AAFX TRADING

Daily Market Lookup

  • Asian shares jumped on Thursday to a three-month high and the dollar fell broadly after the Federal Reserve cut interest rates as expected and U.S. Treasury yields declined U.S. Treasury yields slipped in Asia after the rate cut, but Fed Chairman Jerome Powell signalled additional trims are unlikely because there are several areas of strength in the U.S. economy. The yen held onto gains versus the dollar after the Bank of Japan keep its ultra-easy monetary policy in place as expected and changed its forward guidance to more clearly signal the future chance of a rate cut. Debate at the Fed and the BOJ highlights the struggle that many central banks are facing The U.S.-China trade war and Britain’s divorce from the European Union have increased uncertainty, but central banks are somewhat reluctant to ease policy aggressively because interest rates are already very low in many major economies. U.S. stock futures edged 0.01% higher on Thursday in Asia after the S&P 500 rose 0.33% to close at a record high on Wednesday for the second time in three trading sessions. A positive mood on Wall Street carried over to Asian equities, except for Australian shares, which fell 0.51% after weak earnings from Australia and New Zealand Banking Group. The Fed lowered its policy rate to 1.50%-1.75%, but dropped a previous reference in its statement to “act as appropriate” to sustain the economic expansion. In his news conference, Powell listed several reasons why he feels the economy is doing well, such as robust consumer spending, strengthening home sales, and healthy asset prices. The yield on benchmark 10-year Treasury notes fell to 1.7785% in Asia on Thursday, while the two-year yield eased slightly to 1.6216%. News that Chile will not host the Asia-Pacific Economic Cooperation (APEC) summit in mid-November was one reason the dollar was dented - as the market has been expecting the United States and China to sign a partial trade deal there. But despite the setback in Chile, Chinese officials voiced optimism that Beijing and Washington can find a way to clinch the so-called Phase One trade deal next month. Traders will focus on BOJ Governor Haruhiko Kuroda’s press conference later on Thursday to gauge how he assesses the risks posed by the U.S.-China trade war and Brexit. Optimism that Washington and Beijing will sign a preliminary agreement to call a truce to their trade war was a factor behind the Fed’s decision to signal that further rate cuts are on hold, highlighting the importance of trade talks to global monetary policy.
  • U.S. dollar slipped on Thursday in Asia after the Federal Reserve slashed its benchmark funds rate by 25 basis points to a range of 1.5% to 1.75% as expected, but altered language in its post-meeting statements and indicated that it may pause rate cuts from here. Fed Chair Jerome Powell said in a news conference that central bank officials “see the current stance of monetary policy as likely to remain appropriate.” Trade tensions between China and the U.S. remained uncertain after Chile said it is canceling the Asia-Pacific Economic Cooperation summit next month due to ongoing protests. U.S. President Donald Trump and Chinese President Xi Jinping were expected to meet on the sidelines and possibly sign phase one of a trade deal. The dollar dipped against a basket of major currencies on Thursday, reversing earlier gains, after the Federal Reserve cut interest rates for the third time this year but signaled its rate-cut cycle might be at a pause, as was broadly expected. In lowering its policy rate by 25 basis points to a target range of between 1.50% and 1.75%, the U.S. central bank dropped a previous reference in its policy statement that it "will act as appropriate" to sustain the economic expansion - language that was considered a sign for future cuts. Still, lack of an explicit signal from the Fed that it is done with easing for now was perceived to be less hawkish than expected, helping to drive the dollar down. The dollar also temporarily dipped on news that Chile has withdrawn as host of an APEC trade summit in November where the United States and China had been expected to take major steps toward ending a 15-month-old trade war. Optimism that the U.S. and China will soon agree on a partial deal has boosted risk sentiment this week. Sterling edged up after British Prime Minister Boris Johnson won parliamentary approval on Wednesday to hold a general election in December, though moves were limited as large currency options expiring this week curbed volatility. The Bank of Japan will likely hold off on expanding stimulus later in the day, as calm markets and easing U.S.-China trade tensions take the heat off the central bank from using its limited monetary arsenal to fight the risk of recession.
  • Oil prices were mixed on Thursday in Asia amid a surprise surge in U.S. crude stockpiles, while U.S. GDP dropped to an annual rate of 1.9% in the third quarter. The GDP growth was above Wall Street expectations, but it still raised concerns about investment and growth ahead as the stimulus from tax cuts disappears. Crude stockpiles rose by 5.7 million barrels for the week ended Oct. 25, the EIA said. The market was expecting a rise of about 494,000 barrels.. Gasoline inventories fell by about 3 million barrels, versus forecasts for drawdown of about 2.19 million barrels, while distillate inventories declined by 1 million barrels, compared with expectations for a drop of 2.35 million. While not a major directional driver for oil prices today, the U.S. Federal Reserve cut interest rates for a third time this year as expected, and signaled it plans to pause further rate cuts unless the economy takes a turn for the worse. Crude inventories rose 5.7 million barrels in the week to Oct. 25, the U.S. EIA said on Wednesday, compared with analysts' expectations for a 494,000-barrel build. On Tuesday, the American Petroleum Institute, an industry group, had reported a 708,000-barrel decline in inventories, raising hopes that official figures would also show a drop. Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose for a fourth straight week, gaining 1.6 million barrels last week, the EIA said. Still, gasoline and distillate inventories extended their declines even as refiners ramped up production, it said. Gasoline stocks fell by 3 million barrels, compared with analysts' expectations in a Reuters poll for a 2.2 million-barrel drop. The fifth weekly drop brought stocks down to 220.1 million barrels, their lowest since Nov. 2017. Distillate stockpiles, which include diesel and heating oil, declined for a sixth week in a row, falling 1 million barrels last week, versus expectations for a 2.4 million-barrel drop, the EIA data showed.

 

 
Intraday RESISTANCE LEVELS
1st November 2019 R1 R2 R3
GOLD-XAU 1,524 1,524 1,535-1,546
Silver-XAG 17.80-18.00 18.50 18.90-19.20
Crude Oil 56.00-56.50 57.20 58.00-58.70
EURO/USD 1.1180 1.1200 1.1250-1.1300
GBP/USD 1.2920 1.2990 1.3040-1.3100
USD/JPY 109.30-110.00 110.70 111.30

Intraday SUPPORTS LEVELS
1st November 2019 S1 S2 S3
GOLD-XAU 1,489 1,478 1,470-1,466
Silver-XAG 17.60-17.30 16.90 16.25-16.00
Crude Oil 55.10-54.70 53.90 53.30-52.50
EURO/USD 1.0980 1.0980 1.0930-1.0850
GBP/USD 1.2840-1.2790 1.2710 1.2650-1.2600
USD/JPY 108.50-107.80 107.00 106.50-106.10

Intra-Day Strategy (1st November 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$1496.55/oz and low of US$1481.09/oz. Gold up by 0.463% at US$1495.59/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 1489-1447 with risk below 1447, targeting 1500-1509-1524 and 1535-1546-1555. Sell below 1500-1546 keeping

 
Intraday Support Levels
S1     1,489
S2     1,478
S3     1,470-1,466
Intraday Resistance Levels
R1     1,524
R2     1,524
R3     1,535-1,546

Technical Indicators

Name   Value Action
14DRSI  

51.882

Buy
20-DMA   1494.08 Sell
50-DMA  

1504.21

Sell
100-DMA   1468.95 Buy
200-DMA   32.745 Buy
STOCH(5,3)   32.745 Sell
MACD(12,26,9)   -0.936 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$17.94/oz and low of US$17.57/oz. Silver settled up by 0.286% at US$17.83/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     17.80-18.00
R2     18.50
R3     18.90-19.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.112 Buy
20-DMA   17.60 Buy
50-DMA   17.84 Buy
100-DMA   16.89 Buy
200-DMA   16.03 Buy
STOCH(5,3)   42.268 Buy
MACD(12,26,9)   -0.075 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$55.76/bbl, intraday low of US$54.44/bbl and settled down by 1.153% to close at US$54.86/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 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 56.50-58.70 with stop loss at 58.70; targeting 56.00-55.30-54.95 and 53.90-53.30.

 
Intraday Support Levels
S1     55.10-54.70
S2     53.90
S3     53.30-52.50

Intraday Resistance Levels
R1     56.00-56.50
R2     57.20
R3     58.00-58.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.864 Sell
20-DMA   54.07 Sell
50-DMA   55.29 Sell
100-DMA   55.82 Sell
200-DMA   57.24 Sell
STOCH(5,3)   54.130 Sell
MACD(12,26,9)   -0.143 Sell

EUR/USD

AAFX TRADING

EUR/USD of Wednesday an intraday low of US$1.1079/EUR, high of US$1.1152/EUR and settled the day up by 0.358% to close at US$1.1151/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 1.1050-1.0850 with risk below 1.0900, targeting 1.1090-1.1180-1.1200 and 1.1250-1.1300. Sell below 1.1090-1.1300 targeting 1.1050-1.0960 and 1.0860-1.0805 with stop-loss at daily closing above 1.1300.

 
Intraday Support Levels
S1     1.0980
S2     1.0980
S3     1.0930-1.0850

Intraday  Resistance Levels
R1     1.1180
R2     1.1200
R3     1.1250-1.1300

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.755 Buy
20-DMA   1.1060 Buy
50-DMA   1.1035 Buy
100-DMA   1.1124 Sell
200-DMA   1.1198 Sell
STOCH(5,3)   39.958 Sell
MACD(12,26,9)   -0.005 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2844/GBP, high of US$1.2906/GBP and settled the day up by 0.2884% to close at US$1.2898/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 1.2840-1.2790-1.2710 and 1.2650-1.2600 stop-loss should be below 1.3000. Buy above 1.2840-1.2510 with targets 1.2920-1.2990 and 1.3040-1.3100 with stop loss closing below 1.2500.

 
Intraday Support Levels
S1     1.2840-1.2790
S2     1.2710
S3     1.2650-1.2600

Intraday Resistance Levels
R1     1.2920
R2     1.2990
R3     1.3040-1.3100

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

63.933

Buy
20-DMA   1.2648 Buy
50-DMA   1.2447 Buy
100-DMA   1.2431 Sell
200-DMA   1.2712 Sell
STOCH(5,3)   29.450 Sell
MACD(12,26,9)   -0.016 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY108.14/USD and made an intraday high of JPY108.89/USD and settled the day down by 0.421% at JPY108.84/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 108.50-105.00 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   63.122 Buy
20-DMA   108.14 Buy
50-DMA   107.54 Buy
100-DMA   107.56 Buy
200-DMA   109.04 Sell
STOCH(9,6)   86.253 Buy
MACD(12,26,9)   0.3417 Buy

AAFX TRADING
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