AAFX TRADING

Daily Market Lookup

  • Asian shares struggled to make headway on Friday as uncertainty over how much further the U.S. Federal Reserve would cut interest rates added to investors’ worries over slowing global growth. With a trade war between the United States and China dragging on, and political tumult in Hong Kong, Italy and Britain adding to the tense backdrop, investors were keenly awaiting Fed Chair Jerome Powell’s speech at a gathering of central bankers in Jackson Hole, Wyoming, later in the day (1400 GMT). Business surveys on Thursday suggested further slowing in advanced economies in August, but service sector activity remained resilient, offsetting some of the drag from weak manufacturing. In the U.S. bond market, the closely watched two-year, 10-year Treasury yield curve briefly moved back into inversion overnight, a shift that also occurred last week and sent financial markets into a tailspin amid worries of a sharp global downturn. An inversion in the U.S. yield curve has presaged several past U.S. recessions, raising fears the decade-long expansion in the world’s biggest economy might be nearing its end. While markets overwhelmingly expect the Fed to follow up its first rate cut in a decade with more stimulus at its meeting next month, some policymakers disagree. Kansas City Fed President Esther George, who dissented against the decision to ease in July, and Philadelphia Fed President Patrick Harker, who said he “reluctantly” supported the cut, both said the U.S. economy does not need more stimulus at this point. Dallas Fed President Robert Kaplan said the businesses had become much more cautious due to surprises on trade policy and he was “going to at least be open-minded about making some adjustment” if he sees continued weakness. All of that has made Powell’s speech in Jackson Hole pivotal for markets as they look for any clues on future easing, after the Fed last month cut rates for the first time since the financial crisis Any indications of hawkishness in the Fed chief’s comments might hurt riskier assets, though the dollar stands to benefit. The euro also was little changed against U.S. currency at $1.1073. A survey showing a surprise uptick in euro zone business growth for August was offset somewhat by trade war fears knocking future expectations to their weakest in over six years. The pound jumped to a three-week high of $1.2273 overnight after traders interpreted comments from German Chancellor Angela Merkel to mean that a solution to the Irish border problem could be found before Britain leaves the European Union on Oct. 31. Merkel on Wednesday challenged Britain to come up with alternatives to the Irish border backstop within 30 days, but French President Emmanuel Macron cautioned there would be no renegotiation of the Brexit deal. Sterling last quoted at $1.2234, 0.1% weaker on the day.
  • The dollar held steady in Asia on Friday on expectations U.S. Federal Reserve Chairman Jerome Powell would stick with his message that the central bank has not entered a prolonged monetary easing cycle. Powell gives a highly-awaited speech later Friday at a meeting of central bankers in Jackson Hole, but doubts have emerged after two Fed officials said they saw no reason to cut interest rates again without new signs of economic weakness. Currency markets have in recent months been driven by global central banks' shift to much more accommodative policy settings as economic demand slows and trade disputes intensify. Expectations that the Fed will cut rates at its next meeting in September are still very high, according to interest rate futures, but the currency market is likely to react if the tone of Powell's comments do not match these dovish expectations. In the United States, Philadelphia Federal Reserve Bank President Patrick Harker and Kansas City Federal Reserve Bank President Esther George both said on Thursday they saw no immediate need to cut rates. Powell is likely to acknowledge later Friday that fallout from the U.S.-China trade war may worsen a global economic slowdown and ultimately make more U.S. rate cuts necessary. But he is expected also to try to ensure he is not seen as bowing before repeated attacks from President Donald Trump for not easing policy further.
  • Oil prices clawed back the previous day's losses on Friday, with Brent nudging above $60 a barrel, as tighter supplies from key producers offset slowing demand growth and investors await clues on the U.S. Federal Reserve's monetary policy. A speech by Fed Chair Jerome Powell later on Friday at a meeting of global central bankers in Jackson Hole, Wyoming, is expected to provide clues on whether the U.S. central bank will cut interest rates for a second time this year to boost the world's largest economy. Traders' expectations of further U.S. monetary easing were clouded by comments from two Fed officials on Wednesday who said they do not see a case for a rate cut now. McCarthy also said Brent has good support at $60 a barrel on technical charts and may have some upside potential. Oil prices fell in July and are down so far in August, dropping after the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC) cut demand growth forecasts due to risks to global economy from the U.S.-China trade war. Production cuts from OPEC members and Russia, and reduced exports from Iran and Venezuela because of U.S. sanctions, have continued to support oil prices. On the data front, traders will look to the latest rig count data due later in the day for clues on crude production activity following an uptick in U.S. production to 12.3 million last week. Data last week showed the number of oil rigs operating in the U.S. fell by 4 to 770. The number is down 11.4% from a year ago. Elsewhere, Reuters' report cited OPEC data showing that its share of global oil supply had fallen to 30% its lowest in a decade, but the agency concluded the cartel won't be stampeded into changing output policy as a result. Iraq is currently pumping above its agreed output ceiling, while Russia increased its output by an average of 180,000 barrels a day this month from July levels, according to UBS commodity strategist Giovanni Staunovo.

 

 
Intraday RESISTANCE LEVELS
23rd August 2019 R1 R2 R3
GOLD-XAU 1,509-1,516 1,526 1,539-1,550
Silver-XAG 17.00-17.50 17.90 18.50-18.90
Crude Oil 56.05-56.50 57.40 58.20-59.00
EURO/USD 1.1100-1.1150 1.1250 1.1250-1.1290
GBP/USD 1.2250-1.2300 1.2350 1.2410
USD/JPY 106.50 107.00-107.60 108.20

Intraday SUPPORTS LEVELS
23rd 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 55.40 54.90 54.50-53.60
EURO/USD 1.1050-1.1030 1.0990 1.0900-1.0850
GBP/USD 1.2190-1.2160 1.2100 1.2065-1.2010
USD/JPY 106.10-105.60 105.00 104.60-104.00

Intra-Day Strategy (23rd 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 Thursday made its intraday high of US$1504.48/oz and low of US$1492.42/oz. Gold down by 0.286% at US$1497.81/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     1,509-1,516
R2     1,526
R3     1,539-1,550

Technical Indicators

Name   Value Action
14DRSI  

62.193

Buy
20-DMA   1474.20 Buy
50-DMA  

1430.98

Buy
100-DMA   1361.08 Buy
200-DMA   1320.14 Buy
STOCH(5,3)   32.519 Sell
MACD(12,26,9)   26.325 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$17.13/oz and low of US$16.93/oz. Silver settled down by 0.368% at US$17.02/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 17.00-18.90 with stop loss above 18.90; targeting 16.90-16.50 and 15.90-15.50.

 
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   59.191 Buy
20-DMA   16.80 Sell
50-DMA   16.03 Buy
100-DMA   15.41 Buy
200-DMA   15.30 Buy
STOCH(5,3)   43.246 Sell
MACD(12,26,9)   0.306 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$56.38/bbl, intraday low of US$54.79/bbl and settled down by 0.949% to close at US$55.28/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 56.00-59.00 with stop loss at 59.00; targeting 55.50-54.90 and 54.05-53.60-53.00. Buy above 55.40-52.60 with risk daily closing below 52.60 and targeting 56.50-57.00 and 57.40-58.20-59.00.

 
Intraday Support Levels
S1     55.40
S2     54.90
S3     54.50-53.60

Intraday Resistance Levels
R1     56.05-56.50
R2     57.40
R3     58.20-59.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.314 Sell
20-DMA   55.22 Buy
50-DMA   56.47 Buy
100-DMA   58.42 Sell
200-DMA   56.19 Buy
STOCH(5,3)   46.130 Sell
MACD(12,26,9)   -0.390 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1062/EUR, high of US$1.1062/EUR and settled the day down by 0.044% to close at US$1.1078/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 1.1050-1.0850 with risk below 1.0850, targeting 1.1100-1.1160-1.1200 and 1.1250-1.1290. Sell below 1.1100-1.1350 targeting 1.1130-1.1090 and 1.1005-1.0980 with stop-loss at daily closing above 1.1350.

 
Intraday Support Levels
S1     1.1050-1.1030
S2     1.0990
S3     1.0900-1.0850

Intraday  Resistance Levels
R1     1.1100-1.1150
R2     1.1250
R3     1.1250-1.1290

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.585 Buy
20-DMA   1.1133 Sell
50-DMA   1.1206 Sell
100-DMA   1.1212 Sell
200-DMA   1.1282 Sell
STOCH(5,3)   20.958 Sell
MACD(12,26,9)   -0.003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2107/GBP, high of US$1.2271/GBP and settled the day up by 1.054% to close at US$1.2248/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 1.2250-1.2410 with targets at 1.2190-1.2160-1.2100and 1.2065-1.2010-1.1980 stop-loss should be below 1.2410. Buy above 1.2190-1.2010 with targets 1.2250-1.2300 and 1.2350-1.2410 with stop loss closing below 1.2010.

 
Intraday Support Levels
S1     1.2190-1.2160
S2     1.2100
S3     1.2065-1.2010

Intraday Resistance Levels
R1     1.2250-1.2300
R2     1.2350
R3     1.2410

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

49.307

Buy
20-DMA   1.2134 Sell
50-DMA   1.2388 Sell
100-DMA   1.2625 Sell
200-DMA   1.2774 Sell
STOCH(5,3)   76.175 Buy
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY106.41/USD and made an intraday high of JPY106.64/USD and settled the day down by 0.167% at JPY106.41/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   47.684 Buy
20-DMA   106.66 Sell
50-DMA   107.48 Sell
100-DMA   108.86 Buy
200-DMA   109.93 Sell
STOCH(9,6)   77.253 Buy
MACD(12,26,9)   -0.553 Buy

AAFX TRADING
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