AAFX TRADING

Daily Market Lookup

  • Asian stocks extended a global sell-off on Wednesday as Italy’s political crisis rippled across financial markets, toppling the euro to a 10-month low, pushing up borrowing costs for Rome and sending investors into safer assets such as U.S. Treasuries. The sharp downturn in Asia followed from an equally harsh session on Wall Street on Tuesday, where the Dow Jones Industrial Average fell 1.6 percent, the S&P 500 lost 1.2 percent and the Nasdaq Composite dropped 0.5 percent. The financial sector took the hardest hit. Investors fear that repeat elections in the euro zone’s third-largest economy - which could come as soon as July - may become a de-facto referendum on Italian membership of the currency bloc and its role in the European Union. In Asia, traders also fretted over the on-again, off-again U.S.-North Korean summit and the U.S.-China trade relationship. The United States said on Tuesday that it would continue pursuing actions on trade with China, prompting Chinese state media to slam the U.S. announcement. Emerging market stocks lost 1.2 percent, marking a new low point for the year, under continued pressure from a rising U.S. dollar for countries that often borrow in that currency. Indonesia’s central bank is holding an out-of-cycle policy meeting on Wednesday, and is expected to raise its benchmark interest rate for the second time in two weeks, according to a Reuters poll.
  • The dollar maintained its momentum, continuing to rally against major currencies in morning trade in Asia Wednesday even as both the Japanese yen and Korean won also gained ground. Meanwhile, the political turmoil in Italy sent investors rushing to U.S. Treasuries and to the Japanese yen. Geopolitical tensions in East Asia eased as White House confirmed the U.S.-North Korean summit, boosting market confidence. White House spokeswoman Sarah Huckabee Sanders said on Tuesday that the U.S. is prepared for the planned meeting between President Donald Trump and North Korean leader Kim Jong Un. Political woes in Italy also supported the yen, as the euro fell to a 10-month low, prompting investors to move into safe-haven assets. The yen was also supported by Japan’s monthly retail sales data, which beat expectation by posting 1.6% growth for April versus the estimated 0.9% and the 1.0% recorded in March. The data measures the change in the total value of inflation-adjusted sales at the retail level and is the top indicator of consumer spending, which accounts for the majority of overall economic activity in Japan However, Bank of Japan (BoJ) Governor Kuroda said the central bank must begin to investigate why Japan's inflation is still sluggish and wage growth is lagging despite years of ultra-loosening monetary policy.
  • OPEC's plans to boost output have spooked oil market bulls, who are starting to seek protection at levels well below the current futures price in case the group delivers a rapid increase in production. Volatility - a gauge of demand for a particular option - has risen sharply for bearish sell options at around $67 a barrel that expire immediately after OPEC's meeting with its partners that will run from June 22-23. Saudi Arabia and Russia are discussing raising OPEC and non-OPEC oil production by 1 million barrels a day, sources said last week, weeks after U.S. President Donald Trump complained about artificially high prices. Volatility on one-month downside put options, which give the holder the right, but not the obligation, to sell Brent crude futures at a pre-determined price by a set date, has risen to its highest since mid-February More tellingly, the gap between volatility on bearish puts and bullish calls expiring just after June 22 has grown in the last few weeks, as expectations for OPEC to keep its supply strategy unchanged have waned. This gap, or skew, is now around four percentage points, up from closer to 3 percentage points where it held for the past two months, according to Reuters data. The OPEC and allies led by Russia agreed to curb output by about 1.8 million bpd) from January last year through 2018 to reduce global stocks. However, the inventory overhang is now near OPEC's target so there's no doubt that price optimism remains alive and well in the options market. Open interest in strikes between $60 and $100 on August Brent futures has grown by over 50 percent to nearly 130,000 lots in the last month. Most of that increase has come from builds in open interest in strikes above $75 a barrel The options volatility surface, which reflects volatilities for options of different strike prices and different maturities, shows a pick-up in the last month of the premium of bearish puts over bullish calls maturing in late June. But it also shows an increase from a month ago in demand for upside calls expiring in mid- to late 2019, a reflection of investors' expectation that oil demand will outpace supply next year.

 

 
Intraday RESISTANCE LEVELS
30th 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 1.1600-1.1700 1.1800 1.1850-1.1915
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
30th 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 1.1550-1.1450 1.1390 1.1300
GBP/USD 1.3310-1.3260 1.3160 1.3100
USD/JPY 108.50 107.60-107. 00 106.60

Intra-Day Strategy (30th 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$1306.51/oz and low of US$1292.80/oz. Gold was up by 0.060% at US$1298.62/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 Tuesday made its intraday high of US$16.30/oz and low of US$16.30/oz. Silver settled down by 0.243% at US$16.38/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 Tuesday made an intra‐day high of US$67.29/bbl, intraday low of US$65.89 /bbl and settled up by 0.617% to close at US$66.79/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   37.132 Sell
20-DMA   69.12 Buy
50-DMA   67.72 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 Tuesday made an intraday low of US$1.1509/EUR, high of US$1.1639/EUR and settled the day down by 0.722% to close at US$1.1538/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 1.1600-1.1915 targeting 1.1550-1.1450 with stop-loss at daily closing above 1.1915. Buy above 1.1550-1.1300 with risk below 1.1300 targeting 1.1600-1.1700-1.1800 and 1.1850-1.1915.

 
Intraday Support Levels
S1     1.1550-1.1450
S2     1.1390
S3     1.1300

Intraday  Resistance Levels
R1     1.1600-1.1700
R2     1.1800
R3     1.1850-1.1915

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 Tuesday made an intra‐day low of US$1.3203/GBP, high of US$1.3324/GBP and settled the day down by 0.496% to close at US$1.3240/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 Wednesday made intra‐day low of JPY108.10/USD and made an intraday high of JPY109.46/USD and settled the day down by 0.291% at JPY108.75/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     108.50
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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