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Daily Market Lookup

  • Asian shares fell on Thursday after the U.S. government launched a national security probe into auto imports that could lead to new tariffs, and President Donald Trump's comments indicated fresh setbacks in U.S.-China trade talks. The U.S. Commerce Department said on Wednesday that it would launch a national security investigation into car and truck imports under Section 232 of the Trade Expansion Act of 1962, a move that could lead to tariffs like those imposed on steel and aluminum in March. Adding to market jitters, Trump on Wednesday called for "a different structure" in any trade deal with China, fuelling uncertainty over the negotiations. On Thursday, China's Commerce Ministry said it had not pledged to cut China's trade surplus with the U.S. by a certain figure, and that it hopes the U.S. implements measures promised during trade negotiations as soon as possible. Prompting further uncertainty, Trump on Wednesday cast doubt on plans for an unprecedented summit with North Korean leader Kim Jong Un, saying he would know next week whether the meeting would take place. While the minutes from the Federal Reserve's May 1-2 meeting indicated that policymakers expect another interest rate increase would be warranted "soon" if the U.S. economic outlook remains intact, they helped to ease market concerns that the Fed would accelerate the pace of interest rate increases. Concerns over trade, talks and tariffs overpowered indications of strong economic performance in two of the region's major economies. Confidence among Japanese manufacturers saw its first rise in fourth months, and service-sector sentiment rose to a record high in the latest Reuters Tankan poll, underscoring expectations that the Japanese economy will return to growth in the second quarter. The Bank of Korea held interest rates steady for a sixth straight month on Thursday, with inflation seen remaining below target and amid concerns a U.S.-China trade war would hurt regional economies.
  • The dollar slid against major Asian currencies Thursday morning after climbing overnight to a fresh high for the year. Without any key economic data in the region, investors focused on political events that clouded the market outlook. As risk appetite soured, the safe-haven yen was sent higher. The market was also reacting to the outcome of a meeting of the U.S. Federal Reserve on Wednesday. The Fed appeared to be content to let inflation run above the 2% target for a “temporary period”, signaling no rush to tighten monetary policy. The USD/JPY pair slid 0.49% to 109.49 as the U.S. sought to impose more tariffs, reigniting fears of a trade war. The yen surged after U.S. President Donald Trump ordered Commerce Secretary Wilbur Ross to initiate a probe into automobile imports. The yen was also affected by the reaction to uncertainty over whether a planned summit between Trump and North Korean leader Kim Jong-un would happen. Doubts over whether the summit will go ahead have destabilized geopolitical relations in Asia. A top North Korean diplomat criticized U.S. Vice President Mike Pence who suggested that the fate of North Korea follow the Libyan model, prompting the Asian country to say that a “nuclear-to-nuclear showdown is entirely dependent upon the decision and behavior of the United States”. The Libyan model refers to the U.S. approach to that country, which ended with the capture and killing of leader Moammar Gadhafi after operations carried out with NATO support and help.
  • Oil prices continued to fall on Thursday morning in Asia, as markets took into account the possibility of higher output from the Organization of the Petroleum Exporting Countries (OPEC). In the face of worries over supply from both Venezuela and Iran, OPEC members could step up production as soon as June. Production in Venezuela plunged to 1.5 million barrels last month, its lowest level in decades due to its ongoing economic crisis. Venezuela’s crude output could drop further following a disputed presidential election, and the U.S. might impose oil export sanctions on the country. U.S. sanctions against Iran, which currently produces 4% of global oil supplies, will also likely cause shortages later this year when trade restrictions take effect. Geopolitical risks caused by Washington’s exit from a nuclear arms control deal with Tehran have driven prices to multi-year highs, with Brent breaking through $80 last week for the first time since November 2014. Meanwhile, Libya, an OPEC member, cut its oil production by about 120,000 barrels per day (bpd) as unusually hot weather prompted power problems. In response to concerns from Washington over a rally in oil prices, OPEC may decide to increase oil output to make up for the reduced supply. OPEC and some non-OPEC major oil producers are scheduled to meet in Vienna on June 22. The group previously agreed to curb their output by about 1.8 million bpd to boost oil prices and clear a supply glut. Any signs that the group may be heading towards an early exit from the production cut agreement would weigh on prices.

 

 
Intraday RESISTANCE LEVELS
24th 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 71.90 72.80 73.25-73.90
EURO/USD 1.1800 1.1850-1.1915 1.1950
GBP/USD 1.3400 1.3450-1.3500 1.3550
USD/JPY 110.00-110.50 111.00 111.50-112.00

Intraday SUPPORTS LEVELS
24th 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 71.50 71.00 70.50-70.00
EURO/USD 1.1700-1.1660 1.1600 1.1550
GBP/USD 1.3320-1.3260 1.3160 1.3100
USD/JPY 109.60-109.00 107.60 107.00

Intra-Day Strategy (24th 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 Wednesday made its intraday high of US$1298.44/oz and low of US$1287.84/oz. Gold was down by 0.157% at US$1293.29/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$16.57/oz and low of US$16.30/oz. Silver settled down by 0.424% at US$16.43/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   46.673 Buy
20-DMA   16.47 Sell
50-DMA   16.52 Sell
100-DMA   16.59 Sell
200-DMA   16.71 Sell
STOCH(5,3)   53.588 Buy
MACD(12,26,9)   -0.0309 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$72.18/bbl, intraday low of US$71.14/bbl and settled down by 0.402% to close at US$71.76/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     71.50
S2     71.00
S3     70.50-70.00

Intraday Resistance Levels
R1     71.90
R2     72.80
R3     73.25-73.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.306 Sell
20-DMA   70.43 Buy
50-DMA   67.91 Buy
100-DMA   64.96 Buy
200-DMA   60.78 Buy
STOCH(5,3)   43.936 Sell
MACD(12,26,9)   1.367 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1675/EUR, high of US$1.1788/EUR and settled the day down by 0.687% to close at US$1.1695/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 1.1700-1.1650 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     1.1700-1.1660
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   25.851 Buy
20-DMA   1.1888 Sell
50-DMA   1.2050 Sell
100-DMA   1.2087 Buy
200-DMA   1.1954 Buy
STOCH(5,3)   25.2675 Sell
MACD(12,26,9)   -0.0121 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3304/GBP, high of US$1.3441/GBP and settled the day down by 0.610% to close at US$1.3345/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     1.3320-1.3260
S2     1.3160
S3     1.3100

Intraday Resistance Levels
R1     1.3400
R2     1.3450-1.3500
R3     1.3550

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

25.025

Buy
20-DMA   1.3558 Buy
50-DMA   1.3735 Buy
100-DMA   1.3746 Buy
200-DMA   1.3589 Buy
STOCH(5,3)   21.001 Sell
MACD(12,26,9)   -0.0138 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY109.55/USD and made an intraday high of JPY110.91/USD and settled the day up by 0.730% at JPY110.07/USD.

Technicals in Focus:

In daily charts, JPY is sustaining below 200DMA (109.62), 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 negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 110.00-112.90 with risk above 112.90 targeting 109.60-109.00 and 108.40-109.00. Long positions above 109.60-108.40 with targets of 110.00 110.50-111.00 with stop below 108.40.

 
Intraday Support Levels
S1     109.60-109.00
S2     107.60
S3     107.00

INTRADAY RESISTANCE LEVELS
R1     110.00-110.50
R2     111.00
R3     111.50-112.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.1272 Buy
20-DMA   109.73 Buy
50-DMA   108.84 Buy
100-DMA   108.92 Sell
200-DMA   109.62 Sell
STOCH(9,6)   31.792 Sell
MACD(12,26,9)   0.623 Sell

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