AAFX TRADING

Daily Market Lookup

  • Asian shares skidded on Tuesday as a strong dollar sapped demand for emerging market assets while surging oil prices stoked concerns about a flare-up in inflation and faster U.S. interest rate increases. Liquidity was relatively thin due to holidays in South Korea and Hong Kong. Even though most major Asian markets edged lower, MSCI’s broadest index of Asia-Pacific shares outside Japan managed to eke out a small 0.17 percent gain. Those concerns offset the boost to sentiment from overnight gains on Wall Street over the apparent reconciliation between the United States and China over import duties. Analysts said investors in the region were worried about the growth outlook, with the U.S. Federal Reserve staying on its policy tightening path. JPMorgan’s Shigemi said investors will now turn their focus to the next Fed meeting on June 13 where it is widely expected to raise rates for a second time this year. It was the fear of higher inflation and thus faster Fed rate rises that caused a bond market rout earlier this year, sending yields sharply higher and triggering a share market sell-off. The dollar hovered near five-month highs against a basket of currencies, boosted by the U.S.-China trade optimism. Italy’s far-right League and the 5-Star Movement agreed on a candidate to lead their planned coalition government and to implement spending plans seen by some investors as threatening the sustainability of the country’s debt pile The combination of higher oil and conciliatory actions on the US-China trade front boosted the Australian dollar, a liquid proxy for risk, to a one-month peak.
  • The Dollar/Yen initially surged on Monday in response to the upbeat news about U.S.-China trade relations, firm Treasury yields and expectations for further rate hikes later in the year. However, the Forex pair retreated into the close as the initial news about China wore off and Treasury yields ended the session flat. Investors may have also started to square positions ahead of the release of the Fed minutes on Wednesday. To recap the events which set in motion the early rally, Treasury Secretary Steven Mnuchin said over the weekend the prospect of a trade war was “on hold” following an agreement to suspend tariff threats. On Saturday, negotiators from the world’s two largest economies said they would continue talking about measures under which Beijing would import more energy and agricultural commodities from the U.S. in an effort to bridge the $335 billion annual U.S. goods and services trade deficit with China. A pull-back in the U.S. 10-year Treasury yields from seven-year highs set last week likely prompted traders to book some profits on their bullish dollar bets. In other news, there were no major economic reports on Monday, but scheduled to speak was FOMC Member Raphael Bostic. Atlanta Federal Reserve Bank President Raphael Bostic said on Monday the U.S. economy is close to meeting the Fed’s employment and inflation goals, with growth of around 2.5 percent expected this year. In prepared remarks to an economic group in Atlanta he did not update his views on interest rates, but has recently said he has a base case for two additional rate increases this year. He also said that as the Fed debates possible changes to its inflation framework, he is “drawn to” systems that offset years of below- or above-target inflation with “misses” in the opposite direction.
  • Oil prices rose on Tuesday, with Brent edging closer to $80 per barrel, on concerns that Venezuela's crude output could drop further following a disputed presidential election and potential U.S. sanctions on the OPEC-member The United States also toughened its stance on Iran and made a list of sweeping demands, which could further curb the country's crude oil exports and boost oil prices. "Combined with expectations for falling Iranian production as the U.S. pressures allies to reduce their imports, this will push crude oil prices up to $80 a barrel and we think it can go higher." Venezuela's socialist President Nicolas Maduro faced widespread international condemnation on Monday after his re-election in a weekend vote his critics denounced as a farce cementing autocracy in the crisis-stricken oil producer. The United States is actively considering oil sanctions on Venezuela, where output has dropped by a third in two years to its lowest in decades. Concerns that looming U.S. sanctions on Iran will curb that country's crude exports have also been boosting oil prices in recent weeks. The United States on Monday demanded Iran make sweeping changes - from dropping its nuclear program to pulling out of the Syrian civil war - or face severe economic sanctions as the Trump administration hardened its approach to Tehran. This could reduce Iranian oil exports by 200,000 barrels-per-day by the fourth quarter, Mitsubishi Corp's Nunan estimated. Elsewhere, Washington and Beijing both claimed victory on Monday as the world's two largest economies stepped back from the brink of a global trade war and agreed to hold further talks to boost U.S. exports to China. Growing production of shale oil could curb oil prices eventually and widen the price spread between WTI and Brent crude oil, said Nunan.

 

 
Intraday RESISTANCE LEVELS
22nd May 2018 R1 R2 R3
GOLD-XAU 1,295 1,305 1,311-1,321
Silver-XAG 16.50-17.00 17.40 17.70-18.20
Crude Oil 72.80 73.25-73.90 74.50
EURO/USD 1.1800 1.1850-1.1915 1.1950
GBP/USD 1.3450-1.3500 1.3550 1.3605-1.3700
USD/JPY 111.50-112.00 112.90 113.50

Intraday SUPPORTS LEVELS
22nd May 2018 S1 S2 S3
GOLD-XAU 1,280-1,274 1,265 1,259
Silver-XAG 16.05-15.60 15.30 14.90
Crude Oil 71.90-71.50 71.00 70.50-70.00
EURO/USD 1.1730-1.1660 1.1600 1.1550
GBP/USD 1.3400-1.3320 1.3160 1.3160
USD/JPY 111.00-110.50 110.00 109.60-109.00

Intra-Day Strategy (22nd 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$1293.00/oz and low of US$1281.98/oz. Gold was up by % at US$1292.23/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 1290-1331 keeping stop loss closing above 1331 and targeting 1280-1274 and 1265-1259. Buy above 1289-1265 with risk below 1280, targeting 1295-1305-1311 and 11321-1331.

 
Intraday Support Levels
S1     1,280-1,274
S2     1,265
S3     1,259
Intraday Resistance Levels
R1     1,295
R2     1,305
R3     1,311-1,321

Technical Indicators

Name   Value Action
14DRSI  

33.945

Buy
20-DMA   1307.12 Sell
50-DMA  

1317.31

Sell
100-DMA   1316.54 Sell
200-DMA   1304.54 Buy
STOCH(5,3)   31.208 Buy
MACD(12,26,9)   -9.835 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$16.50/oz and low of US$16.25/oz. Silver settled up by 0.733% at US$16.49/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 16.05-14.90 targeting 16.50-17.00-17.75 and 18.20-18.60; stop breakage below 15.00. Sell below 16.50-18.20 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     14.90

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.004 Buy
20-DMA   16.48 Sell
50-DMA   16.53 Sell
100-DMA   16.60 Sell
200-DMA   16.72 Sell
STOCH(5,3)   36.378 Buy
MACD(12,26,9)   -0.0469 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$71.28/bbl, intraday low of US$71.28/bbl and settled up by 1.652% to close at US$72.58/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 72.80-74.50with stop loss at 74.50; targeting 71.90-71.50-71.00 and 70.50-70.00. Buy above 71.50-68.90 with risk daily closing below 68.90 and targeting 72.00- 72.80 and 73.50-73.90.

 
Intraday Support Levels
S1     71.90-71.50
S2     71.00
S3     70.50-70.00

Intraday Resistance Levels
R1     72.80
R2     73.25-73.90
R3     74.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.464 Sell
20-DMA   70.21 Buy
50-DMA   67.62 Buy
100-DMA   64.70 Buy
200-DMA   60.57 Buy
STOCH(5,3)   82.532 Sell
MACD(12,26,9)   1.540 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1715/EUR, high of US$1.1794/EUR and settled the day up by 0.178% to close at US$1.1790/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 1.1800-1.1950 targeting 1.1730-1.1650 and 1.1600-1.1550 with stop-loss at daily closing above 1.1950. Buy above 1.1730-1.1600 with risk below 1.1600 targeting 1.1800-1.1850-1.1915 and 1.1975-1.2000.

 
Intraday Support Levels
S1     1.1730-1.1660
S2     1.1600
S3     1.1550

Intraday  Resistance Levels
R1     1.1800
R2     1.1850-1.1915
R3     1.1950

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.562 Buy
20-DMA   1.2005 Sell
50-DMA   1.2132 Sell
100-DMA   1.2131 Buy
200-DMA   1.1967 Buy
STOCH(5,3)   27.104 Sell
MACD(12,26,9)   -0.0101 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3390/GBP, high of US$1.3482/GBP and settled the day down by 0.289% to close at US$1.3419/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 1.3450-1.3700 with targets at 1.3400-1.3320 and 1.3260-1.3160. Buy above 1.3400-1.3160 with targets 1.3450-1.3550-1.3605 and 1.3700-1.3750 with stop loss closing below 1.3160.

 
Intraday Support Levels
S1     1.3400-1.3320
S2     1.3160
S3     1.3160

Intraday Resistance Levels
R1     1.3450-1.3500
R2     1.3550
R3     1.3605-1.3700

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

25.501

Buy
20-DMA   1.3662 Buy
50-DMA   1.3780 Buy
100-DMA   1.3769 Buy
200-DMA   1.3596 Buy
STOCH(5,3)   17.773 Sell
MACD(12,26,9)   -0.0134 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY110.81/USD and made an intraday high of JPY111.38/USD and settled the day up by 0.162% at JPY111.04/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 111.00-112.90 with risk above 112.90 targeting 110.50-110.00-109.60 and 109.00-108.40. Long positions above 110.50-108.40 with targets of 109.60-110.00 and 110.50-111.00 with stop below 108.40.

 
Intraday Support Levels
S1     111.00-110.50
S2     110.00
S3     109.60-109.00

INTRADAY RESISTANCE LEVELS
R1     111.50-112.00
R2     112.90
R3     113.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   73.302 Buy
20-DMA   109.45 Buy
50-DMA   108.59 Buy
100-DMA   108.80 Sell
200-DMA   109.59 Sell
STOCH(9,6)   95.627 Buy
MACD(12,26,9)   0.765 Sell

AAFX TRADING
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