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Daily Market Lookup

  • Asian shares crept higher on Monday after a tame reading on U.S. wages lowered the risk of faster rate hikes by the Federal Reserve, although Sino-U.S. trade tensions and a looming deadline for the Iranian nuclear deal argued for caution. Oil prices hit their highest in more than three years as global supplies remained tight and the market awaited news from Washington on possible new U.S. sanctions against Iran. President Donald Trump has set a May 12 deadline for Europeans to “fix” the deal with Iran over its nuclear program or he would refuse to extend U.S. sanctions relief for the oil-producing Islamic Republic. The week ahead also has important readings on the health of the Chinese economy, and hence global demand, as well as the latest data on U.S. consumer price inflation. Friday’s U.S. jobs report showed unemployment dropping to a new cycle low of 3.9 percent yet wages remained benign, suggesting the Federal Reserve would keep raising rates but at a gradual pace. The recent run of solid U.S. economic news contrasts with a softer turn in European data and lifted the dollar to its highest for the year so far against the euro. It had less luck against the Japanese yen, in part because strains in emerging market currencies were supporting safe havens such as the yen. The dollar eased off to 108.89 JPY=EBS, having topped out around 110.05 last week. Markets from Argentina to Turkey have been under intense pressure, in part because many of these countries have large amounts of U.S. dollar debt which gets more expensive to finance as the currency rises.
  • The dollar stayed near its 2018 peak early on Monday after U.S. jobs and wages data did little to water down perceptions of strength in the U.S. economy, though renewed concerns about trade frictions could cloud its outlook. The dollar gained broadly, maintaining its strength after Friday's mixed U.S. data. The U.S. economy added fewer jobs than expected and the average hourly earnings, closely watched for signs of inflationary pressures, rose less-than-expected 0.1 percent in April, leaving the annual increase at 2.6 percent. The unemployment rate dropped to near a 17-1/2-year low of 3.9 percent, although this was driven in part by Americans leaving the labor force. None of this changed the perception that the Federal Reserve will likely hike interest rates at least twice, and possibly three times, by the end of year. In contrast, recent data suggested Europe's stellar growth last year is losing momentum, leading speculators to trim bets on the currency on expectations the European Central Bank will wind down its stimulus. Data from U.S. financial watchdog published late on Friday showed speculators' net long position in the euro in Chicago's futures exchange declined only slightly in the latest week. A wider measure of dollar positioning that includes contracts on some emerging market currencies showed net dollar shorts shrank to $18.32 billion, from a seven-year high of $28.18 billion two weeks earlier. Concerns about Trump's protectionism was one big reason many investors had shied away from the dollar earlier. Some market participants expect worries over a trade war could return after the trade talk between the United States and China produced little apparent progress. In a sign that the trade tension is spilling over to other issues, Beijing and Washington came to loggerheads over how to refer to Taiwan, Hong Kong and Macau. The yen's rebound was in part driven by short-covering by Japanese margin traders, especially against the Turkish lira , which fell to record lows during Japan's Golden Week holidays.
  • U.S. oil prices rose above $70 a barrel on Monday for the first time since November 2014 while Brent crude prices climbed to fresh highs, as a deepening economic crisis in Venezuela threatened the country’s already tumbling oil supplies. The concerns added to worries over a looming decision on whether the United States will walk away from a deal with Iran and instead re-imposes sanctions on Tehran, keeping international oil markets on edge. Analysts warned that the deepening economic crisis in major oil exporter Venezuela threatened to further crimp its production and exports. U.S. oil firm ConocoPhillips has moved to take key Caribbean assets of Venezuela’s state-run PDVSA to enforce a $2 billion arbitration award, actions that could further impair PDVSA’s declining oil production and exports. Venezuela’s oil output has halved since the early 2000s to just 1.5 Mn (bpd), as the South American country has failed to invest enough to maintain its petroleum industry. Beyond Venezuela’s woes Greg McKenna, chief market strategist at futures brokerage AxiTrader, said “the big story this week is going to be about oil and the Iran Nuclear deal.” Most market participants expect Trump to withdraw from the pact, he said. Iran re-emerged as a major oil exporter in 2016 after international sanctions against it were lifted in return for curbs on Iran’s nuclear program. Expressing doubts over Iran’s sincerity, Trump has threatened to walk away from the 2015 agreement by not extending sanctions waivers when they expire on May 12, which would likely result in a reduction of Iran’s oil exports. Some traders, however, are becoming cautious about ever higher oil prices. Looming over markets is surging U.S. output, which has soared by more than a quarter in the last two years, to 10.62 million bpd. U.S. output will likely rise further this year, towards or past Russia’s 11 million bpd, as its energy firms keep drilling for more. U.S. energy companies added nine oil rigs looking for new production in the week to May 4, bringing the total count to 834, the highest level since March 2015, energy services firm Baker Hughes said last Friday.

 

 
Intraday RESISTANCE LEVELS
7th May 2018 R1 R2 R3
GOLD-XAU 1,321 1,331 1,340-1,350
Silver-XAG 17.00 17.40 17.70-18.20
Crude Oil 70.00 70.50-71.00 71.50
EURO/USD 1.1975-1.2000 1.2090 1.2150-1.2200
GBP/USD 1.3550 1.3605 1.3700-1.3750
USD/JPY 109.60 110.00-110.50 111.00

Intraday SUPPORTS LEVELS
7th May 2018 S1 S2 S3
GOLD-XAU 1,311-1,304 1,295 1,289-1,280
Silver-XAG 16.50 16.05-15.60 15.30
Crude Oil 69.60-68.90 68.10 67.50-67.00
EURO/USD 1.1950-1.1915 1.1850 1.1800
GBP/USD 1.3500 1.3450 1.3400-1.3320
USD/JPY 109.00 108.40 107.50-107.00

Intra-Day Strategy (7th 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 Thursday made its intraday high of US$1318.00/oz and low of US$1312.08/oz. Gold was up by 0.230% at US$1312.08/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 1321-1350 keeping stop loss closing above 1350 and targeting 1311-1303 and 1295-1289-1280. Buy above 1311-1280 with risk below 1280, targeting 1321-1331-1340 and 1350-1357.

 
Intraday Support Levels
S1     1,311-1,304
S2     1,295
S3     1,289-1,280
Intraday Resistance Levels
R1     1,321
R2     1,331
R3     1,340-1,350

Technical Indicators

Name   Value Action
14DRSI  

43.7788

Buy
20-DMA   1332.86 Sell
50-DMA  

1326.76

Buy
100-DMA   1320.26 Buy
200-DMA   1304.74 Buy
STOCH(5,3)   37.110 Buy
MACD(12,26,9)   -6.212 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.51/oz and low of US$16.35/oz. Silver settled up by 0.670% at US$16.51/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     16.50
S2     16.05-15.60
S3     15.30

Intraday  Resistance Levels
R1     17.00
R2     17.40
R3     17.70-18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.615 Buy
20-DMA   16.52 Sell
50-DMA   16.56 Sell
100-DMA   16.63 Sell
200-DMA   16.75 Sell
STOCH(5,3)   66.050 Sell
MACD(12,26,9)   -0.0505 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$69.85/bbl, intraday low of US$68.02/bbl and settled up by 1.930% to close at US$69.68/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 70.00-71.50 with stop loss at 71.50; targeting 69.60-68.90-68.10 and 67.50-66.50. Buy above 69.60-67.00 with risk daily closing below 67.00 and targeting 70.00-70.50-71.00 and 71.50-72.00

 
Intraday Support Levels
S1     69.60-68.90
S2     68.10
S3     67.50-67.00

Intraday Resistance Levels
R1     70.00
R2     70.50-71.00
R3     71.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.975 Sell
20-DMA   67.30 Buy
50-DMA   65.34 Buy
100-DMA   62.91 Buy
200-DMA   59.20 Buy
STOCH(5,3)   65.087 Sell
MACD(12,26,9)   1.039 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1908/EUR, high of US$1.1994/EUR and settled the day down by 0.225% to close at US$1.1960/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 1.1975-1.2200 targeting 1.1950-1.1915 and 1.1850-1.1800 with stop-loss at daily closing above 1.2300. Buy above 1.1950-1.1800 with risk below 1.1800 targeting 1.2000-1.2090-1.2150 and 1.2200-1.2250.

 
Intraday Support Levels
S1     1.1950-1.1915
S2     1.1850
S3     1.1800

Intraday  Resistance Levels
R1     1.1975-1.2000
R2     1.2090
R3     1.2150-1.2200

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.345 Buy
20-DMA   1.2155 Sell
50-DMA   1.2225 Sell
100-DMA   1.2173 Buy
200-DMA   1.1973 Buy
STOCH(5,3)   16.222 Sell
MACD(12,26,9)   -0.0090 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3485/GBP, high of US$1.3585/GBP and settled the day down by 0.224% to close at US$1.3530/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 1.3550-1.3750 with targets at 1.3500-1.3450 and 1.3400-1.3320. Buy above 1.3500-1.3320 with targets 1.3550-1.3605 and 1.3700-1.3750 with stop loss closing below 1.3450.

 
Intraday Support Levels
S1     1.3500
S2     1.3450
S3     1.3400-1.3320

Intraday Resistance Levels
R1     1.3550
R2     1.3605
R3     1.3700-1.3750

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

24.129

Buy
20-DMA   1.3863 Buy
50-DMA   1.3930 Buy
100-DMA   1.3832 Buy
200-DMA   1.3606 Buy
STOCH(5,3)   8.300 Sell
MACD(12,26,9)   -0.0012 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY108.63/USD and made an intraday high of JPY109.26/USD and settled the day down by 0.054% at JPY109.12/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 109.00-106.00 with targets of 109.60-110.00 and 110.50-111.00 with stop below 106.00.

 
Intraday Support Levels
S1     109.00
S2     108.40
S3     107.50-107.00

INTRADAY RESISTANCE LEVELS
R1     109.60
R2     110.00-110.50
R3     111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.82 Buy
20-DMA   108.43 Buy
50-DMA   107.92 Buy
100-DMA   108.56 Sell
200-DMA   109.55 Sell
STOCH(9,6)   40.239 Buy
MACD(12,26,9)   0.722 Sell

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