AAFX TRADING

Daily Market Lookup

  • Asian shares suffered their steepest daily drop in nine months on Monday, as Sino-U.S. trade friction sent the yuan slumping to a more than decade trough and stampeded investors into safe harbors including the yen, bonds and gold. Markets have been badly spooked since U.S. President Donald Trump abruptly declared he would slap 10% tariffs on $300 billion in Chinese imports, ending a month-long trade truce. China vowed on Friday to fight back. The trade dispute between the world’s two largest economies has already disrupted global supply chains and investment. The abrupt escalation capped a critical week for global markets after the U.S. Federal Reserve delivered a widely anticipated interest rate cut and played down expectations of further easing So far, investors are not buying Fed Chairman Jerome Powell’s claim that the 25-basis-point rate reduction was a mere “mid-cycle adjustment to policy” Bond markets were well ahead of the game as U.S. 10-year yields dived 7 basis points to 1.77%, a violent shift for usually cautious Asian hours. Yields in Australia and New Zealand touched all-time lows. German 10-year government bond yields dropped on Friday to an all-time low of -0.502% and the country’s entire government bond yield curve turned negative for the first time ever.
  • The Japanese yen rose against the U.S. dollar on Monday in Asia as traders seek safe-haven amid tensions between Washington and Beijing, while escalated protests in Hong Kong also dampened investor sentiment. Sino-U.S. trade tensions returned to focus after U.S. President Donald Trump unexpectedly announced late last week an additional 10% tariff on $300 billion worth of Chinese imports that will kick in on Sept 1 The Japanese yen benefited from falling Asian markets today. Political unrest in Hong Kong was cited as the catalyst for the selling. The press conference came after a weekend of intense stand-off between the police forces and protestors in multiple districts in the city, which resulted in tear gases and arrests In June, an estimated one million of citizens marched on the streets of the city against the now-abandoned extradition law. Protestors demanded a complete withdrawal of the bill and an inquiry into police actions over the handling of demonstrations, which Lam has refused to do so so far Japan is due to release its preliminary GDP data on Friday Meanwhile, the U.S. dollar was down to seven-month lows against the safe haven yen after data showing that U.S. jobs growth slowed in July, underlining the case for the Fed to cut rates again in September Nonfarm payrolls increased by 164,000 jobs in July, less than the month prior, and wages increased modestly, the Labor Department said.
  • Demand for safe haven assets looks likely to be underpinned early this week amid heightened trade tensions after U.S. President Donald Trump raised the stakes in the Sino- U.S. trade war and Beijing pledged to retaliate. Currency traders will also be looking ahead to a fresh round of central bank decisions, following last week’s Federal Reserve rate cut. Fed speakers will be in focus, as investors try to gauge the future path of monetary policy. The U.S. dollar plumbed seven-month lows against the safe haven yen on Friday after data showing that U.S. jobs growth slowed in July, underlining the case for the Fed to cut rates again in September. Nonfarm payrolls increased by 164,000 jobs in July, less than the month prior, and wages increased modestly, the Labor Department said. The report came a day after Trump announced an additional 10% tariff on $300 billion worth of Chinese imports starting Sept. 1, a move that led financial markets to almost fully price in a September rate cut. Trump on Thursday tweeted that a 10% tariff would be imposed on $300 billion worth of Chinese goods on Sept. 1 after U.S. negotiators returned from the latest round of trade talks without having made significant progress. Meanwhile, the British pound held close to 30-month lows against the dollar on Friday as a shrinking of Britain’s ruling Conservative Party’s majority in parliament added to worries over domestic politics three months before the deadline for Brexit. Sterling shed more than 4% of its value in July, its worst month since October 2016, following Johnson’s vow to leave the European Union on Oct. 31 whether or not a transition deal can be agreed with Brussels.
  • Oil prices traded lower on Monday in Asia. Sino-U.S. trade war developments were in focus. Concerns that the U.S.-China trade war may further intensify eased somewhat after President Donald Trump reportedly said that proposed tariffs on China could be delayed or halted if Beijing “takes positive action.” During an interview with CNBC, Trump said that his administration could delay or halt the imposition of tariffs if China "takes positive action. The comments came on Friday, a day after Trump announced that the U.S. would impose new levies on $300 billion worth of Chinese goods, raising fresh fears about oil demand growth, sending oil prices tumbling 8% - their biggest one-day drop in more than four years. The trade war has been hitting economic growth, which tends to reduce demand for commodities such as oil. In other news, Iranian Revolutionary Guards seized an Iraqi oil tanker in the Gulf, which they said was smuggling fuel, Iran’s state media reported on Sunday. The American Petroleum Institute will issue its weekly report on oil stockpiles on Wednesday in Asia, while the Energy Information Administration will release its weekly report the following day.

 

 
Intraday RESISTANCE LEVELS
5th August 2019 R1 R2 R3
GOLD-XAU 1455-1460 1,469 1,474-1,480
Silver-XAG 16.60-16.90 17.50 17.90
Crude Oil 55.50-56.07 56.50 57.50-58.10
EURO/USD 1.1130 1.1150 1.1180-1.1210
GBP/USD 1.2190-1.2250 1.2300 1.2350-1.2410
USD/JPY 106.00-106.50 107.00 107.60-108.00

Intraday SUPPORTS LEVELS
5th August 2019 S1 S2 S3
GOLD-XAU 1,450-1,436 1,429 1,425-1,413
Silver-XAG 16.20-15.90 15.50 15.25-15.05
Crude Oil 54.90-54.05 53.60 53.10
EURO/USD 1.1090-1.1000 1.0905 1.0850-1.0805
GBP/USD 1.2100-1.2065 1.1980 1.1950-1.1900
USD/JPY 105.80-105.00 104.50 104.00

Intra-Day Strategy (5th August 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$1448.94/oz and low of US$1440.59/oz. Gold down by 0.2644% at US$1440.59/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 1450-1400 with risk below 1400, targeting 1457-1464 and 1474-1480. Sell below 1455-1480 keeping stop loss closing above 1450, targeting 1450-1436-1429 and 1422-1413-1409.

 
Intraday Support Levels
S1     1,450-1,436
S2     1,429
S3     1,425-1,413
Intraday Resistance Levels
R1     1455-1460
R2     1,469
R3     1,474-1,480

Technical Indicators

Name   Value Action
14DRSI  

63.123

Buy
20-DMA   1422.87 Buy
50-DMA  

1385.44

Buy
100-DMA   1337.29 Buy
200-DMA   1303.96 Buy
STOCH(5,3)   90.021 Sell
MACD(12,26,9)   9.175 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.33/oz and low of US$15.98/oz. Silver settled down by 0.717% at US$16.18/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   64.508 Buy
20-DMA   16.01 Sell
50-DMA   15.39 Buy
100-DMA   15.17 Buy
200-DMA   15.10 Buy
STOCH(5,3)   40.246 Buy
MACD(12,26,9)   0.312 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$56.03/bbl, intraday low of US$54.16/bbl and settled up by 1.06% to close at US$55.18/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 55.50-58.80 with stop loss at 58.10; targeting 54.90-54.05 and 53.60-53.10. Buy above 54.90-53.00 with risk daily closing below 53.00 and targeting 55.50-56.10 and 56.50-57.50-58.10.

 
Intraday Support Levels
S1     54.90-54.05
S2     53.60
S3     53.10

Intraday Resistance Levels
R1     55.50-56.07
R2     56.50
R3     57.50-58.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.605 Sell
20-DMA   57.19 Buy
50-DMA   56.26 Buy
100-DMA   59.21 Sell
200-DMA   57.76 Buy
STOCH(5,3)   25.130 Sell
MACD(12,26,9)   -0.0194 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1069/EUR, high of US$1.1115/EUR and settled the day up by 0.198% to close at US$1.1106/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 1.1090-1.0805 with risk below 1.0805, targeting 1.1130-1.1150-1.1210 and 1.1240-1.1280-. Sell below 1.1130-1.1210 targeting 1.1090-1.1005-1.0950 and 1.0905-1.0850 with stop-loss at daily closing above 1.1210.

 
Intraday Support Levels
S1     1.1090-1.1000
S2     1.0905
S3     1.0850-1.0805

Intraday  Resistance Levels
R1     1.1130
R2     1.1150
R3     1.1180-1.1210

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.376 Buy
20-DMA   1.1197 Sell
50-DMA   1.1245 Sell
100-DMA   1.1311 Sell
200-DMA   1.1394 Sell
STOCH(5,3)   23.958 Sell
MACD(12,26,9)   -0.0013 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2089/GBP, high of US$1.2168/GBP and settled the day up by 0.346% to close at US$1.2161/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 1.2150-1.2410 with targets at 1.2100-1.2065 and 1.1980-1.1950-1.1900 top should be below 1.2410. Buy above 1.2100-1.1900 with targets 1.2140-1.2190-1.2250 and 1.2300-1.2350 with stop loss closing below 1.2200.

 
Intraday Support Levels
S1     1.2100-1.2065
S2     1.1980
S3     1.1950-1.1900

Intraday Resistance Levels
R1     1.2190-1.2250
R2     1.2300
R3     1.2350-1.2410

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

25.865

Buy
20-DMA   1.2417 Sell
50-DMA   1.2561 Sell
100-DMA   1.2789 Sell
200-DMA   1.2841 Sell
STOCH(5,3)   7.175 Sell
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY106.50/USD and made an intraday high of JPY107.56/USD and settled the day down by 0.661% at JPY106.60/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 109.00-111.00 with risk above 111.00 targeting 108.40-108.00-107.60 and 107.00-106.50. Long positions above 108.40-106.00 with targets of 109.05-109.50 and 110.00-111.00 with stop below 106.00.

 
Intraday Support Levels
S1     105.80-105.00
S2     104.50
S3     104.00

INTRADAY RESISTANCE LEVELS
R1     106.00-106.50
R2     107.00
R3     107.60-108.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.936 Buy
20-DMA   108.33 Sell
50-DMA   108.30 Sell
100-DMA   109.63 Sell
200-DMA   110.56 Sell
STOCH(9,6)   71.58 Sell
MACD(12,26,9)   -0.008 Buy

AAFX TRADING
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