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  • Sharper losses could be in store for Wall Street. The slide left the benchmark index down 6% from its record high close on July 26. That was its deepest fall from a record high since a 6.8 percent selloff that began in early May and lasted a month, also driven by nervousness about the year-long trade conflict. Monday’s sell-off was sparked after China let the yuan currency tumble beyond the 7-per-dollar level for the first time in more than a decade. It was a sign Beijing might be willing to tolerate further currency weakness in the face of the escalating trade dispute with the United States The sharp 1.4% drop in the yuan comes days after U.S. President Donald Trump stunned investors by vowing to impose 10% tariffs on the remaining $300 billion of Chinese imports from Sept. 1, abruptly breaking a brief month-long ceasefire in the bruising trade war. Trump has measured himself by the success of the stock market, tweeting about its record levels during his administration. He has also lambasted Federal Reserve Chairman Jerome Powell for not cutting interest rates more aggressively in order to support the market. After the Federal Reserve last week cut interest rates for the first time in over a decade, traders of interest-rate futures are pricing in about a one-in-three chance of a half-point rate cut in September, up from less than a 2% chance for such a large reduction seen on Friday.
  • The yuan slipped on Tuesday in Asia as China sets the daily currency fixing at a stronger-than-expected level. In a statement, Treasury Secretary Steven Mnuchin said overnight that the U.S. government has declared China a currency manipulator. The announcement came after China allowed the yuan to fall past the key 7-per-dollar level for the first time in more than 10 years. The People’s Bank of China (PBOC) said it would "continue to ... take necessary and targeted measures against the positive feedback behavior that may occur in the foreign exchange market." The Treasury statement said the PBOC’s comments “is an open acknowledgement” that the Chinese central bank “has extensive experience manipulating its currency and remains prepared to do so on an ongoing basis,.” Separately, China also announced that it would stop buying U.S. agricultural products, one day after its state-owned media said Beijing won’t be bullied and would “fight back.” The move is in retaliation to U.S. President Donald Trump threatening fresh tariffs on essentially all Chinese goods In other news, the central bank also announced today the planned sale of yuan-denominated bonds in Hong Kong. The PBOC will sell 30 billion yuan ($4.26 billion) of such bills in Hong Kong on August 14. Citing traders, Reuters said the PBOC in the past used issuance in Hong Kong as a way to support offshore yuan levels.
  • The U.S. dollar fell to an almost-two-week low after weak services data, while trade tensions between the U.S. and China prompted a selloff of the Chinese yuan. Growth in the services sector fell to its weakest level since August 2016, with trade worries weighing on business orders, the ISM non-manufacturing survey showed. The greenback was already weak from tensions with China, as the government asked state-owned companies to stop buying American agricultural goods, Bloomberg reported. The move is in retaliation to U.S. President Donald Trump threatening fresh tariffs on essentially all Chinese goods. The chances of a 50-basis-point rate cut in September rose on the news, with the odds above 20% compared with 2% at the end of last week. A quarter point cut of at least 25 basis points is already priced in. The onshore yuan, which is controlled by the Chinese central bank, fell to an 11-year low below 7 to the dollar, indicating the Chinese were not supporting the currency. But it was labeled "currency manipulation" by President Donald Trump in a tweet.
  • Oil prices edged up on Tuesday, but remained under pressure as the escalating U.S.-China trade war stoked concerns over global economic growth and future demand for crude. The international benchmark fell more than 3% on Monday as traders worried the ongoing trade tensions between the world's two biggest oil buyers would dent appetite for fuel. A yearlong U.S.-China trade war boiled over as Washington accused Beijing of manipulating its currency after China let the yuan drop to its lowest point in more than a decade. Iran will no longer tolerate "maritime offences" in the Strait of Hormuz, its foreign minister said on Monday, a day after it seized a second oil tanker near the strategic waterway that it accused of smuggling fuel. Iran's seizure of the Iraqi oil tanker had raised some concerns about potential Middle East supply disruptions in the Gulf. Concerns that the trade conflict has entered a phase of retaliatory action was weighing down on the sentiments in the oil market, which at the moment is taking lesser notice of the Middle East tensions, analysts said. Oil prices might get some respite later in the day as a preliminary Reuters poll showed U.S. crude oil inventories were expected to be down for an eighth consecutive week. The poll was conducted ahead of reports from the American Petroleum Institute (API), an industry group, which is scheduled to release its data for the latest week at 4:30 p.m. EDT (2030 GMT) on Tuesday.

 

 
Intraday RESISTANCE LEVELS
6th August 2019 R1 R2 R3
GOLD-XAU 1,474-1,481 1,489 1,500-1,509
Silver-XAG 16.60-16.90 17.50 17.90
Crude Oil 54.90-55.50 56.07 57.50-58.10
EURO/USD 1.1250-1.1290 1.1325 1.1350-1.1400
GBP/USD 1.2190-1.2250 1.2300 1.2350-1.2410
USD/JPY 106.50 107.00 107.60-108.00

Intraday SUPPORTS LEVELS
6th August 2019 S1 S2 S3
GOLD-XAU 1,469-1460 1455 1,436-1,429
Silver-XAG 16.20-15.90 15.50 15.25-15.05
Crude Oil 54.50-54.05 53.60 53.10
EURO/USD 1.1210-1.1180 1.1130 1.1090-1.1000
GBP/USD 1.2100-1.2065 1.1980 1.1950-1.1900
USD/JPY 106.00-105.80 105.00 104.50-104.00

Intra-Day Strategy (6th August 2019)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

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Gold on Monday made its intraday high of US$1469.65/oz and low of US$1436.60/oz. Gold up by 1.664% at US$1463.47/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1339) and breakage below will call for 1321-1300. 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 positive crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1469-14029 with risk below 1429, targeting 1474-1481 and 1489-1500-1509. Sell below 1474-1509 keeping stop loss closing above 1474, targeting 1469-1460-1450 and 1436-1429.

 
Intraday Support Levels
S1     1,469-1460
S2     1455
S3     1,436-1,429
Intraday Resistance Levels
R1     1,474-1,481
R2     1,489
R3     1,500-1,509

Technical Indicators

Name   Value Action
14DRSI  

67.086

Buy
20-DMA   1427.87 Buy
50-DMA  

1389.44

Buy
100-DMA   1339.29 Buy
200-DMA   1305.96 Buy
STOCH(5,3)   91.021 Buy
MACD(12,26,9)   17.175 Buy

Silver - XAG

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Silver on Monday made its intraday high of US$16.55/oz and low of US$16,10/oz. Silver settled up by 1.142% at US$16.38/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (15.00), breakage above will lead to 15.60. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold 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 16.20-14.50 targeting 16.50-16.90 and 17.50-17.90; stop breakage below 14.50. Sell below 16.50-17.90 with stop loss above 17.90; targeting 16.20-15.90-15.50 and 15.05-14.60.

 
Intraday  Support Levels
S1     16.20-15.90
S2     15.50
S3     15.25-15.05

Intraday  Resistance Levels
R1     16.60-16.90
R2     17.50
R3     17.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.508 Buy
20-DMA   16.01 Sell
50-DMA   15.39 Buy
100-DMA   15.17 Buy
200-DMA   15.10 Buy
STOCH(5,3)   40.246 Buy
MACD(12,26,9)   0.312 Buy

Oil - WTI

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Crude Oil on Monday made an intra‐day high of US$55.49/bbl, intraday low of US$54.20/bbl and settled down by 0.778% to close at US$54.83/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 55.88 which is a resistance level and breakage above will call for 59.60. MACD is above zero line and histograms are in decreasing mode will bring bearish 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 oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 55.00-58.10 with stop loss at 58.10; targeting 54.50-54.05 and 53.60-53.10. Buy above 54.50-53.00 with risk daily closing below 53.00 and targeting 55.50-56.10 and 56.50-57.50-58.10.

 
Intraday Support Levels
S1     54.50-54.05
S2     53.60
S3     53.10

Intraday Resistance Levels
R1     54.90-55.50
R2     56.07
R3     57.50-58.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.605 Sell
20-DMA   57.00 Buy
50-DMA   56.16 Buy
100-DMA   59.16 Sell
200-DMA   56.704 Buy
STOCH(5,3)   24.130 Sell
MACD(12,26,9)   -0.0194 Sell

EUR/USD

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EUR/USD on Monday made an intraday low of US$1.1098/EUR, high of US$1.1212/EUR and settled the day up by 0.923% to close at US$1.1202/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.1349), which become immediate resistance level, break above will target 1.1320-1.1280. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold 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.

Trading Strategy: Neutral to Buy

Buy above 1.1210-1.1085 with risk below 1.1080, targeting 1.1240-1.1290 and1.1.1325-1.1350-1.1400-. Sell below 1.1250-1.1400 targeting 1.1210-1.1180-1.1130 and 1.1090-1.1005 with stop-loss at daily closing above 1.1210.

 
Intraday Support Levels
S1     1.1210-1.1180
S2     1.1130
S3     1.1090-1.1000

Intraday  Resistance Levels
R1     1.1250-1.1290
R2     1.1325
R3     1.1350-1.1400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.376 Buy
20-DMA   1.1197 Sell
50-DMA   1.1245 Sell
100-DMA   1.1311 Sell
200-DMA   1.1394 Sell
STOCH(5,3)   23.958 Sell
MACD(12,26,9)   -0.0013 Buy

GBP/USD

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GBP/USD on Monday made an intra‐day low of US$1.2100/GBP, high of US$1.2187/GBP and settled the day up by 0.083% to close at US$1.2137/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 1.2150-1.2410 with targets at 1.2100-1.2065 and 1.1980-1.1950-1.1900 top should be below 1.2410. Buy above 1.2100-1.1900 with targets 1.2140-1.2190-1.2250 and 1.2300-1.2350 with stop loss closing below 1.2200.

 
Intraday Support Levels
S1     1.2100-1.2065
S2     1.1980
S3     1.1950-1.1900

Intraday Resistance Levels
R1     1.2190-1.2250
R2     1.2300
R3     1.2350-1.2410

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

25.865

Buy
20-DMA   1.2417 Sell
50-DMA   1.2561 Sell
100-DMA   1.2789 Sell
200-DMA   1.2841 Sell
STOCH(5,3)   7.175 Sell
MACD(12,26,9)   -0.0011 Sell

USD/JPY

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USD/JPY on Monday made intra‐day low of JPY105.78/USD and made an intraday high of JPY106.67/USD and settled the day down by 0.661% at JPY105.94/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (110.64), 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 106.50-108.00 with risk above 108.00 targeting 106.00-105.60-105.00 and 104.50-104.00 Long positions above 106.00-104.00 with targets of 106.50-107.00 and 107.60-108.00-109.05 with stop below 106.00.

 
Intraday Support Levels
S1     106.00-105.80
S2     105.00
S3     104.50-104.00

INTRADAY RESISTANCE LEVELS
R1     106.50
R2     107.00
R3     107.60-108.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.647 Buy
20-DMA   107.89 Sell
50-DMA   108.08 Sell
100-DMA   109.46 Buy
200-DMA   110.39 Sell
STOCH(9,6)   13.58 Sell
MACD(12,26,9)   -0.008 Buy

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