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Daily Market Lookup

  • Asian shares turned lower on Thursday after the U.S. Federal Reserve cut interest rates as expected but signaled a higher bar to further policy easings. Treasury yields rose broadly and the curve flattened as Fed Chairman Jerome Powell took a cautious approach to any further reductions in borrowing costs, while division among central bankers has increased uncertainty over how much further rates might fall. The yen rose from a seven-week low versus the dollar and held onto those gains after the Bank of Japan kept policy on hold, as expected, but signaled it could ease next month. Central banks around the world have been loosening policy to counter the risks of low inflation and recession. Easier monetary policy has generally supported equities. However, some analysts argue that a bond market rally has gone too far, saying yields have fallen too fast and curves flattened too much. Others are worried about the growing amount of sovereign debt with negative yields. The Fed cut interest rates for a second time this year to 1.75%-2.00% in a 7-3 vote but signaled further cuts are unlikely as the labor market remains strong. The rate cut was widely expected, but the split vote has raised some concern about predicting the future path of monetary policy So-called dot-plot forecasts from all 17 policymakers showed even broader disagreement, with seven expecting a third rate cut this year, five seeing the current rate cut as the last for 2019, and five who appeared to have been against even Wednesday’s move. The spread between two- and 10-year Treasury yields, the most commonly used measure of the yield curve, was near the lowest since Sept. 9. The curve inverted on Aug. 14 for the first time since 2007 when long-term yields traded below short-term yields, a widely accepted indicator of coming recession. The BOJ maintained its pledge to guide short-term interest rates at minus 0.1% and the 10-year government bond yield around 0%. Investors will closely watch BOJ Governor Haruhiko Kuroda’s post-decision press conference later on Thursday to gauge how he assesses risks to Japan’s economic outlook. Investors are awaiting a Bank of England policy meeting later Thursday. The BOE is expected to keep rates unchanged, but uncertainty about how the UK will exit from the European Union has complicated the outlook for monetary policy.
  • The Japanese yen rose against the U.S. dollar on Thursday in Asia following the conclusion of the Bank of Japan’s meeting. The Bank of Japan kept its short-term rate target at -0.1%, but noted in a statement that “it is becoming necessary to pay closer attention to the possibility that the momentum towards achieving its price target will be lost.” BOJ governor Haruhiko Kuroda will provide a briefing later in the day. The U.S. dollar index slipped 0.1% to 98.058 after the Federal Reserve lowered its interest rates to the 1.75-2% range from the previous 2-2.25%. The move, which was widely expected by analysts, was the second rate cut this year. The dollar stood tall on Thursday after the U.S. Federal Reserve cut rates by 25 basis points, as expected, but its chairman signaled a higher bar for future rate cuts. The greenback touched a seven-week high of 108.47 against the Japanese yen and stood just below that in Asian morning trade. It also rose on the Swiss franc , hitting a three-month high, and climbed against other major currencies. The U.S. central bank, on a 7-3 vote, lowered the Fed funds target rate on Wednesday to a range of 1.75% to 2.00% "in light of the implications of global developments for the economic outlook." However, Fed Chairman Jerome Powell described U.S. prospects as "favourable" and the rate move as "insurance." He did not rule out future cuts, but his remarks were not as dovish as markets had hoped for which lifted bond yields and the dollar. Projections published by the Fed showed policymakers, at the median, expected rates to stay within the new range through 2020, while futures markets have priced in at least another cut. Its strength on the yen may also reduce pressure for further easing from the Bank of Japan, which meets later on Thursday and is widely expected to keep rates on hold.
  • Oil prices rose on Thursday in Asia following the first U.S. inventory build in four weeks. The U.S. Energy Information Administration reported that crude inventories rose by 1.06 million barrels for the week ended Sept 13, compared with expectations for a drawdown of 2.5 million barrels Gasoline inventories rose by 780,000 barrels versus forecasts for a drop of 540,000 barrels. Distillate stockpiles increased by 440,000 barrels, compared with forecasts for a rise of 535,000 barrels Concerns on the Saudi Arabia situation limited losses today, although U.S. President Donald Trump seemed to be reluctant to call for a military strike against Iran, as he ordered the Treasury Department to “substantially increase” sanctions on the country Meanwhile, Saudi Arabia pledged to restore full production by the end of September, adding that it has managed to restore supplies by drawing from its oil inventories, according to Reuters. Energy Minister Abdulaziz bin Salman also assured the world this week that the kingdom’s energy industry was barely affected and that its production would be higher than pre-attack levels by November.

 

 
Intraday RESISTANCE LEVELS
19th September 2019 R1 R2 R3
GOLD-XAU 1,500-1,509 1,520 1532-1,539
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
19th September 2019 S1 S2 S3
GOLD-XAU 1,489-1,480 1,474 1,469-1,460
Silver-XAG 17.50-16.90 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 (19th 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 Wednesday made its intraday high of US$1511.62/oz and low of US$1482.84/oz. Gold down by 0.487% at US$1493.94/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 1489-1460 with risk below 1460, targeting 1500-1509-1520 and 1532-1539. Sell below 1509-1539 keeping stop loss closing above 1539, targeting 1489-1480 and 1469-1460.

 
Intraday Support Levels
S1     1,489-1,480
S2     1,474
S3     1,469-1,460
Intraday Resistance Levels
R1     1,500-1,509
R2     1,520
R3     1532-1,539

Technical Indicators

Name   Value Action
14DRSI  

48.965

Buy
20-DMA   1514.86 Sell
50-DMA  

1481.37

Buy
100-DMA   1409.46 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 Wednesday made its intraday high of US$18.02/oz and low of US$17.50/oz. Silver settled up by 0.930% at US$17.73/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     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 Wednesday made an intra‐day high of US$59.21/bbl, intraday low of US$57.53/bbl and settled down by 0.903% to close at US$58.11/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 Wednesday made an intraday low of US$1.1074/EUR, high of US$1.1074/EUR and settled the day down by 0.378% to close at US$1.1012/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   45.755 Buy
20-DMA   1.1044 Sell
50-DMA   1.1117 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 Wednesday made an intra‐day low of US$1.2438/GBP, high of US$1.2511/GBP and settled the day up by 0.228% to close at US$1.2468/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 Wednesday made intra‐day low of JPY108.08/USD and made an intraday high of JPY108.47/USD and settled the day up by 0.305% at JPY108.43/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

AAFX TRADING
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