AAFX TRADING

Daily Market Lookup

  • U.S. job growth likely remained strong in May, a further sign of an acceleration in economic activity that would effectively seal the case for an interest rate increase this month despite sluggish wage gains. The unemployment rate is forecast unchanged at a 10-year low of 4.4 percent. It has dropped four-tenths of a percentage point this year. The Labor Department will release its closely watched employment report on Friday, less than two weeks before the Federal Reserve's June 13-14 policy meeting. Minutes of the Fed's May 2-3 policy meeting, which were published last week, showed that while policymakers agreed they should hold off hiking rates until there was evidence the growth slowdown was transitory, "most participants" believed "it would soon be appropriate" to raise borrowing costs. The U.S. central bank raised interest rates by 25 basis points in March. Data on consumer spending and manufacturing suggest the economy gained speed early in the second quarter after gross domestic product increased at a tepid 1.2 percent annualized rate at the start of the year. The Atlanta Fed is forecasting GDP increasing at a 4.0 percent pace in the second quarter. A soft average hourly earnings reading would come as annual inflation rates have retreated in recent months. But with the labor market expected to hit full employment this year, there is optimism that wage growth will accelerate. There is growing anecdotal evidence of companies struggling to find qualified workers. The Fed in its Beige Book on Wednesday said a manufacturing firm in the Chicago district reported raising wages for unskilled laborers by 10 percent to attract better-quality workers and retain its workforce. The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population. Republican President Donald Trump, who inherited a strong job market from the Obama administration, has vowed to sharply boost economic growth and further strengthen the labor market by slashing taxes and cutting regulation. There are, however, fears that political scandals could derail the Trump administration's economic agenda.
  • The dollar hit a one-week high against the yen on Friday after upbeat U.S. private sector job figures, while the closely-watched non-farm payrolls report out later in the global day could provide another boost. Prior to the boost from the stronger-than-expected May ADP employment report issued late on Thursday, the dollar had struggled with U.S. political concerns and a consequent risk-off mood that had gripped the wider markets earlier in the week. The nonfarm payrolls report on Friday is expected to show that the U.S. economy created 185,000 jobs last month, and will be closely watched as it is the final jobs report before the FOMC meets in June. Overnight, the dollar advanced against a basket of major currencies on Thursday, as the pace of US private-sector jobs growth surged in May, fuelling expectations of strong monthly non-farm payrolls. Reports on Friday, which lifted the possibility of a June rate hike to its highest level. Private employers added 253,000 jobs in May, according to payroll processor ADP, well above Wall Street expectations of a 185,000 rise. In separate report, U.S. manufacturing activity ticked higher, hitting 53.5 in May, the ISM said on Thursday. Economists had expected a rise to 52.8. Meanwhile, spending in the construction sector fell 1.4% for the month, the biggest drop in a year, and below forecasts of a 0.2% decline. Despite the dip in construction spending, expectations of a June rate hike rose to the highest level after the surge in private-sector jobs bolstered the prospect of a strong nonfarm payrolls report.
  • Oil prices dropped below $50 on Friday amid worries that U.S. President Donald Trump's decision to abandon a global climate pact could spark more crude drilling in the United States, stoking a persistent glut in global supply. Commodity markets were absorbing news the United States would withdraw from the landmark 2015 global agreement to fight climate change, a move that fulfilled a major campaign pledge but drew condemnation from U.S. allies. Surging U.S. production has put a strain on OPEC members' efforts to curb production to drain a global crude supply overhang. A week ago, the OPEC and some non-OPEC members met in Vienna to roll over an output cut deal to reduce 1.8 million bpd until the end of next March. Russian Deputy Prime Minister Arkady Dvorkovich said on Friday that he did not think that the global output cut agreement would be altered should prices go lower. Faced with lingering glut woes, the oil cartel also discussed last week reducing output by a further 1 to 1.5 percent, and could revisit the proposal should inventories remain high, according to sources. But oil markets were offered some support by official data that showed crude inventories in the United States, the world's top oil consumer, fell sharply last week as refining and exports surged to record highs. Crude stockpiles were down to 6.4 million barrels in the week to May 26, beating analyst expectations for a decrease of 2.5 million barrels. However, U.S. crude production rose to 9.34 million bpd last week, up nearly 500,000 bpd from a year ago. Rising output from Nigeria and Libya is also undercutting the oil producers' attempt to limit production. Nigeria and Libya are exempted from crimping output as they seek to restore supplies hurt by internal conflicts.

 

 
Intraday RESISTANCE LEVELS
2nd June 2017 R1 R2 R3
GOLD-XAU 1,270-1,276 1,284 1,290
Silver-XAG 17.20 17.50-17.70 18.10
Crude Oil 48.40 49.00 50.10-51.00
EURO/USD 1.1260-1.1300 1.1370 1.1425
GBP/USD 1.2900-1.2970 1.3015 1.3100
USD/JPY 112.90-113.90 114.50 115.40-116.00

Intraday SUPPORTS LEVELS
2nd June 2017 S1 S2 S3
GOLD-XAU 1,260-1,252 1,247 1,241
Silver-XAG 16.90 16.60 16.10-15.65
Crude Oil 47.70-46.95 46.00 45.22
EURO/USD 1.1200 1.1100 1.1055-1.0990
GBP/USD 1.2800 1.2770-1.2700 1.2620
USD/JPY 112.30-111.30 110.10 109.20

Intra-Day Strategy (2nd 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 Thursday and made its intraday high of 1270.14/oz and intraday low of US$1261.36/oz. Gold down by 0.238% at US$1265.68/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 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  

51.457

Buy
20-DMA   1248.19 Buy
50-DMA  

1255.93

Buy
100-DMA   1239.60 Buy
200-DMA   1241.79 Buy
STOCH(5,3)   51.718 Sell
MACD(12,26,9)   4.327 Sell

Silver - XAG

AAFX TRADING

Silver closed down Thursday on made its intraday high of US$17.28/oz and intraday low of US$17.14/oz. Silver settled by down by 0.173% at US$17.16/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 16.90-15.30 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     16.90
S2     16.60
S3     16.10-15.65

Intraday  Resistance Levels
R1     17.20
R2     17.50-17.70
R3     18.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.306 Buy
20-DMA   16.86 Buy
50-DMA   17.41 Sell
100-DMA   17.46 Sell
200-DMA   17.44 Sell
STOCH(5,3)   50.940 Buy
MACD(12,26,9)   -0.0035 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$49.15/bbl and made an intraday low of US$47.87/bbl and settled down by 1.213% at US$48.01/bbl on session close.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 49.76 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 48.40-51.60 with stop loss at 52.00; targeting 47.70-46.5 and 46.00-45.22. Buy above 47.70-46.05 with risk daily closing below 46.90 and targeting 50.10-51.00 and 51.70-52.20.

 
Intraday Support Levels
S1     47.70-46.95
S2     46.00
S3     45.22

Intraday Resistance Levels
R1     48.40
R2     49.00
R3     50.10-51.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.345 Sell
20-DMA   48.96 Sell
50-DMA   49.64 Sell
100-DMA   50.93 Sell
200-DMA   49.76 Sell
STOCH(5,3)   15.682 Sell
MACD(12,26,9)   -0.139 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1201/EUR and made an intraday high of US$1.1255/EUR and settled the day down by 0.275% at US$1.1211/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   64.590 Buy
20-DMA   1.1101 Buy
50-DMA   1.0895 Buy
100-DMA   1.0780 Buy
200-DMA   1.0820 Buy
STOCH(5,3)   78.747 Buy
MACD(12,26,9)   0.0101 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2829/GBP and made an intraday high of US$1.2915/GBP and settled the day up by 0.0628% at US$1.2880/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  

50.479

Buy
20-DMA   1.2920 Buy
50-DMA   1.2764 Buy
100-DMA   1.2587 Buy
200-DMA   1.2583 Buy
STOCH(5,3)   58.050 Buy
MACD(12,26,9)   0.0022 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY110.67/USD and made an intraday high of JPY111.47/USD and settled the day up by 0.532% at JPY111.34/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     112.30-111.30
S2     110.10
S3     109.20

INTRADAY RESISTANCE LEVELS
R1     112.90-113.90
R2     114.50
R3     115.40-116.00

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

AAFX TRADING
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