AAFX TRADING

Daily Market Lookup

  • Asian stocks pulled back on Tuesday, brushing off a firmer lead from Wall Street, as investors turned cautious after soft Chinese economic data and awaited fresh developments on U.S.-China trade talks and North Korea. The two countries are still "very far apart" on resolving trade frictions, U.S. Ambassador to China Terry Branstad said on Tuesday as a second round of high-level talks was set to begin in Washington. China reported weaker-than-expected investment and retail sales in April and a drop in home sales, clouding its economic outlook even as policymakers try to navigate debt risks and defuse a heated trade row with the United States. The downbeat economic news temporarily offset optimism over further foreign inflows into Chinese stocks ahead of their inclusion in MSCI's widely tracked equity benchmarks from June 1. Investors in Chinese equities will likely have to re-jig their exposure after the U.S. index publisher made some last-minute tweaks in its index weightings on Tuesday. MSCI said 234 Chinese large caps will be included in its global and regional indexes next month. The greenback took a knock against the euro earlier on Monday after European Central Bank policymaker Francois Villeroy de Galhau said the ECB could give fresh timing guidance of its first rate hike as the end of its exceptional bond purchases approaches.
  • The dollar dropped slightly against the other major currencies on Tuesday morning in Asia. China’s industrial data was in focus as its positive reading supported the Aussie. China released its industrial production data on Tuesday morning which came in better than expected, 7% versus the estimated 6.4%. The data measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. An increase is regarded as inflationary that can translate into tightening monetary policy, making sentiment positive for the yuan and the Aussie. Meanwhile, the Reserve Bank of Australia released its meeting minutes, citing there was not a "strong case" for a near-term adjustment in monetary policy. The Bank has been holding on its dovish stance to keep rates at 1.5% since August 2016. U.S. consumer price data raised doubts as to whether the U.S. Federal Reserve would raise interest rates as many as four times in 2018. But some traders remain upbeat about its near-term outlook. Innes said he would probably remain dollar positive until there is a wave of positive economic data from countries other than the United States, or until the ECB starts to sound "overtly hawkish instead of just tentatively". The euro had briefly strengthened on Monday after ECB policymaker Francois Villeroy de Galhau said that the ECB could give fresh guidance on the timing of its first rate hike as the end of its exceptional bond purchases approaches. Still, some analysts are skeptical of the dollar's upside potential Major currencies showed limited reaction to the latest batch of Chinese economic data, which overall showed signs of a further slowing in economic momentum. Investors are focused this week on speeches by Fed officials, as well as economic indicators such as U.S. retail sales data due later on Tuesday.
  • Oil held gains near $71 a barrel after escalating conflict in the Middle East raised geopolitical risks and as most OPEC members cut output more than required last month. Dozens of Palestinians were killed in clashes with Israeli troops in Gaza after the U.S. opened an embassy in Jerusalem. Meanwhile, Saudi Arabia pumped the least crude since output cuts began in early 2017, with all nations in the OPEC except Iraq exceeding or matching curbs pledged under a deal aimed at clearing a glut. Oil rallied this month to the highest since 2014 as tensions in the Middle East escalated and after U.S. President Donald Trump withdrew from a 2015 accord that had curbed Iran’s nuclear program in exchange for sanctions relief. Investors are watching whether OPEC and its allies such as Russia intend to end output cuts and increase production if renewed American measures restrict the Persian Gulf state’s exports. Saudi Energy Minister Khalid Al-Falih had signaled last month that the kingdom is prepared to keep supply restrained, even though inventories are back to normal. Saudi Arabia pumped 9.868 million barrels a day last month, the lowest since January 2017, according to OPEC’s monthly report. The numbers provided by the group’s biggest producer indicate that if the kingdom chose to compensate for Iran, it could increase output by about 190K barrels a day and still respect the limit agreed with fellow members. OPEC’s compliance with crude-output cuts was at 166 percent in April, compared with a revised 167% in March, according to Bloomberg calculations from the producer group’s secondary-source data published Monday. Iraq’s compliance was at 63 percent, and it was the only member not to have curbed production as agreed under a deal that took effect Jan. 1, 2017 and is scheduled to run through the end of 2018 Fifty-five Palestinians were killed in confrontations with Israeli troops Monday after tens of thousands converged on the Gaza Strip border to protest the U.S. embassy. With more than 1,200 people wounded by live fire, it was the deadliest day in Gaza since Hamas’s last war with Israel in 2014. Trump issued a memorandum allowing for cuts to purchases of Iranian crude and oil products by or through foreign financial institutions. U.S. crude stockpiles probably fell 1.5 mn barrels last week, according to the median estimate of analysts surveyed by Bloomberg. Crude inventories at the Cushing, Oklahoma, pipeline hub rose by an estimated 550K barrels last week,

 

 
Intraday RESISTANCE LEVELS
15th May 2018 R1 R2 R3
GOLD-XAU 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 72.80
EURO/USD 1.1950 .1975-1.2000 1.2070
GBP/USD 1.3605 1.3700 1.3750-1.3830
USD/JPY 109.60 110.00-110.50 111.00

Intraday SUPPORTS LEVELS
15th May 2018 S1 S2 S3
GOLD-XAU 1,305 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
EURO/USD -1.1915 1.1850 1.1800-1.1730
GBP/USD 1.3550-1.3500 1.3450 1.3400-1.3320
USD/JPY 109.00 108.40 107.50-107.00

Intra-Day Strategy (15th 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 Monday made its intraday high of US$1322.20/oz and low of US$1312.89/oz. Gold was down by 0.364% at US$1313.26/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 1321-1340 keeping stop loss closing above 1340 and targeting 1311-1303-1295 and 1289-1280. Buy above 1311-1280 with risk below 1280, targeting 1321-1331-1340 and 1350-1357.

 
Intraday Support Levels
S1     1,305
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  

46.611

Buy
20-DMA   1319.35 Sell
50-DMA  

1323.88

Sell
100-DMA   1319.89 Sell
200-DMA   1305.43 Buy
STOCH(5,3)   47.043 Buy
MACD(12,26,9)   -4.899 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$16.72/oz and low of US$16.48 /oz. Silver settled down by 0.481% 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     16.05-15.60
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   47.225 Buy
20-DMA   16.53 Sell
50-DMA   16.55 Sell
100-DMA   16.61 Sell
200-DMA   16.73 Sell
STOCH(5,3)   44.525 Sell
MACD(12,26,9)   -0.0176 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$71.22/bbl, intraday low of US$70.23/bbl and settled up by 0.979% to close at US$70.14/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 71.00-73.50 with stop loss at 73.50; targeting 71.00-70.50 and 70.00-69.60-68.90. Buy above 71.00-68.90 with risk daily closing below 68.50 and targeting 71.50-72.00 and 72.80-73.50.

 
Intraday Support Levels
S1     70.50
S2     70.00
S3     69.60-68.90

Intraday Resistance Levels
R1     71.00
R2     71.50-71.90
R3     72.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.182 Sell
20-DMA   69.04 Buy
50-DMA   66.66 Buy
100-DMA   63.93 Buy
200-DMA   59.98 Buy
STOCH(5,3)   72.996 Sell
MACD(12,26,9)   1.460 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1925/EUR, high of US$1.1995/EUR and settled the day down by 0.125% to close at US$1.1926/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 1.1975-1.2150 targeting 1.1950-1.915-1.1850 and 1.1800-1.1730-1.1650 with stop-loss at daily closing above 1.2150. Buy above 1.1950-1.1730 with risk below 1.1700 targeting 1.1975-1.2000-1.2070 and 1.2150.

 
Intraday Support Levels
S1     -1.1915
S2     1.1850
S3     1.1800-1.1730

Intraday  Resistance Levels
R1     1.1950
R2     .1975-1.2000
R3     1.2070

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.380 Buy
20-DMA   1.2031 Sell
50-DMA   1.2147 Sell
100-DMA   1.2138 Buy
200-DMA   1.1969 Buy
STOCH(5,3)   34.354 Sell
MACD(12,26,9)   -0.0101 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3527/GBP, high of US$1.3607/GBP and settled the day up by 0.147% to close at US$1.3554/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     1.3550-1.3500
S2     1.3450
S3     1.3400-1.3320

Intraday Resistance Levels
R1     1.3605
R2     1.3700
R3     1.3750-1.3830

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

32.047

Buy
20-DMA   1.3720 Buy
50-DMA   1.3848 Buy
100-DMA   1.3800 Buy
200-DMA   1.3602 Buy
STOCH(5,3)   54.016 Sell
MACD(12,26,9)   -0.0013 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY109.20USD and made an intraday high of JPY109.66/USD and settled the day up by 0.292% at JPY109.64/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   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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