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Daily Market Lookup

  • Asian stocks gained on Friday, joining a global trend as investors took heart from firm U.S. economic data plans hopes a meeting between U.S. and Chinese negotiators next month signals an easing in trade tensions. The improvement in investors’ appetite for risk reduced demand for safe havens such as government bonds and the yen, however. Global equity markets welcomed news that the United States and China agreed on Thursday to hold high-level talks early in October, raising hopes for substantial progress in de-escalating their long, bitter trade conflict. Upbeat U.S. data on Thursday also helped sentiment. U.S. private payrolls increased in August at their fastest pace in four months, according to ADP National Employment Report. Separately the U.S. services industry rebounded last month to its fastest expansion since February, according to the Institute for Supply Management’s non-manufacturing purchasing managers index (PMI). The non-farm payroll report is expected to show an increase of 158,000 and the unemployment rate holding steady at 3.7%. The pound hovered near a six-week peak of $1.2353 scaled the previous day on hopes that Britain could avoid exiting the European Union without a deal. Sterling had fallen to a three-year low of $1.1959 midweek after British Prime Minister Boris Johnson stoked fears of a no-deal Brexit. The dollar index against a basket of six major currencies was little changed at 98.369 after pulling back from a one-week low of 98.085 the previous day, thanks to a rise in U.S. Treasury yields.
  • he U.S. dollar was marginally higher Friday morning in Asia following a surprise increase in payrolls in the U.S. and positive signs in the trade negotiations between the U.S. and China. After a difficult weekend that saw tariffs take effect both in China and the U.S., officials from both sides suggested that negotiations would kick off again in October. U.S. job growth likely slowed further in August, but the pace of gains probably remains sufficient to keep the economy expanding moderately amid rising threats from trade tensions and weakness overseas that have left financial markets fearing a recession. The Labor Department’s closely watched monthly employment report on Friday will come in the wake of a survey on Tuesday that showed manufacturing contracting for the first time in three years in August. The economy’s waning fortunes, underscored by an inversion of the U.S. Treasury yield curve, have been largely blamed on the White House’s year-long trade war with China. Washington and Beijing slapped fresh tariffs on each other on Sunday. While the two economic giants on Thursday agreed to hold high-level talks in early October in Washington, the uncertainty, which has eroded business confidence, lingers. The economy is also facing headwinds from Britain’s potentially disorderly exit from the European Union, and softening growth in China and the rest of the world. The Federal Reserve is expected to cut interest rates again this month to keep the longest economic expansion in history, now in its 11th year, on track. The U.S. central bank lowered borrowing costs in July for the first time since 2008. Nonfarm payrolls probably increased by 158,000 jobs last month after advancing 164,000 in July, according to a Reuters survey of economists. The anticipated job gains would be below the monthly average of 165,000 over the last seven months, but still above the roughly 100,000 per month needed to keep up with growth in the working age population. The unemployment rate is forecast unchanged at 3.7% for a third straight month. August job growth could, however, fall short of expectations because of a seasonal quirk related to students leaving their summer jobs and returning to school. Over the past several years, the initial August job count has tended to exhibit a weak bias, with revisions subsequently showing strength Government employment could get a lift from hiring for the 2020 decennial census, which could create roughly 40,000 temporary jobs. Traders now await the government's monthly payrolls report due at 1230 GMT on Friday for the next snapshot on the labor market's health. Other factors supporting risk sentiment were a potential breakthrough in the Hong Kong political crisis and reduced chances of Britain crashing out of the European Union on Oct. 31 without a deal. That was in spite of more political chaos in Britain, as Prime Minister Boris Johnson's plan to kick off what is in effect an election and a Brexit campaign was overshadowed on Thursday when his younger brother quit the government. Sentiment has been skittish, however, since the Brexit project remains up in the air and previous progress on U.S.-China trade negotiations has failed in the past.
  • Oil prices gained Friday morning in Asia after crude oil inventory draw figures and trade talk progress. The Energy Information Administration released an estimate saying that U.S. crude oil inventories had dropped by 4.8 million barrels in the week to August 30. This comes after the American Petroleum Institute (API) placed crude oil inventory build at an estimated 401,000 barrels for the week ending Aug 29. This made stocks rise to 429.1 million barrels, against expectations of a 2.5 million barrel decline expected by analysts. Oil prices started to gain after favourable economic data came in from China, the world’s second-largest oil consumer. Recent data demonstrated that China’s services sector expanded by the fastest pace in three months in August, driven by new orders. China is the world’s second-largest oil consumer. In Hong Kong, Chief Executive Carrie Lam’s decision to formally and fully withdraw a controversial extradition bill also helped raise investor sentiment about Chinese markets. The Chinese special administrative region has faced much political unrest since June due to the proposed bill. However, observers expect the unrest to continue as protestors had only one of their five demands met. Still, adding fuel to the gains is U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin’s announcement that talks with a Chinese delegate about the U.S.-China trade war have been scheduled for “the coming weeks” in Washington.  Though both economies have suffered losses, neither seem willing to budge. The trade war has become the main factor of note when forecasting oil demand trends, taking precedence even over OPEC policies and rising U.S. crude oil production.

 

 
Intraday RESISTANCE LEVELS
6th September 2019 R1 R2 R3
GOLD-XAU 1,520-1532 1,539 1,550-1,562
Silver-XAG 18.60-18.90 19.50 20.00-20.50
Crude Oil 56.50-57.60 58.00 58.50
EURO/USD 1.1030-1.1050 1.1070 1.1100-1.1150
GBP/USD 1.2350-1.2400 1.2440 1.2525
USD/JPY 106.50 107.00 107.60-108.20

Intraday SUPPORTS LEVELS
6th September 2019 S1 S2 S3
GOLD-XAU 1,516 1,509-1,500 1,490
Silver-XAG 18.10 17.90-17.50 16.70
Crude Oil 56.05-55.40 54.50 54.00-53.60
EURO/USD 1.0940-1.0910 1.0860 1.0815
GBP/USD 1.2310-1.2250 1.2190 1.2100-1.2065¬
USD/JPY 106.10-105.60 105.00 104.60-104.00

Intra-Day Strategy (6th 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 Thursday made its intraday high of US$1552.93/oz and low of US$1533.83/oz. Gold down by 2.14% at US$1518.89/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 1526-1570 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     1,520-1532
R2     1,539
R3     1,550-1,562

Technical Indicators

Name   Value Action
14DRSI  

54.734

Buy
20-DMA   1520.38 Buy
50-DMA  

1465.76

Buy
100-DMA   1389.97 Buy
200-DMA   1339.37 Buy
STOCH(5,3)   42.519 Buy
MACD(12,26,9)   19.325 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$19.63/oz and low of US$19.17/oz. Silver settled up by 1.773% at US$19.56/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 18.10-16.70 targeting 18.60-18.90-19.50 and 20.00-20.50; stop breakage below 16.90. Sell below 18.60-20.50 with stop loss above 20.50; targeting 18.90-18.50-17.90 and 17.50-16.80.

 
Intraday  Support Levels
S1     18.10
S2     17.90-17.50
S3     16.70

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.523 Buy
20-DMA   17.73 Sell
50-DMA   16.63 Buy
100-DMA   15.72 Buy
200-DMA   15.49 Buy
STOCH(5,3)   75.246 Buy
MACD(12,26,9)   0.677 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$57.60/bbl, intraday low of US$55.63/bbl and settled up by 0.44% to close at US$56.04/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 56.50-58.75 with stop loss at 58.75; targeting 56.05-55.40-54.90 and 54.50-53.60. Buy above 56.05-53.60 with risk daily closing below 53.60 and targeting 56.50-57.60 and 58.00-58.50.

 
Intraday Support Levels
S1     56.05-55.40
S2     54.50
S3     54.00-53.60

Intraday Resistance Levels
R1     56.50-57.60
R2     58.00
R3     58.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.365 Sell
20-DMA   55.15 Buy
50-DMA   56.17 Buy
100-DMA   57.62 Sell
200-DMA   56.21 Buy
STOCH(5,3)   71.130 Buy
MACD(12,26,9)   -0.222 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1016/EUR, high of US$1.1084/EUR and settled the day down by 0.008% to close at US$1.1033/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 1.0940-1.0815 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     1.0940-1.0910
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   40.422 Buy
20-DMA   1.1084 Sell
50-DMA   1.1158 Sell
100-DMA   1.1191 Sell
200-DMA   1.1267 Sell
STOCH(5,3)   53.958 Buy
MACD(12,26,9)   -0.003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2209/GBP, high of US$1.2352/GBP and settled the day up by 0.653% to close at US$1.2329/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 1.2350-1.2525 with targets at 1.2310-1.2250-1.2190 and 1.2100-1.2065-1.2010 stop-loss should be below 1.2400. Buy above 1.2310-1.2065 with targets 1.2250-1.2300 and 1.2350-1.2400 with stop loss closing below 1.1800.

 
Intraday Support Levels
S1     1.2310-1.2250
S2     1.2190
S3     1.2100-1.2065¬

Intraday Resistance Levels
R1     1.2350-1.2400
R2     1.2440
R3     1.2525

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

57.754

Buy
20-DMA   1.2172 Sell
50-DMA   1.2298 Sell
100-DMA   1.2542 Sell
200-DMA   1.2747 Sell
STOCH(5,3)   95.175 Buy
MACD(12,26,9)   -0.0004 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY106.30/USD and made an intraday high of JPY107.22/USD and settled the day up by 0.527% at JPY106.90/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 106.50-108.20 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

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