AAFX TRADING

Daily Market Lookup

  • Shares in Asia fell for an eighth straight session on Wednesday on lingering worries over the escalating U.S.-China trade war, but losses and nerves were soothed somewhat by White House assurances that it wants to press ahead with negotiations. Signs that China is stepping in to steady the yuan after its recent sharp fall also helped ease investors’ fears of a possible global currency war, though the yuan slipped further in morning trade, keeping markets guessing. Still, selling pressure was mild compared with the last few sessions, when trade tensions intensified by the day. Panicky selling of riskier assets eased after the People’s Bank of China took steps to steady the yuan, with a firmer-than-expected mid-point fixing on Tuesday and state banks mopping up dollars, sources told Reuters. Wednesday’s yuan fixing was weaker, however, and just a hair away from the key 7 per dollar level, keeping markets nervous about China’s intentions. Beijing let spot yuan break through the 7 level on Monday for the first time in 11 years, days after Washington threatened to impose more tariffs. U.S. President Donald Trump dismissed fears of a protracted trade war on Tuesday despite a warning from Beijing that labeling it a currency manipulator would have severe consequences for the global financial order. Washington announced that move on Monday hours after the yuan tumbled. While Trump played down the prospect that the trade dispute could be drawn out, St. Louis Federal Reserve Bank President James Bullard said the U.S. central bank may be stuck with a volatile global trade environment for years. Comments from Larry Kudlow, director of the White House National Economic Council Kudlow, may have also tempered some jitters. He said on Tuesday the Trump administration wants to continue trade talks with China and is still planning to host a Chinese delegation for talks in September Many investors believe Trump cannot afford prolonged instability in financial markets since his reputation was staked so closely on economic growth and the success of the U.S. stock market.
  • The U.S. dollar steadied after a drubbing the previous day, clawing back losses against safe-haven currencies as China took steps to limit weakness in the yuan and reassured investors that it wouldn’t weaponize its currency in its trade spat with the U.S. The dollar found its footing, led by gains against safe-haven yen and Swiss franc, as demand for safe havens eased somewhat on signs China is unlikely to deliberately weaken the yuan - to offset the impact of the U.S.-Sino trade war - after the People’s Bank of China set the daily currency limit of the yuan at a stronger-than-expected level. The move comes a day after the Chinese’s central bank allowed the yuan to slip below 7 per dollar – a level it had previously vowed to protect – for the first time since 2008. Traders had feared that further action to weaken the yuan would risk additional tariffs being imposed by the U.S., and lead to a currency war. President Trump on Monday labelled China a “currency manipulator” GBP/USD also supported the greenback after retreating from a session high of $1.221 to trade at $1.214, up just 0.01%, amid rising fears the U.K. could leave the European Union without a trade deal, referred to as a “hard Brexit.” Senior EU and U.K. diplomats reportedly left Brussels with the impression that a no-deal Brexit is now the “central scenario” of the new U.K. Prime Minister Boris Johnson, according to reports in U.K. media.
  • Oil fell on Wednesday as the intensifying Sino-U.S. trade dispute stoked worries over demand, although a drop in U.S. crude inventories offered some support to prices. Meanwhile, Saudi Arabia Energy Minister Khalid Al-Falih and U.S. Energy Secretary Rick Perry on Tuesday said both sides expressed concern over threats targeting freedom of maritime traffic in the Arabian Gulf as they met in Washington. Tensions in the Middle East have heightened in the wake of attacks on tankers and U.S. drones, raising concerns over passing through the Straight of Hormuz, a key shipping artery of global oil trade. Elsewhere, data indicating a larger-than-expected drop in U.S. crude stocks offered some support to oil prices. U.S. crude inventories fell by 3.4 million barrels in the week ended Aug.2 to 439.6 million barrels, compared with analyst expectations for a decrease of 2.8 million barrels. Official data from the government's Energy Information Administration (EIA) is due later on Wednesday. The U.S. labelled China as a “currency manipulator” earlier this week. While reports suggested that the labelling is merely symbolic, some analysts said the move could lead to a scaling up of the trade war and harsher impacts on global economic growth. “We shouldn’t underestimate the potential impact of a full-blown trade war between the world’s two biggest economies,” said Bart Melek, head of global commodity strategy at TD Securities, in a Bloomberg report. “This could very well mean we as a market significantly overestimated demand growth for oil and we could easily be in a surplus situation in 2020.” Meanwhile, reports that U.S. President Donald Trump and his administration ratcheted up action against Venezuela continued to be cited as supportive for the oil markets today and limited losses. Trump signed an executive order late Monday in the U.S. declaring a total economic embargo against Venezuela, freezing all of the government’s assets and prohibiting transactions with the country, unless specifically exempted.

 

 
Intraday RESISTANCE LEVELS
7th August 2019 R1 R2 R3
GOLD-XAU 1,489-1,500 1,509 1,516-1,526
Silver-XAG 16.90-17.50 17.90 18.50
Crude Oil 53.60-54.05 54.50 54.90-55.50
EURO/USD 1.1250-1.1290 1.1325 1.1350-1.1400
GBP/USD 1.2190-1.2250 1.2300 1.2350-1.2410
USD/JPY 106.50 107.00 107.60-108.00

Intraday SUPPORTS LEVELS
7th August 2019 S1 S2 S3
GOLD-XAU 1,481-1,474 1,469 1460-1455
Silver-XAG 16.60-16.20 15.90 15.50-15.25
Crude Oil 53.10-52.50 51.90 51.00-50.60
EURO/USD 1.1200-1.1180 1.1130 1.1090-1.1000
GBP/USD 1.2100-1.2065 1.1980 1.1950-1.1900
USD/JPY 106.00-105.80 105.00 104.50-104.00

Intra-Day Strategy (7th 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 Tuesday made its intraday high of US$1474.82/oz and low of US$1436.60/oz. Gold up by 1.664% at US$1463.47/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1339) and breakage below will call for 1321-1300. 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 overbought territory and giving positive crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1469-14029 with risk below 1429, targeting 1474-1481 and 1489-1500-1509. Sell below 1474-1509 keeping stop loss closing above 1474, targeting 1469-1460-1450 and 1436-1429.

 
Intraday Support Levels
S1     1,481-1,474
S2     1,469
S3     1460-1455
Intraday Resistance Levels
R1     1,489-1,500
R2     1,509
R3     1,516-1,526

Technical Indicators

Name   Value Action
14DRSI  

70.086

Buy
20-DMA   1430.75 Buy
50-DMA  

1393.73

Buy
100-DMA   1340.90 Buy
200-DMA   1306.49 Buy
STOCH(5,3)   95.021 Buy
MACD(12,26,9)   20.175 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$16.79/oz and low of US$16,42/oz. Silver settled up by 0.231% at US$16.70/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 16.60-15.00 targeting 16.90-17.50 and 17.90-18.50; stop breakage below 15.00. Sell below 16.90-18.50 with stop loss above 18.50; targeting 16.60-16.20-15.90 and 15.50-15.05.

 
Intraday  Support Levels
S1     16.60-16.20
S2     15.90
S3     15.50-15.25

Intraday  Resistance Levels
R1     16.90-17.50
R2     17.90
R3     18.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.482 Buy
20-DMA   16.15 Sell
50-DMA   15.47 Buy
100-DMA   15.19 Buy
200-DMA   15.14 Buy
STOCH(5,3)   80.246 Buy
MACD(12,26,9)   0.312 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$55.29/bbl, intraday low of US$53.23/bbl and settled down by 2.501% to close at US$53.39/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 54.05-58.10 with stop loss at 58.10; targeting 54.50-54.05 and 53.60-53.10. Buy above 53.10-50.60 with risk daily closing below 50.60 and targeting 54.05-54.50-54.90 and 55.50-56.10.

 
Intraday Support Levels
S1     53.10-52.50
S2     51.90
S3     51.00-50.60

Intraday Resistance Levels
R1     53.60-54.05
R2     54.50
R3     54.90-55.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.605 Sell
20-DMA   56.59 Buy
50-DMA   56.03 Buy
100-DMA   59.09 Sell
200-DMA   56.62 Buy
STOCH(5,3)   11.130 Sell
MACD(12,26,9)   -0.0194 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1166/EUR, high of US$1.1249/EUR and settled the day down by 0.847% to close at US$1.1197/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 overbought 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 1.1210-1.1085 with risk below 1.1080, targeting 1.1240-1.1290 and1.1.1325-1.1350-1.1400-. Sell below 1.1250-1.1400 targeting 1.1210-1.1180-1.1130 and 1.1090-1.1005 with stop-loss at daily closing above 1.1210.

 
Intraday Support Levels
S1     1.1200-1.1180
S2     1.1130
S3     1.1090-1.1000

Intraday  Resistance Levels
R1     1.1250-1.1290
R2     1.1325
R3     1.1350-1.1400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.653 Buy
20-DMA   1.1182 Sell
50-DMA   1.1237 Sell
100-DMA   1.1227 Sell
200-DMA   1.1296 Sell
STOCH(5,3)   83.958 Buy
MACD(12,26,9)   -0.0013 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2134/GBP, high of US$1.2208/GBP and settled the day up by 0.1911% 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  

31.256

Buy
20-DMA   1.2348 Sell
50-DMA   1.2520 Sell
100-DMA   1.2745 Sell
200-DMA   1.2827 Sell
STOCH(5,3)   44.175 Buy
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY105.51/USD and made an intraday high of JPY107.08/USD and settled the day up by 0.486% at JPY106.45/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 106.50-108.00 with risk above 108.00 targeting 106.00-105.60-105.00 and 104.50-104.00 Long positions above 106.00-104.00 with targets of 106.50-107.00 and 107.60-108.00-109.05 with stop below 106.00.

 
Intraday Support Levels
S1     106.00-105.80
S2     105.00
S3     104.50-104.00

INTRADAY RESISTANCE LEVELS
R1     106.50
R2     107.00
R3     107.60-108.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.647 Buy
20-DMA   107.89 Sell
50-DMA   108.08 Sell
100-DMA   109.46 Buy
200-DMA   110.39 Sell
STOCH(9,6)   13.58 Sell
MACD(12,26,9)   -0.008 Buy

AAFX TRADING
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