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Daily Market Lookup

  • The U.S. dollar steadied on Wednesday in Asia ahead of the U.S. Federal Reserve’s two-day policy meeting. The Fed is expected to cut the target range for the Fed funds rate by 25 basis points at this week’s meeting. Stronger-than-expected retail sales and consumer sentiment data, coupled with hopes of a breakthrough in the trade dispute with China, appeared to weaken the argument for easing in recent days. Traders are also keeping an eye out on the Sino-U.S. trade development. U.S. President Donald Trump told reporters on Tuesday that Washington could reach a trade deal with China before the U.S. presidential election. The president said that China would prefer to deal with someone else, but warned that terms of the deal will be “far worse” if it came after the 2020 election. The dollar traded near a seven-week high versus the yen as oil markets recovered from a supply shock, but the focus is firmly on a U.S. Federal Reserve meeting later on Wednesday that is widely expected to deliver an interest rate cut. Sterling traded near a six-week high versus the dollar as some speculators reduced excessive bets on a decline in the pound, but sentiment remained weak due to uncertainty over how the UK will exit the European Union. Major currencies are likely to trade in narrow ranges before the Fed's meeting. Fed Reserve Chairman Jerome Powell has clearly broadcast his intention to cut rates, so some analysts warn that the dollar could actually bounce if the Fed eases policy as expected. The British pound was quoted at $1.2497, holding onto a 0.6% gain from Tuesday, when it briefly touched the highest since July 19. Oil prices tumbled around 6% on Tuesday after Saudi Arabia's energy minister said the kingdom has tapped inventories to restore oil supplies to where they stood before drone attacks over the weekend shut around 5% of global oil output. Economists and analysts widely expect the Fed to cut its benchmark rate for the second time this year by 25 basis points to 1.75%-2.00% at a meeting ending Wednesday to counter risks posed by the U.S.-China trade war. Short-term rates spiked overnight, which led the Fed to inject $53.15 billion into the financial system with a money market operation it has not used in more than a decade.
  • The Federal Reserve will conclude its latest policy meeting on Wednesday buffeted by conflicting economic data, under steady pressure from the White House for steep interest rate cuts, and confronted as well with an unexpected jump in overnight borrowing costs that may require action on its own. Despite divisions about whether a reduction in borrowing costs is needed, the U.S. central bank is widely expected on Wednesday to cut its key overnight lending rate by a quarter of a percentage point for the second time this year. The Fed is due to release its policy statement at 2 p.m. EDT. Fed Chair Jerome Powell is scheduled to hold a news conference half an hour later. A rate cut on Wednesday would lower the Fed’s target policy rate to a range of between 1.75% and 2.00% and dovetail with moves by central banks around the world to ease monetary policy to offset the impact of a U.S.-China trade war and other risks to the global economy. From world bond markets to U.S. President Donald Trump, however, the more consequential reaction may come in response to how the Fed describes its latest policy decision, the expectations it sets for possible rate cuts later this year and in 2020, and whether the central bank shifts gears and begins to again expand its asset holdings. A possible change in the Fed’s balance sheet policy or the central bank’s tools to manage interest rates only emerged as a talking point among analysts this week when overnight funding rates spiked unexpectedly and the federal funds rate hit 2.25%, the upper limit of the target range set by the Fed at its July policy meeting. The jump in the overnight “repo” rate, a key measure of conditions in U.S. financial markets, prompted the New York Fed to intervene with a $75 billion auction to keep the related federal funds rate in line. Some analysts said the developments in short-term funding markets indicated the Fed had gone too far in reducing the size of its balance sheet in recent months, and needed to begin buying bonds again to boost the level of reserves available to banks. A rate cut would be intended to do the same, as the Fed reacts to an array of issues that have forced it to pivot since the start of the year from a stance in which it expected to continue raising rates this year to one in which it is cutting them. The question that policymakers will answer in their statement, through updated economic projections, and in Powell’s news conference, is how much more help they feel the economy needs considering that U.S. unemployment is low and growth remains steady.
  • Oil prices fell on Wednesday in Asia after Saudi Arabia’s energy minister said the kingdom is recovering faster than expected from an attack on the weekend that knocked out 5% of global oil output. Saudi Energy Minister Prince Abdulaziz bin Salman said in a press conference overnight that the kingdom will restore lost oil production by the end of September. Average oil production in September and October would be 9.89 million barrels per day, he said, adding that Saudi would ensure full oil supply commitments to its customers this month. Meanwhile, State-owned Aramco CEO Amin Nassser said full capacity of 12 million barrels per day would be back at the end of November. Oil prices were already falling yesterday after a Reuters report cited a Saudi official as predicting the kingdom could fully restore oil output within two to three weeks. Earlier reports suggested it would take far longer to bring output back to normal after missile attacks over the weekend took an estimated 5.77 million barrels a day of production offline. On the data front, the American Petroleum Institute said U.S. stockpiles rose by about 600,000 barrels last week. They dropped by 7.2 million barrels the week before.

 

 
Intraday RESISTANCE LEVELS
18th September 2019 R1 R2 R3
GOLD-XAU 1,509 1,520 1,532-1,539
Silver-XAG 17.90 18.10 18.60-18.90
Crude Oil 59.00-60.20 60.90 61.60-62.40
EURO/USD 1.1090 1.1130-1.1180 1.1250
GBP/USD 1.2505 1.2570 1.2600-1.2650
USD/JPY 108.50-108.90 109.55 110.00

Intraday SUPPORTS LEVELS
18th September 2019 S1 S2 S3
GOLD-XAU 1,500-1,480 1,474 1,469-1,460
Silver-XAG 17.50-16.90 16.70 16.70 15.90-15.60
Crude Oil 58.20-57.60 56.75 56.00-55.40
EURO/USD 1.1030-1.1000 1.0940 1.0910-1.0860
GBP/USD 1.2440-1.2400 1.2350 1.2310-1.2270
USD/JPY 108.00-107.60 107.00 106.50-106.10

Intra-Day Strategy (18th September 2019)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Buy
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Tuesday made its intraday high of US$1507.02/oz and low of US$1493.42/oz. Gold up by 0.189% at US$1501.19/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 1500-1460 with risk below 1460, targeting 1509-1520 and 1532-1539. Sell below 1509-1539 keeping stop loss closing above 1539, targeting 1489-1480 and 1469-1460.

 
Intraday Support Levels
S1     1,500-1,480
S2     1,474
S3     1,469-1,460
Intraday Resistance Levels
R1     1,509
R2     1,520
R3     1,532-1,539

Technical Indicators

Name   Value Action
14DRSI  

51.965

Buy
20-DMA   1515.86 Sell
50-DMA  

1476.37

Buy
100-DMA   1402.92 Buy
200-DMA   1347.31 Buy
STOCH(5,3)   31.123 Sell
MACD(12,26,9)   4.123 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$18.07/oz and low of US$17.74/oz. Silver settled up by 0.930% at US$17.99/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 17.50-15.60 targeting 17.90-18.20 and 18.60-18.90; stop breakage below 16.90. Sell below 17.90-18.90 with stop loss above 18.90; targeting 17.50-16.90-16.70 and 16.00-15.60.

 
Intraday  Support Levels
S1     17.50-16.90
S2     16.70
S3     16.70 15.90-15.60

Intraday  Resistance Levels
R1     17.90
R2     18.10
R3     18.60-18.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.718 Buy
20-DMA   17.99 Buy
50-DMA   16.96 Buy
100-DMA   15.90 Buy
200-DMA   15.60 Buy
STOCH(5,3)   17.246 Buy
MACD(12,26,9)   0.308 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$62.34/bbl, intraday low of US$58.21/bbl and settled down by 5.080% to close at US$58.51/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 200DMA i.e. 56.35 which is a resistance level and breakage above will call for 57.00-58.00. MACD is above zero line and histograms are in increasing mode will bring bullish 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 neutral region and more downside can be expected to reach the oversold region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 58.20-56.00 with risk daily closing below 56.00 and targeting 59.00-60.20-60.90 and 61.60-62.40-63.10. Sell below 59.00-62.40 with stop loss at 62.40; targeting 58.20-57.60-56.90 and 56.00-55.40.

 
Intraday Support Levels
S1     58.20-57.60
S2     56.75
S3     56.00-55.40

Intraday Resistance Levels
R1     59.00-60.20
R2     60.90
R3     61.60-62.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.413 Sell
20-DMA   56.12 Buy
50-DMA   56.06 Buy
100-DMA   57.00 Buy
200-DMA   56.46 Buy
STOCH(5,3)   62.130 Sell
MACD(12,26,9)   0.753 Sell

EUR/USD

AAFX TRADING

EUR/USD of Tuesday made an intraday low of US$1.0989/EUR, high of US$1.1073/EUR and settled the day up by 0.653% to close at US$1.1070/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1129), which become immediate resistance level, break above will target 1.1180-1.1260. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.1090-1.0815 with risk below 1.0815, targeting 1.1090-1.1130 and 1.1160-1.1200. Sell below 1.1090-1.1250 targeting 1.1030-1.1000-1.0940 and 1.0910-1.0860 with stop-loss at daily closing above 1.1250.

 
Intraday Support Levels
S1     1.1030-1.1000
S2     1.0940
S3     1.0910-1.0860

Intraday  Resistance Levels
R1     1.1090
R2     1.1130-1.1180
R3     1.1250

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.755 Buy
20-DMA   1.1046 Sell
50-DMA   1.1118 Sell
100-DMA   1.1178 Sell
200-DMA   1.1253 Sell
STOCH(5,3)   64.958 Buy
MACD(12,26,9)   -0.0026 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2391/GBP, high of US$1.2526/GBP and settled the day up by 0.587% to close at US$1.2497/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 1.2515-1.2710 with targets at 1.2490-1.2440-1.2400 and 1.2350-1.2310-1.2250 stop-loss should be below 1.2400. Buy above 1.2490-1.2300 with targets 1.2515-1.2570-1.2600 and 1.2650-1.2710 with stop loss closing below 1.2300.

 
Intraday Support Levels
S1     1.2440-1.2400
S2     1.2350
S3     1.2310-1.2270

Intraday Resistance Levels
R1     1.2505
R2     1.2570
R3     1.2600-1.2650

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

62.863

Buy
20-DMA   1.2291 Buy
50-DMA   1.2275 Buy
100-DMA   1.2498 Sell
200-DMA   1.2734 Sell
STOCH(5,3)   79.450 Sell
MACD(12,26,9)   -0.0037 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY108.10/USD and made an intraday high of JPY108.36/USD and settled the day up by 0.019% at JPY108.10/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 108.50-110.00 with risk above 110.00 targeting 108.00-107.60-107.00 and 106.50-106.10-105.80. Long positions above 108.00-105.00 with targets of 108.50-108.90-109.55 and 110.00-110.60 with stop below 106.00.

 
Intraday Support Levels
S1     108.00-107.60
S2     107.00
S3     106.50-106.10

INTRADAY RESISTANCE LEVELS
R1     108.50-108.90
R2     109.55
R3     110.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.821 Buy
20-DMA   106.81 Sell
50-DMA   107.10 Sell
100-DMA   108.02 Buy
200-DMA   109.39 Sell
STOCH(9,6)   86.253 Buy
MACD(12,26,9)   -0.359 Buy

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