AAFX TRADING

Daily Market Lookup

  • Asian shares were mostly weaker on Wednesday with investors cautious after U.S. President Donald Trump tempered optimism over progress made in trade talks between the world’s two largest economic powers. People walk past an electronic board showing exchange rate between Japanese Yen and U.S. Dollar outside a brokerage at a business district in Tokyo, Japan August 9, 2017. Trump said on Tuesday he was not pleased with recent trade talks between the United States and China, souring the improved market sentiment following weekend comments from U.S. Treasury Secretary Steven Mnuchin that the “trade war” is “on hold”. His remarks followed Beijing’s announcement that it would cut import tariffs for automobiles and car parts. Further weighing on prices of risk assets, Trump also said there was a “substantial chance” his summit with North Korean leader Kim Jong Un will not take place as planned on June 12 amid concerns that Kim is resistant to giving up his nuclear weapons. Investors fret Abe’s long-running cronyism scandal could attract more attention as the Ministry of Finance is due to release related documents on Thursday. The biggest mover in the currency market was the Turkish lira, which fell more than two percent early on Wednesday to a record low of 4.8450 after rating agencies sounded the alarm on Tuesday over plans by President Tayyip Erdogan to tighten his grip on monetary policy.
  • The dollar edged higher versus a basket of currencies on Wednesday, with investors awaiting the minutes of the Federal Reserve’s last policy meeting for hints on the pace of further U.S. monetary tightening. The increase marked a gain of more than 5 percent from mid-April and was driven by generally upbeat U.S. economic data and expectations the Fed would raise interest rates at least two more times this year. The yen gained broadly on Wednesday, as investors sought safer assets amid economic concerns after U.S. President Donald Trump tempered optimism over progress made so far in trade talks between the world’s two largest economies. Trump said on Tuesday he was not pleased with recent trade talks between the United States and China. Further weighing on the prices of riskier assets, Trump also said there was a “substantial chance” his summit with North Korean leader Kim Jong Un will not take place as planned on June 12 amid concerns that Kim is resisting giving up his nuclear weapons. The yen tends to rise in times of market turbulence since Japan is the world’s largest creditor nation and traders tend to assume Japanese investors would repatriate funds at times of crisis. Investors are now looking to the release on Wednesday of the Fed’s minutes from its most recent meeting, when it kept interest rates steady. In its post-meeting statement issued in early May, the Fed also 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 dollar rose against the other major currencies in Asia on Wednesday morning, after climbing to a fresh new high this year on Monday. The warming trade relations between the U.S. and China helped revive risk appetite. Markets also eye the Federal Reserve’s minutes that will come on Thursday in Asia to look for cues for rate hikes. Apart from the easing trade relations between the world’s two biggest economies – the U.S. and China, the dollar was also supported by the continued rise of U.S. 10-year Treasury yields that hit 3% recently and expectations for interest rates. On the other hand, the much-awaited minutes from the Federal Reserve also drove the dollar higher in late morning in Asia. The Fed kept the interest rates unchanged on May 2, as what the markets expected. The Fed also expressed confidence that inflation could hit its 2% target. Investors will look for more hints for Fed’s future plan of hiking the interest rates.
  • Oil prices edged lower on Wednesday, pulling back from their strongest levels in three-and-a-half-years as investors looked ahead to fresh weekly data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise. The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended May 18 at 10:30AM ET (1430GMT), amid forecasts for an oil-stock drop of 1.5 mn barrels. Analysts also forecast a fall of 1.4 mn barrels for gasoline stockpiles, while distillate inventories are expected to drop by 1.3 mn barrels. After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories declined by 1.3 million barrels last week. The API data, however, showed a rise of 980,000 barrels in gasoline stockpiles, while inventories of distillates declined by 1.3 mn barrels. There are often sharp divergences between the API estimates and the official figures from EIA OPEC may decide to raise oil output as soon as June after Washington raised concerns the oil rally was going too far, according to sources. Gulf OPEC countries are leading the initial talks on when the exporting group can boost oil production and how many barrels each member can add, the sources said. The OPEC and non-OPEC producers led by Russia have agreed to curb output by about 1.8 million bpd until the end of 2018 to reduce high global oil stocks, but the inventory overhang has now fallen close to OPEC’s target.

 

 
Intraday RESISTANCE LEVELS
23rd 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 110.50-111.00 111.50 112.00-112.90

Intraday SUPPORTS LEVELS
23rd 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 1.3260 1.3160
USD/JPY 110.00 109.60-109.00 107.60

Intra-Day Strategy (23rd 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$1296.05/oz and low of US$1287.85/oz. Gold was down by 0.0959% at US$1291.21/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 Wednesday made its intraday high of US$16.65/oz and low of US$16.43/oz. Silver settled down by 0.242% at US$16.52/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 Tuesday made an intra‐day high of US$72.84/bbl, intraday low of US$71.81/bbl and settled down by 0.716% to close at US$72.03/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 Tuesday made an intraday low of US$1.1755/EUR, high of US$1.1829/EUR and settled the day up by 0.580% to close at US$1.1777/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   27.080 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$1.3411/GBP, high of US$1.3490/GBP and settled the day down by 0.044% to close at US$1.3427/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     1.3260
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  

25.025

Buy
20-DMA   1.3584 Buy
50-DMA   1.3752 Buy
100-DMA   1.3755 Buy
200-DMA   1.3592 Buy
STOCH(5,3)   17.773 Sell
MACD(12,26,9)   -0.0134 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY110.18/USD and made an intraday high of JPY111.18/USD and settled the day up by 0.126% at JPY110.89/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     110.00
S2     109.60-109.00
S3     107.60

INTRADAY RESISTANCE LEVELS
R1     110.50-111.00
R2     111.50
R3     112.00-112.90

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

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