AAFX TRADING

Daily Market Lookup

  • Asian shares rose on Friday after U.S. equities were buoyed by a rebound in technology stocks, while markets in Seoul were underpinned by optimism as leaders of North and South Korea held their first summit in over a decade. The euro languished near a 3-1/2-month low, having taken a hit after the European Central Bank on Thursday struck a dovish tone as it kept interest rates unchanged. ECB chief Mario Draghi acknowledged evidence of a "pull-back" from exceptional growth readings seen around the turn of the year, although the central bank sought to bolster expectations for a gradual withdrawal of its monetary stimulus. Weaker-than-expected economic data out of the euro zone has cast some doubt as to how quickly the ECB can head toward policy normalization and weighed on the euro recently. Focus of the day for the Asian currency market was on the lackluster economic data from BOJ’s interest rate decision and the inter-Korean summit. The yen held firm against the dollar despite a slew of worse-than-expected data, with Tokyo CPI for April coming at 0.5% versus the estimated 0.8% and March retail sales figures at 1.0% versus the expected 1.5%. The yen also reacted little to the Bank of Japan’s monetary policy statement, which indicated inflation is unlikely to hit 2% as targeted. BOJ delivered its much anticipated decision on monetary policy in late morning in Asia without mentioning the timeframe for achieving the 2% inflation target. The move suggested that the target will likely remain out of reach in the near future, as the Bank kept its inflation forecast for the next fiscal year unchanged at 1.8%. Earlier this year, the correlation between U.S. yields and the dollar broken down as investors focused more on trade frictions and geopolitical issues, with currencies largely driven by Trump's tweets than by economic data and yields. But so far this week, as concerns over U.S.-China trade tensions have ebbed somewhat, the markets have turned their attention to interest rate plays.
  • The U.S. economy likely slowed in the first quarter as growth in consumer spending braked sharply, but the setback is expected to be temporary against the backdrop of a tightening labor market and large fiscal stimulus. Gross domestic product probably increased at a 2.0 percent annual rate, according to a Reuters survey of economists, also held back by a moderation in business spending on equipment as well as a widening of the trade deficit and decline in investment in homebuilding. Those factors likely offset an increase in inventories. The economy grew at a 2.9 percent pace in the fourth quarter. The anticipated tepid first-quarter growth will, however, probably not be a true reflection of the economy, despite the expected weakness in consumer spending. First-quarter GDP tends to be soft because of a seasonal quirk. The labor market is near full employment and both business and consumer confidence are strong. Economists expect growth will accelerate in the second quarter as households start to feel the impact of the Trump administration’s $1.5 trn income tax package on their paychecks. Lower corporate and individual tax rates as well as increased government spending will likely lift annual economic growth to the administration’s 3% target, despite the weak start to the year. Federal Reserve officials are likely to shrug off weak first-quarter growth. The U.S. central bank raised interest rates last month in a nod to the strong labor market and economy, and forecast at least two rate hikes this year. Minutes of the March 20-21 meeting published earlier this month showed policymakers “expected that the first-quarter softness would be transitory,” citing “residual seasonality in the data, and more generally to strong economic fundamentals.” Economists estimate that growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, braked to below a 1.5% in the first quarter. That would be the slowest pace in nearly five years and follows the fourth quarter’s robust 4.0% growth rate. Consumer spending in the last quarter was likely held back by delayed tax refunds and impact of tax cuts. Rebuilding and clean-up efforts following hurricanes late last year probably pulled forward spending into the fourth quarter. Business spending on equipment is forecast to have slowed after double-digit growth in the second half of 2017.
  • Oil prices rose yesterday as traders worried that the U.S. will re-impose sanctions against Iran. As Iran is the third-largest producer in the OPEC, sanctions on the nation could tighten global oil supplies. French President Emmanuel Macron said on Wednesday during a state visit to the U.S. that he expected Trump to pull out of a deal with Iran reached in 2015, in which Iran suspended its nuclear program in return for western powers lifting crippling sanctions. A day after, a top adviser to Iran’s supreme leader said Tehran would not accept any change to the 2015 nuclear deal. The U.S. has until May 12 to decide whether it will leave the nuclear deal with Iran and impose new sanctions against Tehran, which would likely result in a reduction of its oil exports. And not only is there the possibility of sanctions on Iran, there’s also the possibility of Venezuelan and Russian sanctions. Venezuelan oil output has already tumbled 40% in two years due to political and economic turmoil, and the European Union said earlier this month it could impose further sanctions on Venezuela, OPEC’s largest producer in Latin America, if it believes democracy is being undermined there. In addition to the geopolitical uncertainties, OPEC-led supply cuts and strong global demand continue to prop up prices.

 

 
Intraday RESISTANCE LEVELS
27th April 2018 R1 R2 R3
GOLD-XAU 1,321-1,331 1,340 1,350-1,357
Silver-XAG 17.00 17.40 17.70-18.20
Crude Oil 68.90-69.60 70.50 71.00
EURO/USD 1.2200 1.2250-1.2300 1.2400
GBP/USD 1.4025 1.4080 1.4150-1.4210
USD/JPY 109.60-110.00 110.50 111.00

Intraday SUPPORTS LEVELS
27th April 2018 S1 S2 S3
GOLD-XAU 1,311 1,304 1,295-1,289
Silver-XAG 16.40-16.00 15.60 15.00
Crude Oil 67.50 67.00 66.50-66.00
EURO/USD 1.2150-1.2090 1.2000 1.1940
GBP/USD 1.3910 1.3830-1.3750 1.3700
USD/JPY 108.40 107.50-107.00 106.30

Intra-Day Strategy (27th April 2018)
GOLD-XAU Sell on Strength
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Sell
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Thursday made its intraday high of US$1326.51/oz and low of US$1315.23/oz. Gold was down by 0.467% at US$1316.81/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1326) and breakage below will call for 1316-1300. MACD is below zero line and histograms are decreasing trend and it will bring upward stance in the upcoming sessions. RSI is in oversold region and more downside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Sell on Strength

Based on the charts and explanations above; sell below 1331-1363 keeping stop loss closing above 1363 and targeting 1321-1311 and 1303-1295. Buy above 1321-1295 with risk below 1295, targeting 1331-1340 and 1350-1357.

 
Intraday Support Levels
S1     1,311
S2     1,304
S3     1,295-1,289
Intraday Resistance Levels
R1     1,321-1,331
R2     1,340
R3     1,350-1,357

Technical Indicators

Name   Value Action
14DRSI  

41.295

Buy
20-DMA   1332.06 Sell
50-DMA  

1330.18

Buy
100-DMA   1321.20 Buy
200-DMA   1304.40 Buy
STOCH(5,3)   9.451 Buy
MACD(12,26,9)   -2.298 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.49/oz and low of US$16.40/oz. Silver settled down by 0.181% at US$16.50/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (16.77), breakage above will lead to 17.25-17.70. 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 neutral region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 16.50-15.00 targeting 17.00-17.75 and 18.20-18.60; stop breakage below 15.00. Sell below 17.00-18.20 with stop loss above 18.20; targeting 16.50-16.00-15.60 and 15.00-14.50.

 
Intraday  Support Levels
S1     16.40-16.00
S2     15.60
S3     15.00

Intraday  Resistance Levels
R1     17.00
R2     17.40
R3     17.70-18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.404 Buy
20-DMA   16.68 Sell
50-DMA   16.62 Sell
100-DMA   16.66 Sell
200-DMA   16.78 Sell
STOCH(5,3)   29.161 Sell
MACD(12,26,9)   0.095 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$68.71/bbl, intraday low of US$67.05/bbl and settled up by 0.384% to close at US$68.09/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 61.15 which is a major resistance and breakage above will call for 62.20-62.80. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in neutral 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 68.90-71.00 with stop loss at 71.00; targeting 67.90-67.50-66.50 and 66.00-65.20. Buy above 67.90-66.00 with risk daily closing below 66.00 and targeting 68.90-69.60 and 70.50-72.00.

 
Intraday Support Levels
S1     67.50
S2     67.00
S3     66.50-66.00

Intraday Resistance Levels
R1     68.90-69.60
R2     70.50
R3     71.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.957 Sell
20-DMA   66.47 Buy
50-DMA   64.55 Buy
100-DMA   62.23 Buy
200-DMA   58.64 Buy
STOCH(5,3)   40.000 Sell
MACD(12,26,9)   1.330 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.2095/EUR, high of US$1.2209/EUR and settled the day down by 0.476% to close at US$1.2102/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.2164), which become immediate resistance level, break below will target 1.2150-1.2000. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider buy.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.2250-1.2510 targeting 1.2200-1.2160 and 1.2090-1.2000 with stop-loss at daily closing above 1.2510. Buy above 1.2200-1.2000 with risk below 1.2000 targeting 1.2250-1.2300-1.2350 and 1.2400-1.2450.

 
Intraday Support Levels
S1     1.2150-1.2090
S2     1.2000
S3     1.1940

Intraday  Resistance Levels
R1     1.2200
R2     1.2250-1.2300
R3     1.2400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.764 Buy
20-DMA   1.2284 Sell
50-DMA   1.2286 Sell
100-DMA   1.2195 Buy
200-DMA   1.1972 Buy
STOCH(5,3)   9.836 Sell
MACD(12,26,9)   -0.0028 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3894/GBP, high of US$1.3997/GBP and settled the day down by 0.107% to close at US$1.3911/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.3953) 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 oversold territory and giving negative crossover to confirm bearish 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 1.4025-1.4300 with targets at 1.3900-1.3830 and 1.3750-1.3700. Buy above 1.3910-1.3830 and 1.3750-1.3700 with stop loss closing below 1.3830 targeting 1.4025-1.4080-1.4150 and 1.4210-1.4300.

 
Intraday Support Levels
S1     1.3910
S2     1.3830-1.3750
S3     1.3700

Intraday Resistance Levels
R1     1.4025
R2     1.4080
R3     1.4150-1.4210

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.603

Buy
20-DMA   1.4088 Buy
50-DMA   1.4017 Buy
100-DMA   1.3854 Buy
200-DMA   1.3597 Buy
STOCH(5,3)   2.586 Sell
MACD(12,26,9)   0.0049 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY109.06/USD and made an intraday high of JPY109.46/USD and settled the day up by 0.109% at JPY109.29/USD.

Technicals in Focus:

In daily charts, JPY is sustaining below 200DMA (111.15), which is major resistance on the daily chart. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases 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 positive crossover to confirm bullish stance.

Trading Strategy: Neutral to Sell

Sell below 109.60-111.00 with risk above 111.00 targeting 108.40-107.50-107.00 and 106.70-106.00. Long positions above 108.00-106.00 with targets of 108.90-109.60 and 110.00-110.50 with stop below 104.90.

 
Intraday Support Levels
S1     108.40
S2     107.50-107.00
S3     106.30

INTRADAY RESISTANCE LEVELS
R1     109.60-110.00
R2     110.50
R3     111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.292 Buy
20-DMA   107.64 Buy
50-DMA   107.52 Buy
100-DMA   108.43 Sell
200-DMA   109.59 Sell
STOCH(9,6)   60.682 Buy
MACD(12,26,9)   0.507 Sell

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