AAFX TRADING

Daily Market Lookup

  • TAsian stocks stumbled and oil prices extended a punishing sell-off on Thursday as investors feared an historic drop in long-term U.S. bond yields could portend a recession globally. The only saving grace was that the sheer scale of the scare would be bound to alarm central banks everywhere and likely draw a policy response, especially from the Federal Reserve. The futures market was clearly expecting drastic action as it priced in a greater chance the Fed would have to cut rates by half a point at its September meeting. All three of the major U.S. stock indexes tumbled about 3% overnight, with the blue-chip Dow .DJI posting its biggest one-day point drop since October. Global growth woes have mounted as the Sino-U.S. trade war claimed ever more victims, with the German economy contracting in the June quarter and a truly dire set of activity data for July out of China. President Donald Trump on Wednesday seemed to tie a U.S. trade deal with China to a humane resolution of the weeks of protests wracking Hong Kong.
  • Gold prices drew some safe-haven demand and rebounded on Thursday in Asia as global stock markets fell. An inverted yield curve was cited as driving investors away from risk assets and into the safe-haven metal. Global markets fell after the yield on the 30-year U.S. bond hit an all-time low, while the yields on the German 10-year bund and the French 10-year OAT marked fresh record lows in negative territory. Lower yields are beneficial to gold as they reduce the opportunity cost of holding the non-yielding precious metal. Meanwhile, political unrest in Hong Kong also contributed to the gains in gold. Following months of protests against a proposed extradition bill, several Chinese firms are now reconsidering raising funds in Hong Kong, according to Bloomberg. One company scrapped plans for a $500 million IPO in Hong Kong, while at least two other companies are considering the same move, the article reported citing two senior bankers on the deals. U.S. President Donald Trump suggested in a tweet overnight that he wants to have a “personal meeting” with his Chinese counterpart Xi Jinping over the ongoing Hong Kong crisis, and that a trade deal should come after China “work humanely with Hong Kong.” In other news, Reuters reported citing industry sources that China has restricted import of gold since May by some 300-500 tonnes compared with last year. China imports about one-third of the world's total supply, buying about 1,500 tonnes of metal last year, Reuters reported citing customs data.
  • The Japanese yen inched up against the U.S. dollar. Safe-haven demand was cited as the reason for the buying in yen today as recession fears rose after the U.S. Treasury yield curve inverted for the first time in 12 years while U.S. stocks closed sharply lower overnight. Investor sentiment has already taken a hit earlier this week after China reported weaker-than-expected economic data while political unrest in Hong Kong showed no signs of stopping in the near future. Sentiment was already fragile after disappointing economic data from China and Germany revealed the extent of the damage the U.S.-Sino trade war is causing to two of the world's most important exporters. Safe-haven currencies, gold, bonds and other low-risk assets could continue to get a boost due to growing worries about the poor health of the global economy.
  • Oil prices were down on Thursday in Asia after the U.S. Energy Information Administration (EIA) reported a crude inventory build for a second week in a row. The EIA reported a 1.6-million-barrel crude build in the week to August 9 versus market expectations for a 2.8-million-barrel draw. At 440.5 million barrels, inventories were about 3% above the five-year average for this time of year, the EIA said. Oil prices also took a hit following weak industrial production, retail sales data in China and an inverted U.S. treasury yield curve that sparked recession fears. The yield on the U.S. 10-year Treasury note fell below that of the 2-year note, inverting the yield curve for the first time since 2007. Some economists consider the yield curve inversion to be an early indicator of a recession. U.S. stock markets plunged overnight. Oil prices fell on Thursday, adding to sharp overnight losses as U.S. crude inventories unexpectedly rose, fears of recession mounted and economic data out of China and Europe disappointed. The combination of a slew of data suggesting a slowdown in global growth amid the U.S.-China trade war and persistently high levels of oil in U.S. storage has punctured recent optimism in crude markets, but stoked expectations that leading producers may take further steps to support prices. The Organization of the Petroleum Exporting Countries (OPEC) has been mostly trimming production since the start of 2017 and traders say they expect Saudi Arabia to reduce output further amid slowing global oil demand. China reported disappointing data for July, including a surprise drop in industrial output growth to a more than 17-year low, underlining widening economic cracks as the trade war with the U.S. intensifies. Global economic worries, amplified by tariff conflicts and uncertainty over Brexit, are also hitting European economies. A slump in exports sent Germany's economy into reverse in the second quarter, data showed, while the euro zone's GDP barely grew in the second quarter of 2019. A second week of unexpected builds in U.S. crude inventories is adding to the pressure on oil prices. U.S. crude stocks grew by 1.6 million barrels last week, compared with analyst expectations for a decrease of 2.8 million barrels, as refineries cut output, the Energy Information Administration (EIA) said in a report. At 440.5 million barrels, inventories were about 3% above the five-year average for this time of year, the EIA said.

 

 
Intraday RESISTANCE LEVELS
15th August 2019 R1 R2 R3
GOLD-XAU 1,526 1,530-1,539 1,550
Silver-XAG 17.50 17.90 18.50-18.90
Crude Oil 55.50-56.05 56.50 57.40-58.20
EURO/USD 1.1160-1.1200 1.1250 1.1290-1.1325
GBP/USD 1.2065-1.2100 1.2150 1.2190-1.2250
USD/JPY 106.50 107.00-107.60 108.20

Intraday SUPPORTS LEVELS
15th August 2019 S1 S2 S3
GOLD-XAU 1,509-1,500 1,489 1,481-1,474
Silver-XAG 17.20-16.80 16.50 15.90-15.50
Crude Oil 54.90 54.50-53.60 53.00
EURO/USD 1.1130 1.1090-1.1030 1.0990
GBP/USD 1.2010-1.1980 1.1950 1.1900
USD/JPY 106.10-105.80 105.00 104.60-104.00

Intra-Day Strategy (15th 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 Wednesday made its intraday high of US$1523.92/oz and low of US$1494.06/oz. Gold up by 0.996% at US$1516.21/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1410) and breakage below will call for 1400. 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 negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1509-1469 with risk below 1469, targeting 1526-1532 and 1539-1550. Sell below 1526-1550 keeping stop loss closing above 1550, targeting 1509-1500-1489 and 1481- 1474.

 
Intraday Support Levels
S1     1,509-1,500
S2     1,489
S3     1,481-1,474
Intraday Resistance Levels
R1     1,526
R2     1,530-1,539
R3     1,550

Technical Indicators

Name   Value Action
14DRSI  

72.425

Buy
20-DMA   1458.19 Buy
50-DMA  

1416.73

Buy
100-DMA   1352.70 Buy
200-DMA   1314.98 Buy
STOCH(5,3)   61.519 Sell
MACD(12,26,9)   30.325 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$17.30/oz and low of US$16.86/oz. Silver settled up by 1.54% at US$17.19/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 50DMA (15.70), breakage below will lead to 15.20. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in overbought region, indicating buy signal for now. The Stochastic Oscillator is in overbought region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 17.20-15.00 targeting 17.50-17.90 and 18.50-18.90; stop breakage below 15.00. Sell below 17.50-18.90 with stop loss above 18.90; targeting 17.20-16.90-16.60 and 16.20-15.90.

 
Intraday  Support Levels
S1     17.20-16.80
S2     16.50
S3     15.90-15.50

Intraday  Resistance Levels
R1     17.50
R2     17.90
R3     18.50-18.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.706 Buy
20-DMA   16.60 Sell
50-DMA   15.76 Buy
100-DMA   15.29 Buy
200-DMA   15.20 Buy
STOCH(5,3)   62.246 Sell
MACD(12,26,9)   0.396 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$56.80/bbl, intraday low of US$53.97/bbl and settled down by 3.175% to close at US$54.88/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 55.50-59.00 with stop loss at 59.00; targeting 54.90-54.05-53.60 and 53.00-52.50. Buy above 54.90-52.60 with risk daily closing below 52.60 and targeting 55.50-56.10-57.00 and 57.40-58.20-59.00.

 
Intraday Support Levels
S1     54.90
S2     54.50-53.60
S3     53.00

Intraday Resistance Levels
R1     55.50-56.05
R2     56.50
R3     57.40-58.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.781 Sell
20-DMA   55.43 Buy
50-DMA   56.16 Buy
100-DMA   58.78 Sell
200-DMA   56.32 Buy
STOCH(5,3)   69.130 Buy
MACD(12,26,9)   -0.637 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1130/EUR, high of US$1.1190/EUR and settled the day down by 0.294% to close at US$1.1137/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1293), which become immediate resistance level, break above will target 1.1320-1.1350. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider.

Trading Strategy: Neutral to Buy

Buy above 1.1130-1.0980 with risk below 1.0980, targeting 1.1160-1.1200-1.1250 and 1.1290-1.1350. Sell below 1.1160-1.1350 targeting 1.1130-1.1090 and 1.1005-1.0980 with stop-loss at daily closing above 1.1350.

 
Intraday Support Levels
S1     1.1130
S2     1.1090-1.1030
S3     1.0990

Intraday  Resistance Levels
R1     1.1160-1.1200
R2     1.1250
R3     1.1290-1.1325

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.487 Buy
20-DMA   1.1159 Sell
50-DMA   1.1232 Sell
100-DMA   1.1220 Sell
200-DMA   1.1289 Sell
STOCH(5,3)   10.958 Sell
MACD(12,26,9)   -0.0013 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2043/GBP, high of US$1.2100/GBP and settled the day down by 0.0045% to close at US$1.2054/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 1.2065-1.2250 with targets at 1.2010-1.1980 and 1.1950-1.1900 stop-loss should be below 1.2250. Buy above 1.2010-1.1900 with targets 1.2065-1.2100-1.2140 and 1.2190-1.2250 with stop loss closing below 1.2250.

 
Intraday Support Levels
S1     1.2010-1.1980
S2     1.1950
S3     1.1900

Intraday Resistance Levels
R1     1.2065-1.2100
R2     1.2150
R3     1.2190-1.2250

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

27.170

Buy
20-DMA   1.2277 Sell
50-DMA   1.2486 Sell
100-DMA   1.2712 Sell
200-DMA   1.2816 Sell
STOCH(5,3)   15.175 Sell
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY105.64/USD and made an intraday high of JPY106.76/USD and settled the day down by 0.77% at JPY105.90/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (107.84), 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 106.10-105.80-105.00 and 104.50-104.00. Long positions above 105.80-104.00 with targets of 106.50-107.00 and 107.60-108.00-109.05 with stop below 106.00.

 
Intraday Support Levels
S1     106.10-105.80
S2     105.00
S3     104.60-104.00

INTRADAY RESISTANCE LEVELS
R1     106.50
R2     107.00-107.60
R3     108.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.261 Buy
20-DMA   107.26 Sell
50-DMA   107.77 Sell
100-DMA   109.20 Buy
200-DMA   110.19 Sell
STOCH(9,6)   55.253 Buy
MACD(12,26,9)   -0.553 Buy

AAFX TRADING
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