AAFX TRADING

Daily Market Lookup

  • Asian shares rose but struck a more cautious note than a tech-fueled rally on Wall Street, while the euro stayed near two-month lows as soft economic data fueled hopes the European Central Bank could cut rates at its meeting on Thursday. Japan’s Nikkei touched nearly three-month highs before trimming gains to be up 0.33%. Australian shares neared a 12-year peak, driven by expectations the ECB and the Federal Reserve will soon lower borrowing costs. Chinese blue-chips added 0.48%, building on the previous day’s gains, as investors looked with hope to a face-to-face meeting between top U.S. and Chinese negotiators next week for progress in the two countries’ trade war. Stock investors have generally been encouraged in recent days by hopes of some headway in Sino-U.S. trade negotiations, and expectations of easier monetary policy. Cementing such expectations, a series of purchasing manager index (PMI) readings in the United States and Europe on Wednesday were weaker than expected. The stock has surged over 56% so far this year, despite warnings on future revenue growth from new data privacy rules and forthcoming privacy-focused product changes. Market attention on Thursday will be squarely on the ECB rate decision after PMI data showed euro zone manufacturing contracted for the sixth straight month. In the United States, manufacturing activity slowed to a 10-year low in early July with production volumes and purchases falling. But Nomura’s McCafferty said that given the unclear ability of ever-looser monetary policy to jump-start growth, global investors are increasingly looking to signs of fiscal support. Sterling was last trading down 0.05% at $1.2475, after falling for several sessions as market participants feared the looming possibility of a no-deal Brexit under Britain’s new Prime Minister, Boris Johnson.
  • A quarter-point Federal Reserve interest rate cut in July is almost a done deal, according to economists in a Reuters poll, who expect another later in the year amid rising economic risks from the ongoing U.S.-China trade war Expectations in the July 16-24 poll for the first rate cut in more than a decade have firmed this month after several Fed members have strongly hinted policy easing is coming soon, pushing U.S. stocks to new record highs. While that lines up with most major central banks, which have turned dovish in recent months, the latest poll shows economists, like financial markets, have settled on a 25 basis point cut in the federal funds rate to 2.00-2.25% rather than a half-point reduction. Over 95% of 111 economists now predict a 25 basis point cut at the July 30-31 meeting. Only two economists polled expected a 50 basis point reduction and a further two said the Fed would hold steady Indeed, while some forward-looking indicators on activity in the U.S. economy have dipped, the unemployment rate is the lowest in 50 years and Wall Street is at a record high - not normally the environment for a change in the interest rate cycle. Fed rate expectations have taken a U-turn this year, going to a holding pattern earlier in the year from a steady tightening path expected beforehand to a series of cuts. Indeed, just a month ago, the U.S. central bank was still forecast to keep policy on hold for now and ease next year. The U.S. economy likely lost momentum last quarter and is now forecast to have expanded at an annualized pace of 1.8% in the April-June period, down from 3.1% reported for the first quarter, according to the poll. Growth is expected to hover around that rate in each quarter through to end-2020. The Fed’s preferred measure of inflation - the change in the core personal consumption expenditures price index - has remained below the 2% target since the start of 2019 and is not expected shoot significantly higher anytime soon.
  • The euro remained near 2-month low against the U.S. dollar on Thursday in Asia ahead of the European Central Bank’s (ECB) policy meeting due later in the day. Some traders expect dovish guidance from the central bank, which paves the way for easing in September. The euro is now down about 2% in July on speculation of an ECB easing amid continuing concerns surrounding the Sino-U.S. trade war. Meanwhile, data that showed Germany’s manufacturing sector contracted at the quickest pace in seven years and French business growth has also unexpectedly slowed also sent the euro lower The U.S. dollar index that tracks the greenback against a basket of other currencies was unchanged at 97.460. Officials from the U.S. and China will resume in-person trade talks in Beijing as soon as next week, Treasury Secretary Steven Mnuchin said.
  • Oil prices nudged higher on Thursday amid Middle East tensions and after weekly U.S. crude stocks dropped more than expected, but gains were stemmed by a fragile demand outlook on increasing signs of slowing global economic growth. The overall sentiment in the oil market has darkened as investors worry that slowing global economic growth will weaken demand for oil. Adding to a recent string of downward revisions for the oil market, Energy consultancy FGE lowered its 2019 global oil demand growth to average 740,000 bpd in 2019. A series of purchasing manager index readings in the United States and Europe were weaker than expected, confirming concerns about slower economic growth amid a trade war between the United States and China. Set against those worries are ongoing tensions in the Middle East following the seizure of a British-flagged tanker in the Gulf by Iranian forces last week. The military adviser to Iran's supreme leader was quoted on Wednesday as saying that any change in the status of the Strait of Hormuz, which Tehran says it protects, would open the door to a dangerous confrontation. Britain, meanwhile, gained initial support from France, Italy and Denmark for its plan for a European-led naval mission to ensure safe shipping in the Gulf. Meanwhile, U.S. crude stocks fell by nearly 11 million barrels last week, well above analysts' expectations for a drop of 4 million barrels.

 

 
Intraday RESISTANCE LEVELS
25th July 2019 R1 R2 R3
GOLD-XAU 1,424-1,429 1,436 1,450-1,457
Silver-XAG 16.60-16.90 17.50 17.90
Crude Oil 56.50-57.50 58.10 59.20-60.50
EURO/USD 1.1150-1.1180 1.1210 1.1240-1.1280
GBP/USD 1.2500-1.2550 1.2600 1.2650-1.2700
USD/JPY 108.50 109.05 109.50-110.15

Intraday SUPPORTS LEVELS
25th July 2019 S1 S2 S3
GOLD-XAU 1,413-1,405 1,390 1,380
Silver-XAG 16.20-15.90 15.50 15.25-15.05
Crude Oil 56.05 55.50 54.90-54.00
EURO/USD 1.1130-1.1106 1.0950 1.0905
GBP/USD 1.2450-1.2410 1.2350 1.2300-1.2250
USD/JPY 108.00-107.60 107.00 106.50-106.00

Intra-Day Strategy (25th 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$1429.39/oz and low of US$1414.15/oz. Gold down by 0.565% at US$1425.37/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 1413-1382 with risk below 1390, targeting 1429-1436-1450 and 1457-1464. Sell below 1424-1464 keeping stop loss closing above 1470, targeting 1424 and 1409-1400-1390.

 
Intraday Support Levels
S1     1,413-1,405
S2     1,390
S3     1,380
Intraday Resistance Levels
R1     1,424-1,429
R2     1,436
R3     1,450-1,457

Technical Indicators

Name   Value Action
14DRSI  

57.388

Buy
20-DMA   1413.15 Buy
50-DMA  

1361.41

Buy
100-DMA   1326.56 Buy
200-DMA   1295.79 Buy
STOCH(5,3)   33.621 Sell
MACD(12,26,9)   16.175 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$16.63/oz and low of US$16.31/oz. Silver settled up by 1.282% at US$16.58/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   73.196 Buy
20-DMA   15.60 Sell
50-DMA   15.12 Buy
100-DMA   15.09 Buy
200-DMA   15.06 Buy
STOCH(5,3)   83.246 Buy
MACD(12,26,9)   0.372 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$57.62/bbl, intraday low of US$55.33/bbl and settled down by 2.316% to close at US$55.88/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 56.50-60.50 with stop loss at 60.50; targeting 56.05-55.50 and 54.50-54.00. Buy above 56.05-54.00 with risk daily closing below 54.00 and targeting 56.50-57.50-58.10 and 59.20-60.50.

 
Intraday Support Levels
S1     56.05
S2     55.50
S3     54.90-54.00

Intraday Resistance Levels
R1     56.50-57.50
R2     58.10
R3     59.20-60.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.821 Sell
20-DMA   57.65 Sell
50-DMA   56.91 Sell
100-DMA   59.30 Sell
200-DMA   57.20 Sell
STOCH(5,3)   47.130 Buy
MACD(12,26,9)   -0.267 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1126/EUR, high of US$1.1155/EUR and settled the day down by 0.102% to close at US$1.1139/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 1.1130-1.0905 with risk below 1.0905, targeting 1.1150-1.1210-1.1240 and 1.1280-1.1320. Sell below 1.1150-1.1280 targeting 1.1130-1.1105 and 1.0950-1.0905 with stop-loss at daily closing above 1.1105.

 
Intraday Support Levels
S1     1.1130-1.1106
S2     1.0950
S3     1.0905

Intraday  Resistance Levels
R1     1.1150-1.1180
R2     1.1210
R3     1.1240-1.1280

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.376 Buy
20-DMA   1.1236 Sell
50-DMA   1.1241 Sell
100-DMA   1.1243 Sell
200-DMA   1.1309 Sell
STOCH(5,3)   5.958 Buy
MACD(12,26,9)   -0.002 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2425/GBP, high of US$1.2521/GBP and settled the day up by 0.367% to close at US$1.2483/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 1.2500-1.2790 with targets at 1.2450-1.2350 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     1.2450-1.2410
S2     1.2350
S3     1.2300-1.2250

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

43.356

Buy
20-DMA   1.2521 Sell
50-DMA   1.2611 Sell
100-DMA   1.2837 Sell
200-DMA   1.2862 Sell
STOCH(5,3)   39.175 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 JPY108.26/USD and settled the day down by 0.325% at JPY108.20/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     108.00-107.60
S2     107.00
S3     106.50-106.00

INTRADAY RESISTANCE LEVELS
R1     108.50
R2     109.05
R3     109.50-110.15

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.651 Buy
20-DMA   108.07 Sell
50-DMA   108.46 Sell
100-DMA   109.79 Buy
200-DMA   110.60 Sell
STOCH(9,6)   62.58 Buy
MACD(12,26,9)   -0.195 Buy

AAFX TRADING
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING