AAFX TRADING

Daily Market Lookup

  • Asian stocks climbed on Wednesday, capping a fifth consecutive month of gains, as data showed China's factory activity grew at a steady clip this month, bucking expectations of a slowdown. Activity in China's manufacturing sector grew at the same pace in May as in April, with a headline reading of 51.2, official data showed, in a reassuring sign the world's second-biggest economy is not losing too much steam after a solid first quarter performance. Growth in China's steel industry rebounded to the strongest level in a year, supported by an increase in new orders, according to an industry survey, buoying prices of iron ore and steel rebar futures in Shanghai. In a further vote of confidence, Moody's Investors Services said the improving outlook for global growth in 2017 appeared sustainable as some of the biggest risks to the developed economies seem to have subsided. Despite signs of improvement in the global economy, investors are wary of chasing markets higher with stock trading volumes on the mainland and Hong Kong trending lower in recent days, signaling diminishing investor confidence. The news came after a string of opinion polls showed a narrowing lead for May's Conservatives, shaking investors' confidence that May would easily win a majority in a national election on June 8 and potentially fuelling market uncertainty. The dollar held near two-week lows against the safe-haven yen as investors turned cautious amid political worries in Europe as well as weaker stock and commodity markets after a long U.S. holiday weekend. The greenback's weakness was also accentuated after the U.S. Treasury yields resumed their downward trend after a brief spike earlier this month. Ten-year yields were trading at 2.21 percent compared to 2.41 percent, two weeks ago.
  • Gold dipped as China reported better than expected PMI figures for May on Wednesday, lifting copper slightly on expected continued growth. China reported official manufacturing PMI for May at 51.2, compared with a level of 51.0 seen, and steady with 51.2 in April. The non-manufacturing PMI came in at 54.5, up from a level last at 54.0 in April. A figure above 50 denotes expansion. The private manufacturing PMI from Caixin is due on Thursday. Gold retreated from a one-month high, despite an increase in safe haven demand amid ongoing geopolitical concerns in Europe while hawkish comments concerning U.S. interest rates from a top Fed official capped upside momentum. Gold prices dipped at the start of European trade on Tuesday, as concerns about geopolitical uncertainty in Europe eased somewhat, following the release of the ICM poll for The Guardian, showing the Conservative Party held a healthy lead of 45% compared to Labour's 33%, ahead of the general election scheduled for June 8. Elsewhere in Europe, however, Eurozone finance ministers’ failure to agree on Greek debt relief with the International Monetary Fund last week, and the prospect of early elections in Italy increased demand for safe haven gold, which limited losses. Former Italian prime minister Matteo Renzi suggested on Sunday that the country's next election be held at the same time as Germany's election, September 24, adding to speculation that Italians could head to the polls in the autumn. In the mid-afternoon U.S. session, investors parsed Federal Reserve Governor Lael Brainard’s comments that an interest rate hike is "likely appropriate soon" but reaction in gold prices were muted, as Brainard warned that the Fed may delay an interest rate hike should inflation continue to slow.
  • Oil prices fell on Wednesday, as rising output from Libya added to concerns about increasing U.S. production that is undermining OPEC-led production cuts aimed at tightening the market. Traders said the price declines were a result of higher output in conflict-torn Libya, which was adding to a relentless rise in U.S. production Libya's oil production is expected to rise to 800,000 bpd this week, state-run National Oil Corporation said on Monday. That would likely boost its exports. Shipping data in Thomson Reuters Eikon shows that, excluding pipeline exports, Libya shipped out an average of 500,000 bpd of crude oil so far this year, compared with just 300,000 bpd shipped on average in 2016. Libya's rising production and exports add to soaring U.S. output, which largely thanks to shale oil drilling has jumped by more than 10 percent since the middle of last year to over 9.3 million bpd C-OUT-T-EIA, close to top producers Saudi Arabia and Russia. Rising output from the United States and Libya undermines efforts by the OPEC and other producers including Russia to tighten an oversupplied market by cutting production by around 1.8 million bpd until the end of the first quarter of 2018. The cuts, which have been in place since January and were initially due expire in June, have so far not had the desired effect of substantially drawing down excess inventories. Libya is an OPEC member, but it was exempt from the cuts. The United States is not participating in the self-imposed production cuts.

 

 
Intraday RESISTANCE LEVELS
31st May 2017 R1 R2 R3
GOLD-XAU 1,270-1,276 1,284 1,290
Silver-XAG 17.50-17.70 18.10 18.50
Crude Oil 50.10-51.00 51.60 52.50
EURO/USD 1.1200 1.1260-1.1300 1.1370
GBP/USD 1.2900-1.2970 1.3015 1.3100
USD/JPY 111.10 111.60 112.00-112.60

Intraday SUPPORTS LEVELS
31st May 2017 S1 S2 S3
GOLD-XAU 1,260-1,252 1,247 1,241
Silver-XAG 17.20-16.90 16.60 16.10-15.65
Crude Oil 49.00 48.40-47.70 46.95
EURO/USD 1.1100 1.1055-1.0990 1.0930
GBP/USD 1.2800 1.2770-1.2700 1.2620
USD/JPY 110.50-109.70 109.00 108.55

Intra-Day Strategy (31st 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 down on Tuesday and made its intraday high of 1270.33/oz and intraday low of US$1259.21/oz. Gold down by 0.333% at US$1262.74/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 positive crossover to confirm bearish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1264-1276 keeping stop loss closing above 1284 and targeting 1254-1247-1241 and 1228-1221. Buy above 1254-1207 with risk below 1207, targeting 1264-1270 and 1276-1284.

 
Intraday Support Levels
S1     1,260-1,252
S2     1,247
S3     1,241
Intraday Resistance Levels
R1     1,270-1,276
R2     1,284
R3     1,290

Technical Indicators

Name   Value Action
14DRSI  

58.567

Buy
20-DMA   1242.80 Buy
50-DMA  

1254.21

Buy
100-DMA   1236.57 Buy
200-DMA   1243.34 Buy
STOCH(5,3)   77.305 Buy
MACD(12,26,9)   2.953 Sell

Silver - XAG

AAFX TRADING

Silver closed up Tuesday on made its intraday high of US$17.45/oz and intraday low of US$17.21/oz. Silver settled by down by 0.057% at US$17.37/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (17.44), 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 overbought 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 17.20-15.30 targeting 17.50-17.70 and 18.10; stop breakage below 15.00. Sell below 17.50-18.50 with stop loss above 18.50; targeting 17.20-16.90-16.30 and 16.10-15.65.

 
Intraday  Support Levels
S1     17.20-16.90
S2     16.60
S3     16.10-15.65

Intraday  Resistance Levels
R1     17.50-17.70
R2     18.10
R3     18.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.135 Buy
20-DMA   16.77 Buy
50-DMA   17.42 Sell
100-DMA   17.45 Sell
200-DMA   17.56 Sell
STOCH(5,3)   87.096 Buy
MACD(12,26,9)   -0.0054 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$50.05/bbl and made an intraday low of US$49.01/bbl and settled down by 0.819% at US$49.62/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 50.10-52.50 with stop loss at 52.50; targeting 49.00-48.40-47.70 and 46.5-46.00. Buy above 49.00-46.95 with risk daily closing below 46.90 and targeting 50.10-51.00 and 51.70-52.20.

 
Intraday Support Levels
S1     49.00
S2     48.40-47.70
S3     46.95

Intraday Resistance Levels
R1     50.10-51.00
R2     51.60
R3     52.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.262 Sell
20-DMA   48.80 Sell
50-DMA   49.65 Sell
100-DMA   51.03 Sell
200-DMA   49.76 Sell
STOCH(5,3)   38.903 Buy
MACD(12,26,9)   0.155 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1108/EUR and made an intraday high of US$1.1205/EUR and settled the day up by 0.197% at US$1.1185/EUR on session close.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0877), 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 1.1200-1.1370 targeting 1.1100-1.1054 and 1.0990-1.0930 with stop-loss at daily closing above 1.1100. Buy above 1.1100-1.0930 with risk below 1.0930 targeting 1.1200-1.1260 and 1.1300-1.1365.

 
Intraday Support Levels
S1     1.1100
S2     1.1055-1.0990
S3     1.0930

Intraday  Resistance Levels
R1     1.1200
R2     1.1260-1.1300
R3     1.1370

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.461 Buy
20-DMA   1.1075 Buy
50-DMA   1.0877 Buy
100-DMA   1.0767 Buy
200-DMA   1.0820 Buy
STOCH(5,3)   38.351 Sell
MACD(12,26,9)   0.0097 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2793/GBP and made an intraday high of US$1.2888/GBP and settled the day up by 0.163% at US$1.2856/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 1.2800-1.2775 and 1.2700-1.2620, breakage above 1.3100 look for further upside with 1.3150 as targets. Buy above 1.2800-1.2620 with stop loss closing below 1.2620 targeting 1.2900-1.2970 and 1.3015-1.3070-1.3100.

 
Intraday Support Levels
S1     1.2800
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  

46.427

Buy
20-DMA   1.2920 Buy
50-DMA   1.2747 Buy
100-DMA   1.2572 Buy
200-DMA   1.2585 Buy
STOCH(5,3)   25.050 Buy
MACD(12,26,9)   0.0024 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY110.65/USD and made an intraday high of JPY111.30/USD and settled the day down by 0.368% at JPY110.82/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 110.50-108.55 with targets of 111.10-111.60 and 112.00-112.60-113.20 with stop below 108.50. Sell below 111.10-113.20 with risk above 113.20 targeting 110.50-109.70 and 109.20-108.55.

 
Intraday Support Levels
S1     110.50-109.70
S2     109.00
S3     108.55

INTRADAY RESISTANCE LEVELS
R1     111.10
R2     111.60
R3     112.00-112.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.502 Buy
20-DMA   112.24 Sell
50-DMA   111.20 Buy
100-DMA   112.34 Sell
200-DMA   110.20 Buy
STOCH(9,6)   23.993 Sell
MACD(12,26,9)   -0.148 Sell

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