AAFX TRADING

Daily Market Lookup

  • Asian shares extended their gains on Tuesday as hopes for stimulus in major economies tempered anxiety about a global recession, boosting riskier assets and drawing money from safe-havens such as bonds and gold. Shares in China and Hong Kong opened lower and swung in and out of negative territory after China lowered its lending reference rate only slightly in the first publication of a new benchmark since new interest rate reforms were announced on Saturday. Oil futures were also down in a tentative sign that worries about an attack at a Saudi oil field over the weekend have eased, but some traders were nervously monitoring an Iranian tanker at the center of a clash between Tehran and Washington. For now, however, investors were cheered by signs policymakers were willing to do more to support their economies in the grip of international trade frictions, led by the bruising Sino-U.S. tariff tussle. The immediate focus shifts to the minutes of the U.S. Federal Reserve’s last meeting due on Wednesday. Traders are also keenly waiting on the Fed’s Jackson Hole seminar and a Group of Seven summit this weekend for clues on what additional steps policymakers will take to bolster growth. Senior White House officials are discussing a temporary payroll tax cut to boost the economy, the Washington Post reported on Monday. Hopes for additional stimulus are rising after reports that Germany is prepared to increase fiscal spending, and after the People’s Bank of China took steps to lower corporate borrowing costs. Markets overwhelmingly expect the Fed to cut rates again at its Sept. 17-18 policy meeting from the current 2.00%-2.25%. The Fed cut rates in July for the first time in a decade to mitigate the effects of the U.S.-China trade row and a global slowdown. Last week, financial markets went into a tailspin after the Treasury yield curve briefly inverted when short-term yields traded above those of long-term paper. Investors, who feared a steep global downturn given an inverted yield curve has presaged several past U.S. recessions, dumped riskier assets. However, a bounce in yields from lows hit last week has eased some of the concerns about the global economy.
  • The dollar hovered near a three-week high on Tuesday, as expectations policymakers around the world would unleash fresh stimulus drove an improvement in appetite for riskier assets and lifted U.S. government bond yields Yields on benchmark U.S. Treasuries pulled away from three-year lows, helped in part by the prospect of Germany ditching its balanced budget rule to boost spending and on more economic support measures by China. The yuan was also modestly pressured after the People's Bank of China (PBOC) set its new lending rate slightly lower. It was the first publication of the benchmark since the PBOC announced interest rate reforms over the weekend designed to lower corporate borrowing cost. Italy’s opposition Democratic Party has had good, initial contacts with the ruling 5-Star Movement over the possibility of forging a coalition, a PD source with knowledge of the talks said on Monday. The 5-Star’s current coalition partner, the far-right League, has said it will present a no-confidence motion against Prime Minister Giuseppe Conte in an attempt to trigger a snap election and cash in on its surging popularity in the polls. Market focus will shift to the annual symposium of global central bankers starting on Friday at Jackson Hole, Wyoming. Particular attention will center on Fed Chairman Jerome Powell's comments on monetary policy at a time when investors widely expect the Fed to cut rates again at its next meeting in September. The U.S. dollar was unchanged on Tuesday in Asia, while the Chinese yuan fell as the country’s central bank debuted a new loan prime rates announced on the weekend. Looking ahead, this week’s Jackson Hole symposium and Federal Reserve Chairman Jerome Powell’s speech will be the main focus for the dollar. Following recent recession fears, some analysts believe the Fed might cut rates by another 25 basis points at the next policy meeting in September. The People’s Bank of China today debuted its new loan prime rates under a new mechanism that was revealed on Saturday. The interest rate reforms help lower borrowing costs for companies and support slowing growth, which has been hit by the trade war with the U.S.
  • Crude oil prices held mostly steady on Tuesday on optimism that U.S.-China trade tensions would ease and on hopes that major economies would enact stimulus measures to counter a possible global economic slowdown that could affect oil demand. The United States said it would extend a reprieve that permits China's Huawei Technologies to buy components from U.S. companies, signaling a slight softening of the trade conflict between the world's two largest economies. The extension sets a very "comforting tone" ahead of next month's U.S.-China trade talks, Stephen Innes, managing partner of VM Markets, said in a note. A rally in equity markets around the world on growing expectations that global economies would take action to counteract slowing growth also supported oil prices. China's new lending reference rate was set slightly lower on Tuesday after the central bank announced interest rate reforms designed to reduce corporate borrowing costs, while Germany's right-left coalition government said it would be prepared to ditch its balanced budget rule and take on new debt to counter a possible recession. Meanwhile, a Reuter’s poll of seven analysts revealed expectations that crude oil inventories in the United States fell by 1.9 million barrels in the week to Aug. 16. The poll was conducted ahead of reports from the American Petroleum Institute (API), an industry group, and the Energy Information Administration (EIA), an agency of the U.S. Department of Energy. The API is scheduled to release its data on Tuesday. Still, prices were weighed down by a report from the Organization of the Petroleum Exporting Countries (OPEC) that stoked concerns about oil demand growth. Traders were also watching for signs of tension in the Middle East after the United States called the release of an Iranian tanker at the center of a confrontation between Iran and Washington unfortunate, warning Greece and Mediterranean ports against helping the vessel.

 

 
Intraday RESISTANCE LEVELS
20th August 2019 R1 R2 R3
GOLD-XAU 1,500-1,516 1,526 1,539-1,550
Silver-XAG 17.00-17.50 17.90 18.50-18.90
Crude Oil 56.50 57.40-58.20 59.00
EURO/USD 1.1120-1.1150 1.1250 1.1250-1.1290
GBP/USD 1.2150 1.2190 1.2250-1.2300
USD/JPY 106.50 107.00-107.60 108.20

Intraday SUPPORTS LEVELS
20th August 2019 S1 S2 S3
GOLD-XAU 1,489 1,481-1,474 1,466
Silver-XAG 16.80 16.50 15.90-15.50
Crude Oil 56.05-55.50 54.90 54.50-53.60
EURO/USD 1.1070-1.1030 1.0990 1.0900-1.0850
GBP/USD 1.2120-1.2065 1.2010 1.1980-1.1950
USD/JPY 106.10-105.60 105.00 104.60-104.00

Intra-Day Strategy (20th 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 Monday made its intraday high of US$1512.81/oz and low of US$1493.16/oz. Gold down by 1.095% at US$1495.64/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 1500-1469 with risk below 1469, targeting 1516-1526-1532 and 1539-1550. Sell below 1516-1550 keeping stop loss closing above 1550, targeting 1500-1489 and 1481- 1474.

 
Intraday Support Levels
S1     1,489
S2     1,481-1,474
S3     1,466
Intraday Resistance Levels
R1     1,500-1,516
R2     1,526
R3     1,539-1,550

Technical Indicators

Name   Value Action
14DRSI  

26.431

Buy
20-DMA   1470.20 Buy
50-DMA  

1426.98

Buy
100-DMA   1359.08 Buy
200-DMA   1319.14 Buy
STOCH(5,3)   36.519 Sell
MACD(12,26,9)   26.325 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$17.15/oz and low of US$16.83/oz. Silver settled down by 1.564% at US$16.85/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 16.80-15.00 targeting 17.00-17.50-17.90 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     16.80
S2     16.50
S3     15.90-15.50

Intraday  Resistance Levels
R1     17.00-17.50
R2     17.90
R3     18.50-18.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.093 Buy
20-DMA   16.69 Sell
50-DMA   15.85 Buy
100-DMA   15.33 Buy
200-DMA   15.24 Buy
STOCH(5,3)   62.246 Sell
MACD(12,26,9)   0.396 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$56.23/bbl, intraday low of US$54.72/bbl and settled up by 2.08% to close at US$56.02/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 56.50-59.00 with stop loss at 59.00; targeting 56.05-55.50-54.90 and 54.05-53.60-53.00. Buy above 56.05-52.60 with risk daily closing below 52.60 and targeting 56.50-57.00 and 57.40-58.20-59.00.

 
Intraday Support Levels
S1     56.05-55.50
S2     54.90
S3     54.50-53.60

Intraday Resistance Levels
R1     56.50
R2     57.40-58.20
R3     59.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.871 Sell
20-DMA   55.29 Buy
50-DMA   56.27 Buy
100-DMA   58.63 Sell
200-DMA   56.23 Buy
STOCH(5,3)   56.130 Buy
MACD(12,26,9)   -0.390 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1075/EUR, high of US$1.1113/EUR and settled the day down by 0.134% to close at US$1.1076/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 1.1100-1.0980 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     1.1070-1.1030
S2     1.0990
S3     1.0900-1.0850

Intraday  Resistance Levels
R1     1.1120-1.1150
R2     1.1250
R3     1.1250-1.1290

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.9612 Buy
20-DMA   1.1146 Sell
50-DMA   1.1225 Sell
100-DMA   1.1218 Sell
200-DMA   1.1286 Sell
STOCH(5,3)   16.958 Sell
MACD(12,26,9)   -0.0013 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2103/GBP, high of US$1.2171/GBP and settled the day down by 0,028% to close at US$1.2124/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 1.2120-1.2300 with targets at 1.2065-1.2010-1.1980 and 1.1950-1.1900 stop-loss should be below 1.2250. Buy above 1.2065-1.1900 with targets 1.2120-1.2150 and 1.2190-1.2250-1.2300 with stop loss closing below 1.2300.

 
Intraday Support Levels
S1     1.2120-1.2065
S2     1.2010
S3     1.1980-1.1950

Intraday Resistance Levels
R1     1.2150
R2     1.2190
R3     1.2250-1.2300

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.307

Buy
20-DMA   1.2185 Sell
50-DMA   1.2426 Sell
100-DMA   1.2662 Sell
200-DMA   1.2792 Sell
STOCH(5,3)   68.175 Buy
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY106.22/USD and made an intraday high of JPY106.69/USD and settled the day up by 0.383% at JPY106.62/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     106.10-105.60
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   41.684 Buy
20-DMA   107.10 Sell
50-DMA   107.67 Sell
100-DMA   109.11 Buy
200-DMA   110.11 Sell
STOCH(9,6)   52.253 Buy
MACD(12,26,9)   -0.553 Buy

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