AAFX TRADING

Daily Market Lookup

  • The dollar rose to a six-day high against the yen on Wednesday as crude oil prices rallied and pushed Treasury yields higher after U.S. President Donald Trump pulled out from an international nuclear deal with Iran. The greenback also gained on the euro as concerns about Italian political turmoil hurt the common currency. The U.S. currency was lifted as long-term Treasury yields climbed to two-week peaks with crude oil prices surging more than 2 percent to their highest since November 2014. Trump on Tuesday pulled the United States out of an international nuclear deal with Iran, raising the risk of conflict in the Middle East, upsetting European allies and casting uncertainty over global oil supplies. The common currency, already under pressure from weak economic indicators and widening U.S.-euro zone interest rate differentials, was also hit by political developments in Italy. Italian President Sergio Mattarella's call to bickering political parties to rally behind a "neutral government" was met with immediate opposition and raised the prospect of elections as early as July. The pound has fallen heavily in recent weeks on expectations the BoE would not, as earlier believed, tighten monetary policy because of a relatively weak economy and as investors piled into a rallying dollar. The Reserve Bank of New Zealand is widely expected to stand pat on monetary policy when it meets on Thursday but the event was still approached with anticipation as it will be the first under new Governor Adrian Orr.
  • Crude oil prices jumped back to near 3-1/2-year highs on Wednesday after President Donald Trump pulled the United States out of an international nuclear deal with Iran, sparking worries about fresh tension in the Middle East and global oil supplies. Asian shares ticked lower as renewed U.S. sanctions on Tehran were seen as disruptive for many companies that have deals with Iran. Trump's move is also seen as risking worsening already-tense relations between Iran and U.S. allies in the region. However, European shares looked set to start flat on Wednesday and U.S. S&P futures were little changed Iran, the third-biggest producer among the OPEC, produces about 3.8 million bpd, or about 4 percent of the world's oil supplies. While some investors drew comfort from the fact Iran pledged to remain in the nuclear deal despite the U.S. pullout, they are wary of escalating tensions in the Middle East. Israel is on a high alert, mobilizing reserve forces while Syrian state media accused Israel of launching missiles at a target near Damascus on Tuesday just after Trump's announcement. In neighboring Lebanon, Hezbollah and its political allies had just made significant gains in a parliamentary election, boosting an Iranian-backed movement fiercely opposed to Israel and underlining Tehran's growing regional clout. Souring risk sentiment is hitting emerging markets, which have been clobbered in recent weeks by concerns about capital outflows, as the prospect of higher U.S. interest rates lures investors back to U.S. bonds rather than riskier assets. Countries with high perceived political risks, such as Brazil and Turkey, were among the worst hit.
  • Oil prices rose more than 2 percent on Wednesday, with Brent hitting a 3-1/2-year high, after U.S. President Trump abandoned a nuclear deal with Iran and announced the "highest level" of sanctions against the OPEC member amid an already tight market. Ignoring pleas by allies, U.S. President Donald Trump on Tuesday pulled out of an international nuclear deal with Iran that was agreed in late 2015, raising the risk of conflict in the Middle East and casting uncertainty over global oil supplies. In China, the biggest single buyer of Iranian oil, Shanghai crude futures hit their strongest in dollar terms since they were launched in late May, around $73.20 per barrel. Analysts said the soaring prices were the result of an expected fall in Iranian oil exports. Iran re-emerged as a major oil exporter in 2016 after international sanctions against it were lifted in return for curbs on its nuclear program, with its April exports standing above 2.6 mn bpd. That made Iran the third biggest exporter of crude within the OPEC, behind Saudi Arabia and Iraq. Walking away from the deal means that the United States will likely re-impose sanctions against Iran after 180 days, unless some other agreement is reached before then. Several refiners in Asia said they were seeking alternatives to Iranian supplies. All key crude oil futures contracts saw traded volumes jump as speculators took on new positions in the hope of profiting from rising prices while refiners hedged to protect themselves from higher feedstock oil prices. Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said the soaring volumes were "causing clearing delays". Trying to ease market concerns, Saudi Arabia on Wednesday said it would work with other producers to lessen the impact of any shortage in oil supplies. The country has been leading efforts since 2017 to withhold production to prop up prices.

 

 
Intraday RESISTANCE LEVELS
9th May 2018 R1 R2 R3
GOLD-XAU 1,311-1,321 1,331 1,340-1,350
Silver-XAG 16.50-17.00 17.40 17.70-18.20
Crude Oil 71.00 71.50-71.90 73.00
EURO/USD 1.1850-1.1915 1.1950 1.1975-1.2000
GBP/USD 1.3550 1.3605 1.3700-1.3750
USD/JPY 110.00-110.50 111.00 110.80

Intraday SUPPORTS LEVELS
9th May 2018 S1 S2 S3
GOLD-XAU 1,304 1,295 1,289-1,280
Silver-XAG 16.05-15.60 15.30 14.90
Crude Oil 70.50-70.00 69.60 68.90-68.10
EURO/USD 1.1800-1.1730 1.1650 1.1570
GBP/USD 1.3450 1.3450 1.3400-1.3320
USD/JPY 109.60-109.00 108.40 107.50-107.00

Intra-Day Strategy (9th 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 Tuesday made its intraday high of US$1315.21/oz and low of US$1307.84/oz. Gold was up by 0.230% at US$1314.99/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 1311-1340 keeping stop loss closing above 1340 and targeting 1303-1295 and 1289-1280. Buy above 1311-1280 with risk below 1280, targeting 1321-1331-1340 and 1350-1357.

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

Technical Indicators

Name   Value Action
14DRSI  

40.412

Buy
20-DMA   1320.81 Sell
50-DMA  

1325.12

Buy
100-DMA   1319.79 Buy
200-DMA   1304.95 Buy
STOCH(5,3)   58.559 Buy
MACD(12,26,9)   -6.355 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$16.51/oz and low of US$16.29/oz. Silver settled up by 0.06% at US$16.46/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     16.05-15.60
S2     15.30
S3     14.90

Intraday  Resistance Levels
R1     16.50-17.00
R2     17.40
R3     17.70-18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.887 Buy
20-DMA   16.50 Sell
50-DMA   16.55 Sell
100-DMA   16.62 Sell
200-DMA   16.74 Sell
STOCH(5,3)   67.783 Sell
MACD(12,26,9)   -0.0466 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$70.29/bbl, intraday low of US$67.56/bbl and settled up by 0.014% to close at US$69.96/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     70.50-70.00
S2     69.60
S3     68.90-68.10

Intraday Resistance Levels
R1     71.00
R2     71.50-71.90
R3     73.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.073 Sell
20-DMA   68.04 Buy
50-DMA   65.88 Buy
100-DMA   63.33 Buy
200-DMA   59.53 Buy
STOCH(5,3)   68.107 Sell
MACD(12,26,9)   1.325 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1896/EUR, high of US$1.1977/EUR and settled the day down by % to close at US$1.1921/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 1.1850-1.2000 targeting 1.1800-1.1730 and 1.1650-1.1570 with stop-loss at daily closing above 1.2300. Buy above 1.1800-1.1570 with risk below 1.1570 targeting 1.1850-1.1915-1.1950 and 1.1975-1.2000-1.2090.

 
Intraday Support Levels
S1     1.1800-1.1730
S2     1.1650
S3     1.1570

Intraday  Resistance Levels
R1     1.1850-1.1915
R2     1.1950
R3     1.1975-1.2000

TECHNICAL INDICATORS
Name   Value Action
14DRSI   28.139 Buy
20-DMA   1.2113 Sell
50-DMA   1.2202 Sell
100-DMA   1.2163 Buy
200-DMA   1.1972 Buy
STOCH(5,3)   20.3604 Sell
MACD(12,26,9)   -0.0097 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3485/GBP, high of US$1.3592/GBP and settled the day down by 0.0029% to close at US$1.3545/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     1.3450
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 Tuesday made intra‐day low of JPY109.34/USD and made an intraday high of JPY109.34/USD and settled the day up by 0.027% at JPY109.11/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     109.60-109.00
S2     108.40
S3     107.50-107.00

INTRADAY RESISTANCE LEVELS
R1     110.00-110.50
R2     111.00
R3     110.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.912 Buy
20-DMA   108.66 Buy
50-DMA   108.08 Buy
100-DMA   108.60 Sell
200-DMA   109.55 Sell
STOCH(9,6)   49.851 Buy
MACD(12,26,9)   0.660 Sell

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