AAFX TRADING

Daily Market Lookup

  • Moody's Investors Service downgraded China's credit ratings on Wednesday for the first time in nearly 30 years, saying it expects the financial strength of the economy will erode in coming years as growth slows and debt continues to rise. The one-notch downgrade in long-term local and foreign currency issuer ratings, to A1 from Aa3, comes as the Chinese government grapples with the challenges of rising financial risks stemming from years of credit-fueled stimulus. China's leaders have identified the containment of financial risks and asset bubbles as a top priority this year. All the same, authorities have moved cautiously to avoid knocking economic growth, gingerly raising short-term interest rates while tightening regulatory supervision. At the same time, Beijing's need to deliver on official growth targets is likely to make the economy increasingly reliant on stimulus. While the downgrade is likely to modestly increase the cost of borrowing for the Chinese government and its state-owned enterprises, it remains comfortably within the investment grade rating range.
  • Dollar Wednesday bounced off overnight lows despite some weak U.S. economic data. U.S. new home sales, manufacturing PMI below estimates. But the services sector beat. The market is looking to the release of the minutes of the latest FOMC meeting later in the session. The market odds of a Fed rate hike in June stand at close to 76%. Australia is reliant on Chinese imports of raw materials. The yuan was slightly lower. The euro fell back below the $1.12 mark after being boosted by some strong euro-zone data. ECB President Mario Draghi is due to speak later in the session. The U.S. dollar had broadly weakened recently following a string of revelations surrounding the FBI’s investigation into alleged Russian interference in November’s U.S. presidential election and reports that Donald Trump attempted to interfere with the judicial process. The U.S. currency also managed to halt its slide against the euro, which had enjoyed a bull run this month on factors including an ebb in French political concerns, upbeat euro zone data, and a widening German-U.S. government debt yield spread. Investors are now turning their focus toward the Federal Reserve's monetary policy stance. Minutes of the Fed's latest policy-setting meeting are set for publication at 2 p.m. eastern time (1800 GMT) on Wednesday. The market already expects the Fed to raise interest rates in June, but given the greenback's recent weakness, dollar bulls are expected to welcome any hawkish hints by the central bank.
  • Gold prices were lower in European trade on Wednesday, as investors looked ahead to minutes of the Federal Reserve’s latest policy meeting due later in the global day for further hints on the timing of the next U.S. rate hike. The Fed will release minutes of its most recent policy meeting at 18:00GMT, as traders seek further insight into the likelihood of higher interest rates in the months ahead. The U.S. central bank left interest rates unchanged following its meeting on May 3 and gave a positive assessment of the U.S. economy, suggesting it was still on track for two more rate hikes this year. But a recent run of disappointing U.S. economic data combined with signs of deepening political turmoil in the White House saw investors temper expectations for higher interest rates in the months ahead. Investor sentiment has been hit by fears that the U.S. political system could become engulfed by crisis, preventing lawmakers from pushing through tax or spending reforms.
  • Oil prices were higher in European trading on Wednesday, trying for their sixth straight session of gains on the likelihood that OPEC will extend production cuts for another nine months when it meets on Thursday. Oil ministers from the OPEC and other major producing countries will meet in Vienna on Thursday to decide whether to extend their current production agreement beyond a June 30-deadline. In November last year, OPEC and 11 other non-OPEC producers, including Russia, agreed to cut output by about 1.8 mn barrels per day between January 1 and June 30. Most market analysts expect the oil cartel to extend output cuts for a further nine months until March 2018, instead of six months as previously expected. There is also talk that OPEC is looking at the option of deepening current production cuts, but it is not clear whether there would be support for that. So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya, and a relentless increase in U.S. shale oil output. The U.S. rig count rose for the 18th week in a row to the highest level since April 2015 last week, implying that further gains in domestic production are ahead. Investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products. The U.S. EIA will release its official weekly oil supplies report at 10:30AM ET (14:30GMT) Wednesday. Analysts expect crude oil inventories dropped by around 2.4 mn barrels at the end of last week, while gasoline supplies are seen decreasing by about 1.1 million barrels and distillates are forecast to fall by 743K barrels. After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by a less-than-expected 1.5 million barrels in the week ended May 19. The API report also showed a decline of 3.15 mn barrels in gasoline stocks, while distillate stocks dropped by 1.85 mn barrels.

 

 
Intraday RESISTANCE LEVELS
24th May 2017 R1 R2 R3
GOLD-XAU 1,258 1,264-1,270 1,276
Silver-XAG 17.30-17.50 17.70 18.10
Crude Oil 51.70-52.20 53.00 53.70
EURO/USD 1.1200 1.1260-1.1295 1.1365
GBP/USD 1.3015-1.3070 1.3100 1.3180
USD/JPY 112.00-112.60 113.20 114.00

Intraday SUPPORTS LEVELS
24th May 2017 S1 S2 S3
GOLD-XAU 1,247-1,241 1,228 1,214
Silver-XAG 16.90-16.60 16.10 15.65-15.30
Crude Oil 51.50-51.00 50.10 49.20-48.40
EURO/USD 1.1170-1.1130 1.1100 1.1050
GBP/USD 1.2970 1.2900-1.2840 1.2770
USD/JPY 111.50 111.00 110.50-109.70

Intra-Day Strategy (24th 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 Tuesday and made its intraday high of 1263.64/oz and intraday low of US$1250.55/oz. Gold down by 0.733% at US$1250.94/oz.

Technicals in Focus:

In daily charts, prices are below 200DMA (1244) 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 1258-1276 keeping stop loss closing above 1284 and targeting 1247-1241 and 1228-1221. Buy above 1247-1207 with risk below 1207, targeting 1254-1264-1270 and 1276-1284.

 
Intraday Support Levels
S1     1,247-1,241
S2     1,228
S3     1,214
Intraday Resistance Levels
R1     1,258
R2     1,264-1,270
R3     1,276

Technical Indicators

Name   Value Action
14DRSI  

50.907

Buy
20-DMA   1242.34 Buy
50-DMA  

1251.75

Buy
100-DMA   1233.75 Buy
200-DMA   1244.52 Buy
STOCH(5,3)   58.826 Sell
MACD(12,26,9)   -0.098 Sell

Silver - XAG

AAFX TRADING

Silver closed up on Tuesday made its intraday high of US$17.29/oz and intraday low of US$17.01/oz. Silver settled by down by 0.467% at US$17.04/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 17.00-15.30 targeting 17.36-17.50 and 17.70-18.10; stop breakage below 15.00. Sell below 17.40-18.10 with stop loss above 18.10; targeting 16.90-16.30-16.10 and 15.65-15.30.

 
Intraday  Support Levels
S1     16.90-16.60
S2     16.10
S3     15.65-15.30

Intraday  Resistance Levels
R1     17.30-17.50
R2     17.70
R3     18.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.518 Buy
20-DMA   16.65 Buy
50-DMA   17.43 Sell
100-DMA   17.41 Sell
200-DMA   17.62 Sell
STOCH(5,3)   73.426 Buy
MACD(12,26,9)   -0.150 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$51.76/bbl and made an intraday low of US$50.55/bbl and settled up by 0.862% at US$51.46/bbl on session close.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 49.74 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 overbought region and giving positive crossover for confirmation of bullish 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 51.70-53.70 with stop loss at 53.70; targeting 51.50-51.00 and 50.10-49.20 and 48.40-48.00-47.15. Buy above 51.50-48.50 with risk daily closing below 48.50 and targeting 51.70-52.20 and 53.30-53.70.

 
Intraday Support Levels
S1     51.50-51.00
S2     50.10
S3     49.20-48.40

Intraday Resistance Levels
R1     51.70-52.20
R2     53.00
R3     53.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.621 Sell
20-DMA   48.57 Sell
50-DMA   49.61 Sell
100-DMA   51.19 Sell
200-DMA   49.72 Sell
STOCH(5,3)   91.405 Buy
MACD(12,26,9)   -0.343 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1174/EUR and made an intraday high of US$1.1267/EUR and settled the day down by 0.489% at US$1.1181/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 sell crossovers to signal for bearish 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 1.1200-1.1365 targeting 1.1170-1.1100 and 1.1054-1.1000 with stop-loss at daily closing above 1.1100. Buy above 1.1170-1.1054 with risk below 1.1054 targeting 1.1200-1.1260 and 1.1300-1.1365.

 
Intraday Support Levels
S1     1.1170-1.1130
S2     1.1100
S3     1.1050

Intraday  Resistance Levels
R1     1.1200
R2     1.1260-1.1295
R3     1.1365

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.014 Buy
20-DMA   1.1001 Buy
50-DMA   1.0835 Buy
100-DMA   1.0736 Buy
200-DMA   1.0823 Buy
STOCH(5,3)   70.363 Sell
MACD(12,26,9)   0.0109 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2951/GBP and made an intraday high of US$1.3033/GBP and settled the day down by 0.315% at US$1.2959/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 positive crossover to confirm bullish 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 1.2970-1.3100 with targets at 1.2900-1.2840 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     1.2970
S2     1.2900-1.2840
S3     1.2770

Intraday Resistance Levels
R1     1.3015-1.3070
R2     1.3100
R3     1.3180

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

61.379

Buy
20-DMA   1.2921 Buy
50-DMA   1.2673 Buy
100-DMA   1.2528 Buy
200-DMA   1.2594 Buy
STOCH(5,3)   72.570 Buy
MACD(12,26,9)   0.0077 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY110.85/USD and made an intraday high of JPY111.85/USD and settled the day up by 0.439% at JPY111.76/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 111.10-109.20 with targets of 112.00-112.60 and 113.20-114.60 with stop below 114.60. Sell below 112.00-113.20 with risk above 113.20 targeting 111.10-110.50 and 109.70-109.20.

 
Intraday Support Levels
S1     111.50
S2     111.00
S3     110.50-109.70

INTRADAY RESISTANCE LEVELS
R1     112.00-112.60
R2     113.20
R3     114.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.144 Buy
20-DMA   112.42 Buy
50-DMA   111.32 Buy
100-DMA   112.58 Sell
200-DMA   109.93 Buy
STOCH(9,6)   52.940 Buy
MACD(12,26,9)   0.183 Sell

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