AAFX TRADING

Daily Market Lookup

  • Asia stocks fell on Monday as investors scaled back expectations of an aggressive Federal Reserve interest rate cut, while crude oil prices rose on heightened Middle East tensions following Iran’s seizure of a British tanker. Global equity markets had rose briefly toward the end of last week after dovish comments by New York Fed President John Williams boosted expectations the central bank would lower rates by 50 basis points (bps) at its July 30-31 meeting. But stock markets gave back those gains on Friday, with Wall Street shares falling, after the New York Fed walked back Williams’ comments by saying his speech was not about potential policy action at the upcoming Fed meeting. Expectations for a larger cut were scaled back even more after the Wall Street Journal reported the Fed was likely to cut rates by 25 bps this month, and may make further cuts in the future given global growth and trade uncertainties. Trump maintained pressure on Beijing last week by renewing a threat to impose tariffs on another $325 billion of Chinese goods, even as hopes grew that the two sides could soon resume face-to-face negotiations in a bid to end their year-long trade war. Gold prices rose on Monday in Asia after landing a second-straight week of gains as traders expect a U.S. rate cut this month. The yellow metal was supported by IMF’s comments that the U.S. dollar is overvalued, and U.S. President Donald Trump’s call for lower interest rates. On Friday, the President accused the Federal Reserve of sticking to a “faulty thought process.” The Fed is widely expected to cut rates by at least a quarter-point this month, and some believe rates will be 50 basis points lower after the September policy meeting. Gold prices also benefited from weaker stock markets in Asia today. Hong Kong’s Hang Seng Index was down almost 1%, while other major markets in Asia also fell.
  • The dollar drifted higher on Monday as investors tempered their expectations for deep U.S. interest rate cuts this month and heightened Middle East tensions supported safe-haven assets. While currency-market focus will center on global central bank decisions scheduled for the next two weeks, traders are also watching for developments in U.S.-China trade negotiations and Wall Street earnings. Geopolitical fears were dominated by confrontation in the oil trade's most important waterway escalating, with footage showing the Iranian military defying a British warship when it seized a tanker in the Strait of Hormuz on Friday. On the policy front, markets generally expect central banks to either cut rates or keep settings accommodative, starting with the European Central Bank (ECB), which meets on Thursday followed by the Bank of Japan and then the Fed next week. Pricing for a 50-basis-point Fed cut soared last week after a dovish speech by New York Fed President John Williams. Those expectations later tapered off after a Fed spokesman clarified that the remarks did not refer to "potential policy actions" In Asia, focus remains on China as Beijing and Washington seek to end a protracted trade war. A report over the weekend by China's Xinhua news agency suggested some local firms were seeking to buy U.S. farm products, a possible sign of progress.
  • Sentiment in the oil market has shifted dramatically in recent days, with hedge funds, producers and traders all taking a more bearish tack in response to what they see as weakness in worldwide demand The oil market has struggled to sustain a rally despite supply restrictions that generally would be considered bullish. U.S. sanctions on Venezuela and Iran have removed more than 1.5 million barrels of daily supply from the market, OPEC extended a supply-cut deal into 2020 and tensions between the United States and Iran are rising. Hedge funds and investors have exited bullish bets on the realization that demand may be weaker than anticipated while U.S. production surges. Producers, meanwhile, have rushed to lock in future prices, betting that this may be their best chance to protect against a selloff, oil traders and brokers said. Front-month, or current, futures contracts have not had a massive selloff - but looking at later-dated contracts, the underlying weakness is apparent. The premium on front-month Brent crude futures compared with oil to be delivered in half a year has fallen from a six-year high in May at more than $4 a barrel to less than $1.50 last week. That is a signal that worries about tight supply have abated. Even rising tensions in the Strait of Hormuz, where the United States and others are moving to protect tankers against Iran, has produced only modest gains. On Friday, news that Iran had seized a British tanker supported prices - but futures rose less than 1 percent. The steady rise in U.S. oil output and demand worries from a protracted Sino-U.S. trade war, however, have weighed on demand forecasts. The International Energy Agency recently cut its expectation for global demand through 2019 and 2020 and said it may cut it again if the global economy - and especially China -show further weakness, while Saudi Arabian exports fell to a 1-1/2-year low in May. Traders said there has been "relentless" selling in bullish Brent call options as far as December 2021 and 2022, a reflection of growing expectations that demand for oil is weakening as supply grows. Average 2020 Brent oil prices slipped to the weakest in a month at $60.28 a barrel last week. Separately, bullish speculator bets on U.S. crude futures and options on the NYMEX are near the lowest level since 2013.The price weakness presents challenges for oil producers, and many have started to hedge to protect against a damaging future downturn in prices. With the recent weakness in the market, some consultants are warning about waiting too long to protect against future market moves by buying options to sell or buy oil at a certain price in the future.

 

 
Intraday RESISTANCE LEVELS
22nd July 2019 R1 R2 R3
GOLD-XAU 1,429-1,436 1,450 1,457-1,464
Silver-XAG 16.60-16.90 17.50 17.90
Crude Oil 57.00-57.50 58.10 58.70-59.20
EURO/USD 1.1240-1.1280 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
22nd July 2019 S1 S2 S3
GOLD-XAU 1,424-1,413 1,405 1,390
Silver-XAG 16.20-15.90 15.50 15.25-15.05
Crude Oil 56.05 55.50 54.90-54.00
EURO/USD 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 (22nd 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 Friday made its intraday high of US$1452.83/oz and low of US$1420.08/oz. Gold down by 1.460% at US$1425.25/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 1424-1390 with risk below 1390, targeting 1429-1436-1450 and 1457-1464. Sell below 1429-1464 keeping stop loss closing above 1470, targeting 1424 and 1409-1400-1390.

 
Intraday Support Levels
S1     1,424-1,413
S2     1,405
S3     1,390
Intraday Resistance Levels
R1     1,429-1,436
R2     1,450
R3     1,457-1,464

Technical Indicators

Name   Value Action
14DRSI  

60.295

Buy
20-DMA   1413.04 Buy
50-DMA  

1356.59

Buy
100-DMA   1323.96 Buy
200-DMA   1293.83 Buy
STOCH(5,3)   64.621 Sell
MACD(12,26,9)   18.175 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.57/oz and low of US$16.04/oz. Silver settled down by 0.692% at US$16.19/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 Friday made an intra‐day high of US$56.45/bbl, intraday low of US$55.11/bbl and settled up by 0.107% to close at US$55.87/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 57.50-54.00 with risk daily closing below 58.10 and targeting 60.50-61.00-61.90 and 62.50-63.30.

 
Intraday Support Levels
S1     56.05
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   45.821 Sell
20-DMA   58.06 Sell
50-DMA   57.27 Sell
100-DMA   59.30 Sell
200-DMA   57.43 Sell
STOCH(5,3)   19.130 Buy
MACD(12,26,9)   0.526 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1202/EUR, high of US$1.1281/EUR and settled the day down by 0.493% to close at US$1.1220/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   44.752 Buy
20-DMA   1.1271 Sell
50-DMA   1.1244 Sell
100-DMA   1.1246 Sell
200-DMA   1.1315 Sell
STOCH(5,3)   45.157 Buy
MACD(12,26,9)   0.0001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2475/GBP, high of US$1.2555/GBP and settled the day down by 0.330% to close at US$1.2503/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 Friday made intra‐day low of JPY107.21/USD and made an intraday high of JPY107.97/USD and settled the day up by 0.392% at JPY107.69/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   44.912 Buy
20-DMA   107.96 Sell
50-DMA   108.64 Sell
100-DMA   109.98 Buy
200-DMA   110.71 Sell
STOCH(9,6)   21.58 Buy
MACD(12,26,9)   -0.195 Buy

AAFX TRADING
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