AAFX TRADING

Daily Market Lookup

  • Asian shares were hobbled on Friday by a downbeat performance on Wall Street though they remained on track for weekly gains, while oil prices extended a rally on hopes for output cuts. China's banking regulator this week launched emergency risk assessments of lenders' new business practices, sources told Reuters, as Beijing deepens its crackdown on shadow banking. Earlier in the day, China's central bank injected fresh funds through a medium-term lending facility while keeping a tight rein on short-term funding in what appeared to be a further effort to dampen speculative investment. U.S. stocks fell on Thursday after several large department stores reported worse-than-expected sales drops while Macy's (M.N) released results for a dismal quarter, and political drama in Washington continued to unsettle investors. Combined with a tightening labor market, firming inflation backs market expectations that the Federal Reserve is poised to raise interest rates at its meeting next month. The central bank has forecast two more hikes this year after a quarter point increase in March. Dovish comments from a European Central Bank official weighed on the single currency. Maintaining its ultra-loose monetary policy for longer is the safer way for the ECB to avoid an economic relapse, its vice-president Vitor Constancio told Reuters on the sidelines of an ECB conference on Thursday, signaling a change of tack was unlikely until the autumn. Sterling was steady on the day at $1.2886 GBP= after dropping to a one-week low on Thursday following the Bank of England's decision to keep interest rates unchanged. Policymakers indicated that rates were unlikely to rise until late 2019.
  • The dollar traded above breakeven against a basket of major currencies on Thursday, as President Trump’s decision to sack FBI chief James Covey continued to weigh on sentiment while upbeat economic data capped losses. Upbeat producer inflation and initial jobless claims data offset investors’ concerns that Trump’s decision to abruptly sack FBI chief James Comey, could cause a delay to the Trump administration's economic agenda, which includes tax reform and deregulation. U.S. Labor Department said its producer price index, which measures inflation before it reaches the consumer, rose 0.5% in April, above expectations for a 0.2% increase. In a separate report, the Labor Department reported that initial jobless claims decreased by 2,000 to 236,000 in the week ended May 6, below economists’ estimates The number of Americans who filed for unemployment insurance dropped to a more than 28-year low, which fueled expectations that the Federal Reserve would hike interest rates in June amid a tightening labor market. Boston Fed President Eric Rosengren suggested on Tuesday, that faster interest rate hikes would be needed should unemployment continue to drop below the level of “natural employment” and cause the economy to overheat. Gold gained in Asia on Friday with a meeting of top finance officials from the world's leading economies at the weekend in Italy to discuss issues from trade to currencies. Finance ministers and central bankers from G7 economies will descend on Italy to discuss a range of issues, with trade protectionism likely a key item on the agenda.
  • Crude held gain in Asia on Friday ahead of U.S. rig count data with the market in a holding pattern ahead of a May 25 meeting of OPEC and non-OPEC nations in Vienna widely expected to extend a pact to curb oil output. Oilfield services firm Baker Hughes will report weekly U.S. rig count data on Friday. Last week, it said rigs rose by 6 to 703 for the sixteenth straight weekly increase. Overnight, crude futures settled higher on Thursday, as investor sentiment remained positive amid a large drawdown in U.S. crude stockpiles while hopes for an extension of the OPEC-led deal received a boost. Crude prices settled just shy of $48, as investors continued to cheer the EIA’s bullish inventories report released on Wednesday. For the week ended May 3, the EIA said that crude oil inventories fell by 5.25 million barrels, which confounded expectations of a draw of 1.79 million barrels. Meanwhile, Algeria and Iraq lifted hopes that the OPEC-led supply-cut agreement would be extended beyond June, after both nations said they would support a deal extension. In November last year, OPEC and other producers, including Russia, agreed to cut output by about 1.8 million bpd. The deal to cut production began in January this year, for a period of six-months until June. OPEC is expected to decide at talks on May 25 whether to extend the current deal to cut production for additional six-months to the end of the year. In its monthly report on Thursday, OPEC announced that group production fell in April, and projected non-OPEC production this year to grow by 950,000 bpd. Total non-OPEC growth rose to 580,000 barrels in April; U.S. production accounted for the bulk of non-OPEC growth around 540,000 barrels, or 93%. Crude prices have rallied more than 4% over the past two-sessions, however, overall sentiment remains bearish as the EIA raised its U.S. oil production forecast and lowered projection for average oil prices in 2017. The International Energy Agency will review its electric vehicle use and oil demand forecasts after India and China recently signaled new policies in favor of electric cars and vehicles using other alternatives to gasoline. In its current policies scenario, last updated in November 2016, the IEA expects vehicle demand for oil to rise until 2040.

 

 
Intraday RESISTANCE LEVELS
12th May 2017 R1 R2 R3
GOLD-XAU 1,234-1,240 1,248 1,259-1,266
Silver-XAG 16.60-16.90 17.30 17.70
Crude Oil 48.00-48.40 49.20 50.10
EURO/USD 1.0900-1.0955 1.1000 1.1054-1.1120
GBP/USD 1.2950 1.3015-1.3070 1.3100
USD/JPY 114.60-115.30 116.00 116.50

Intraday SUPPORTS LEVELS
12th May 2017 S1 S2 S3
GOLD-XAU 1,221-1,207 1,200 1,190
Silver-XAG 16.10-15.65 15.30 14.90
Crude Oil 47.15-46.50 46.00 45.30-44.00
EURO/USD 1.0840-1.0800 1.0750 1.0705
GBP/USD 1.2880-1.2840 1.2770 1.2705
USD/JPY 113.20 112.60 112.00-111.40

Intra-Day Strategy (12th May 2017)
GOLD-XAU Neutral
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Sell
GBP/USD Neutral to Sell
USD/JPY Neutral to Buy

Gold – XAU

AAFX TRADING

Gold closed up on Thursday and made its intraday high of 1227.57/oz and intraday low of US$1216.83/oz. Gold up by 0.485% at US$1224.70/oz.

Technicals in Focus:

In daily charts, prices are below 200DMA (1260) and breakage above will call for 1292-1300. MACD is below zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is approaching neutral region and more upside is expected before it touched overbought region. Stochastic Oscillator is in overbought territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1234-1266 keeping stop loss closing above 1270 and targeting 1221-1207 and 1200-1190. Buy above 1232-1207 with risk below 1207, targeting 1239-1248 and 1260-1270.

 
Intraday Support Levels
S1     1,221-1,207
S2     1,200
S3     1,190
Intraday Resistance Levels
R1     1,234-1,240
R2     1,248
R3     1,259-1,266

Technical Indicators

Name   Value Action
14DRSI  

32.260

Buy
20-DMA   1263.13 Sell
50-DMA  

1247.05

Sell
100-DMA   1222.61 Buy
200-DMA   1250.31 Sell
STOCH(5,3)   9.2115 Sell
MACD(12,26,9)   -6.787 Sell

Silver - XAG

AAFX TRADING

Silver closed on Thursday from made its intraday high of US$16.37/oz after setting intraday low of US$16.16/oz. Silver settled by down by 0.030% at US$16.30/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (17.34), breakage above will lead to 17.80-18.00. 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: Neutral

Based on the charts and explanations above, buy above 16.10-14.90 targeting 16.60-16.80 and 17.36-17.70; stop breakage below 16.00. Sell below 16.60-17.70 with stop loss above 17.70; targeting 16.30-16.10 and 15.65-15.30.

 
Intraday  Support Levels
S1     16.10-15.65
S2     15.30
S3     14.90

Intraday  Resistance Levels
R1     16.60-16.90
R2     17.30
R3     17.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   28.934 Buy
20-DMA   17.09 Sell
50-DMA   17.49 Sell
100-DMA   17.34 Sell
200-DMA   17.74 Sell
STOCH(5,3)   51.817 Buy
MACD(12,26,9)   -0.452 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$48.20/bbl and made an intraday low of US$47.31/bbl and settled up by 0.950% at US$47.80/bbl on session close.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 49.24 which is a major resistance and breakage above will call for 50.30-51.00. MACD is below 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 48.00-50.10 with stop loss at 50.10; targeting 47.15-4.50 and 46.00-45.30-44.00. Buy above 47.15-44.00 with risk daily closing below 44.00 and targeting 48.00-48.40 and 49.20-50.10.

 
Intraday Support Levels
S1     47.15-46.50
S2     46.00
S3     45.30-44.00

Intraday Resistance Levels
R1     48.00-48.40
R2     49.20
R3     50.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.107 Sell
20-DMA   48.98 Sell
50-DMA   49.77 Sell
100-DMA   51.49 Sell
200-DMA   49.37 Sell
STOCH(5,3)   77.910 Buy
MACD(12,26,9)   -1.110 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.0838/EUR and made an intraday high of US$1.0892/EUR and settled the day down by 0.055% at US$1.0860/EUR on session close.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0702), which become immediate support level, break below will target 1.0626-1.0600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving buy crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving upwards directions to consider buy.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.0900-1.1110 targeting 1.0840-1.0800 and 1.0750-1.0700 with stop-loss at daily closing above 1.1110. Buy above 1.0840-1.0705 with risk below 1.0705 targeting 1.0900-1.0955 and 1.1000-1.1055.

 
Intraday Support Levels
S1     1.0840-1.0800
S2     1.0750
S3     1.0705

Intraday  Resistance Levels
R1     1.0900-1.0955
R2     1.1000
R3     1.1054-1.1120

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.229 Buy
20-DMA   1.0853 Buy
50-DMA   1.0750 Buy
100-DMA   1.0681 Buy
200-DMA   1.0824 Buy
STOCH(5,3)   11.515 Sell
MACD(12,26,9)   0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2848/GBP and made an intraday high of US$1.2948/GBP and settled the day up by 0.402% at US$1.2883/GBP on session close.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2616) 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 overbought territory and giving negative crossover to confirm bearish stance. MACD is below zero line and histograms are decreasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; short positions below 1.2950-1.3100 with targets at 1.2880-1.2840 and 1.2775-1.2700, breakage above 1.3100 look for further upside with 1.3150 as targets. Buy above 1.2880-1.2700 with stop loss closing below 1.2700 targeting 1.2950-1.3015 and 1.3070-1.3100.

 
Intraday Support Levels
S1     1.2880-1.2840
S2     1.2770
S3     1.2705

Intraday Resistance Levels
R1     1.2950
R2     1.3015-1.3070
R3     1.3100

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

58.387

Buy
20-DMA   1.2865 Buy
50-DMA   1.2581 Buy
100-DMA   1.2487 Buy
200-DMA   1.2594 Buy
STOCH(5,3)   40.720 Sell
MACD(12,26,9)   0.0095 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY113.44/USD and made an intraday high of JPY114.36/USD and settled the day down by 0.708% at JPY114.25/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.90), which is major support on the daily chart. 14-D RSI is currently is approaching oversold region. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is approaching overbought territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Buy

Long positions above 113.20-111.40 with targets of 114.60-115.30 and 116.00-116.40 with stop below 116.40. Sell below 114.60-116.50 with risk above 116.50 targeting 114.00-113.20 and 112.60-112.00- 111.40.

 
Intraday Support Levels
S1     113.20
S2     112.60
S3     112.00-111.40

INTRADAY RESISTANCE LEVELS
R1     114.60-115.30
R2     116.00
R3     116.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.467 Buy
20-DMA   111.49 Buy
50-DMA   111.72 Buy
100-DMA   113.00 Buy
200-DMA   109.50 Buy
STOCH(9,6)   80.295 Sell
MACD(12,26,9)   0.813 Sell

AAFX TRADING
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