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Daily Market Lookup

  • Asian shares rose to their highest in two-and-a-half-weeks on Monday as strong U.S. jobs data offset worries that tariff wars between the United States and the rest of the world could retard global economic growth. Finance leaders of the closest U.S. allies vented anger over the Trump administration's metal import tariffs on Saturday, setting the tone for a heated G7 summit next week in Quebec. In a rare show of division among the normally harmonious club of wealthy nations, six G7 member countries issued a statement asking U.S. Treasury Secretary Steven Mnuchin to convey their "unanimous concern and disappointment" to President Donald Trump. There appears to have been no major break-through on trade disputes after U.S. Commerce Secretary Wilbur Ross met Chinese Vice Premier Liu He, either. China warned the United States on Sunday that any agreements reached on trade and business between the two countries will be void if Washington implements tariffs and other trade measures, as the two ended their latest round of talks in Beijing. Still, the U.S. economy's current strength kept bears at bay for the moment. Data released on Friday showed U.S. job growth accelerated in May and the unemployment rate dropped to an 18-year low of 3.8 percent, indicating a rapidly tightening labour market, which could eventually fuel inflation. Average hourly earnings rose eight cents, or 0.3 percent last month after edging up 0.1 percent in April. That pushed the annual increase in average hourly earnings to 2.7 percent from 2.6 percent in April. The strong employment report added to a string of upbeat economic data, including consumer spending, industrial production and construction spending. They have suggested economic growth was regaining speed early in the second quarter after expanding at a moderate 2.2 percent annualised rate in the January-March period. Given the strength, the Federal Reserve is all but certain to raise interest rates at its policy meeting next week.
  • The dollar opened the week sliding in morning trade in Asia Monday but holding on to most of its strength even as confidence in the U.S. economy was boosted by a strong jobs report and the likelihood of another interest rate increase by the U.S. Federal Reserve increased. Investors continue to watch closely the looming trade war the U.S. and China. Talks between the U.S. and China ended on Sunday without any deal announcement and China threatening to void any previous commitments. A trade war could prompt China to slowly devalue its currency. In a widely distributed statement, China said that "if the U.S. introduces trade sanctions including raising tariffs, all the economic and trade achievements negotiated by the two parties will be void." Last Friday evening, U.S. released job data. Nonfarm payroll employment increased by 223,000 in May , while average hourly earnings also rose 0.3% compared to May last year. The unemployment rate fell from 3.9% to 3.8%. The strong data supported the idea that the Fed may raise rates later this month. Closely watched data out on Friday showed U.S. jobs growth gathering pace and wages rising in May, making a rate hike by the Federal Reserve in June a near certainty and increasing expectations of a fourth hike this year. The robust U.S. jobs report helped offset factors that had weighed on the dollar earlier last week, such as a flare up in trade tensions between the United States and its allies. The prospect of a snap election in Italy shook investor risk sentiment at the start of last week as some feared the vote could be a referendum on the country's euro membership. But the euro has drifted up since as markets gained some composure after anti-establishment parties reached a deal to resurrect their proposed coalition government, averting potentially destabilizing elections.
  • Crude oil futures lost more ground on Monday as the market was weighed down by U.S. output climbing to a record-high and expectations that OPEC members will raise supplies. Saudi Arabia, effective leader of the Organization of the Petroleum Exporting Countries (OPEC), and Russia have discussed boosting output to compensate for supply losses from Venezuela and to address concerns about the impact of U.S. sanctions on Iranian output. Russia's largest oil producer Rosneft (MM:ROSN) will be able to restore 70,000 barrels per day (bpd) of oil output in just two days if global production limits are lifted, Renaissance Capital wrote in a client note. U.S. crude production climbed in March to 10.47 million barrels per day (bpd), a monthly record, the Energy Information Administration said on Thursday. U.S. drillers added two oil rigs in the week to June 1, bringing the total to 861, the most since March 2015, General Electric Co's (N:GE) Baker Hughes energy services firm said on Friday. That was the eighth time drillers have added rigs in the past nine weeks. Hedge funds and other money managers cut their bullish wagers on U.S. crude futures and options, according to data released on Friday, as oil prices slumped on oversupply fears. The speculator group cut its combined futures and options position in New York and London by 50,937 contracts to 370,980 during the week to May 29, the U.S. Commodity Futures Trading Commission said.

 

 
Intraday RESISTANCE LEVELS
4th June 2018 R1 R2 R3
GOLD-XAU 1300-1,305 1,311 1,321-1,330
Silver-XAG 17.00 17.40 17.70-18.20
Crude Oil 66.30 67.00 68.10-69.00
EURO/USD 1.1725 1.1800 1.1850-1.1915
GBP/USD 1.3400 1.35501.3450-1.3500 1.3550
USD/JPY 110.00-110.50 111.00 111.50-112.00

Intraday SUPPORTS LEVELS
4th June 2018 S1 S2 S3
GOLD-XAU 1,290 1,280-1,274 1,265
Silver-XAG 16.31 16.00-15.60 15.30
Crude Oil 65.70-65.20 64.50 63.00
EURO/USD 1.1600 1.1550-1.1450 1.1390
GBP/USD 1.3300-1.3260 1.3160 1.3100
USD/JPY 109.00-108.50 107.60 107.00-106.60

Intra-Day Strategy (4th June 2018)
GOLD-XAU Sell on Strength
Silver-XAG Neutral
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Friday made its intraday high of US$1300.44/oz and low of US$1289.17/oz. Gold was down by 0.400% at US$1293.14/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     1,290
S2     1,280-1,274
S3     1,265
Intraday Resistance Levels
R1     1300-1,305
R2     1,311
R3     1,321-1,330

Technical Indicators

Name   Value Action
14DRSI  

38.410

Buy
20-DMA   1301.29 Sell
50-DMA  

1311.27

Sell
100-DMA   1313.42 Sell
200-DMA   1303.97 Buy
STOCH(5,3)   23.875 Sell
MACD(12,26,9)   -6.296 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.32/oz and low of US$16.49/oz. Silver settled down by 0.0304% at US$16.39/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 Friday made an intra‐day high of US$67,24/bbl, intraday low of US$65.47/bbl and settled down by 1.881% to close at US$65.71/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 66.30-69.00 with stop loss at 690.00; targeting 65.70-65.20 and 64.50-63.00. Buy above 65.70-65.20 with risk daily closing below 63.00 and targeting 66.30-67.00-68.10 and 69.30-70.00.

 
Intraday Support Levels
S1     65.70-65.20
S2     64.50
S3     63.00

Intraday Resistance Levels
R1     66.30
R2     67.00
R3     68.10-69.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.752 Sell
20-DMA   68.49 Buy
50-DMA   67.60 Buy
100-DMA   65.18 Buy
200-DMA   61.18 Buy
STOCH(5,3)   15.170 Buy
MACD(12,26,9)   -0.512 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1616/EUR, high of US$1.1717/EUR and settled the day down by 0.256% to close at US$1.1659/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 Buy

Buy above 1.1600-1.1300 with risk below 1.1300 targeting 1.1725-1.1800 and 1.1850-1.1915. Sell below 1.1700-1.1915 targeting 1.1600-1.1550-and 1.1450-1.1390 with stop-loss at daily closing above 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 Monday made an intra‐day low of US$1.3252/GBP, high of US$1.3361/GBP and settled the day up by 0.406% to close at US$1.3346/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 Buy

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     1.35501.3450-1.3500
R3     1.3550

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

37.835

Buy
20-DMA   1.3434 Buy
50-DMA   1.3630 Buy
100-DMA   1.3689 Buy
200-DMA   1.3570 Buy
STOCH(5,3)   77.186 Buy
MACD(12,26,9)   -0.0122 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY108.17/USD and made an intraday high of JPY109.72/USD and settled the day up by 0.671% at JPY109.52/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     109.00-108.50
S2     107.60
S3     107.00-106.60

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.830 Buy
20-DMA   109.46 Buy
50-DMA   108.92 Buy
100-DMA   108.95 Sell
200-DMA   109.54 Sell
STOCH(9,6)   71.821 Sell
MACD(12,26,9)   0.138 Sell

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