopolitical and trade tensions Japan also saw manufacturing activity contract in June to hit a three-month low, offering fresh evidence of an economy under the pump as global demand weakens. Separately, a BOJ survey showed big manufacturers’ confidence hit a near three-year low, keeping its central bank under pressure to maintain or even ramp up a massive stimulus program. In South Korea, factory activity shrank at the fastest pace in four months in June as the global trade slowdown deepened; prompting companies to cut production and shed more jobs Manufacturing activity also fell in Malaysia and Taiwan in a sign the U.S.-China trade conflict’s impact on the rest of Asia was broadening. The U.S-China trade war has hurt business sentiment, threatened to disrupt supply chains and jolted financial markets, drawing warnings by policymakers over the widening fallout on the global economy. International Monetary Fund Managing Director Christine Lagarde welcomed the resumption of trade talks between the two countries, but warned that more needs to be done to resuscitate a global economy that had already hit a “rough patch. Expectations of a U.S. Federal Reserve interest rate cut have put pressure on the European Central Bank and the BOJ to follow suit, despite their dwindling options to arrest stalling growth.
  • The yuan gained and the safe-haven yen slid against the dollar on Monday as appetite for risk-sensitive currencies improved after the United States and China agreed to restart their troubled trade talks. After meeting Chinese President Xi Jinping in Japan on Saturday on the sidelines of Group of 20 summit, U.S. President Donald Trump said he would hold back on new tariffs and that China will buy more farm products. Trump also said the U.S. Commerce Department would study over the next few days whether to take Huawei off the list of firms banned from buying components and technology from U.S. companies without government approval. Economists polled by Reuters expect U.S. non-farm payrolls, which will be released on Friday, to have risen to 160,000 in June from 75,000 in May. Other key U.S. data due this week include Wednesday's Institute of Supply Management's (ISM) non-manufacturing activity index for June. At a June 18-19 policy meeting the Federal Reserve opened the door for possible interest rate cuts later this year. But comments last week from central bank officials, including Chair Jerome Powell, and the weekend agreement to resume Sino-U.S. trade talks have cooled expectations for aggressive rate cuts. The yuan lost some of its earlier momentum after a Caixin/Markit PMI showed that China's factory activity unexpectedly shrank in June as domestic and export demand faltered.
  • OPEC and its allies look set to extend oil supply cuts this week at least until the end of 2019 as Iran joined top producers Saudi Arabia, Iraq and Russia in endorsing a policy aimed at propping up the price of crude amid a weakening global economy. Iranian Oil Minister Bijan Zanganeh told reporters on Monday he would support prolonging output cuts by six to nine months. Tehran has in the past objected to policies put forward by arch-rival Saudi Arabia, saying Riyadh was too close to Washington. The United States is not a member of OPEC, nor is it participating in the supply pact. Washington has demanded Riyadh pump more oil to compensate for lower exports from Iran after slapping fresh sanctions on Tehran over its nuclear program. OPEC and its allies led by Russia have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the United States, which has become the world's top producer this year ahead of Russia and Saudi Arabia.Fears about weaker global demand as a result of a U.S.-China trade spat have added to the challenges faced by the 14-nation Organization of the Petroleum Exporting Countries in recent months. Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day, or 1.2% of global demand, by six to nine months - until December 2019 or March 2020. Saudi Energy Minister Khalid al-Falih said the deal would most likely be extended by nine months and no deeper reductions were needed. Benchmark Brent crude has climbed more than 25% since the start of 2019 to $65 per barrel. But prices could stall as a slowing global economy squeezes demand and U.S. oil floods the market, a Reuters poll of analysts found. The output-cutting pact expired on Sunday. OPEC meets in Vienna on Monday followed by talks with Russia and other allies, a grouping known as OPEC+, on Tuesday. Zanganeh said he would not object to deepening the cuts but would reject a proposal to sign a new charter for cooperation with non-OPEC, led by Russia. He expressed frustration that Putin had announced the deal at a G20 summit in Osaka before waiting for OPEC to gather in Vienna. Iran's exports have plummeted to 0.3 million barrels per day in June from as much as 2.5 million bpd in April 2018 due to Washington's fresh sanctions. The sanctions are putting Iran under unprecedented pressure. Even in 2012, when the European Union joined U.S. sanctions on Tehran, the country's exports stood at around 1 million bpd. Oil represents the lion's share of Iran's budget revenues. Washington has said it wants to change what it calls a “corrupt” regime in Tehran. Iran has denounced the sanctions as illegal and says the White House is run by “mentally retarded” people.

 

 
Intraday RESISTANCE LEVELS
1st July 2019 R1 R2 R3
GOLD-XAU 1,400-1,411 1,425 1,433-1.440
Silver-XAG 15.35-15.60 16.00 16.20-16.50
Crude Oil 60.20 61.00 61.70-62.50
EURO/USD 1.1350-1.1390 1.1420 1.1450-1.1500
GBP/USD 1.2700-1.2760 1.2790 1.2830-1.2870
USD/JPY 108.50 109.05 109.50-110.00

Intraday SUPPORTS LEVELS
1st July 2019 S1 S2 S3
GOLD-XAU 1,390-1,380 1,374 1,368-1,360
Silver-XAG 15.05 14.60 14.30-13.90
Crude Oil 59.50-58.70 58.10 57.35-56.90
EURO/USD 1.1320 1.1280-1.1220 1.1180
GBP/USD 1.2650 1.2600-1.2500 1.2450
USD/JPY 107.60-107.00 106.50 106.00-105.50

Intra-Day Strategy (1st July 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 Friday made its intraday high of US$1424.58/oz and low of US$1405.65/oz. Gold down by 0.004% at US$1409.39/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 oversold 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 1388-1360 with risk below 1360, targeting 1400-1411-1425 and 1433-1440. Sell below 1400-1440 keeping stop loss closing above 1440, targeting 1388-1380-1374 and 1368-1360.

 
Intraday Support Levels
S1     1,390-1,380
S2     1,374
S3     1,368-1,360
Intraday Resistance Levels
R1     1,400-1,411
R2     1,425
R3     1,433-1.440

Technical Indicators

Name   Value Action
14DRSI  

65.125

Buy
20-DMA   1364.90 Buy
50-DMA  

1316.50

Buy
100-DMA   1309.71 Buy
200-DMA   1277.42 Buy
STOCH(5,3)   29.621 Sell
MACD(12,26,9)   28.975 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$15.32/oz and low of US$15.14/oz. Silver settled up by 0.531% at US$15.30/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (14.93), 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 15.35-15.60-15.90 and 16.20-16.50; stop breakage below 13.20. Sell below 15.35-16.90 with stop loss above 16.90; targeting 15.35-15.05-14.60 and 14.30-13.90.

 
Intraday  Support Levels
S1     15.05
S2     14.60
S3     14.30-13.90

Intraday  Resistance Levels
R1     15.35-15.60
R2     16.00
R3     16.20-16.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.283 Buy
20-DMA   15.01 Buy
50-DMA   14.82 Buy
100-DMA   15.09 Buy
200-DMA   14.95 Buy
STOCH(5,3)   28.246 Sell
MACD(12,26,9)   0.154 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$59.78/bbl, intraday low of US$57.74/bbl and settled down by 1.781% to close at US$58.16/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 60.20-62.50 with stop loss at 62.50; targeting 59.50-58.70-58.10 and 57.35-56.90-56.00. Buy above 56.60-55.00 with risk daily closing below 55.00 and targeting 59.50-60.20an d61.00-61.70-62.50.

 
Intraday Support Levels
S1     59.50-58.70
S2     58.10
S3     57.35-56.90

Intraday Resistance Levels
R1     60.20
R2     61.00
R3     61.70-62.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.559 Sell
20-DMA   55.17 Sell
50-DMA   58.84 Sell
100-DMA   59.02 Sell
200-DMA   58.58 Sell
STOCH(5,3)   73.130 Sell
MACD(12,26,9)   -0.209 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1350/EUR, high of US$1.1392/EUR and settled the day up by 0.008% to close at US$1.1369/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.1349), which become immediate resistance level, break above will target 1.1320-1.1280. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold 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 1.1320-1.1175 with risk below 1.1175, targeting 1.1390-1.1420-1.1450 and 1.1500-1.1550. Sell below 1.1390-1.1550 targeting 1.1350-1.1320 and 1.1280-1.1220 with stop-loss at daily closing above 1.1540.

 
Intraday Support Levels
S1     1.1320
S2     1.1280-1.1220
S3     1.1180

Intraday  Resistance Levels
R1     1.1350-1.1390
R2     1.1420
R3     1.1450-1.1500

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.331 Buy
20-DMA   1.1298 Buy
50-DMA   1.1229 Buy
100-DMA   1.1260 Buy
200-DMA   1.1342 Sell
STOCH(5,3)   41.157 Sell
MACD(12,26,9)   0.0037 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2659/GBP, high of US$1.2733/GBP and settled the day up by 0.229% to close at US$1.2698/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 1.2790-1.12950 with targets at 1.2760-1.2700-1.2650 and 1.2600-1.2500-1.2475 stop should be below 1.2870. Buy above 1.2650-1.2400 with targets 1.2700-1.2750-1.2790 and 1.2830-1.2870 with stop loss closing below 1.2400.

 
Intraday Support Levels
S1     1.2650
S2     1.2600-1.2500
S3     1.2450

Intraday Resistance Levels
R1     1.2700-1.2760
R2     1.2790
R3     1.2830-1.2870

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

46.948

Buy
20-DMA   1.2671 Buy
50-DMA   1.2786 Sell
100-DMA   1.2941 Buy
200-DMA   1.2918 Buy
STOCH(5,3)   23.175 Buy
MACD(12,26,9)   -0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY107.55/USD and made an intraday high of JPY107.93/USD and settled the day up by 0.004% at JPY107.82/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 108.50-111.00 with risk above 111.00 targeting 107.60-107.00-106.50 and 106.00-105.50. Long positions above 107.60-105.50 with targets of 108.00-109.05 and 109.50-110.00-110.60 with stop below 106.00.

 
Intraday Support Levels
S1     107.60-107.00
S2     106.50
S3     106.00-105.50

INTRADAY RESISTANCE LEVELS
R1     108.50
R2     109.05
R3     109.50-110.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.190 Buy
20-DMA   108.80 Sell
50-DMA   110.13 Sell
100-DMA   110.47 Buy
200-DMA   111.15 Sell
STOCH(9,6)   60.955 Sell
MACD(12,26,9)   -0.5704 Buy

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