AAFX TRADING

Daily Market Lookup

  • Asian shares fell on Tuesday and the euro hovered near 6-1/2 month lows as early elections loomed in Italy, but a revival in diplomatic talks with North Korea and a retreat in oil prices from recent highs supported sentiment. Australia was the only market in the black, thanks to gains in banking stocks. [.AX] But liquidity was relatively thin with public holidays in Singapore, Malaysia, Indonesia and Thailand. European shares were hammered overnight after the anti-establishment 5-Star and League parties in Italy abandoned plans to form a government. Investors feared Italy’s election campaign could focus on the country’s continued membership of European institutions and strengthen the populist parties’ hand. Adding to the uncertainty, Spanish Prime Minister Mariano Rajoy will face a vote of confidence in his leadership on Friday. The tick up in U.S. stock futures came as South Korean President Moon Jae-in flagged more impromptu talks and summits with North Korea’s Kim Jong Un after the pair’s surprise meeting at the weekend. Kim has reaffirmed his commitment to “complete” denuclearisation of the Korean peninsula, Moon said, as U.S. officials seek to revive what would be a historic meeting between President Donald Trump and Kim. Analysts will next focus their attention on U.S. inflation data due later in the week which could provide clues to future interest rate rises ahead of the Federal Reserve policy meeting next month.
  • The dollar dropped slightly against major currencies in Asia on Tuesday morning trade, despite the US dollar index surging once again above the 94 level the day before. Political turmoil in Italy also hurt investor’s risk appetite. Italian President Sergio Mattarella refused to accept the nomination of a euroskeptic finance minister, prompting the anti-establishment Five Star Movement and far-right League party to give up trying to form an administration. To seek safety, investors moved their money away from the euro and into the anti-risk yen.
  • The euro struggled near a 6-1/2-month low against the dollar on Tuesday, as the bounce seen at the start of the week faded and investors took a grim view on the prospect of fresh elections in Italy. But Mattarella's veto angered the anti-establishment parties which had been trying to forge an alliance, prompting them to abandon their coalition plans and setting the stage for fresh elections. Financial markets fear that the elections, which could take place as early as August, are seen as a quasi-referendum over Italy's role in the European Union and euro zone and could end up strengthening eurosceptic parties even further. Such worries have resulted in a big sell-off of Italian debt and a surge in safe-haven German bond prices. As a result, the yield spread between 10-year German and Italian bonds was at its broadest since December 2013. The dollar rose briefly to 109.830 yen on Monday as U.S.-North Korea summit plans appeared to get back on track, but the relief has been quickly eclipsed by euro zone political concerns.
  • Gold prices slid on Tuesday despite the dollar traded slightly lower against a basket of major currencies. Gold prices eased from the $1,307.80 level hit on Friday as U.S. President Donald Trump appeared to confirm on Monday that the summit with North Korean leader Kim Jong-un is now back on track, days after pulling out of the meeting last week. Meanwhile, Prime Minister Shinzo Abe is planning to meet U.S. President Donald Trump at the G-7 conference in Quebec on June 8-9, reports on Tuesday suggested, adding that South Korean President Moon Jae-in is considering to travel to Singapore for a three-way summit with North Korean leader Kim Jong-un and Trump next month.
  • Oil prices were mixed on Tuesday morning in Asia but remained under pressure from expectations that Saudi Arabia and Russia would pump more crude to ease a potential shortfall in supply. Investors have started pricing in the likelihood of Saudi Arabia and Russia increasing oil production, but doubt remains, with any agreement to be finalised when the OPEC meet in Vienna on June 22. Saudi Arabia, de-facto leader of OPEC, as well as Russia have discussed raising oil production in the second-half of the year by some 1 mn bpd to make up potential supply shortfalls from Venezuela and Iran. This potential boost in output, along with rising oil production in the U.S., has dragged down oil prices. OPEC as well as a group of non-OPEC producers led by Russia started withholding output in 2017 to boost oil prices and clear a supply glut. The group had agreed to curb their output by about 1.8 mn bpd Prices have soared since the start of the cuts, with Brent breaking through $80 per barrel earlier in May. The pace of the recent rise in oil prices has sparked a debate among investors on whether this poses downside risks to global growth. Meanwhile, there are some worries over a fall in U.S. oil demand if more Middle East crude supplies flow into the market. U.S. crude oil production has risen by more than a quarter in the last two years, to 10.73 mn bpd, inching ever closer to top producer Russia’s output of around 11 mn bpd.

 

 
Intraday RESISTANCE LEVELS
29th May 2018 R1 R2 R3
GOLD-XAU 1,305 1,311-1,321 1,330
Silver-XAG 17.00 17.40 17.70-18.20
Crude Oil 67.00-68.10 69.30 70.00
EURO/USD 1.1700-1.1800 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
29th May 2018 S1 S2 S3
GOLD-XAU 1,295 1,280-1,274 1,265
Silver-XAG 16.31 16.00-15.60 15.30
Crude Oil 66.30 65.75-65.00 64.20
EURO/USD 1.1600 1.1550-1.1450 1.1390
GBP/USD 1.3310-1.3260 1.3160 1.3100
USD/JPY 109.00 107.60-107.00 106.60

Intra-Day Strategy (29th 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$1300.26/oz and low of US$1295.43/oz. Gold was down by 0.343% at US$1297.98/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 overbought 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 1300-1331 keeping stop loss closing above 1331 and targeting 1290-1280-1274 and 1265-1259. Buy above 1289-1265 with risk below 1280, targeting 1295-1305-1311 and 11321-1331.

 
Intraday Support Levels
S1     1,295
S2     1,280-1,274
S3     1,265
Intraday Resistance Levels
R1     1,305
R2     1,311-1,321
R3     1,330

Technical Indicators

Name   Value Action
14DRSI  

41.972

Buy
20-DMA   1304.00 Sell
50-DMA  

1314.03

Sell
100-DMA   1314.86 Sell
200-DMA   1304.28 Buy
STOCH(5,3)   60.424 Sell
MACD(12,26,9)   -7.095 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$16.49/oz and low of US$16.41/oz. Silver settled down by 0.182% at US$16.45/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 16.31-14.90 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     16.31
S2     16.00-15.60
S3     15.30

Intraday  Resistance Levels
R1     17.00
R2     17.40
R3     17.70-18.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.997 Buy
20-DMA   16.49 Sell
50-DMA   16.52 Sell
100-DMA   16.59 Sell
200-DMA   16.71 Sell
STOCH(5,3)   61.416 Buy
MACD(12,26,9)   -0.0013 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$67.45/bbl, intraday low of US$65.75/bbl and settled down by 1.172% to close at US$66.59/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 oversold 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 67.00-68.10 with stop loss at 68.10; targeting 65.70-65.00 and 64.20-63.50. Buy above 65.70-63.50 with risk daily closing below 63.50 and targeting 67.00-68.10 and 69.30-70.00.

 
Intraday Support Levels
S1     66.30
S2     65.75-65.00
S3     64.20

Intraday Resistance Levels
R1     67.00-68.10
R2     69.30
R3     70.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.121 Sell
20-DMA   69.46 Buy
50-DMA   67.77 Buy
100-DMA   65.06 Buy
200-DMA   60.95 Buy
STOCH(5,3)   10.368 Buy
MACD(12,26,9)   0.532 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1606/EUR, high of US$1.1727/EUR and settled the day down by 0.513% to close at US$1.1623/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 1.1700-1.1950 targeting 1.1600-1.1650 and 1.1600-1.1550 with stop-loss at daily closing above 1.1950. Buy above 1.1660-1.1450 with risk below 1.1600 targeting 1.1700-1.1800-1.1850 and 1.1915-1.1975.

 
Intraday Support Levels
S1     1.1600
S2     1.1550-1.1450
S3     1.1390

Intraday  Resistance Levels
R1     1.1700-1.1800
R2     1.1850
R3     1.1915-1.1950

TECHNICAL INDICATORS
Name   Value Action
14DRSI   23.883 Buy
20-DMA   1.1823 Sell
50-DMA   1.2003 Sell
100-DMA   1.2061 Buy
200-DMA   1.1945 Buy
STOCH(5,3)   7.431 Sell
MACD(12,26,9)   -0.0130 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3295/GBP, high of US$1.3340/GBP and settled the day down by 0.037% to close at US$1.3307/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     1.3310-1.3260
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  

28.033

Buy
20-DMA   1.3515 Buy
50-DMA   1.3703 Buy
100-DMA   1.3729 Buy
200-DMA   1.3584 Buy
STOCH(5,3)   18.463 Sell
MACD(12,26,9)   -0.0140 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY109.22/USD and made an intraday high of JPY109.82/USD and settled the day down by 0.291% at JPY109.40/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     109.00
S2     107.60-107.00
S3     106.60

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.375 Buy
20-DMA   109.67 Buy
50-DMA   108.85 Buy
100-DMA   108.92 Sell
200-DMA   109.61 Sell
STOCH(9,6)   19.559 Sell
MACD(12,26,9)   0.502 Sell

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