AAFX TRADING

Daily Market Lookup

  • The bitter trade war between China and the United States kept Asian factory activity mostly in decline in August, business surveys showed, strengthening the case for policymakers to unleash fresh stimulus to fend off recession risks. In a surprise development, China’s factory activity unexpectedly expanded in August as output edged up, a private sector purchasing managers’ index (PM) showed on Monday, but orders remained weak and business confidence faltered. Export-reliant South Korea, Japan and Taiwan also saw factory activity shrink, underscoring the growing pain from the tit-for-tat tariff war between the world’s two-largest economies. In a fresh escalation of trade tensions, the United States began imposing 15% tariffs on a variety of Chinese goods on Sunday. China reciprocated with new duties on U.S. crude. In China, the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for August rose to a five-month high of 50.4 from 49.9 in July, beating a median market forecast and exceeding the 50-point level that separates contraction from growth on a monthly basis. The reading followed Beijing’s official PMI that showed factory activity shrank in August for the fourth month in a row, pointing to a further slowdown in the world’s second-largest economy. Elsewhere in Asia, Japanese manufacturing activity fell for a fourth straight month in August, underlining a darkening outlook for the world’s third-largest economy. While Japan’s exports slipped for an eighth month in July due to slumping China-bound sales, the economy has so far enjoyed steady growth thanks to robust domestic demand. But there are signs the economy may start to lose the support from consumption and capital expenditure. Any further sign of weakness in domestic demand could add pressure on the Bank of Japan to ramp up stimulus at its rate review on Sept. 18-19, which follows the European Central Bank’s rate decision and that of the U.S. Federal Reserve. South Korean’s factory activity also shrank as manufacturers felt the pinch not just from the U.S.-China trade war but an escalating diplomatic dispute with Japan. The country’s exports tumbled in August for a ninth straight month on sluggish demand from its biggest buyer, China, and depressed prices of computer chips globally.
  • The yen strengthened on Monday, thanks to bigger appetites for safe-haven assets as Washington and Beijing put additional tariffs on each other's exports, adding to the gloom hanging over the global economic outlook. The United States slapped 15% tariffs on a variety of Chinese goods on Sunday - including footwear, smart watches and flat-panel televisions - while China imposed new duties on U.S. crude oil. U.S. President Donald Trump said the two sides would still meet for talks later this month, but hopes for a resolution to the trade war have diminished. Gold, which like the yen tends to find favour during uncertain times, also rose on Monday by the most in almost a week as investors were drawn to so-called risk-off trades. Declines in Asian shares also showed investors steering away from risk. Sentiment toward the yuan improved after a private survey on Chinese manufacturing in August beat market expectations, and Chinese shares managed to rise more than 1% on Monday. China's factory activity unexpectedly expanded in August as production edged up, the Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) survey showed on Monday, but orders remained weak, suggesting the improvement could be temporary. Data due this week includes a survey on Chinese services and August trade numbers on Sunday. There will be manufacturing and services surveys for the United States, which will also release data on its trade balance and non-farm payrolls. The euro stood at $1.0992 (EUR=), up 0.01% in Asia, but sentiment toward the common currency was weak after it tumbled on Friday to its weakest in more than two years. German Chancellor Angela Merkel's conservatives and her coalition partners held off a surge in far right support in two state elections in eastern Germany on Sunday. The result averted an immediate political crisis in Europe's largest economy, but expectations are high that the European Central Bank will cut interest rates at its next monetary policy meeting on Sept. 12, which could weigh on the euro.
  • Oil prices dropped on Monday as new tariffs on both the U.S. and China trade dispute took effect, adding to concerns over an already-gloomy global economic outlook and lower demand for crude. Over the weekend, the Sino-U.S. trade war intensified again as U.S. tariffs on 15% on Chinese goods including footwear, smart watches and flat-panel televisions took effect. Chinese tariffs of between 5% to 10% on a range of U.S. goods also kicked in. Adding fuel to the fire, U.S. President Donald Trump wrote in a tweet: “Importers can find suppliers outside of China. Absolutely worth it, we don’t want to be servants to the Chinese!” More trade talks between the two biggest economies in the world are expected to happen later in the month. On August 23, Beijing announced a 5% tariff on U.S. crude, the first time oil was directly affected by the Sino-U.S. trade war since it broke out more than a year ago. Elsewhere, a Reuters survey found that OPEC oil output rose in August as higher supply from Iraq and Nigeria outweighed restraint by Saudi Arabia and losses caused by U.S. sanctions on Iran..

 

 
Intraday RESISTANCE LEVELS
2nd September 2019 R1 R2 R3
GOLD-XAU 1,532-1,539 1,550 1,555-1,562
Silver-XAG 18.60-18.90 19.50 20.00-20.50
Crude Oil 55.40-56.05 56.50 57.40-58.00
EURO/USD 1.1030-1.1050 1.1070 1.1100-1.1150
GBP/USD 1.2190-1.2250 1.2300 1.2350-1.2410
USD/JPY 106.50 107.00 107.60-108.20

Intraday SUPPORTS LEVELS
2nd September 2019 S1 S2 S3
GOLD-XAU 1,516 1,509-1,500 1,490
Silver-XAG 18.10-17.90 17.50 16.80-16.50
Crude Oil 54.90-54.50 53.60 53.00-51.40
EURO/USD 1.0960-1.0910 1.0860 1.0815
GBP/USD 1.2160 1.2100 1.2065-1.2010
USD/JPY 106.10-105.60 105.00 104.60-104.00

Intra-Day Strategy (2nd September 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 Friday made its intraday high of US$1533.08/oz and low of US$1516.94/oz. Gold down by 0.459% at US$1520.38/oz.

Technicals in Focus:

In daily charts, prices are above 20DMA (1506) 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 1516-1490 with risk below 1490, targeting 1532-1539-1550 and 1562-1570. Sell below 1533-1570 keeping stop loss closing above 1570, targeting 1516-1509 and 1500-1489.

 
Intraday Support Levels
S1     1,516
S2     1,509-1,500
S3     1,490
Intraday Resistance Levels
R1     1,532-1,539
R2     1,550
R3     1,555-1,562

Technical Indicators

Name   Value Action
14DRSI  

61.734

Buy
20-DMA   1512.74 Buy
50-DMA  

1454.01

Buy
100-DMA   1377.43 Buy
200-DMA   1331.20 Buy
STOCH(5,3)   56.519 Buy
MACD(12,26,9)   27.325 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$18.46/oz and low of US$18.05/oz. Silver settled up by 0.729% at US$18.35/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 18.10-15.90 targeting 18.60-18.90 and 19.50-20.00-20.50; stop breakage below 15.90. Sell below 18.60-20.50 with stop loss above 20.50; targeting 18.50-17.90-17.50 and 16.80-16.50.

 
Intraday  Support Levels
S1     18.10-17.90
S2     17.50
S3     16.80-16.50

Intraday  Resistance Levels
R1     18.60-18.90
R2     19.50
R3     20.00-20.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   75.523 Buy
20-DMA   17.37 Sell
50-DMA   16.39 Buy
100-DMA   15.60 Buy
200-DMA   15.42 Buy
STOCH(5,3)   74.246 Sell
MACD(12,26,9)   0.358 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$56.55/bbl, intraday low of US$54.42/bbl and settled down by 2.639% to close at US$56.96/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 55.40-58.75 with stop loss at 58.75; targeting 54.90-54.50 and 53.60-52.80. Buy above 54.90-52.80 with risk daily closing below 52.80 and targeting 55.40-56.00-56.50 and 57.40-58.00.

 
Intraday Support Levels
S1     54.90-54.50
S2     53.60
S3     53.00-51.40

Intraday Resistance Levels
R1     55.40-56.05
R2     56.50
R3     57.40-58.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.377 Sell
20-DMA   54.82 Buy
50-DMA   56.41 Buy
100-DMA   57.88 Sell
200-DMA   56.17 Buy
STOCH(5,3)   64.130 Buy
MACD(12,26,9)   -0.245 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.0962/EUR, high of US$1.1059/EUR and settled the day down by 0.661% to close at US$1.0982/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 1.0960-1.0815 with risk below 1.0815, targeting 1.1030-1.1050-1.1070 and 1.1160-1.1200. Sell below 1.1010-1.1150 targeting 1.0960-1.0910 and 1.0860-1.0815 with stop-loss at daily closing above 1.1150.

 
Intraday Support Levels
S1     1.0960-1.0910
S2     1.0860
S3     1.0815

Intraday  Resistance Levels
R1     1.1030-1.1050
R2     1.1070
R3     1.1100-1.1150

TECHNICAL INDICATORS
Name   Value Action
14DRSI   32.413 Buy
20-DMA   1.1132 Sell
50-DMA   1.1180 Sell
100-DMA   1.1199 Sell
200-DMA   1.1272 Sell
STOCH(5,3)   12.958 Sell
MACD(12,26,9)   -0.003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2138/GBP, high of US$1.2225/GBP and settled the day down by 0.146% to close at US$1.2159/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 1.2190-1.2410 with targets at 1.2160-1.2100 and 1.2065-1.2010-1.1980 stop-loss should be below 1.2410. Buy above 1.2160-1.2010 with targets 1.2190-1.2250-1.2300 and 1.2350-1.2410 with stop loss closing below 1.2010.

 
Intraday Support Levels
S1     1.2160
S2     1.2100
S3     1.2065-1.2010

Intraday Resistance Levels
R1     1.2190-1.2250
R2     1.2300
R3     1.2350-1.2410

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

46.307

Buy
20-DMA   1.2150 Sell
50-DMA   1.2347 Sell
100-DMA   1.2583 Sell
200-DMA   1.2762 Sell
STOCH(5,3)   28.175 Buy
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY106.09/USD and made an intraday high of JPY106.53/USD and settled the day down by 0.201% at JPY106.27/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 106.50-108.20 with risk above 108.20 targeting 106.10-105.80-105.00 and 104.50-104.00. Long positions above 106.10-104.00 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
R3     107.60-108.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.360 Buy
20-DMA   106.13 Sell
50-DMA   107.29 Sell
100-DMA   108.63 Buy
200-DMA   109.78 Sell
STOCH(9,6)   66.253 Buy
MACD(12,26,9)   -0.412 Buy

AAFX TRADING
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