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Daily Market Lookup

  • Asian shares pulled ahead on Wednesday while rising Treasury yields lifted the dollar as investors waited anxiously to hear if the world’s most powerful central banker would confirm or confound expectations for U.S. easing this month. A worrying lack of inflation globally is one reason investors are counting on Federal Reserve Chair Jerome Powell to sound suitably dovish when testifying to Congress on Wednesday. Futures are still fully priced for a 25-basis-point cut at the Fed’s July 30-31 meeting, but have abandoned wagers on a half-point move. They had implied a 25% probability of an aggressive cut before Friday’s upbeat jobs report. Overnight, Atlanta Fed bank president Raphael Bostic let nothing out of the bag by saying the central bank was debating the risks and benefits of letting the U.S. economy run “a little hotter.” Lurking in the background, U.S. and Chinese trade officials held “constructive” talks on trade by phone on Tuesday, White House economic adviser Larry Kudlow said. The U.S. dollar was flat on Tuesday in Asia as expectations of aggressive interest rate cut reduced following a strong jobs report released late last week. As many as 10 U.S. central bankers, including Federal Reserve chairman Jerome Powell, are set to speak this week. The Fed’s June meeting minutes are also due on Wednesday. Data released last Friday showed a sharp rebound in U.S. job growth in June and reduced expectations that the Fed will cut interest rates by 50 basis points when it meets at the end of July. The GBP/USD pair was little changed at 1.2509. On the data front, U.K. gross domestic product and industrial output figures are due Wednesday, while the Bank of England will release its financial stability report on Thursday. Boris Johnson, who has vowed to take the U.K. out of the EU on Oct. 31 even without transitional arrangements to mitigate the shock, is reportedly on course for a clear victory in the Conservative Party leadership contest, according to a Reuters report. The USD/JPY pair was also near flat at 108.72. Tension between Japan and South Korea remained after Japan’s Industry Minister Hiroshige Seko said today that Japan was “not thinking at all” of withdrawing restrictions on Japanese high-tech exports to South Korea. Last Monday, Japan’s Ministry of Economy, Trade and Industry issued a statement that Tokyo “will apply updated licensing policies and procedures on the export and transfer of controlled items and their relevant technologies to (South Korea).”
  • The dollar neared a three-week high against a basket of major currencies on Wednesday as investors continued to unwind bets on deep U.S. interest rate cuts, pushing Treasury yields higher. Further gains in the greenback depend on the tone Federal Reserve Chairman Jerome Powell strikes during two days of Congressional testimony starting later on Wednesday. Expectations for a 50 basis point (bps) rate cut at a Fed meeting later this month have evaporated, but investors still expect a 25 bps cut due to weak inflation and worries about growing business fallout from the U.S.-China trade war. The dollar could continue to creep higher if Powell's comments on the U.S. economy are perceived as neutral or even slightly hawkish, which would support the argument that additional rate cuts will be limited. Renewed strength in the dollar would be an extra worry for the British pound, which is stuck near a six-month low due to uncertainty over how Britain will avoid a messy no-deal exit from the European Union. Stronger-than-expected employment growth in June tempered expectations that the Fed would opt for aggressive rate cuts at a meeting ending July 31. Traders will also closely scrutinize the release later on Wednesday of minutes from the Federal Open Market Committee's previous meeting. Sentiment for the pound remained weak after data on Tuesday showed sales at British retailers rose at their slowest average pace on record, highlighting trouble in the economy. Data on British gross domestic product and industrial output are due on Wednesday, while the Bank of England will release its financial stability report on Thursday, which could help traders gauge whether the BoE will take a more dovish view of the economy.
  • Oil prices rose on Wednesday after industry data showed U.S. stockpiles fell far more than expected, alleviating concerns about oversupply, while major U.S. producers evacuated rigs in the Gulf of Mexico ahead of a brewing storm. The U.S. and global benchmarks have gained this year as the Organization of the Petroleum Exporting Countries (OPEC) and big producers such as Russia have curbed output to bolster prices. However, ongoing trade tensions have raised fears about weaker demand, and investors have been on the lookout for signs that rapidly increasing U.S. production is being consumed. U.S. crude stockpiles fell more than forecast last week, while gasoline inventories decreased and distillate stocks built, data from industry group the American Petroleum Institute (API) showed on Tuesday. Crude inventories fell by 8.1 million barrels in the week to July 5 to 461.4 million, compared with analyst expectations for a decrease of 3.1 million barrels, according to the data. Official figures from the government's Energy Information Administration (EIA) are due later on Wednesday. U.S. oil was also supported as major producers began evacuating and shutting in production in the Gulf of Mexico as a tropical disturbance may become a storm later on Wednesday or Thursday. Oil prices have been under pressure from concerns about global economic growth amid growing signs of harm from the U.S.-China trade war that has rumbled on over the last year. Lower economic growth typically means reduced demand for commodities such as oil. Still, U.S. crude oil production is forecast to rise to a record of 12.36 million barrels per day (bpd) in 2019 from the high of 10.96 million bpd last year, the EIA's Short Term Energy Outlook said on Tuesday. OPEC and allied producers led by Russia agreed last week to extend their supply-cutting deal until March 2020. Brent has risen nearly 20% in 2019, supported by the pact and tensions in the Middle East, especially the row over Iran's nuclear program.

 

 
Intraday RESISTANCE LEVELS
10th July 2019 R1 R2 R3
GOLD-XAU 1,400-1,411 1,425 1,433-1.440
Silver-XAG 15.25-15.50 16.00 16.20-16.50
Crude Oil 58.70-59.20 60.00 60.65
EURO/USD 1.1220-1.1280 1.1320 1.13500-1.1390
GBP/USD 1.2500-1.2550 1.2600 1.2650-1.2700
USD/JPY 109.05 109.50-110.15 110.65

Intraday SUPPORTS LEVELS
10th July 2019 S1 S2 S3
GOLD-XAU 1,390 1,380-1,374 1,366
Silver-XAG 15.05 14.60 14.30-13.90
Crude Oil 58.10-57.35 56.80 56.05-55.50
EURO/USD 1.1210-1.1180 1.1150 1.1120
GBP/USD 1.2440-1.2405 1.2350 1.2300
USD/JPY 108.50-107.60 107.00 106.50-106.00

Intra-Day Strategy (10th 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 Tuesday made its intraday high of US$1399.94/oz and low of US$1385.66/oz. Gold up by 0.185% at US$1397.61/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 1390-1366 with risk below 1366, targeting 1400-1411-1425 and 1433-1440. Sell below 1400-1450 keeping stop loss closing above 1450, targeting 1388-1380 and 1374-1366.

 
Intraday Support Levels
S1     1,390
S2     1,380-1,374
S3     1,366
Intraday Resistance Levels
R1     1,400-1,411
R2     1,425
R3     1,433-1.440

Technical Indicators

Name   Value Action
14DRSI  

62.300

Buy
20-DMA   1384.32 Buy
50-DMA  

1329.14

Buy
100-DMA   1314.61 Buy
200-DMA   1282.65 Buy
STOCH(5,3)   42.621 Sell
MACD(12,26,9)   24.175 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$15.12/oz and low of US$15.12/oz. Silver settled up by 0.801% at US$15.09/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     15.05
S2     14.60
S3     14.30-13.90

Intraday  Resistance Levels
R1     15.25-15.50
R2     16.00
R3     16.20-16.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.162 Buy
20-DMA   15.12 Sell
50-DMA   14.85 Buy
100-DMA   15.06 Buy
200-DMA   14.98 Buy
STOCH(5,3)   32.246 Sell
MACD(12,26,9)   0.154 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$58.74/bbl, intraday low of US$57.39/bbl and settled up by 1.345% to close at US$58.36/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 58.70-60.65 with stop loss at 60.65; targeting 58.10-57.35-56.80 and 56.05-55.50. Buy above 58.10-55.50 with risk daily closing below 55.50 and targeting 58.70-59.50-60.20 and 60.65-61.20.

 
Intraday Support Levels
S1     58.10-57.35
S2     56.80
S3     56.05-55.50

Intraday Resistance Levels
R1     58.70-59.20
R2     60.00
R3     60.65

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.175 Sell
20-DMA   56.78 Buy
50-DMA   57.87 Sell
100-DMA   59.20 Sell
200-DMA   58.09 Sell
STOCH(5,3)   72.130 Sell
MACD(12,26,9)   0.3715 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1192/EUR, high of US$1.1218/EUR and settled the day down by 0.053% to close at US$1.1207/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 1.1210-1.1120 with risk below 1.1120, targeting 1.1220-1.1280-1.1320 and 1.1390-1.1420. Sell below 1.1220-1.1390 targeting 1.1220-1.1180 and 1.1150-1.1120 with stop-loss at daily closing above 1.1400.

 
Intraday Support Levels
S1     1.1210-1.1180
S2     1.1150
S3     1.1120

Intraday  Resistance Levels
R1     1.1220-1.1280
R2     1.1320
R3     1.13500-1.1390

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.105 Buy
20-DMA   1.1291 Sell
50-DMA   1.1237 Sell
100-DMA   1.1258 Sell
200-DMA   1.1330 Sell
STOCH(5,3)   11.157 Sell
MACD(12,26,9)   0.0037 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2438/GBP, high of US$1.2522/GBP and settled the day down by % to close at US$1.2459/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 1.2500-1.12760 with targets at 1.2440-1.2405 and 1.2350-1.2300 top should be below 1.2760. Buy above 1.2500-1.2300 with targets 1.2500-1.2550-1.2600 and 1.2650-1.2700-1.2750 with stop loss closing below 1.2300.

 
Intraday Support Levels
S1     1.2440-1.2405
S2     1.2350
S3     1.2300

Intraday Resistance Levels
R1     1.2500-1.2550
R2     1.2600
R3     1.2650-1.2700

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

30.097

Buy
20-DMA   1.2610 Sell
50-DMA   1.2720 Sell
100-DMA   1.2911 Sell
200-DMA   1.2895 Sell
STOCH(5,3)   13.175 Sell
MACD(12,26,9)   -0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY108.66/USD and made an intraday high of JPY108.95/USD and settled the day up by 0.279% at JPY108.84/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 109.05-111.00 with risk above 111.00 targeting 108.50-107.60-107.00 and 106.50-106.00. Long positions above 108.50-106.00 with targets of 109.05-109.50-110.00-110.60 with stop below 106.00.

 
Intraday Support Levels
S1     108.50-107.60
S2     107.00
S3     106.50-106.00

INTRADAY RESISTANCE LEVELS
R1     109.05
R2     109.50-110.15
R3     110.65

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.190 Buy
20-DMA   108.03 Sell
50-DMA   108.96 Sell
100-DMA   110.14 Buy
200-DMA   110.88 Buy
STOCH(9,6)   90.955 Buy
MACD(12,26,9)   -0.295 Buy

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