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Daily Market Lookup

  • The U.S. dollar’s dominance will come to an end if the Federal Reserve gives in to pressure from financial markets and President Donald Trump and chops interest rates another 50 basis points this year, a Reuters poll of market strategists showed. The U.S. central bank delivered a rate cut last week but the dollar .DXY held firm, mostly driven by Fed Chair Jerome Powell’s comments citing the latest move as “a mid-cycle adjustment to policy,” dampening expectations for aggressive easing. While the greenback’s allure has remained intact on solid demand for dollar-denominated assets, over 40% of the strategists who answered a separate question said a change in Fed policy expectations would drive the currency from here. Financial markets are pricing in at least two 25 basis point Fed rate cuts by year-end, according to CME Fed Watch. That would weaken the dollar significantly, according to the majority of responses to an additional question While Powell’s message is clear that this is not the start of an easing cycle the central bank has been pressured repeatedly by Trump, who has called out the Fed chief he appointed for not cutting rates more aggressively. The Fed - which wants to assert its independence - is conflicted by economic data not yet supporting aggressive easing. At the same time, worries about spillover from the U.S.-China trade war warranted action at the end of July meeting, and has escalated sharply since then. The single currency is under pressure as the European Central Bank is expected to cut its already negative deposit rate next month and likely restart its asset purchases programme soon. When asked how low could the euro go based on any potential ECB stimulus, forecasts ranged from as high as $1.15 to a single call for just below parity with the dollar.
  • Asian shares were trying to piece together a rally on Thursday as Beijing reported surprisingly solid trade numbers while also limiting the fall in its yuan, offering a brief respite from fears of a global currency war. Data showed Chinese exports rose 3.3% in July from a year earlier, when analysts had looked for a fall of 2%. Imports also declined by less than expected, suggesting some resilience to the drawn-out Sino-U.S. tariff struggle. Beijing helped by fixing the yuan at a firmer level than many had feared, even though it was beyond 7 per dollar level for the first time since the global financial crisis. Investors have increasingly come to fear the trade war will prove protracted enough to tip the world into recession, and have piled into bonds and gold as a hedge. Chicago Fed President Charles Evans signaled on Wednesday he was open to lower rates to bolster inflation and counter risks to economic growth from trade tensions. futures moved to price in a 100% probability of a Fed easing in September and a near 24% chance of a half-point cut. Some 75 basis points of easing is implied by January, with rates ultimately reaching 1%. Dire data on German industrial output stoked concerns Europe might already be in recession and pushed bund yields deeper into negative territory. All of which fueled speculation that the major central banks would also have to take drastic action, if only to prevent an export-crimping rise in their currencies. The Bank of Japan would be under particular pressure as the yen has gained sharply from the flood to safe havens, leaving it at 106.16 per dollar from 109.30 just a week ago.
  • Oil prices rebounded on Thursday in Asia after plunging almost 5% overnight on rising crude stockpiles. Oil prices were supported today by reports of possible producer actions to prop up oil markets. Citing an unnamed official from Saudi Arabia, Bloomberg said the world's top exporter contacted other producers and is in talks to take action to halt the slide in prices. Oil prices slumped overnight after the U.S. Energy Information Administration (EIA) reported in its weekly oil inventory dataset that crude stockpile rose by 2.39 million barrels in the week to August 2. That was compared to forecasts for a stockpile draw of 2.85 million barrels, after a decline of 8.5 million barrels in the previous week. The EIA also reported that gasoline inventories unexpectedly surged by 4.44 million barrels, compared to expectations for a draw of 0.72 million barrels, while distillate stockpiles increased by 1.53 million barrels, compared to forecasts for a gain of 0.48 million. Ongoing Sino-U.S. trade war was also cited as a headwind for oil prices. Hopes of a quick trade deal diminished after the U.S. slapped additional tariffs on more Chinese goods. ensions escalated further after the People’s Bank of China reportedly devaluated the yuan this week, prompting Washington to label Beijing as a currency manipulator. China and the U.S. are the world’s biggest oil importers. Oil futures jumped more than $1 a barrel on Thursday, recovering half of the nearly 5% losses in the previous session, on expectations that lower prices may lead to production cuts. Both contracts hit their lowest levels since January on Wednesday after a surprise build in U.S. crude inventories added to worries that the China-U.S. trade war could further dampen demand growth this year. Analysts said that crude prices were moving higher on the expectation that Saudi Arabia, the world's biggest oil exporter, and other producers in the Organization of the Petroleum Exporting Countries (OPEC) may take action to support the market by reducing supply. Bloomberg in a report on Wednesday cited a Saudi official saying that the country is in talks with other producers to take action to halt the oil price slide.

 

 
Intraday RESISTANCE LEVELS
8th August 2019 R1 R2 R3
GOLD-XAU 1,509 1,516-1,526 1,539
Silver-XAG 17.20-17.50 17.90 18.50-18.90
Crude Oil 53.60 54.05 54.50-54.90
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
8th August 2019 S1 S2 S3
GOLD-XAU 1,500-1,489 1,481 1,474-1,469
Silver-XAG 16.90-16.60 16.20 15.90-15.50
Crude Oil 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 (8th August 2019)
GOLD-XAU
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$1506.59/oz and low of US$1491.65/oz. Gold up by 1.806% at US$1501.21/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:

Based on the charts and explanations above; buy above 1500-1489 with risk below 1489, targeting 1509-1516 and 1526-1539. Sell below 1509-1539 keeping stop loss closing above 1439, targeting 1494-1489-1481 and 1474-1469-1460.

 
Intraday Support Levels
S1     1,500-1,489
S2     1,481
S3     1,474-1,469
Intraday Resistance Levels
R1     1,509
R2     1,516-1,526
R3     1,539

Technical Indicators

Name   Value Action
14DRSI  

72.391

Buy
20-DMA   1436.22 Buy
50-DMA  

1398.22

Buy
100-DMA   1342.93 Buy
200-DMA   1307.92 Buy
STOCH(5,3)   95.519 Buy
MACD(12,26,9)   72.325 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$17.32/oz and low of US$16,42/oz. Silver settled up by 4.063% at US$17.09/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 17.00-15.00 targeting 17.20-17.50 and 17.90-18.50-18.90; stop breakage below 15.00. Sell below 17.20-18.90 with stop loss above 18.90; targeting 16.90-16.60-16.20 and 15.90-15.50.

 
Intraday  Support Levels
S1     16.90-16.60
S2     16.20
S3     15.90-15.50

Intraday  Resistance Levels
R1     17.20-17.50
R2     17.90
R3     18.50-18.90

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 Wednesday made an intra‐day high of US$53.70/bbl, intraday low of US$50.46/bbl and settled down by 2.165% to close at US$52.18/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 53.60-55.00 with stop loss at 55.10; targeting 52.50-51.90 and 51.00-50.60-50.00. Buy above 52.50-50.60 with risk daily closing below 50.60 and targeting 53.60-54.05-54.50-54.90 and 55.50-56.10.

 
Intraday Support Levels
S1     52.50
S2     51.90
S3     51.00-50.60

Intraday Resistance Levels
R1     53.60
R2     54.05
R3     54.50-54.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.506 Sell
20-DMA   56.14 Buy
50-DMA   55.93 Buy
100-DMA   59.00 Sell
200-DMA   56.91 Buy
STOCH(5,3)   21.130 Buy
MACD(12,26,9)   -1.057 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1178/EUR, high of US$1.1241/EUR and settled the day down by 0.089% to close at US$1.1198/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 Wednesday made an intra‐day low of US$1.2120/GBP, high of US$1.2190/GBP and settled the day up by 0.1911% to close at US$1.2138/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 Wednesday made intra‐day low of JPY105.59/USD and made an intraday high of JPY106.49/USD and settled the day up by 0.246% at JPY106.26/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   33.813 Buy
20-DMA   107.66 Sell
50-DMA   107.94 Sell
100-DMA   109.37 Buy
200-DMA   110.32 Sell
STOCH(9,6)   24.253 Sell
MACD(12,26,9)   -0.499 Buy

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