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  • Sterling retreated on Thursday on fears that Prime Minister Theresa May could lose control of parliament in Britain's June 8 election, while conflicting signals on the health of China's manufacturing sector kept most Asian stock markets in check. Sterling fell after a YouGov poll showed May could be well short of the number of seats needed to form a government, raising the prospect of political turmoil just as formal Brexit talks begin. Other polls, however, show May winning a big majority. However, losses were limited by other data showing rising exports in May Factories across much of Asia ran into a soft patch in May as export demand slowed, according to business surveys, but analysts said the weakness was likely to be temporary amid signs of steady improvement in the global economy. Manufacturing activity continued to improve in most of the region -- albeit at a more modest pace -- and business confidence remained strong overall. President Donald Trump's administration has been the focus of independent investigations by the Federal Bureau of Investigation and several congressional panels over alleged Russian meddling in the 2016 presidential election and potential collusion by the Trump campaign. The House intelligence committee on Wednesday approved subpoenas for Trump's former national security advisor and personal lawyer in connected with the Russian meddling probe. A decision by Trump on whether the U.S. will remain in a global pact to fight climate change, due at 3 p.m. EDT is also keeping markets on edge. Pending home sales fell for a second straight month in April, hindered by a lack of supply, while an index of U.S. Midwest manufacturing activity rose in May.
  • San Francisco Federal Reserve Bank President John C. Williams said on Thursday he sees a total of three interest rate increases for this year as his baseline scenario, but views four hikes as also being appropriate if the U.S. economy gets an unexpected boost. "There is potential for upside occurrences in the economy. One big question mark is if there is big fiscal stimulus or other changes in the outlook that we see the economy is doing better than we thought," said Williams, who was speaking on the sidelines of a forum held by the Bank of Korea in Seoul. In March the Fed lifted rates a notch, its third tightening since the 2007-2009 financial crisis and recession. Forecasts from Fed officials suggest a median of two more hikes are planned before year end, and futures markets are pricing in a roughly 90% chance of a 25-basis-point hike later this month to a range of between 1.00% and 1.25%. Williams said he doesn’t expect any changes in fiscal policies this year to impact the U.S. economy in 2017 in any meaningful way, adding the effects of such policy changes will likely influence growth only in 2018 and 2019. He also reiterated his view that the U.S. economy is doing 'very well', though he said that inflation currently running below the Fed’s 2 percent target is a challenge for monetary policy. Just the same, Fed officials have said they remain confident that low unemployment will help lift inflation toward the central bank's target in coming years.
  • Crude prices recovered about 1% in Asia on Thursday despite a weaker than expected reading in a private manufacturing PMI that showed a drop into contraction in May. China's Caixin manufacturing PMI for May came in at 49.6, marking an 11-month low and slipping into contraction as it missed a level of 50.1 seen. Demand faltered in May as total new orders fell to 50.3 - the lowest level in 11 months - from the previous month's 51.0. The rate of expansion in new export orders also weakened significantly, showing only marginal growth. Overnight, 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. U.S. crude oil inventories dropped 8.670 million barrels at the end of last week, the API said on Wednesday, far more than expected as gasoline supplies eased 1.726 million barrels and distillates fell 124,000 barrels. Forecasts saw a crude oil inventory fall of 2.517 million barrels and a drop of 1.091 min barrels for gasoline stocks and a fall of 755,000 barrels for distillates. Supplies at the Cushing, Oklahoma, oil hub dipped by 753,000 barrels. The API estimates will be followed on Thursday with official data from the EIA. The two sets of figures often diverge. Overnight, crude futures settled more than 2% lower on Wednesday, as investors shrugged of a renewed pledge from Saudi Arabia and Russia to reduce the glut in supply. Oil prices fell as investors ignored Saudi and Russian Energy ministers’ comments on reducing global inventories, as concerns grew that oil producers that are not part of the global pact to reduce supply would continue to ramp-up production, undermining Opec and its allies’ efforts to curb the glut in supply. At a meeting with his Russian counterpart Alexander Novak, Saudi Energy Minister Khalid al-Falih said on Wednesday “more needed to be done to draw inventories towards the five-year average”. Novak added that a new framework “for continued steady cooperation between OPEC and non-OPEC” was necessary even after the expiration of the Vienna agreements. OPEC and non-OPEC members agreed to extend production cuts for a period of nine months until March last week, but stuck to production cuts of 1.8 million bpd agreed in November last year, against expectations that the oil cartel was set to announce deeper production cuts.

 

 
Intraday RESISTANCE LEVELS
1st June 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 49.00 50.10-51.00 51.60
EURO/USD 1.1260-1.1300 1.1370 1.1425
GBP/USD 1.2900-1.2970 1.3015 1.3100
USD/JPY 111.10 111.60 112.00-112.60

Intraday SUPPORTS LEVELS
1st June 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 48.40-47.70 46.95 46.00
EURO/USD 1.1200 1.1100 1.1055-1.0990
GBP/USD 1.2800 1.2770-1.2700 1.2620
USD/JPY 110.50-109.70 109.00 108.55

Intra-Day Strategy (1st June 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 Wednesday and made its intraday high of 1256.28/oz and intraday low of US$1246.13/oz. Gold up by 0.653% at US$1254.98/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  

57.711

Buy
20-DMA   1246.62 Buy
50-DMA  

1255.64

Buy
100-DMA   1238.96 Buy
200-DMA   1242.18 Buy
STOCH(5,3)   68.305 Sell
MACD(12,26,9)   4.637 Sell

Silver - XAG

AAFX TRADING

Silver closed down Wednesday on made its intraday high of US$17.41/oz and intraday low of US$17.21/oz. Silver settled by down by 0.345% at US$17.30/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   55.171 Buy
20-DMA   16.82 Buy
50-DMA   17.42 Sell
100-DMA   17.46 Sell
200-DMA   17.55 Sell
STOCH(5,3)   69.096 Buy
MACD(12,26,9)   -0.0037 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$49.70/bbl and made an intraday low of US$47.70/bbl and settled down by 2.035% at US$48.61/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 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 49.00-51.60 with stop loss at 52.00; targeting 48.40-47.70 and 46.5-46.00. Buy above 48.40-46.05 with risk daily closing below 46.90 and targeting 50.10-51.00 and 51.70-52.20.

 
Intraday Support Levels
S1     48.40-47.70
S2     46.95
S3     46.00

Intraday Resistance Levels
R1     49.00
R2     50.10-51.00
R3     51.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.328 Sell
20-DMA   48.92 Sell
50-DMA   49.65 Sell
100-DMA   50.99 Sell
200-DMA   49.76 Sell
STOCH(5,3)   31.682 Sell
MACD(12,26,9)   0.025 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1163/EUR and made an intraday high of US$1.1215/EUR and settled the day up by 0.509% at US$1.1242/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 1.1260-1.1425 targeting 1.1200-1.1100-1.1054 and 1.0990-1.0930 with stop-loss at daily closing above 1.1425. Buy above 1.1200-1.0990 with risk below 1.0990 targeting 1.1260-1.1300 and 1.1365-1.1425.

 
Intraday Support Levels
S1     1.1200
S2     1.1100
S3     1.1055-1.0990

Intraday  Resistance Levels
R1     1.1260-1.1300
R2     1.1370
R3     1.1425

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.037 Buy
20-DMA   1.1091 Buy
50-DMA   1.0888 Buy
100-DMA   1.0747 Buy
200-DMA   1.0820 Buy
STOCH(5,3)   80.560 Buy
MACD(12,26,9)   0.0101 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2768/GBP and made an intraday high of US$1.2920/GBP and settled the day up by 0.248% at US$1.2886/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  

43.6372

Buy
20-DMA   1.2920 Buy
50-DMA   1.2755 Buy
100-DMA   1.2580 Buy
200-DMA   1.2584 Buy
STOCH(5,3)   43.050 Buy
MACD(12,26,9)   0.0024 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY110.47/USD and made an intraday high of JPY111.22/USD and settled the day down by 0.045% at JPY110.77/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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