AAFX TRADING

Daily Market Lookup

  • Asian stocks edged up on Friday, thanks to gains on Wall Street, but signs of widening cracks in the global economy curbed risk appetite as markets looked to a key U.S. job report that could determine whether the Federal Reserve cuts rates further. Investors have been caught out by a set of weak U.S. data this week, including surveys on services and manufacturing sectors, deepening fears the Sino-U.S. trade war is starting to hurt growth in the world’s biggest economy. U.S. stock futures ESc1 tacked on 0.1% on Friday, following a 0.80% increase in the S&P 500 on Wall Street overnight on hopes that future Fed rate cuts will support corporate profits. That sentiment was underscored by a frail performance for world stocks in recent weeks, hurt by political uncertainty in the United Stated and Hong Kong, geopolitical tensions in the Middle East, Brexit and a drumroll of weak global data. U.S. Treasury prices fell slightly but two-year yields remained near the lowest in two years due to growing signs the United States is feeling an economic chill from its trade war with China. The dollar traded near a one-month low versus the yen, while it was stuck near a one-week trough versus the euro as traders increased bets that the Fed will have to cut rates further to keep growth in the U.S. economy on track. Data due later on Friday are forecast to show the U.S. economy added 145,000 new jobs in September, more than an increase of 130,000 in the previous month. However, some traders are braced for a disappointing result after the surprisingly soft data earlier this week on U.S. manufacturing, job creation, and the services sector. The Fed has already cut rates twice this year as policymakers try to limit the damage caused by the bruising Sino-U.S. trade war.
  • The dollar stepped back on Friday after a soft U.S. service sector survey inflamed worries that pressure from U.S. trade disputes with China and other countries could spill over into the broader U.S. economy and eventually tip it into a recession. A survey from the U.S. Institute for Supply Management (ISM) showed its non-manufacturing activity index falling to 52.6 in September, the lowest since August 2016, and far below expectations of 55.1, from 56.4 in August. Coming on the heels of a similar survey on Tuesday on manufacturing showing activity plunging to a more than 10-year lows, the weak data increased fears of a U.S. recession. The U.S. service sector, backed by firm U.S. domestic consumption, has been one of few bright spots in the global economy as the manufacturing sector worldwide has been knocked by the protracted U.S-China trade war. A gauge of employment in the ISM survey in fact fell to 50.4 last month, the lowest reading since February 2014, from 53.1 in August. That does not bode well for the upcoming all-important U.S. jobs data on Friday, said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank, noting the employment component in the ISM has had a meaningful correlation with the payrolls data. The median economists' forecast polled by Reuters is for a rise of 145,000 in September, a tad below the average over the last 12 months around 173,000. Heightened worries about the U.S. service sector increased expectations that the U.S. Federal Reserve will cut interest rates at the end of this month, undermining the dollar's yield advantage Fed funds rate futures are almost fully pricing in a 25 basis point rate cut at Oct. 30 and a high chance of another cut by December. It has risen to one-week high of $1.2413 on Thursday after the head of a group of euroskeptic lawmakers in Prime Minister Boris Johnson's Conservative Party said the government's latest Brexit proposals offered the possibility of a "tolerable deal." Still, traders remained unsure whether Johnson's proposal to replace the Irish border "backstop" was going to morph into a final Brexit divorce agreement due to mixed messages coming from both sides.
  • Oil futures were higher ahead of the weekend but remained on track for large weekly losses on fears that slower global economic growth will hurt fuel demand, even as Saudi Arabia said it has fully restored oil output after recent attacks. For the week, Brent futures were down 6.3%, marking its largest weekly loss since July. WTI was down 5.7% for the week, also its biggest decline since July. Weak U.S. services sector and jobs growth data on Thursday added to worries about global oil demand and exacerbated fears that a protracted U.S.-China trade war could push the global economy into a recession. Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, also said on Thursday the world's top crude oil exporter has fully restored oil output after attacks on its facilities last month knocked out more than 5% of global oil supply. Recent data showing a slowdown in U.S. shale output and drilling activity, however, could lend some support. Oil prices gained on Friday in Asia but are set for huge weekly losses. Concerns of slowing demand increased following the release of weaker-than-expected U.S. economic data. The Institute of Supply Management said this week that its non-manufacturing index fell to its lowest level since August 2016. That came on the heels of the ISM’s purchasing managers index for manufacturing, which posted the lowest reading since 2009 Then, on Wednesday, the ADP National Employment Report showed that private payrolls growth in August was not as strong as previously estimated.

 

 
Intraday RESISTANCE LEVELS
4th October 2019 R1 R2 R3
GOLD-XAU 1,509 1.520 1,524-1,535
Silver-XAG 17.80 18.50 18.90-19.20
Crude Oil 53.90 53.90 54.95-55.40
EURO/USD 1.1030 1.1090 1.1130-1.1180
GBP/USD 1.2350 1.2400 1.2440-1.2505
USD/JPY 107.00-107.80 108.50 108.90¬-109.55

Intraday SUPPORTS LEVELS
4th October 2019 S1 S2 S3
GOLD-XAU 1,500-1,489 1,478 1,470-1,466
Silver-XAG 17.30-16.90 16.25 16.00-15.70
Crude Oil 52.10-51.90 51.00 50.40
EURO/USD 1.0960-1.0900 1.0860 1.0805-1.0740
GBP/USD 1.2310-1.2260 1.2205 1.2165-1.2100
USD/JPY 106.50 106.10-105.50 105.00

Intra-Day Strategy (4th October 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 Thursday made its intraday high of US$1519.50/oz and low of US$1495.75/oz. Gold up by 0.359% at US$1504.86/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 neutral territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1500-1466 with risk below 1466, targeting 1509-1520 and 1524-1535. Sell below 1509-1535 keeping stop loss closing above 1535, targeting 1500-1489-1474 and 1466-1460.

 
Intraday Support Levels
S1     1,500-1,489
S2     1,478
S3     1,470-1,466
Intraday Resistance Levels
R1     1,509
R2     1.520
R3     1,524-1,535

Technical Indicators

Name   Value Action
14DRSI  

51.806

Buy
20-DMA   1499.91 Sell
50-DMA  

1498.09

Sell
100-DMA   1431.08 Buy
200-DMA   1363.80 Buy
STOCH(5,3)   56.745 Buy
MACD(12,26,9)   -1.139 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$17.78/oz and low of US$17.45/oz. Silver settled up by 0.079% at US$17.53/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 oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 16.90-15.70 targeting 17.00-17.80-18.50 and 18.90-19.20; stop breakage below 15.60. Sell below 17.00-19.30 with stop loss above 19.50; targeting 16.70 and 16.25-16.00-15.70.

 
Intraday  Support Levels
S1     17.30-16.90
S2     16.25
S3     16.00-15.70

Intraday  Resistance Levels
R1     17.80
R2     18.50
R3     18.90-19.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.112 Buy
20-DMA   17.26 Buy
50-DMA   17.78 Buy
100-DMA   16.85 Buy
200-DMA   15.91 Buy
STOCH(5,3)   83.246 Sell
MACD(12,26,9)   0.052 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$54.31/bbl, intraday low of US$52.07/bbl and settled down by 0.355% to close at US$52.16/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 52.10-50.40 with risk daily closing below 50.40 and targeting 52.70-53.30-53.90 and 54.95-55.40-55.9. Sell below 52.70-55.40 with stop loss at 55.40; targeting 52.10-51.90 and 51.00-50.40.

 
Intraday Support Levels
S1     52.10-51.90
S2     51.00
S3     50.40

Intraday Resistance Levels
R1     53.90
R2     53.90
R3     54.95-55.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.864 Sell
20-DMA   56.26 Buy
50-DMA   55.62 Buy
100-DMA   56.20 Buy
200-DMA   56.87 Buy
STOCH(5,3)   20.130 Sell
MACD(12,26,9)   -0.662 Sell

EUR/USD

AAFX TRADING

EUR/USD of Thursday made an intraday low of US$1.0940/EUR, high of US$1.0998/EUR and settled the day up by 0.038% to close at US$1.0962/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 negative crossovers to signal for bearish 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 1.0900-1.0740 with risk below 1.0740, targeting 1.1030-1.1090-1.1130 and 1.1160-1.1200. Sell below 1.0960-1.1200 targeting 1.0910-1.0860 and 1.0805-1.0740 with stop-loss at daily closing above 1.1250.

 
Intraday Support Levels
S1     1.0960-1.0900
S2     1.0860
S3     1.0805-1.0740

Intraday  Resistance Levels
R1     1.1030
R2     1.1090
R3     1.1130-1.1180

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.755 Buy
20-DMA   1.1009 Sell
50-DMA   1.1066 Sell
100-DMA   1.1154 Sell
200-DMA   1.1233 Sell
STOCH(5,3)   31.958 Buy
MACD(12,26,9)   -0.0041 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2264/GBP, high of US$1.2412/GBP and settled the day up by 0.504% to close at US$1.2326/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 1.2350-1.2510 with targets at 1.2310-1.2260-1.2205 and 1.2165-1.2100 stop-loss should be below 1.2510. Buy above 1.2310-1.2100 with targets 1.2350-1.2400 and 1.2440-1.2505-1.2570 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2310-1.2260
S2     1.2205
S3     1.2165-1.2100

Intraday Resistance Levels
R1     1.2350
R2     1.2400
R3     1.2440-1.2505

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.721

Buy
20-DMA   1.2382 Buy
50-DMA   1.2248 Buy
100-DMA   1.2426 Sell
200-DMA   1.2719 Sell
STOCH(5,3)   59.450 Buy
MACD(12,26,9)   -0.0074 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY106.47/USD and made an intraday high of JPY107.29/USD and settled the day down by 0.251% at JPY106.89/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 107.00-109.55 with risk above 110.00 targeting 106.50-106.10-105.50 and 105.00. Long positions above 106.50-105.00 with targets of 107.00-108.00-108.50 and 108.90-109.55 with stop below 105.00.

 
Intraday Support Levels
S1     106.50
S2     106.10-105.50
S3     105.00

INTRADAY RESISTANCE LEVELS
R1     107.00-107.80
R2     108.50
R3     108.90¬-109.55

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.821 Buy
20-DMA   107.67 Sell
50-DMA   107.07 Sell
100-DMA   107.78 Buy
200-DMA   109.15 Sell
STOCH(9,6)   87.253 Sell
MACD(12,26,9)   0.292 Buy

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