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Daily Market Lookup

  • Asian stocks rose on Friday after a top Federal Reserve official cemented expectations of a U.S. interest rate cut later this month, fuelling appetite for riskier assets and keeping a cap on the dollar. New York Fed President John Williams said on Thursday that policymakers could not wait for economic disaster to hit before adding stimulus, in a speech read as a strong argument in favor of quick monetary action. The comments by Williams made it a virtual certainty the Fed would cut interest rates by 25 basis points (bps) at its July 30-31 policy meeting and also revived expectations of an even deeper 50 bps reduction. After rate cuts by South Africa and Ukraine this week, Russia and Turkey are expected to join the easing in the central and eastern European sphere, they added. South Korea and Indonesia also lowered rates this week, with countries such as Britain expected to eventually follow. The two sides resumed talks recently to seek an end to a year-long trade war that has rattled financial markets and slowed global growth. But most analysts don’t expect an agreement any time soon, with some predicting a strong risk of further tariff escalation.
  • The U.S. dollar inched up on Friday in Asia even after Federal Reserve officials bolstered expectations of an aggressive rate cut this month New York Federal Reserve President John Williams (NYSE:WMB) said in a speech that the Fed will “act quickly” to support the economy as “it’s better to take preventative measures than to wait for disaster to unfold.” The New York Fed clarified later that Williams' speech were not indicative of the central bank’s future moves, but investors still took his remarks as a dovish signal from the central bank. Separately, Fed Vice Chair Richard Clarida told Fox Business Network the central bank might have to act early and not wait "until things get so bad". On the data front, business activity in the Mid-Atlantic has jumped to 21.8 in July, which is its strongest level in a year, according to the Philadelphia Federal Reserve. A figure above zero suggests the region's business activity is growing. Meanwhile a separate report showed that while unemployment claims rose slightly last week, the labor market still remained strong. Initial jobless claims rose 8,000 to a seasonally adjusted 216,000 for the week ended July 13, the Labor Department said, while data for the prior week was revised down by 1,000. The dollar was on the defensive on Friday after Federal Reserve officials bolstered expectations of an aggressive rate cut this month to address weakening price pressures. At a central banking conference on Thursday, New York Fed President John Williams argued for pre-emptive measures to avoid having to deal with too low inflation and interest rates. Although a New York Fed representative subsequently said Williams' comments were academic and not about immediate policy direction, investors still took his remarks along with separate comments from Fed Vice Chair Richard Clarida as a dovish signal from the central bank. That is especially true with neutral rates that would neither restrict nor accelerate the U.S. economy "around half a percent," he said. When adjusted for inflation, the neutral rate is near the Fed's current policy rate, which is in a range of 2.25-2.50%. Financial markets quickly reacted, with money market futures pricing in almost a 70% chance of a 50 basis point cut at its policy meeting on July 30-31 at one point. The odds eased to around 40% after the New York Fed said later that his speech was not about potential actions at the upcoming policy meeting. Still, Williams' rate-cut view was echoed by Fed Vice Chair Clarida, who told Fox Business Network the central bank might have to act early and not wait "until things get so bad".
  • Oil prices climbed around 2% on Friday after the U.S. Navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, again raising tensions in the Middle East. Indications that the U.S. Federal Reserve will cut rates aggressively to support the economy were also behind Friday's gains, said Stephen Innes, managing partner at Vanguard Markets. "The Fed backstop and the report of the U.S. Navy shooting down an Iranian drone are providing a modicum of support for oil markets amidst a very bearish landscape," he said. The United States said on Thursday that a U.S. Navy ship had "destroyed" an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone. The move comes after Britain pledged to defend its shipping interests in the region, while U.S. Central Command chief General Kenneth McKenzie said the United States would work "aggressively" to enable free passage after recent attacks on oil tankers in the Gulf. The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a U.S.-China trade spat, its executive director said on Thursday.The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Fatih Birol said. "China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies ... if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come," Birol told Reuters in an interview Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had already cut the growth forecast to 1.2 million bpd in June this year. Speculators have exited options positions that could have provided exposure to higher prices in the next several years, market participants said on Thursday. U.S. offshore oil and gas production has continued to return to service since Hurricane Barry passed through the Gulf of Mexico last week, triggering platform evacuations and output cuts.

 

 
Intraday RESISTANCE LEVELS
19th July 2019 R1 R2 R3
GOLD-XAU 1,450-1,457 1,464 1,473
Silver-XAG 16.60-16.90 17.50 17.90
Crude Oil 57.00-57.50 58.10 58.70-59.20
EURO/USD 1.1280 1.1320 1.13500-1.1390
GBP/USD 1.2550-1.2600 1.2650 1.2700-1.2790
USD/JPY 108.00-108.50 109.05 109.50-110.15

Intraday SUPPORTS LEVELS
19th July 2019 S1 S2 S3
GOLD-XAU 1,436-1,429 1,424 1,405-1,390
Silver-XAG 16.20-15.90 15.50 15.25-15.05
Crude Oil 56.50-56.05 55.50 54.90-54.00
EURO/USD 1.1240-1.1210 1.1180 1.1150-1.1120
GBP/USD 1.2500-1.2450 1.2350 1.2300-1.2250
USD/JPY 107.60 107.00 106.50-106.00

Intra-Day Strategy (19th 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 Thursday made its intraday high of US$1448.05/oz and low of US$1414.50/oz. Gold up by 1.227% at US$1446.00/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 1436-1390 with risk below 1390, targeting 1450-1457 and 1464-1473. Sell below 1450-1473 keeping stop loss closing above 1473, targeting 1436-1429-1424 and 1409-1400-1390.

 
Intraday Support Levels
S1     1,436-1,429
S2     1,424
S3     1,405-1,390
Intraday Resistance Levels
R1     1,450-1,457
R2     1,464
R3     1,473

Technical Indicators

Name   Value Action
14DRSI  

66.295

Buy
20-DMA   1413.48 Buy
50-DMA  

1354.37

Buy
100-DMA   1322.26 Buy
200-DMA   1292.09 Buy
STOCH(5,3)   89.621 Buy
MACD(12,26,9)   20.175 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$16.33/oz and low of US$15.90/oz. Silver settled up by 2.34% at US$16.32/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 16.20-14.50 targeting 16.50-16.90 and 17.50-17.90; stop breakage below 14.50. Sell below 16.50-17.90 with stop loss above 17.90; targeting 16.20-15.90-15.50 and 15.05-14.60.

 
Intraday  Support Levels
S1     16.20-15.90
S2     15.50
S3     15.25-15.05

Intraday  Resistance Levels
R1     16.60-16.90
R2     17.50
R3     17.90

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 Thursday made an intra‐day high of US$57.42/bbl, intraday low of US$54.83/bbl and settled down by 1.659% to close at US$55.70/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 Thursday made an intraday low of US$1.1204/EUR, high of US$1.1279/EUR and settled the day up by 0.463% to close at US$1.1275/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 1.1240-1.1120 with risk below 1.1120, targeting 1.1280-1.1320 and 1.1390-1.1420. Sell below 1.1280-1.1390 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   49.752 Buy
20-DMA   1.1282 Sell
50-DMA   1.1245 Sell
100-DMA   1.1248 Sell
200-DMA   1.1317 Sell
STOCH(5,3)   63.157 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 1.2540-1.2790 with targets at 1.2500-1.2405-1.2350 and 1.2300-1.2250 top should be below 1.2790. Buy above 1.2500-1.2250 with targets 1.2600 and 1.2650-1.2700-1.2750 with stop loss closing below 1.2250.

 
Intraday Support Levels
S1     1.2500-1.2450
S2     1.2350
S3     1.2300-1.2250

Intraday Resistance Levels
R1     1.2550-1.2600
R2     1.2650
R3     1.2700-1.2790

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

45.097

Buy
20-DMA   1.2567 Sell
50-DMA   1.2643 Sell
100-DMA   1.2865 Sell
200-DMA   1.2876 Sell
STOCH(5,3)   61.175 Buy
MACD(12,26,9)   -0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY107.20/USD and made an intraday high of JPY108.01/USD and settled the day down by 0.605% at JPY107.28/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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