AAFX TRADING

Daily Market Lookup

  • Asian equities recovered from early weakness on Friday as a lower yen supported Japanese stocks and firm exports boosted South Korean markets. Still, rekindled concerns about U.S. trade policies limited regional gains. A fall on Wall Street on Thursday after the United States said it would impose tariffs on aluminum and steel imports from Canada, Mexico and the European Union, set the initial tone in Asia. Fears of a global trade conflict, which had partially receded in past weeks, were reignited as Washington's allies retaliated against the U.S. measures. Still, equity markets are likely to be weighed down, said Soichiro Monji, senior economist at Daiwa SB Investments in Tokyo, "as the United States has opened up a new point of contention on the trade front by getting involved with the European Union." Traders said Chinese stocks were volatile as the long-awaited inclusion of large-cap shares from the country in MSCI's emerging markets index had failed to buoy the market or attract any immediate flows of foreign money. (SS)
  • U.S. job growth likely accelerated in May as warmer weather boosted hiring at construction sites, but wage gains are expected to have remained marginal, pointing to moderate inflation pressures in the economy. Job seekers line up to apply during "Amazon Jobs Day," a job fair being held at 10 fulfillment centers across the United States aimed at filling more than 50,000 jobs, at the Amazon.com Fulfillment Center in Fall River, Massachusetts, U.S., August 2, 2017. Nonfarm payrolls probably increased by 188,000 jobs last month, according to a Reuters survey of economists. The economy added 135,000 and 164,000 jobs in March and April, respectively. Average hourly earnings are expected to have risen 0.2 percent last month after edging up 0.1 percent in April. That would lift the annual increase in average hourly earnings to 2.7 percent from 2.6 percent in April. A string of strong economic data, including consumer spending and industrial production, had fanned fears of inflation against the backdrop of a $1.5 trillion income tax cut package and increased government spending. Inflation is running just below the Federal Reserve’s 2.0 percent target. Monthly job gains have averaged about 200,000 this year, more than the roughly 120,000 needed to keep up with growth in the working-age population. The unemployment rate is forecast unchanged at a near 17-1/2-year low of 3.9 percent. The closely watched employment report on Friday will probably cement expectations that the Fed will raise interest rates in June. The U.S. central bank increased borrowing costs in March and forecast at least two more rate hikes for this year But much depends on financial market conditions, which have tightened in recent days following a political crisis in Italy and renewed fears of a trade war after the Trump administration imposed tariffs on steel and aluminum imports from Canada, Mexico and the European Union. Though the labor market is viewed as being close to or at full employment, there is still some slack remaining. Some economists argue that the unemployment rate is overstating the strength of the jobs market, noting that there was a big pool of unemployed people at the margins of the labor market who could be enticed to rejoin. The jobless rate is within striking distance of the Fed’s forecast of 3.8 percent by the end of this year. There is optimism that wage growth will pick up. Job gains are gradually slowing as employers struggle to find qualified workers. Economists expect the worker shortage will force companies to raise wages. The Fed’s latest Beige Book report of anecdotal information on business activity collected from contacts nationwide showed labor market conditions remained tight across the country in late April and early May. The Fed said contacts continued to report difficulty filling positions across skill levels.
  • Oil prices continued to dip slightly in morning trade in Asia Friday, after a reported rise in inventories in the U.S. and while investors worked to understand the implications of a divergence in the price of London-traded Brent crude and U.S.-traded WTI, the two major oil-price benchmarks. A rise of 1 million barrels in U.S. crude inventories in the week to May 25 to 434.9 million barrels reported by the American Petroleum Institute on Wednesday surprised traders and sent prices down. U.S. crude production has been rising relentlessly, increasing by more than a quarter in the last two years, to 10.73 million bpd, inching ever closer to top producer Russia’s output of around 11 million bpd. The Organization of the Petroleum Exporting Countries (OPEC) and other non-OPEC members including Russia may start to increase their supply as well. Saudi Arabia and Russia have discussed raising oil production in the second half of the year by some 1 million barrels per day (bpd) to make up for potential supply shortfalls from Venezuela and Iran. The former is going through an economic crisis and the later has been hit by sanctions from the U.S. U.S. sanctions against Iran, which produces 4% of global oil supplies are expected to cause shortages later this year. Production in Venezuela has also plunged to its lowest level in decades. OPEC and some non-OPEC producers will meet on June 22 to review their commitment to curb output by about 1.8 million barrels per day until the end of this year. Any signs that the group may be end the agreement early would would weigh on prices.

 

 
Intraday RESISTANCE LEVELS
1st June 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 68.10-69.00 69.50
EURO/USD 1.1725 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
1st June 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 65.75-65.20 64.50
EURO/USD 1.1600 1.1550-1.1450 1.1390
GBP/USD 1.3300-1.3260 1.3160 1.3100
USD/JPY 108.50 107.60-107.00 106.60

Intra-Day Strategy (1st June 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 Thursday made its intraday high of US$1306.38/oz and low of US$1297.42/oz. Gold was down by 0.241% at US$1298.13/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  

43.336

Buy
20-DMA   1302.83 Sell
50-DMA  

1312.39

Sell
100-DMA   1313.97 Sell
200-DMA   1304.15 Buy
STOCH(5,3)   45.041 Sell
MACD(12,26,9)   -5.745 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$16.58/oz and low of US$16.38/oz. Silver settled down by 0.425% at US$16.40/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   47.258 Buy
20-DMA   16.47 Sell
50-DMA   16.51 Sell
100-DMA   16.57 Sell
200-DMA   16.70 Sell
STOCH(5,3)   61.416 Buy
MACD(12,26,9)   -0.0013 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$68.18/bbl, intraday low of US$66.50/bbl and settled down by 1.760% to close at US$66.98/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 67.00-70.70 with stop loss at 70.70; targeting 66.30-65.70 and 65.00-64.20. Buy above 66.30-63.50 with risk daily closing below 63.50 and targeting 68.10-69.30 and 70.00-70.70.

 
Intraday Support Levels
S1     66.30
S2     65.75-65.20
S3     64.50

Intraday Resistance Levels
R1     67.00
R2     68.10-69.00
R3     69.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.273 Sell
20-DMA   68.89 Buy
50-DMA   67.72 Buy
100-DMA   65.19 Buy
200-DMA   61.14 Buy
STOCH(5,3)   33.453 Buy
MACD(12,26,9)   -0.233 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1640/EUR, high of US$1.1723/EUR and settled the day up by 0.257% to close at US$1.1691/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     1.1600
S2     1.1550-1.1450
S3     1.1390

Intraday  Resistance Levels
R1     1.1725
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 Thursday made an intra‐day low of US$1.3276/GBP, high of US$1.3347/GBP and settled the day up by 0.0828% to close at US$1.3229/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 1.3400-1.3700 with targets at 1.3320-1.3260 and 1.3160-1.3100. 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     1.3300-1.3260
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  

31.294

Buy
20-DMA   1.3467 Buy
50-DMA   1.3668 Buy
100-DMA   1.3711 Buy
200-DMA   1.3577 Buy
STOCH(5,3)   20.152 Sell
MACD(12,26,9)   -0.0145 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY108.38/USD and made an intraday high of JPY109.00/USD and settled the day down by 0.594% at JPY108.80/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   43.337 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

AAFX TRADING
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