AAFX TRADING

Daily Market Lookup

  • Asian stocks advanced on Thursday, tracking solid gains on Wall Street as data pointed to slowing economic growth in the United States, bolstering the prospect of rate cuts by the Federal Reserve as soon as this month. On Wall Street, which closed at midday on Wednesday for the eve of Independence Day, all three major stock indexes finished at record closing highs as expectations of Fed policy easing grew. A report by a payrolls processor ADP showed U.S. companies added jobs in June, but fewer than what analysts had forecast, raising concerns the labor market is softening even as the current U.S. economic expansion marked a record run last month. European Union leaders’ nomination of Christine Lagarde, the head of the International Monetary Fund, to replace Mario Draghi as president of the ECB reinforced expectations of more monetary policy easing if it’s needed. The 10-year Italian bond yield hit 1.599% IT10YT=RR, its lowest since October 2016 as the government eases its budget ambitions. The market’s next focus is on Friday’s U.S. non-farm payrolls for June, which economists expect to have risen by 160,000 in June, compared with 75,000 in May. The U.S. Commerce Department said on Wednesday it was reviewing license requests from U.S. companies seeking to export products to China’s Huawei Technologies “under the highest national security scrutiny” since the company is still blacklisted. Top representatives from the United States and China will meet in the coming week to continue trade talks between the world’s largest economies, White House economic adviser Larry Kudlow said on Wednesday. In a Wednesday tweet, Trump repeated his call for the United States to match China and Europe’s “big currency manipulation game” and pumping money into their economies. In commodities, oil prices inched lower on Thursday after solid gains the day before, pressured by data showing a smaller-than-expected decline in U.S. crude stockpiles.
  • The dollar was on the back foot on Thursday, trading near a one-week low versus the yen as falling Treasury yields fueled expectations the U.S. Federal Reserve will cut interest rates this month for the first time in a decade. Government bonds are in the middle of a global rally, which has pushed U.S. Treasury yields to the lowest in more than 2-1/2 years and sent European yields to record lows on increasing bets major central banks will cut interest rates to bolster the global economy. Waning expectations for a quick resolution to the United States-China trade war also hurt sentiment about the dollar. The focus now shifts to U.S. non-farm payrolls data due on Friday, which economists expect to have risen by 160,000 in June, compared with 75,000 in May. Positive payroll data is unlikely to buoy the dollar as expectations for U.S. rate cuts are strong, given low inflation and the fallout from the tariffs the United States and China have imposed on each other's goods. The greenback has fallen 3.5% versus the yen in the past three months amid growing signs the Fed will cut rates at its July 30-31 meeting. U.S. President Donald Trump's administration said on Wednesday it is scheduling a call with Chinese negotiators next week that would mark the resumption of talks between the two countries. Expectations for a smooth resolution to a dispute have waned after Trump said any agreement would have to be tilted somewhat in favor of the United States. The common currency has weakened since IMF Managing Director Christine Lagarde, perceived as a policy dove, was nominated as the next European Central Bank president. Sterling traded hands at $1.2580 , mired near a two-week low of $1.2557 due to speculation the Bank of England will abandon its preference to raise interest rates and swing to the dovish camp as the trade war and uncertainty about Britain's negotiations to leave the European Union impact the outlook.
  • Oil prices were down on Thursday in Asia after the Energy Information Administration (EIA) reported a set of bearish U.S. crude inventories data. The EIA showed crude stockpiles fell 1.1. million barrels in the week ending June 28, below expectations of a draw of about 2.96 million barrels. The EIA data came after the American Petroleum Institute’s separate report, released late Tuesday, showed inventories fell by a larger 5 million barrels last week. Earlier this week, the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, agreed to extend production cuts until March 2020. The news had little impact on prices as markets fell this week amid fears of slowing oil-demand growth resulting from uncertainties surrounding the Sino-U.S. trade development. “While the market reaction to OPEC’s decision was muted in part because the decision was already expected, the truth is that the market knows OPEC’s quotas are not significantly impacting oil supply,” said Ellen Wald, president of Transversal Consulting. U.S. crude inventories dropped by 1.09 million barrels last week, according to the Energy Information Administration. The Bloomberg survey had predicted a loss of 3 million barrels. Gasoline stockpiles fell by 1.58 million barrels for a third weekly draw, compared with a forecast for a 2.4 million barrel loss. Oil production also remains near a record high. Domestic output increased to 12.2 million barrels a day last week, resuming gains after dropping since the start of June, according to EIA data. Crude exports from the country fell back to below 3 million barrels a day.

 

 
Intraday RESISTANCE LEVELS
4th July 2019 R1 R2 R3
GOLD-XAU 1,425 1,433-1.440 1,450
Silver-XAG 15.50 16.00 16.20-16.50
Crude Oil 57.35 58.10 58.70-59.20
EURO/USD 1.1320-1.1350 1.1390 1.1420-1.1450
GBP/USD 1.2650-1.2600 1.2700 1.2760-1.2790
USD/JPY 108.50 109.05 109.50-110.00

Intraday SUPPORTS LEVELS
4th July 2019 S1 S2 S3
GOLD-XAU 1,411-1,400 1,390 1,380-1,374
Silver-XAG 15.25-15.05 14.60 14.30-13.90
Crude Oil 56.80-56.05 55.50 54.90-54.00
EURO/USD 1.1280-1.1220 1.1180 1.1150
GBP/USD 1.2550-1.2500 1.2450 1.2410
USD/JPY 107.60-107.00 106.50 106.00-105.50

Intra-Day Strategy (4th 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 Wednesday made its intraday high of US$1437.63/oz and low of US$1412.03/oz. Gold down by 0.064% at US$1418.58/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 1411-1374 with risk below 1374, targeting 1425-1433 and 1440-1450. Sell below 1425-1450 keeping stop loss closing above 1450, targeting 1411-1400-1388 and 1380-1374-1368.

 
Intraday Support Levels
S1     1,411-1,400
S2     1,390
S3     1,380-1,374
Intraday Resistance Levels
R1     1,425
R2     1,433-1.440
R3     1,450

Technical Indicators

Name   Value Action
14DRSI  

70.300

Buy
20-DMA   1373.62 Buy
50-DMA  

1322.14

Buy
100-DMA   1311.83 Buy
200-DMA   1279.54 Buy
STOCH(5,3)   48.621 Buy
MACD(12,26,9)   28.975 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$15.45/oz and low of US$15.18/oz. Silver settled up by 0.058% at US$15.29/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 15.25-13.90 targeting 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     15.25-15.05
S2     14.60
S3     14.30-13.90

Intraday  Resistance Levels
R1     15.50
R2     16.00
R3     16.20-16.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.896 Buy
20-DMA   15.09 Buy
50-DMA   14.84 Buy
100-DMA   15.08 Buy
200-DMA   14.96 Buy
STOCH(5,3)   41.246 Buy
MACD(12,26,9)   0.154 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$57.464/bbl, intraday low of US$56.09/bbl and settled up by 1.52% to close at US$57.42/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 56.90-59.20 with stop loss at 59.20; targeting 56.05-55.50-54.90 and 54.00-53.50. Buy above 56.00-53.50 with risk daily closing below 53.50 and targeting 56.90-57.35-58.10 and 58.70-59.50-60.20.

 
Intraday Support Levels
S1     56.80-56.05
S2     55.50
S3     54.90-54.00

Intraday Resistance Levels
R1     57.35
R2     58.10
R3     58.70-59.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.559 Sell
20-DMA   55.77 Sell
50-DMA   58.30 Sell
100-DMA   59.11 Sell
200-DMA   58.37 Sell
STOCH(5,3)   19.130 Sell
MACD(12,26,9)   0.192 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1267/EUR, high of US$1.1311/EUR and settled the day down by 0.0584% to close at US$1.1276/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 Wednesday made an intra‐day low of US$1.2556/GBP, high of US$1.2599/GBP and settled the day down by 0.231% to close at US$1.2561/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     1.2550-1.2500
S2     1.2450
S3     1.2410

Intraday Resistance Levels
R1     1.2650-1.2600
R2     1.2700
R3     1.2760-1.2790

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 Wednesday made intra‐day low of JPY107.76/USD and made an intraday high of JPY107.52/USD and settled the day down by 0.522% at JPY117.78/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   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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