AAFX TRADING

Daily Market Lookup

  • Asian stocks gained and the dollar drooped on Thursday after Federal Reserve Chair Jerome Powell reinforced prospects of a U.S. interest rate cut later this month. In an appearance before his congressional overseers on Wednesday, Powell confirmed that the U.S. economy is still under threat from disappointing factory activity, tame inflation and a simmering trade war. Powell said the central bank stands ready to “act as appropriate”. U.S. stocks ended higher on Wednesday and the S&P 500 briefly crossed the 3,000-point mark for the first time following Powell’s remarks. A strong June U.S. jobs report released earlier this month had curbed market expectations that the Fed could lower rates by 50 basis points (bps), and the markets had viewed a 25 bps cut as a more likely option. But the Fed chair’s cautious stance on the world’s largest economy helped revive some bets on heftier easing at its next policy meeting on July 30-31. Minutes from the Fed’ last meeting in mid-June, however, showed some policymakers felt there was not yet a strong case for easing. A confidence shock driven partly by the U.S. trade war is at the center of an increasingly persuasive argument for Federal Reserve policymakers seriously considering cutting rates for the first time in a decade. Federal Reserve Chairman Jerome Powell on Wednesday set the stage for the rate cut this month, as records from policymakers’ latest meeting showed increasing fear that a U.S.-China trade war that has done little to directly restrain growth is indirectly causing businesses to hold back on buying equipment, giving workers a raise and hiking their prices. Those factors have conspired to pose a serious risk of ending the economic expansion by pushing growth and inflation lower. The Fed is getting closer to lower rates to take out “insurance” that does not happen. Powell used an appearance (here) before his congressional overseers on Wednesday to confirm that the U.S. economy is still under threat from disappointing factory activity, tame inflation and a simmering trade war. Those are the kinds of uncertainties that "many" policymakers called out (here) as suggesting the need for a rate cut "in the near term," according to records from the Fed's rate-setting meeting, which were released shortly after Powell concluded several hours of testimony before the U.S. House of Representatives Financial Services Committee. At that June 18-19 meeting, some Fed policymakers worried that they may need act to lift inflation that is failing to meet the U.S. central bank’s 2% annual target and to combat a pervasive pessimism among corporations that they see holding back business investment. Lower rates could “cushion the effects” of shocks from the trade war, according to the minutes’ summary of the case for a cut. Powell and the meeting records both shed light on what is concerning the Fed about an economy they concede is still likely to grow. The short version: Global growth is weak, manufacturers are slowing their investments and not raising their prices partly because of the trade war and the U.S. job market is not hot enough to cause worrisome inflation. The minutes echoed that sentiment: “several participants pointed out that they had revised down their estimates of the longer-run normal rate of unemployment and, as a result, saw a smaller upward contribution to inflation pressures,” and a better case for lower rates.
  • The dollar was soft on Thursday after Federal Reserve Chairman Jerome Powell set the stage for a rate cut later this month, vowing to "act as appropriate" to ensure the world's biggest economy will be able to sustain a decade-long expansion. In testimony to Congress, Powell pointed to "broad" global weakness that was clouding the U.S. economic outlook amid uncertainty about the fallout from the Trump administration's trade conflict with China and other nations. Adding to a generally dovish tone in his testimony, the minutes from the Fed's previous policy meeting showed many policy makers thought more stimulus would be needed soon, reviving speculation of an aggressive rate cut. Money market futures price have jumped to price in about 30% chance that the Fed will cut rates by 50 basis points at its next policy review on July 30-31 - a scenario that had been priced out after Friday's strong U.S. jobs data. Elsewhere, the British pound also bounced off from six-month lows to trade at $1.2508 . But it is still down on the week as the British currency has been dogged by Britain's economic gloom and a fast-approaching Brexit deadline. A raft of dismal UK data and the risk of crashing out of the European Union without agreeing transitional trade arrangements have forced the Bank of England to change its upbeat assessment of the economy. In contrast, the Canadian dollar moved closer to last week's eight-month high, as the Bank of Canada showed no sign that it would match potential interest rate cuts from the Fed, making clear it had no intention of easing monetary policy.
  • Oil prices rose on Thursday in Asia after data showed U.S. crude inventories fell last week. The Energy Information Administration (EIA) said crude oil inventories plummeted by 9.50 million barrels in the week to July 5. Forecasts predicted a stockpile draw of 3.08 million barrels, after a decline of 1.09 million barrels in the previous week. On Tuesday, the American Petroleum Institute report showed an 8.1 million barrel fall in inventories last week. Also supporting oil markets was news that Iran tried to seize a British tanker in Persian Gulf. The oil tanker was crossing into the Strait of Hormuz area when Iranian boats approached it and demanded that the tanker change course and stop in nearby Iranian territorial waters, CNN reported. Tensions have been high in the Middle East after some reported attacks on tankers, and the downing of a U.S. drone by Iran last month. Tehran’s decision this week to enrich uranium beyond the levels it had committed to under the JCPOA nuclear agreement further escalated the tension. U.S. President Donald Trump has warned Tehran over the weekend to “be very careful” about the resumption of enrichment.

 

 
Intraday RESISTANCE LEVELS
11th July 2019 R1 R2 R3
GOLD-XAU 1,425 1,433-1.440 1,450
Silver-XAG 15.25-15.50 16.00 16.20-16.50
Crude Oil 61.00-61.90 62.50 63.30
EURO/USD 1.1280 1.1320 1.13500-1.1390
GBP/USD 1.2550 1.2600 1.2650-1.2700
USD/JPY 108.50-109.05 109.50 110.15-110.65

Intraday SUPPORTS LEVELS
11th July 2019 S1 S2 S3
GOLD-XAU 1,411-1,400 1,390 1,380-1,374
Silver-XAG 15.05 14.60 14.30-13.90
Crude Oil 60.50-60.00 59.20 58.70-58.10
EURO/USD 1.1240-1.1210 1.1180 1.1150-1.1120
GBP/USD 1.2500-1.2440 1.2405 1.2350-1.2300
USD/JPY 107.60 107.00 106.50-106.00

Intra-Day Strategy (11th 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$1418.75/oz and low of US$1389.88/oz. Gold up by 1.522% at US$1418.70/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 1311-1374 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..

 
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  

67.181

Buy
20-DMA   1395.84 Buy
50-DMA  

1337.69

Buy
100-DMA   1316.89 Buy
200-DMA   1286.00 Buy
STOCH(5,3)   63.621 Buy
MACD(12,26,9)   21.175 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$15.27/oz and low of US$15.02/oz. Silver settled up by 1.015% at US$15.22/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 Wednesday made an intra‐day high of US$60.56/bbl, intraday low of US$58.40/bbl and settled up by 3.18% to close at US$60.29/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 61.00-63.30 with stop loss at 63.30; targeting 60.50-60.00-59.20 and 58.70-58.10. Buy above -60.50-58.10 with risk daily closing below 58.10 and targeting 61.00-61.90 and 62.50-63.30.

 
Intraday Support Levels
S1     60.50-60.00
S2     59.20
S3     58.70-58.10

Intraday Resistance Levels
R1     61.00-61.90
R2     62.50
R3     63.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.222 Sell
20-DMA   56.86 Buy
50-DMA   57.90 Sell
100-DMA   59.21 Sell
200-DMA   58.10 Sell
STOCH(5,3)   75.130 Buy
MACD(12,26,9)   0.3715 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1201/EUR, high of US$1.1263/EUR and settled the day up by 0.381% to close at US$1.1249/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     1.1240-1.1210
S2     1.1180
S3     1.1150-1.1120

Intraday  Resistance Levels
R1     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 Wednesday made an intra‐day low of US$1.2442/GBP, high of US$1.2520/GBP and settled the day up by 0.334% to close at US$1.2499/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 1.2550-1.12760 with targets at 1.2500-1.2440-1.2405 and 1.2350-1.2300 top should be below 1.2760. Buy above 1.2550-1.2300 with targets 1.2550-1.2600 and 1.2650-1.2700-1.2750 with stop loss closing below 1.2300.

 
Intraday Support Levels
S1     1.2500-1.2440
S2     1.2405
S3     1.2350-1.2300

Intraday Resistance Levels
R1     1.2550
R2     1.2600
R3     1.2650-1.2700

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.097

Buy
20-DMA   1.2605 Sell
50-DMA   1.2711 Sell
100-DMA   1.2907 Sell
200-DMA   1.2893 Sell
STOCH(5,3)   36.175 Sell
MACD(12,26,9)   -0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY108.34/USD and made an intraday high of JPY108.95/USD and settled the day down by 0.367% at JPY108.44/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     107.60
S2     107.00
S3     106.50-106.00

INTRADAY RESISTANCE LEVELS
R1     108.50-109.05
R2     109.50
R3     110.15-110.65

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 Sell
STOCH(9,6)   90.955 Buy
MACD(12,26,9)   -0.295 Buy

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