AAFX TRADING

Daily Market Lookup

  • Recent data on the performance of the U.S. economy has been generally on the soft side, a sore point discussed at length by Federal Reserve officials at their latest meeting, minutes of the gathering released on Wednesday showed. In fact, measures developed by Citigroup economists to track how incoming economic data stacks up against market expectations show the latest numbers from the United States have been falling persistently short of forecasts. Meanwhile, Citi's comparable "economic surprise" indexes for other regions show just the opposite: upside surprises. Of particular concern for the Fed are recent undershoots on key gauges of inflation that have been lagging the central bank's stated target of 2 percent annualized consumer price growth. Market-based measures of long-term inflation expectations have also weakened substantially, enough so that Fed policymakers agreed at their last meeting that before raising rates again they would need stronger data to confirm recent weakness was not a new trend. With doubts rising over U.S. President Donald Trump's ability to deliver policies to promote faster economic growth, many of these gauges have fallen back to near Election Day levels. Citi's inflation surprise indexes underscore the Fed's anxiety. As this chart shows, recent U.S. inflation readings have returned to their long-term trend of underperforming against forecasts after a brief run of upside surprises earlier this year. Meanwhile, inflation reports from Europe have topped expectations by the widest margin on record. The rest of the so-called Group of 10 largest developed economies are meanwhile beating forecasts by the most since the financial crisis nearly a decade ago, even after taking into account the drag from U.S. numbers. Even Japan, notorious for its decades-long struggles against deflation, is posting inflation data notably above forecasts. The next chance for that gap to narrow comes in the week ahead when the personal consumption expenditures price index for April is reported by the Bureau of Economic Analysis. In March, the core PCE rate, excluding food and energy costs and considered the Fed's favored measures of inflation, fell further from the Fed's target.
  • Dollar edged higher against other major currencies on Friday, as the previous session’s positive data continued to support and as investors were eyeing the release of additional U.S. economic reports later in the day. The greenback was supported by Thursday’s better than expected U.S. initial jobless claims data. The data came a day after the minutes of the Federal Reserve’s May meeting showed that the central bank plans to unwind its balance sheet towards the end of the year, possibly using a system where cap limits are implemented on how much the Fed would roll off every month without reinvesting The Fed also signaled that interest rates could be raised soon, but added that "it would be prudent" to wait for more U.S. economic data. Gold prices moved higher on Friday, but gains were expected to remain limited as the greenback recovered from recent losses posted after the release of the minutes of the Federal Reserve’s meeting. The greenback regained some ground thanks to Thursday’s better than expected U.S. initial jobless claims data. The data came a day after the minutes of the Fed’s May meeting showed that the central bank plans to unwind its balance sheet towards the end of the year, possibly using a system where cap limits are implemented on how much the Fed would roll off every month without reinvesting. The Fed also signaled that interest rates could be raised soon, but added that "it would be prudent" to wait for more U.S. economic data. Market participants were looking ahead to U.S. data on durable goods orders, first-quarter economic growth and consumer sentiment due later in the day.
  • Oil prices edged up on Friday but markets remained on the back foot after tumbling in the previous session when OPEC and allied producers extended output cuts but disappointed investors betting on longer or larger curbs. At Thursday's meeting in Vienna, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers agreed to extend a pledge to cut around 1.8 million bpd until the end of the first quarter of 2018. The initial agreement would have expired in June this year. Crude oil plunged 5 percent following the announcement, only inching up a touch on Friday. Analysts said that the OPEC-led production cuts would support a further rise in U.S. output. Ann-Louise Hittle, vice president at energy consultancy Wood Mackenzie said the "decision in Vienna sends a signal of continued support for oil prices from OPEC which helps U.S. onshore drillers make plans" to further increase their production. U.S. oil production C-OUT-T-EIA has already risen by 10 percent since mid-2016 to over 9.3 million bpd, close to the output of top producers Russia and Saudi Arabia. Goldman Sachs warned that the biggest risk to oil markets was what would happen next year, at the end of the OPEC-led production cut. With U.S. output rising steadily and OPEC and its allies potentially ramping up production in 2018 to regain lost market share, many traders already expect another price slump.

 

 
Intraday RESISTANCE LEVELS
26th May 2017 R1 R2 R3
GOLD-XAU 1,260 1,264-1,270 1,276
Silver-XAG 17.30-17.50 17.70 18.10
Crude Oil 49.00-50.10 51.00 51.80
EURO/USD 1.1260-1.1295 1.1365 1.1420
GBP/USD 1.2900-1.2970 1.3015 1..3100
USD/JPY 111.50 112.00-112.60 113.20

Intraday SUPPORTS LEVELS
26th May 2017 S1 S2 S3
GOLD-XAU 1,252 1,247-1,241 1,228
Silver-XAG 16.90-16.60 16.10 15.65-15.30
Crude Oil 48.40-47.70 46.95 46.00
EURO/USD 1.1200 1.1170-1.1130 1.1100
GBP/USD 1.2840 1.2770-1.2700 1.2620
USD/JPY 111.00 110.50-109.70 109.00

Intra-Day Strategy (26th 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 1259.49/oz and intraday low of US$1253.69/oz. Gold down by 0.255% at US$1255.42/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 ktrend 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     1,252
S2     1,247-1,241
S3     1,228
Intraday Resistance Levels
R1     1,260
R2     1,264-1,270
R3     1,276

Technical Indicators

Name   Value Action
14DRSI  

55.086

Buy
20-DMA   1242.54 Buy
50-DMA  

1252.73

Buy
100-DMA   1234.80 Buy
200-DMA   1244.17 Buy
STOCH(5,3)   61.129 Sell
MACD(12,26,9)   -0.875 Sell

Silver - XAG

AAFX TRADING

Silver closed down on Thursday made its intraday high of US$17.24/oz and intraday low of US$17.11/oz. Silver settled by down by 0.349% at US$17.13/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 Thursday made an intra‐day high of US$51.99/bbl and made an intraday low of US$48.44/bbl and settled down by 5.07% at US$48.63/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 49.00-51.80 with stop loss at 51.80; targeting 48.40-47.70 and 46.5-46.00. Buy above 48.40-46.00 with risk daily closing below 46.00 and targeting 49.00-50.10 and 51.00-51.70-52.20.

 
Intraday Support Levels
S1     48.40-47.70
S2     46.95
S3     46.00

Intraday Resistance Levels
R1     49.00-50.10
R2     51.00
R3     51.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.124 Sell
20-DMA   48.50 Sell
50-DMA   49.57 Sell
100-DMA   51.09 Sell
200-DMA   49.74 Sell
STOCH(5,3)   32.562 Sell
MACD(12,26,9)   -0.111 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1192/EUR and made an intraday high of US$1.1249/EUR and settled the day down by 0.321% at US$1.1209/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 1.1260-1.1420 targeting 1.1200-1.1170-1.1100 and 1.1054-1.1000 with stop-loss at daily closing above 1.1100. Buy above 1.1200-1.1054 with risk below 1.1054 targeting 1.1260-1.1300 and 1.1365-1.1420.

 
Intraday Support Levels
S1     1.1200
S2     1.1170-1.1130
S3     1.1100

Intraday  Resistance Levels
R1     1.1260-1.1295
R2     1.1365
R3     1.1420

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.771 Buy
20-DMA   1.1021 Buy
50-DMA   1.0845 Buy
100-DMA   1.0743 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 Thursday made an intra‐day low of US$1.2930/GBP and made an intraday high of US$1.3014/GBP and settled the day down by 0.239% at US$1.2939/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 1.2900-1.3100 with targets at 1.2840-1.2775 and 1.2700-1.2620, breakage above 1.3100 look for further upside with 1.3150 as targets. Buy above 1.2840-1.2620 with stop loss closing below 1.2700 targeting 1.2900-1.2970 and 1.3015-1.3070-1.3100.

 
Intraday Support Levels
S1     1.2840
S2     1.2770-1.2700
S3     1.2620

Intraday Resistance Levels
R1     1.2900-1.2970
R2     1.3015
R3     1..3100

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.559

Buy
20-DMA   1.2932 Buy
50-DMA   1.2725 Buy
100-DMA   1.2553 Buy
200-DMA   1.2591 Buy
STOCH(5,3)   25.570 Sell
MACD(12,26,9)   0.0058 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY111.46/USD and made an intraday high of JPY111.94/USD and settled the day up by 0.314% at JPY111.81/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 111.50-109.20 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     111.00
S2     110.50-109.70
S3     109.00

INTRADAY RESISTANCE LEVELS
R1     111.50
R2     112.00-112.60
R3     113.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.810 Buy
20-DMA   112.41 Sell
50-DMA   111.25 Buy
100-DMA   112.48 Sell
200-DMA   110.04 Buy
STOCH(9,6)   59.940 Buy
MACD(12,26,9)   0.0052 Sell

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