AAFX TRADING

Daily Market Lookup

  • Asian shares wobbled on Tuesday, U.S. Treasury yields fell and gold rebounded as weak global factory activity reinforced fears about slowing growth, while doubts over whether the United States and China can pull off a trade deal also hurt sentiment. President Donald Trump said on Monday that any trade deal with China would need to be “somewhat tilted” in favor of the United States. The U.S. government also threatened tariffs on $4 billion of additional European Union goods in a long-running dispute over aircraft subsidies. Australian shares were flat, pulling back from earlier gains after the Reserve Bank of Australia cut its benchmark cash rate by 25 basis points to a record low of 1.0%, as widely expected. However, the RBA left limited room for more reductions, raising the possibility of unconventional policy easing. Global shares had rallied strongly on Monday after the United States and China agreed on the weekend to restart trade negotiations aimed at resolving their year-long trade war and Washington said it would postpone further tariffs. U.S. President Donald Trump also offered concessions, including an easing of restrictions on tech company Huawei. Yet, with the previous rounds of Sino-U.S. negotiations breaking down in acrimony, investors were now turning to the prospects of actual progress in talks to settle the dispute that has dented global trade, business investment and economic growth. The fresh U.S. tariff threats against Europe also point to a worrisome prospect of a broadening trade dispute, said Michael McCarthy, chief markets strategist at CMC Markets in Sydney, in a note to clients. Manufacturing surveys over the past 24 hours underscored those risks. Factory activity in the euro zone shrank faster last month than previously thought, and U.S. manufacturing activity slowed to a near three-year low in June. Over recent trading sessions, risk assets have also been held back by a tempering of expectations by U.S. Federal Reserve policymakers for aggressive rate cuts at this month’s meeting. Market expectations that the Fed would implement a relatively large rate cut in July have fallen, with the probability of a 50 basis-point cut at 17.5%, from close to 50% last week.
  • U.S. dollar slipped on Tuesday in Asia despite a trade truce between the U.S. and China. The Aussie dollar gained after the Reserve Bank of Australia (RBA) cut interest rates. U.S. President Donald Trump and his Chinese counterpart Xi Jinping have agreed during a bilateral meeting at the summit in Osaka, Japan, to hold off on imposing new tariffs on imports of each other’s goods and to move forward with trade negotiations. The trade agreement “has to be a deal that is somewhat tilted to our advantage” because of China’s large, long term trade surplus over the U.S. for years, Trump added. The news sent stocks higher, but investor sentiment was later hit by disappointing manufacturing data from the U.S., as it showed growth of the country’s manufacturing activities slowed last month and fell to its lowest level since September 2016. The U.S. jobs report is due Friday and is projected to show nonfarm payrolls rose by 164,000 in June, rebounding from 75,000 the month prior.
  • Oil gained on Tuesday as producer club OPEC agreed to extend supply cuts until next March, although prices were pressured by worries demand could ease amid hints of a slowdown in the global economy. The Organization of the Petroleum Exporting Countries (OPEC) agreed on Monday to extend oil supply cuts until March 2020 as the group's members overcame their differences to try to prop up the price of crude. OPEC is slated to meet with Russia and other producers, an alliance known as OPEC+, later on Tuesday to discuss supply cuts amid surging U.S. output. Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend global output cuts until December 2019 or March 2020. Russia reduced oil production in June by more than the amount agreed in a global deal to cut output, the energy minister and industry sources said on Monday, as the sector felt the impact of a contaminated crude crisis that crippled exports. Meanwhile, U.S. crude oil stockpiles were seen falling for a third consecutive week, a preliminary Reuters poll showed on Monday, also supporting prices. While U.S. producers hit a monthly record of 12.16 million barrels per day (bpd) in April, according to data, new U.S. shale oil production is expected to slip this year from last year, according to a survey of major forecasters. Still, concerns of a weaker global economy denting oil demand capped price gains. While the U.S. and China agreed at a recent Group of 20 leaders summit to restart trade talks, indications that factory activity shrank across much of Europe and Asia in June while growth in manufacturing cooled in the United States weighed on oil prices. Oil prices fell on Tuesday in Asia even after the Organization of the Petroleum Exporting Countries(OPEC) agreed to extend production cuts by nine months. The deal is subject to approval from non-OPEC allies, such as Russia, at a meeting later in the day. Earlier in the day, Iranian Oil Minister Bijan Zanganeh told reporters he had “no problem” with supporting oil supply cuts by nine months. In other news, a truce in the ongoing trade conflict between the U.S. and China was cited as a tailwind for financial markets, although it seems to have little positive impact on oil prices today. The two countries said they would resume trade talks after U.S. President Donald Trump pledged to hold off on the implementation of new tariffs and also ease restrictions on Chinese tech giant Huawei.

 

 
Intraday RESISTANCE LEVELS
2nd 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 1.1320-1.1350 1.1390 1.1420-1.1450
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
2nd 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 59.20-58.70 58.10 57.35-56.90
EURO/USD 1.1280-1.1220 1.1180 1.1150
GBP/USD 1.2650 1.2600-1.2500 1.2450
USD/JPY 107.60-107.00 106.00-105.50 106.00-105.50

Intra-Day Strategy (2nd 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 Monday made its intraday high of US$1405.17/oz and low of US$1405.17/oz. Gold down by 1.494% at US$1384.17/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  

63.125

Buy
20-DMA   1367.88 Buy
50-DMA  

1318.76

Buy
100-DMA   1310.48 Buy
200-DMA   1278.31 Buy
STOCH(5,3)   16.621 Sell
MACD(12,26,9)   25.975 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$15.28/oz and low of US$15.10/oz. Silver settled down by 0.969% at US$15.13/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     59.20-58.70
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   60.559 Sell
20-DMA   55.45 Sell
50-DMA   58.69 Sell
100-DMA   59.08 Sell
200-DMA   58.53 Sell
STOCH(5,3)   57.130 Sell
MACD(12,26,9)   -0.209 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1280/EUR, high of US$1.1370/EUR and settled the day down by 0.619% to close at US$1.1284/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 1.1280-1.1150 with risk below 1.1150, targeting 1.1320-1.1390-1.1420 and 1.1450-1.1500. Sell below 1.1320-1.1500 targeting 1.1280-1.1220 and 1.1180-1.1150 with stop-loss at daily closing above 1.1450.

 
Intraday Support Levels
S1     1.1280-1.1220
S2     1.1180
S3     1.1150

Intraday  Resistance Levels
R1     1.1320-1.1350
R2     1.1390
R3     1.1420-1.1450

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.985 Buy
20-DMA   1.1298 Buy
50-DMA   1.1229 Buy
100-DMA   1.1260 Buy
200-DMA   1.1339 Sell
STOCH(5,3)   14.157 Sell
MACD(12,26,9)   0.0037 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2631/GBP, high of US$1.2704/GBP and settled the day down by 0.409% to close at US$1.2636/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 Monday made intra‐day low of JPY108.09/USD and made an intraday high of JPY108.52/USD and settled the day up by 0.262% at JPY108.42/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     106.00-105.50
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   50.190 Buy
20-DMA   108.07 Sell
50-DMA   109.37 Sell
100-DMA   110.28 Buy
200-DMA   111.02 Sell
STOCH(9,6)   81.955 Sell
MACD(12,26,9)   -0.5704 Buy

AAFX TRADING
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