AAFX TRADING

Daily Market Lookup

  • Asian shares edged higher on Monday after data showed the U.S. unemployment rate dropped to the lowest in almost 50 years, easing concerns of a slowdown in the world’s largest economy. Sentiment toward the U.S. economy deteriorated sharply much of last week after disappointing data on manufacturing and services suggested the trade war was taking a toll, and more rate cuts would be needed to avert a potential recession in the world’s biggest economy. But a modest September increase in U.S. jobs, announced on Friday, eased some of these concerns and lifted U.S. markets that day. The U.S. unemployment rate fell to 3.5% in September to reach the lowest since December 1969. Non-farm payrolls also grew in September, but slightly less than expected. This week, the main focus will be the high-level U.S.-China trade negotiations expected in Washington on Oct. 10-11 to see if the two sides can end a bruising year-long trade war that has hurt global growth and raised the risk of recession. Central banks around the world have been easing policy to try to offset the impact of the trade war The Federal Reserve has lowered interest rates twice this year. Before the jobs report, traders saw a 85.2% chance the Fed will cut rates by 25 basis points to 1.75%-2.00% this month, but that chance has now fallen to 81.1%, according to CME Group’s FedWatch tool. Political instability in Hong Kong could hurt market sentiment after China’s army took the unusual step of issuing warnings to anti-government protesters in Hong Kong over the weekend.
  • The yen gained slightly and the yuan slipped on Monday as investors nervously awaited U.S.-China talks this week for signs of whether the two sides can de-escalate or end their punishing trade war. Risk appetite soured noticeably after Bloomberg reported that Chinese officials are signaling they are increasingly reluctant to agree to a broad deal pursued by U.S. President Donald Trump. Other trade-exposed currencies such as the Australian dollar and the Korean won also fell on doubts that much will be achieved at the trade negotiations. Deputy-level meetings will be held on Monday and Tuesday, with top-level talks scheduled for Thursday and Friday, when Chinese Vice Premier Liu He meets U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Washington. Global markets have been on a roller coaster ride this year as hopes for a deal have waxed and waned, while weak economic data in Europe, the United States and China have added to evidence that the tensions are dragging on global trade and growth. The jitters knocked the dollar from a two-year high last week, and it remained subdued on Monday. Against a basket of major currencies (DXY) it was steady at 98.818 - almost a percentage point below its week-ago peak. Signals from both sides in the lead-up to the trade talks have been mixed Trump last month delayed hiking levies on $250 billion worth of Chinese imports from Oct. 1 to Oct. 15, "as a gesture of good will," while China has again begun purchasing U.S agricultural goods. But administration sources late in September also said the U.S. was considering imposing restrictions on investing in Chinese companies. As the dollar has lost momentum, the euro stood at $1.0979 (EUR=), up 0.03% in Asia, recovering little by little after having hit a near 2-1/2-year low of $1.0879 last Tuesday. With only a few weeks until UK's scheduled exit from the European Union on Oct. 31, British Prime Minister Boris Johnson is seeking significant changes to how the contentious issue of the Irish border is dealt with.
  • Oil prices fell on Monday, extending last week's heavy losses, with traders fearing the global economic slowdown will weigh on future oil demand growth while pegging hopes for a rebound on progress in talks this week on ending the U.S.-China trade war. Both contracts ended last week with a more-than-5% decline after dismal manufacturing data from the United States and China, as the lingering row between the world's top economies hurts global growth and raises the risk of recession. U.S. and Chinese officials will meet in Washington on Oct. 10-11 in the next, much-anticipated fresh effort to work out a deal. On the supply side, a faster-than-expected resumption in Saudi Arabia's production after a Sept. 14 attack on key production facilities also exerted downward pressure on oil prices, although the Middle East remained tense. In Iraq, the second-largest producer among the Organization of the Petroleum Exporting Countries, deadly anti-government unrest is posing the biggest security and political challenge so far to Prime Minister Adel Abdul Mahdi's year-old government. Iraq's oil exports of 3.43 million barrels per day (bpd) from Basra terminals could be disrupted if instability lasts for weeks, Ayham Kamel, Eurasia Group's practice head for Middle East and North Africa, said in a note. Global supply also faces facility repair and maintenance pressures. The Buzzard oil field in the British North Sea has been shut for pipe repair work, a spokesman from China's CNOOC said on Friday. Buzzard is the main contributor to the Forties crude stream, the largest of the five North Sea oil grades that underpin Brent crude futures. Meanwhile Libya's National Oil Corporation (NOC) said on Sunday it will close the Faregh oil field at Zueitina port for scheduled maintenance from Monday until Oct. 14.

 

 
Intraday RESISTANCE LEVELS
7th 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 52.70-53.30 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
7th 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 52.10-51.50 51.00 50.40
EURO/USD 1.0950-1.0900 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 (7th 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 Friday made its intraday high of US$1515.02/oz and low of US$1495.75/oz. Gold down by 0.025% at US$1504.62/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  

51.891

Buy
20-DMA   1500.15 Sell
50-DMA  

1501.40

Sell
100-DMA   1435.63 Buy
200-DMA   1366.15 Buy
STOCH(5,3)   76.745 Buy
MACD(12,26,9)   -0.194 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$18.07/oz and low of US$17.74/oz. Silver settled up by 0.079% 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 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 Friday made an intra‐day high of US$53.25/bbl, intraday low of US$51.96/bbl and settled up by 1.318% to close at US$52.86/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     52.10-51.50
S2     51.00
S3     50.40

Intraday Resistance Levels
R1     52.70-53.30
R2     53.90
R3     54.95-55.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.864 Sell
20-DMA   56.01 Buy
50-DMA   55.54 Buy
100-DMA   56.10 Buy
200-DMA   56.91 Buy
STOCH(5,3)   32.130 Sell
MACD(12,26,9)   -0.926 Sell

EUR/USD

AAFX TRADING

EUR/USD of Friday made an intraday low of US$1.0999/EUR, high of US$1.0956/EUR and settled the day up by 0.135% to close at US$1.0977/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 1.0950-1.0740 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     1.0950-1.0900
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   46.755 Buy
20-DMA   1.0093 Sell
50-DMA   1.1056 Sell
100-DMA   1.1148 Sell
200-DMA   1.1227 Sell
STOCH(5,3)   78.958 Buy
MACD(12,26,9)   -0.0041 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2275/GBP, high of US$1.2356/GBP and settled the day up by 0.0843% to close at US$1.2336/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 Friday made intra‐day low of JPY106.55/USD and made an intraday high of JPY107.12/USD and settled the day up by 0.024% at JPY106.92/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   43.426 Buy
20-DMA   107.67 Sell
50-DMA   106.92 Sell
100-DMA   107.66 Sell
200-DMA   109.07 Sell
STOCH(9,6)   20.253 Sell
MACD(12,26,9)   0.0116 Buy

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