AAFX TRADING

Daily Market Lookup

  • Asian stocks climbed to a fresh-two year high on Tuesday on the back of an overnight rise in Wall Street, while oil extended gains after major producers Saudi Arabia and Russia pledged to push for an extension of supply cuts into 2018. Investors in regional equities, however, are growing increasingly wary as valuations look stretched and with the latest rally taking place in thin volumes and led by just a few sectors. With overall volumes declining and share valuations looking extremely stretched, investors are growing cautious. Hong Kong's technology sector, for example, is the most expensive, trading at a price-to-earnings multiple of more than 42 times. Brent crude has gained nearly 9 percent over the last week though some analysts were skeptical about the durability of the rally despite the proposed supply curbs. "That is going to be easier said than done, it appears, with U.S. production running at its fastest pace since August 2015 and data yesterday confirming that Chinese growth momentum continues to moderate," ANZ strategists wrote in a daily note. Chinese growth cooled in April according to a variety of economic indicators ranging from factory output to retail sales as authorities clamped down on debt risks in an effort to stave off a potentially damaging hit to the economy. In currencies, the U.S. dollar nursed deep losses after a weak manufacturing report trimmed expectations of a Federal Reserve rate increase next month, a key factor behind the dollar's gains in recent weeks. The New York Federal Reserve's barometer on business activity in the state unexpectedly fell in May, sinking into negative territory for the first time since October. Deliveries of the six biggest categories of white goods (AHAM 6) in the United States rose 13.7% YoY in April, data from industry body Association of Home Appliance Manufacturers (AHAM) showed late on Monday.
  • The dollar held weaker in Asia on Tuesday as markets chewed on the latest controversy in the Trump administration after an explosive story in the Washington Post suggested he had provided Russian diplomats with top secret details on Middle Eastern intelligence sources, while the Aussie held gains after the release of minutes. Reserve Bank of Australia released the minutes from its May meeting and focused on the overheated housing market, and signs of softness in job creation as key signposts for the direction of interest rates. The RBA held at a record low 1.5% in the May meeting and in the minutes said "developments in the labor market and housing markets warranted careful monitoring." Still, RBA Governor Philip Lowe has made it clear in recent speeches he would be reluctant to lower interest rates any further, saying the vast debts carried by the average Australian household could slow GDP growth if unrestrained. Overnight, the dollar fell against a basket of major currencies on Monday, after weaker than expected U.S. manufacturing data weighed on sentiment while a surge in the Canadian dollar added to downside momentum. The Federal Reserve Bank of New York said its Empire State manufacturing index fell last month to minus 1, from 5.2 in April, as new orders dipped and shipment grew more quickly.
  • Gold prices inched higher in European trade on Tuesday, trying for its fifth-straight winning session as signs of slowing economic activity in the U.S. saw investors temper expectations for more rate hikes by the Federal Reserve. The New York Federal Reserve’s index of manufacturing conditions contracted for the first time in seven months in May, as new orders and shipments turned negative. The NY Fed said on Monday that its general business conditions index fell to -1.0 this month from a reading of 5.2 in April. Analysts had expected the index to inch up to 7.0 in May. On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions. Precious metal could take cues from U.S. data on housing starts and building permits, as well as industrial production figures, as investors look for further indications on the health of the world’s largest economy. The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases. The dollar index, which tracks the greenback against a basket of six major currencies, slipped to a more than one-week low of 98.53 in London morning trade. Meanwhile, investors were also mulling the potential economic policy impact of a Washington Post report that U.S. President Donald Trump divulged highly classified information during his meeting with Russian officials last week. Market participants were also keeping a wary eye on developments in North Korea, which successfully conducted a newly developed mid-to-long range missile test on Sunday aimed at verifying the capability to carry a "large scale heavy nuclear warhead." The United Nations Security Council is due to meet on Tuesday to discuss North Korea's latest missile launch, which was requested by the U.S. and allies South Korea and Japan. Industrial metals rallied on Monday after Chinese President Xi Jinping pledged $124 billion in fresh financing to support its “Belt and Road” infrastructure mega-program.

 

 
Intraday RESISTANCE LEVELS
16th May 2017 R1 R2 R3
GOLD-XAU 1,240 1,248 1,259-1,266
Silver-XAG 16.90-17.30 17.50 17.70
Crude Oil 49.20 50.10 50.70-51.40
EURO/USD 1.1054-1.1100 1.1130 1.1200
GBP/USD 1.2950 1.3015-1.3070 1.3100
USD/JPY 114.60-115.30 116.00 116.50

Intraday SUPPORTS LEVELS
16th May 2017 S1 S2 S3
GOLD-XAU 1,228-1,221 1,207 1,200
Silver-XAG 16.60 16.10-15.65 15.30
Crude Oil 48.90-48.40 48.00 47.15-46.50
EURO/USD 1.1000-1.0955 1.0900 1.0840-1.0800
GBP/USD 1.2900-1.2840 1.2770 1.2705
USD/JPY 113.20 112.60 112.00-111.40

Intra-Day Strategy (16th 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 Monday and made its intraday high of 1237.18/oz and intraday low of US$1226.81/oz. Gold up by 0.187% at US$1230.17/oz.

Technicals in Focus:

In daily charts, prices are below 200DMA (1247) 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 1240-1266 keeping stop loss closing above 1270 and targeting 1228-1221-1207 and 1200-1190. Buy above 1232-1200 with risk below 1200, targeting 1239-1248 and 1260-1270.

 
Intraday Support Levels
S1     1,228-1,221
S2     1,207
S3     1,200
Intraday Resistance Levels
R1     1,240
R2     1,248
R3     1,259-1,266

Technical Indicators

Name   Value Action
14DRSI  

43.640

Buy
20-DMA   1248.76 Sell
50-DMA  

1245.89

Sell
100-DMA   1227.31 Buy
200-DMA   1247.05 Sell
STOCH(5,3)   73.914 Sell
MACD(12,26,9)   -8.431 Sell

Silver - XAG

AAFX TRADING

Silver closed up on Monday made its intraday high of US$16.79/oz and intraday low of US$16.40/oz. Silver settled by up by 1.035% at US$16.59/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (17.36), 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 positive crossover to show upside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 16.60-15.30 targeting 16.80-17.36 and 17.50-17.70; stop breakage below 15.00. Sell below 16.80-17.70 with stop loss above 17.70; targeting 16.30-16.10 and 15.65-15.30.

 
Intraday  Support Levels
S1     16.60
S2     16.10-15.65
S3     15.30

Intraday  Resistance Levels
R1     16.90-17.30
R2     17.50
R3     17.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.783 Buy
20-DMA   16.93 Sell
50-DMA   17.45 Sell
100-DMA   17.36 Sell
200-DMA   17.70 Sell
STOCH(5,3)   83.817 Buy
MACD(12,26,9)   -0.376 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$49.64/bbl and made an intraday low of US$47.72/bbl and settled up by 2.00% at US$48.78/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 49.20-51.40 with stop loss at 51.40; targeting 48.90-48.00 and 47.15-46.50-46.00. Buy above 48.90-46.00 with risk daily closing below 46.00 and targeting 49.20-50.10 and 50.70-51.40.

 
Intraday Support Levels
S1     48.90-48.40
S2     48.00
S3     47.15-46.50

Intraday Resistance Levels
R1     49.20
R2     50.10
R3     50.70-51.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.639 Sell
20-DMA   48.34 Sell
50-DMA   49.51 Sell
100-DMA   51.37 Sell
200-DMA   49.49 Sell
STOCH(5,3)   82.771 Buy
MACD(12,26,9)   -0.684 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0921/EUR and made an intraday high of US$1.0988/EUR and settled the day up by 0.411% at US$1.0974/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 1.1054-1.1200 targeting 1.1000-1.0955-1.0900 and 1.0840-1.0800-1.0750 with stop-loss at daily closing above 1.1110. Buy above 1.0900-1.0705 with risk below 1.0705 targeting 1.0955-1.1000 and 1.1055-1.1120.

 
Intraday Support Levels
S1     1.1000-1.0955
S2     1.0900
S3     1.0840-1.0800

Intraday  Resistance Levels
R1     1.1054-1.1100
R2     1.1130
R3     1.1200

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.530 Buy
20-DMA   1.0887 Buy
50-DMA   1.0768 Buy
100-DMA   1.0693 Buy
200-DMA   1.0824 Buy
STOCH(5,3)   78.982 Buy
MACD(12,26,9)   0.0060 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2877/GBP and made an intraday high of US$1.2940/GBP and settled the day up by 0.093% at US$1.2893/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 1.2900-1.2705 with stop loss closing below 1.2700 targeting 1.2950-1.3015 and 1.3070-1.3100.

 
Intraday Support Levels
S1     1.2900-1.2840
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  

60.662

Buy
20-DMA   1.2886 Buy
50-DMA   1.2609 Buy
100-DMA   1.2500 Buy
200-DMA   1.2593 Buy
STOCH(5,3)   41.849 Sell
MACD(12,26,9)   0.0084 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY113.19/USD and made an intraday high of JPY113.94/USD and settled the day down by 0.421% at JPY113.36/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   111.70 Buy
20-DMA   111.70 Buy
50-DMA   111.70 Buy
100-DMA   112.96 Buy
200-DMA   109.56 Buy
STOCH(9,6)   56.295 Sell
MACD(12,26,9)   0.786 Sell

AAFX TRADING
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