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Daily Market Lookup

  • Asian shares slipped on Thursday as hopes waned for real progress in Sino-U.S. trade talks, while the U.S. dollar consolidated recent bumper gains after the Federal Reserve reaffirmed the outlook for more rate hikes. Souring the mood were reports the Trump administration is considering executive action to restrict some Chinese companies' ability to sell telecoms equipment in the United States. Talks between U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are due to kick off later on Thursday. However, a breakthrough was viewed as highly unlikely, especially as the U.S. embassy said their delegation would leave as early as Friday evening. The Fed policy meeting ended with no change, as expected, while the central bank expressed confidence a recent rise in inflation to near target would be sustained, leaving it on track to raise borrowing costs in June. Yet the Fed also emphasized the inflation target was "symmetric", suggesting it was not inclined to speed up its tightening plans. The Fed statement was not quite as hawkish as some had wagered on and caused a dip in the dollar, though sentiment remained bullish given U.S. rates were still clearly heading higher while those in Europe and Japan lagged far behind. In the Treasury market, yields dipped slightly as a quarterly refunding program of $73 billion came in short of expectations, reducing the pressure on prices from the torrent of supply.
  • The Federal Reserve held interest rates steady on Wednesday and expressed confidence that a recent rise in inflation to near the U.S. central bank’s target would be sustained, leaving it on track to raise borrowing costs in June. The upgrading of the Fed’s inflation outlook represented a milestone after roughly six years of price gains falling short of its 2 percent goal, even as key aspects of the economy saw a healthy recovery from the 2007-2009 recession. The Fed’s rate-setting committee also downplayed a recent slowdown in economic and job growth, saying activity had been expanding at a moderate rate and job gains, on average, had been strong in recent months. It said inflation had “moved close” to its target and that “on a 12-month basis is expected to run near the Committee’s symmetric 2 percent objective over the medium term.” The Fed’s decision to leave its benchmark overnight lending rate in a target range of between 1.50% and 1.75% was unanimous. Investors had all but ruled out another increase at this week’s meeting. The Fed raised rates in March and currently forecasts another two increases this year, although an increasing number of policymakers see three as possible. Investors overwhelmingly expect a rate hike at the June 12-13 policy meeting. After the release of the Fed’s statement, traders of U.S. short-term interest rate futures kept bets that rates would rise at least two more times in 2018. U.S. stocks pared losses before turning lower, Treasury yields briefly edged higher, and the dollar .DXY was off its highs of the day against a basket of currencies. The Fed’s confidence in the economic outlook was also highlighted by its assertion that business fixed investment had continued to grow strongly. It added that risks to the outlook appear roughly balanced, removing a prior reference to “near-term risks.” Fed Chairman Jerome Powell has maintained that the central bank will pursue a middle-of-the-road approach to monetary policy, continuing to gradually lift rates in the face of a robust economy that had yet to spark a jump in inflation. But data released on Monday showed price gains are now effectively at the Fed’s target. The Fed’s preferred measure of inflation soared 1.9 percent in the 12 months through March, the biggest increase since February 2017, after increasing 1.6 percent in the year through February, the U.S. Commerce Department reported. Fed policymakers had anticipated the rise and have stressed that their target is not a ceiling and that they will tolerate increases above it without being immediately concerned. The Fed’s pace of rate increases has picked up since it began its tightening cycle in December 2015. It raised rates once in 2016, but lifted borrowing costs three times last year amid a strengthening economy and labor market. The economy is now in its second-longest expansion since World War Two. The unemployment rate is at a 17-year low of 4.1 percent, below the Fed’s longer-run estimate of what constitutes full employment, and there are signs wages are moving firmly higher after an extended period of sluggishness.

 

 
Intraday RESISTANCE LEVELS
3rd May 2018 R1 R2 R3
GOLD-XAU 1,311-1,321 1,331 1,340-1,350
Silver-XAG 16.40-17.00 17.40 17.70-18.20
Crude Oil 68.10-68.90 69.60 70.50-71.00
EURO/USD 1.2090 1.2150-1.2200 1.2250
GBP/USD 1.3605 1.3700-1.3750 1.3800
USD/JPY 110.00-110.50 111.00 112.00

Intraday SUPPORTS LEVELS
3rd May 2018 S1 S2 S3
GOLD-XAU 1,304 1,295-1,289 1,280
Silver-XAG 16.05-15.60 15.30 15.00
Crude Oil 67.50 67.00 66.50-66.00
EURO/USD 1.2000-1.1975 1.1915 1.1850
GBP/USD 1.3550-1.3500 1.3450 1.3400
USD/JPY 109.60-109.00 108.40 107.50-107.00

Intra-Day Strategy (3rd May 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 Wednesday made its intraday high of US$1313.30/oz and low of US$1303.36/oz. Gold was down by 0.850% at US$1304.68/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     1,304
S2     1,295-1,289
S3     1,280
Intraday Resistance Levels
R1     1,311-1,321
R2     1,331
R3     1,340-1,350

Technical Indicators

Name   Value Action
14DRSI  

44.897

Buy
20-DMA   1332.63 Sell
50-DMA  

1330.42

Buy
100-DMA   1321.32 Buy
200-DMA   1304.46 Buy
STOCH(5,3)   16.385 Buy
MACD(12,26,9)   -1.817 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$16.51/oz and low of US$16.12/oz. Silver settled up by 1.48% at US$16.36/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 16.05-15.00 targeting 16.40-17.00-17.75 and 18.20-18.60; stop breakage below 15.00. Sell below 16.40-18.20 with stop loss above 18.20; targeting 16.00-15.60 and 15.00-14.50.

 
Intraday  Support Levels
S1     16.05-15.60
S2     15.30
S3     15.00

Intraday  Resistance Levels
R1     16.40-17.00
R2     17.40
R3     17.70-18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42,710 Buy
20-DMA   16.54 Sell
50-DMA   16.57 Sell
100-DMA   16.63 Sell
200-DMA   16.75 Sell
STOCH(5,3)   25.455 Sell
MACD(12,26,9)   -0.0507 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$68.02/bbl, intraday low of US$66.81/bbl and settled up by 0.267% to close at US$67.56/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 68.00-71.00 with stop loss at 71.00; targeting 67.50-66.50 and 66.00-65.20. Buy above 67.50-65.20 with risk daily closing below 65.00 and targeting 68.10-68.90-69.60 and 70.50-71.00.

 
Intraday Support Levels
S1     67.50
S2     67.00
S3     66.50-66.00

Intraday Resistance Levels
R1     68.10-68.90
R2     69.60
R3     70.50-71.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.811 Sell
20-DMA   66.90 Buy
50-DMA   65.03 Buy
100-DMA   62.66 Buy
200-DMA   59.00 Buy
STOCH(5,3)   36.893 Sell
MACD(12,26,9)   1.067 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.937/EUR, high of US$1.2031/EUR and settled the day down by 0.267% to close at US$1.1949/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 1.2090-1.2300 targeting 1.2000-1.1970 and 1.1915-1.1850 with stop-loss at daily closing above 1.2300. Buy above 1.2000-1.1850 with risk below 1.1850 targeting 1.2090-1.2150-1.2250 and 1.2300-1.2350.

 
Intraday Support Levels
S1     1.2000-1.1975
S2     1.1915
S3     1.1850

Intraday  Resistance Levels
R1     1.2090
R2     1.2150-1.2200
R3     1.2250

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.436 Buy
20-DMA   1.2209 Sell
50-DMA   1.2248 Sell
100-DMA   1.2182 Buy
200-DMA   1.1974 Buy
STOCH(5,3)   8.134 Sell
MACD(12,26,9)   -0.004 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3554/GBP, high of US$1.3665/GBP and settled the day down by 0.293% to close at US$1.3570/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 1.3700-1.3910 with targets at 1.3605-1.3550 and 1.3500-1.3450. Buy above 1.3605-1.3450 with targets 1.3500-1.3550 and 1.3500-1.3450 with stop loss closing below 1.3450 targeting 1.3700-1.3750 and 1.3800-1.3910.

 
Intraday Support Levels
S1     1.3550-1.3500
S2     1.3450
S3     1.3400

Intraday Resistance Levels
R1     1.3605
R2     1.3700-1.3750
R3     1.3800

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

27.844

Buy
20-DMA   1.3900 Buy
50-DMA   1.3947 Buy
100-DMA   1.3839 Buy
200-DMA   1.3607 Buy
STOCH(5,3)   6.692 Sell
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY109.58/USD and made an intraday high of JPY110.03/USD and settled the day up by 0.027% at JPY109.82/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 110.00-112.00 with risk above 112.00 targeting 109.60-109.00-108.40 and 107.50-107.00-106.70. 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     109.60-109.00
S2     108.40
S3     107.50-107.00

INTRADAY RESISTANCE LEVELS
R1     110.00-110.50
R2     111.00
R3     112.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.426 Buy
20-DMA   108.27 Buy
50-DMA   107.82 Buy
100-DMA   108.53 Sell
200-DMA   109.56 Sell
STOCH(9,6)   89.522 Buy
MACD(12,26,9)   0.785 Sell

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