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  • Asian shares wobbled on Friday as investors were reluctant to make big bets ahead of key central bank policy meetings next week against the backdrop of slowing global growth, while sterling extended its slide on a fresh bout of Brexit anxiety. The British pound, which had fallen 0.51% on Thursday after British Prime Minister Boris Johnson’s call for a general election on Dec. 12, extended its slide, edging down 0.07% to $1.2841. Johnson conceded on Thursday for the first time that he would not meet his “do or die” deadline to leave the European Union next week. The continued uncertainty over Brexit comes against the backdrop of persistently sluggish global growth. New orders for U.S.-made capital goods fell more than expected in September and shipments also declined, in a sign that business investment remains soft. A Reuters poll of economists in recent weeks showed that most think a steeper decline in global growth is more likely than a synchronised recovery, despite central bank easing. In his last meeting as president of the European Central Bank, Mario Draghi left ECB policy and guidance unchanged, but advised his successor to “never give up” on propping up the eurozone economy in the face of a worsening outlook. The major focus for investors is next week’s U.S. Federal Reserve policy meeting at which it’s almost certain to cut interest rates for a third time this year. Investors will also scrutinise a raft of data that will follow the Fed decision, he said. “It’s really all about next week.” The Bank of Japan is also set to meet for a two-day meeting ending Oct. 31. The decision is expected to be a close call, though sources told Reuters the BOJ is leaning towards keeping monetary policy steady amid relatively stable markets and a lull in U.S.-China trade tensions. Overall, however, investors remain cautious despite the gains in risk assets in recent weeks, supported by apparent progress in Brexit negotiations and China-U.S. trade talks. Investors are also nervous ahead of a summit in Chile where U.S. President Donald Trump hopes to finalise a partial trade deal with his Chinese counterpart Xi Jinping.
  • The British pound slipped against the U.S. dollar on Friday in Asia after U.K. Prime Minister Boris Johnson said U.K. lawmakers should back an early Dec. 12 general election to get more time to scrutinize the Brexit deal, creating more uncertainties surrounding the country’s departure process. EU officials will meet later in the day to decide how long they will extend Britain’s deadline for departing from the bloc. The greenback was boosted after the Markit purchasing managers’ index came in higher than expected, at 51.5 compared to 51.1 in the prior month. The data raised expectations that the Federal Reserve will cut borrowing costs for a third time this year even further. The central bank’s policymakers will meet next week. U.S. President Donald Trump has pushed for even more rate cuts, pointing to falling interest rates at other central banks around the world. Outgoing ECB President Mario Draghi rejected criticism of his negative interest rate policy and his insistence on resuming outright purchases of government bonds from next month. He added that he wasn’t unduly concerned about the dissent regarding September’s multi-faceted package of easing measures, saying that all the key economic data from the euro zone in the course of the last month had justified the actions. The British pound fell on Friday versus the dollar and the euro after Prime Minister Boris Johnson's call for an election cast yet more uncertainty over Britain's divorce from the European Union. At this stage, an election looks unlikely because the main opposition Labour Party has withheld its support and other opposition parties have rejected the offer. However, the twists and turns of the Brexit process have proved too complex to predict, which is likely to discourage some investors from taking on excessive risk before the EU agrees a new deadline for the UK's departure from the bloc. Opposition Labour leader Jeremy Corbyn said he would wait to see what the EU decides on a Brexit delay before deciding on a general election. However, Corbyn also repeated he could only back an election when the risk of Johnson taking Britain out of the EU without a deal to smooth the transition was off the table. The Ifo economic institute's closely-watched measure of German business sentiment due later on Friday is expected to weaken slightly in October, highlighting fears that Europe's largest economy is slipping into recession due to the U.S.-China trade war and Brexit. The European Central Bank left monetary policy unchanged on Thursday after unveiling a big stimulus package last month, but there are concerns the ECB's firepower has largely been spent. The focus shifts next week to a U.S. Federal Reserve meeting ending Oct. 30 and a Bank of Japan meeting ending Oct. 31 The Fed is expected to cut interest rates for a third time this year, but fixed income analysts say this is largely priced into the market. Oil prices declined on Friday after three straight days of gains, as gloomy economic growth forecasts renewed concerns over the outlook for demand. The strong weekly rise was underpinned by a surprise decline in U.S. inventories of crude and optimism about more efforts to support prices by OPEC and its allies. Yet, concerns over weakening economic growth remained the fundamental driver for prices. Economists in a Reuters poll said a steeper decline in global economic growth remains more likely than a synchronized recovery, even as multiple central banks dole out rounds of monetary easing. Another Reuters poll of economists found the recent truce in the U.S.-China trade war is not an economic turning point and has done nothing to reduce the risk that the United States could slip into recession in the next two years. There was also more bad news for European powerhouse Germany, with a survey showing employment in the nation's private sector fell for the first time in six years in October, suggesting that a third-quarter slowdown could stretch into the closing months of the year. Thursday's oil price rally was driven by data showing U.S. inventories dropped by 1.7 million barrels last week, shattering analysts' expectations for an increase of 2.2 million barrels Adding further support to prices, OPEC officials said extended supply curbs are an option to offset the weaker demand outlook in 2020.Saudi Arabia, OPEC's de facto leader, wants to focus first on boosting adherence to the group's production-reduction pact with Russia and other non-members, an alliance known as OPEC+, before committing to more cuts, sources told Reuters.

 

 
Intraday RESISTANCE LEVELS
25th October 2019 R1 R2 R3
GOLD-XAU 1,509 1,524-1,535 1,546
Silver-XAG 17.90 18.50 18.90-19.20
Crude Oil 56.00 56.50-57.20 58.00
EURO/USD 1.1180-1.1200 1.1250 1.1300
GBP/USD 1.2920-1.2990 1.3040 1.3100-1.3170
USD/JPY 109.30-110.00 110.70 111.30

Intraday SUPPORTS LEVELS
25th October 2019 S1 S2 S3
GOLD-XAU 1,500-1,494 1,478 1,470-1,466
Silver-XAG 17.60-17.30 16.90 16.25-16.00
Crude Oil 55.30-54.95 53.90 53.30-52.70
EURO/USD 1.1090 1.1050 1.1180-1.1200
GBP/USD 1.2840 1.2790 1.2710-1.2650
USD/JPY 108.50-107.80 107.00 106.50-106.10

Intra-Day Strategy (25th 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$1503.95/oz and low of US$1487.94/oz. Gold up by 0.789% at US$1503.57/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 negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1494-1447 with risk below 1447, targeting 1509-1524-1535 and 1546-1555. Sell below 1509-1546 keeping stop loss closing above 1546, targeting 1494-1489-1478 and 1470-1466.

 
Intraday Support Levels
S1     1,500-1,494
S2     1,478
S3     1,470-1,466
Intraday Resistance Levels
R1     1,509
R2     1,524-1,535
R3     1,546

Technical Indicators

Name   Value Action
14DRSI  

47.882

Buy
20-DMA   1492.33 Sell
50-DMA  

1505.33

Sell
100-DMA   1459.55 Buy
200-DMA   1378.35 Buy
STOCH(5,3)   46.745 Sell
MACD(12,26,9)   -3.55 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$17.83/oz and low of US$17.46/oz. Silver settled up by 1.518% at US$17.78/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 17.30-15.70 targeting 17.80-18.50 and 18.90-19.20; stop breakage below 15.60. Sell below 17.70-19.30 with stop loss above 19.50; targeting 17.30-16.90 and 16.25-16.00-15.70.

 
Intraday  Support Levels
S1     17.60-17.30
S2     16.90
S3     16.25-16.00

Intraday  Resistance Levels
R1     17.90
R2     18.50
R3     18.90-19.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.112 Buy
20-DMA   17.51 Buy
50-DMA   17.79 Buy
100-DMA   16.80 Buy
200-DMA   15.99 Buy
STOCH(5,3)   69.268 Buy
MACD(12,26,9)   -0.075 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$56.48/bbl, intraday low of US$55.39/bbl and settled up by 0.35% to close at US$56.02/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 overbought region and giving positive crossover for confirmation of bullish 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 55.30-52.60 with risk daily closing below 50.40 and targeting 56.00-56.50 and 57.20-58.00. Sell below 56.00-58.10 with stop loss at 58.10; targeting 55.30-54.95-53.90 and 53.30-52.70-52.10.

 
Intraday Support Levels
S1     55.30-54.95
S2     53.90
S3     53.30-52.70

Intraday Resistance Levels
R1     56.00
R2     56.50-57.20
R3     58.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.864 Sell
20-DMA   53.71 Sell
50-DMA   55.27 Sell
100-DMA   55.71 Sell
200-DMA   57.19 Sell
STOCH(5,3)   -0.664 Buy
MACD(12,26,9)   -0.664 Sell

EUR/USD

AAFX TRADING

EUR/USD of Thursday made an intraday low of US$1.1092/EUR, high of US$1.1161/EUR and settled the day down by 0.234% to close at US$1.1102/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1048), which become immediate resistance level, break above will target 1.1100. 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 1.1090-1.0930 with risk below 1.0900, targeting 1.1180-1.1200 and 1.1250-1.1300. Sell below 1.1140-1.1250 targeting 1.1090-1.1050-1.0960 and 1.0860-1.0805 with stop-loss at daily closing above 1.1250.

 
Intraday Support Levels
S1     1.1090
S2     1.1050
S3     1.1180-1.1200

Intraday  Resistance Levels
R1     1.1180-1.1200
R2     1.1250
R3     1.1300

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.755 Buy
20-DMA   1.1017 Buy
50-DMA   1.1034 Buy
100-DMA   1.1134 Sell
200-DMA   1.1204 Sell
STOCH(5,3)   68.958 Buy
MACD(12,26,9)   -0.005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2787/GBP, high of US$1.2949/GBP and settled the day up by 0.486% to close at US$1.2848/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 neutral 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 1.2920-1.3170 with targets at 1.2865-1.2790 and 1.2710-1.2650 stop-loss should be below 1.3000. Buy above 1.2840-1.2650 with targets 1.2920-1.2990-1.3040 and 1.3100-1.3170 with stop loss closing below 1.2650.

 
Intraday Support Levels
S1     1.2840
S2     1.2790
S3     1.2710-1.2650

Intraday Resistance Levels
R1     1.2920-1.2990
R2     1.3040
R3     1.3100-1.3170

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

63.928

Buy
20-DMA   1.2565 Buy
50-DMA   1.2405 Buy
100-DMA   1.2427 Sell
200-DMA   1.2712 Sell
STOCH(5,3)   51.450 Sell
MACD(12,26,9)   -0.016 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY108.48/USD and made an intraday high of JPY108.74/USD and settled the day up by 0.083% at JPY108.59/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 109.00-110.70 with risk above 110.00 targeting 107.80-107.00-106.50 and 106.10-105.50. Long positions above 107.80-105.00 with targets of 108.70-109.30 and 110.00-110.70 with stop below 105.00.

 
Intraday Support Levels
S1     108.50-107.80
S2     107.00
S3     106.50-106.10

INTRADAY RESISTANCE LEVELS
R1     109.30-110.00
R2     110.70
R3     111.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.122 Buy
20-DMA   107.75 Buy
50-DMA   107.13 Buy
100-DMA   107.54 Buy
200-DMA   109.06 Sell
STOCH(9,6)   71.253 Sell
MACD(12,26,9)   0.303 Buy

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