AAFX TRADING

Daily Market Lookup

  • Asian shares edged lower on Thursday as Wall Street stocks dropped on early signs that the U.S.-China trade war could hurt corporate earnings, which helped underpin solid demand for safe-haven U.S. Treasuries. South Korea’s market was off 0.4% after the Bank of Korea unexpectedly cut its policy interest rate for the first time in three years, as uncertainties from a trade dispute with Japan added to anxiety about the economy’s outlook. Earlier in the week, U.S. President Donald Trump kept up pressure on Beijing with a threat to put tariffs on another $325 billion of Chinese goods, amid market nervousness over when face-to-face talks will resume. The Wall Street Journal reported that progress toward a U.S.-China trade deal has stalled while the Trump administration determines how to address Beijing’s demands that it ease restrictions on Huawei Technologies. U.S. homebuilding fell for a second straight month in June and permits dropped to a two-year low, suggesting the housing market continued to struggle despite declining mortgage rates. In the foreign exchange market, the dollar nursed light losses on Thursday, weighed down by lower U.S. yields and a rebound by the pound from 27-month lows. The International Monetary Fund (IMF) on Wednesday said the dollar was overvalued by 6% to 12%, based on near-term economic fundamentals. Britain’s fiscal watchdog is expected to say on Thursday the country’s economy will fall into a recession next year and that its economy will be 3% smaller in the event of a “no-deal” Brexit, The Times newspaper reported. Precious metals were in demand, with gold prices hitting their highest in two weeks on Thursday, as weaker-than-expected U.S. data reinforced expectations for an interest rate cut by the U.S. Federal Reserve later this month, dragging the dollar lower.
  • The U.S. dollar slipped on Thursday after the International Monetary Fund (IMF) said the currency is overvalued, while a rebound in the pound also weighed. The IMF said overnight that the greenback was overvalued by 6% to 12%, based on near-term economic fundamentals. Concerns about the unresolved U.S.-China trade conflict was also cited as a catalyst for the selling. In other news, San Francisco Fed president Mary Daly told Reuters in an interview that she wasn’t “leaning one way or the other” as regards an interest rate cut at the Federal Open Markets Committee meeting in two weeks’ time. Markets have come to see a 25-basis point cut as a done deal. U.S. President Donald Trump has said previously he wants to weaken the dollar to support growth. Meanwhile, the British pound steadied today after falling to its lowest in more than two years on Wednesday on fears over a “Hard Brexit.” The Times of London reported that Boris Johnson, who has already pledged to take Britain out of the EU in October even if that means scrapping a transitional deal, is looking to call a general election as early as next year. Johnson is reportedly the favourite to win the current Conservative Party leadership contest and take over as Prime Minister. Sterling volatility is getting a shake-up as the risk of the U.K. crashing out of the European Union grows. Measures of expected pound swings over the next three and six months, covering the run-up to and the aftermath of the Oct. 31 Brexit deadline, have surged to the highest among Group-of-10 currencies. The gauges may still climb, being well short of the levels ahead of the original March deadline. U.K. Brexit Secretary Steve Barclay says no-deal risks are “underpriced.” The pound is bucking a trend of almost unprecedentedly low volatility in the multi-trillion-dollar-a-day market for foreign exchange, as it mirrors the twists and turns of the Brexit saga. Bets on swings are more in line with emerging-market currencies such as the Mexican peso and Brazilian real, given the myriad of political risks that could drive a sharp move. The pound’s latest slide and volatility have coincided with the contest to replace Prime Minister Theresa May after she stepped down following failure to get her deal with Brussels through Parliament. Both contenders Boris Johnson and Jeremy Hunt have said they would take the U.K. out of the bloc if no deal could be reached, and this week toughened their rhetoric. Three-month implied sterling-dollar volatility touched 8.72% Wednesday while the six-month gauge hit 9.49%, both the highest since April. By contrast JPMorgan’s Global FX Volatility Index is hovering near record lows.
  • Oil prices rose on Thursday in Asia as data showed U.S. crude inventories fell more than expected last week. The Energy Information Administration said in its weekly report that crude stockpile was down by 3.12 million barrels in the week to July 12, compared to forecasts for a stockpile draw of 2.69 million. Gasoline inventories unexpectedly rose 3.57 million barrels, compared to expectations for a draw of 0.93 million barrels, the report also showed. Meanwhile, distillate stockpiles rose 5.69 million barrels, more than the expected 0.61 million gains. Oil prices were under pressure earlier this week following reports that the U.S. and Iran might begin talks soon, easing tension in the Middle East. However, Iran later denied the reports. Renewed Sino-U.S. trade tension was also cited as a headwind. U.S. President Donald Trump accused Beijing for not buying U.S. farm products as agreed and said a trade deal with China might not be concluded in the near term. The President also threatened to slap additional tariffs on Chinese goods.

 

 
Intraday RESISTANCE LEVELS
18th July 2019 R1 R2 R3
GOLD-XAU 1,425 1,433 1.440-1,450
Silver-XAG 16.20 16.60-16.90 17.50
Crude Oil 57.00-57.50 58.10 58.70-59.20
EURO/USD 1.1240-1.1280 1.1320 1.13500-1.1390
GBP/USD 1.2440-1.2450 1.2500 1.2550-1.2600
USD/JPY 108.00-108.50 109.05 109.50-110.15

Intraday SUPPORTS LEVELS
18th July 2019 S1 S2 S3
GOLD-XAU 1,409-1,400 1,390 1,380-1,374
Silver-XAG 15.90-15.50 15.25 15.05-14.60
Crude Oil 56.50-56.05 55.50 54.90-54.00
EURO/USD 1.1210 1.1180 1.1150-1.1120
GBP/USD 1.2405 1.2350-1.2300 1.2250
USD/JPY 107.60 107.00 106.50-106.00

Intra-Day Strategy (18th 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$1426.70/oz and low of US$1400.02/oz. Gold up by 1.43% at US$1425.96/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 1409-1374 with risk below 1374, targeting 1425-1433 and 1440-1450. Sell below 1425-1450 keeping stop loss closing above 1450, targeting 1409-1400-1388 and 1380-1374.

 
Intraday Support Levels
S1     1,409-1,400
S2     1,390
S3     1,380-1,374
Intraday Resistance Levels
R1     1,425
R2     1,433
R3     1.440-1,450

Technical Indicators

Name   Value Action
14DRSI  

62.295

Buy
20-DMA   1410.40 Buy
50-DMA  

1350.78

Buy
100-DMA   1321.26 Buy
200-DMA   1291.09 Buy
STOCH(5,3)   68.621 Sell
MACD(12,26,9)   18.175 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$15.97/oz and low of US$15.50/oz. Silver settled up by 2.692% at US$15.94/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (15.00), 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 15.90-14.50 targeting 16.20-16.50 and 16.90-17.50; stop breakage below 14.50. Sell below 16.20-17.50 with stop loss above 17.50; targeting 15.90-15.50-15.05 and 14.60-14.30.

 
Intraday  Support Levels
S1     15.90-15.50
S2     15.25
S3     15.05-14.60

Intraday  Resistance Levels
R1     16.20
R2     16.60-16.90
R3     17.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.196 Buy
20-DMA   15.28 Sell
50-DMA   14.93 Buy
100-DMA   15.02 Buy
200-DMA   15.00 Buy
STOCH(5,3)   90.246 Buy
MACD(12,26,9)   0.1495 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$58.46/bbl, intraday low of US$56.32/bbl and settled down by 1.64% to close at US$56.67/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 58.10-60.50 with stop loss at 60.50; targeting 57.50-57.00-56.05 and 55.50-54.50. Buy above 57.50-54 with risk daily closing below 58.10 and targeting 60.50-61.00-61.90 and 62.50-63.30.

 
Intraday Support Levels
S1     56.50-56.05
S2     55.50
S3     54.90-54.00

Intraday Resistance Levels
R1     57.00-57.50
R2     58.10
R3     58.70-59.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.821 Sell
20-DMA   58.27 Buy
50-DMA   57.51 Sell
100-DMA   59.33 Sell
200-DMA   57.61 Sell
STOCH(5,3)   9.130 Buy
MACD(12,26,9)   0.526 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1199/EUR, high of US$1.1232/EUR and settled the day up by 0.124% to close at US$1.1223/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 1.1240-1.1280-1.1320 and 1.1390-1.1420. Sell below 1.1240-1.1390 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
S2     1.1180
S3     1.1150-1.1120

Intraday  Resistance Levels
R1     1.1240-1.1280
R2     1.1320
R3     1.13500-1.1390

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.431 Buy
20-DMA   1.1287 Sell
50-DMA   1.1243 Sell
100-DMA   1.1250 Sell
200-DMA   1.1320 Sell
STOCH(5,3)   31.157 Buy
MACD(12,26,9)   0.0001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2381/GBP, high of US$1.2455/GBP and settled the day up by 0.204% to close at US$1.2381/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     1.2405
S2     1.2350-1.2300
S3     1.2250

Intraday Resistance Levels
R1     1.2440-1.2450
R2     1.2500
R3     1.2550-1.2600

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.097

Buy
20-DMA   1.2599 Sell
50-DMA   1.2674 Sell
100-DMA   1.2888 Sell
200-DMA   1.2862 Sell
STOCH(5,3)   56.175 Sell
MACD(12,26,9)   -0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY107.92/USD and made an intraday high of JPY108.31/USD and settled the day down by 0.256% at JPY107.93/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 108.00-111.00 with risk above 111.00 targeting 107.60-107.00 and 106.50-106.00. Long positions above 108.00-106.00 with targets of 108.00-108.50-109.05 and 109.50-110.00 with stop below 106.00.

 
Intraday Support Levels
S1     107.60
S2     107.00
S3     106.50-106.00

INTRADAY RESISTANCE LEVELS
R1     108.00-108.50
R2     109.05
R3     109.50-110.15

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.004 Buy
20-DMA   107.98 Sell
50-DMA   108.59 Sell
100-DMA   109.95 Buy
200-DMA   110.68 Sell
STOCH(9,6)   21.955 Buy
MACD(12,26,9)   -0.195 Buy

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