AAFX TRADING

Daily Market Lookup

  • Asian shares rose to a fresh 2-1/2-month high on Thursday, supported by sound economic fundamentals, while expectations the European Central Bank (ECB) could start to wind down its stimulus boosted the euro and global bond yields. The euro (EUR=) held near a two-week high while Germany's benchmark 10-year bond hit its own two-week high of 0.486 percent growing conviction the European Central Bank would announce as early as next week its intention to end a drawn-out stimulus program by year-end. ECB Chief Economist Peter Praet said on Wednesday that robust growth made the central bank increasingly confident that inflation is on its way back to target, raising the chances it may use next week's meeting next week to reveal more about the end of its bond-buying program. Worries over the effects of reduced ECB bond buying triggered a broad sell-off in German Bunds and other European government debt, which spilled over to Treasuries, analysts said. White House economic adviser Larry Kudlow said late on Wednesday that U.S. President Donald Trump would meet French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau at the G7 summit this week. Although Kudlow said Trump would not back down from the tough line he has taken on trade, the comments appeared to calm investors. Gold prices edged higher, with spot gold last traded at $1,297 per ounce, up 0.1 percent on the day, loosely supported by a weaker dollar amid ongoing concerns about a trade war between the United States and its allies.
  • The dollar slid in morning trade in Asia Thursday, staying on the bearish track from the previous day. The Aussie was also losing ground to the dollar after Australia reported a weaker-than-expected April trade surplus. Weighing on the dollar is the lingering likelihood of a full-blown trade war with the U.S. as its center. Mexico announced Wednesday it was imposing $3 billion in tariffs on U.S. imports in response to the latter's triggering duties on steel and aluminum last Thursday. Markets are now looking ahead to the G7 on June 8 and 9 in Quebec, Canada. U.S. President Donald Trump plans to meet his Canadian and French counterparts at the summit to discuss trade issues. Elsewhere in Asia, Japanese Prime Minister Shinzo Abe was set to meet with U.S. President Donald Trump on Thursday and Friday at the White House to discuss a planned U.S. summit with North Korean leader Kim Jong Un next week. The euro stayed near two-week highs against many of its rivals on Thursday, on rising bets the European Central Bank (ECB) may soon announce it will start winding down its massive bond purchase program. The central bank's chief economist Peter Praet, a close ally of President Mario Draghi, said the ECB would debate next week whether to end bond purchases later this year. Jens Weidmann, the head of Germany's central bank, said expectations the ECB would taper its bond-buying program by the end of this year were plausible while his Dutch counterpart, Klaas Knot, said there was no reason to continue a quantitative easing program. The ECB has been debating whether to end the unprecedented 2.55 trillion euro ($2.99 trillion) bond purchase program this year as the threat of deflation has passed. Still many market players were surprised by the flurry of comments as they had thought uncertainty caused by a political crisis in Italy could make policymakers cautious about indicating an end to stimulus at its policy meeting on June 14. Indeed, the yield spread of Italian debt to German Bunds widened on Wednesday as Italian bonds are seen as the biggest beneficiary of the ECB's buying. The Federal Reserve is widely expected to raise interest rates for the second time this year on Wednesday. The improving market mood on the back of easing worries about Italian politics and the strength of high-tech shares has supported high-beta currencies such as the Australian dollar and has weighed on a low-yielding yen for the past week. But many investors are cautions on making big bets due to uncertainties over trade frictions, given U.S. President Donald Trump looks set to clash with other Group of Seven leaders at their weekend summit in Canada.
  • Oil prices rose on Thursday amid plunging exports by Venezuela, a member of the OPEC Venezuela is almost a month behind in shipping crude oil to customers from its main oil export port, reports on Thursday said. Elsewhere, inventories of U.S. crude rose by 2.072 mn barrels for the week ended June 1, confounding expectations for a draw of 2.000 mn barrels, according to data from the EIA. Sentiment on oil prices remained mostly negative, as investors continued to fear OPEC, at its meeting on June 22, could ease production curbs to offset falling supplies in Venezuela and an expected drop in Iran oil exports as U.S. sanctions loom In November 2016, OPEC and other producers, including Russia agreed to cut output by 1.8 mn bpd to slash global inventories to the five year-average. The OPEC-led deal was renewed last year through 2018. OPEC-member Iraq said on Wednesday that a production increase was not on the table as the market was stable and prices were good, despite reports that the U.S. government had asked Saudi Arabia and other OPEC members to increase oil output by around 1 mn.

 

 
Intraday RESISTANCE LEVELS
7th 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 65.70-66.30 67.00 68.10-69.00
EURO/USD 1.1800 1.1850-1.1930 1.2010
GBP/USD 1.3550 1.3550 1.3610
USD/JPY 110.50 111.00 111.50-112.00

Intraday SUPPORTS LEVELS
7th 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 65.00-64.50 63.00 61.80
EURO/USD 1.1725 1.1650 1.1550-1.1450
GBP/USD 1.3400 1.3300-1.3260 1.3160
USD/JPY 110.00 109.00-108.50 107.60

Intra-Day Strategy (7th 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 Wednesday made its intraday high of US$1301.72/oz and low of US$1293.71/oz. Gold was up by 0.0084% at US$1296.41/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  

44.341

Buy
20-DMA   1300.52 Sell
50-DMA  

1310.27

Sell
100-DMA   1312.78 Sell
200-DMA   1303.83 Buy
STOCH(5,3)   35.391 Sell
MACD(12,26,9)   -5.478 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$16.72/oz and low of US$16.45/oz. Silver settled up by 1,215% at US$16.65/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   56.416 Buy
20-DMA   16.49 Sell
50-DMA   16.51 Sell
100-DMA   16.57 Sell
200-DMA   16.69 Sell
STOCH(5,3)   78.385 Buy Buy
MACD(12,26,9)   -0.0082 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$65.90/bbl, intraday low of US$64.24/bbl and settled down by 0.7337% to close at US$64.94/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 65.70-69.00 with stop loss at 69.00; targeting 65.20-64.50 and 63.00-61.80. Buy above 65.00-61.80 with risk daily closing below 61.70 and targeting 65.70-66.30-67.00 and 68.10-69.30.

 
Intraday Support Levels
S1     65.00-64.50
S2     63.00
S3     61.80

Intraday Resistance Levels
R1     65.70-66.30
R2     67.00
R3     68.10-69.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.595 Sell
20-DMA   67.88 Buy
50-DMA   67.40 Buy
100-DMA   65.17 Buy
200-DMA   61.25 Buy
STOCH(5,3)   24.276 Sell
MACD(12,26,9)   -0.824 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1709/EUR, high of US$1.1795/EUR and settled the day up by 0.48% to close at US$1.1772/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 1.1725-1.1450 with risk below 1.1450 targeting 1.1800-1.1850 and 1.1930-1.2010-. Sell below 1.1800-1.2010 targeting 1.1725-1.1600-1.1550-and 1.1450-1.1390 with stop-loss at daily closing above 1.2010.

 
Intraday Support Levels
S1     1.1725
S2     1.1650
S3     1.1550-1.1450

Intraday  Resistance Levels
R1     1.1800
R2     1.1850-1.1930
R3     1.2010

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.0314 Buy
20-DMA   1.1762 Sell
50-DMA   1.1935 Sell
100-DMA   1.2018 Buy
200-DMA   1.1929 Buy
STOCH(5,3)   86.063 Buy
MACD(12,26,9)   -0.0092 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3377/GBP, high of US$1.3442/GBP and settled the day up by 0.186% to close at US$1.3409/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     1.3400
S2     1.3300-1.3260
S3     1.3160

Intraday Resistance Levels
R1     1.3550
R2     1.3550
R3     1.3610

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

47.263

Buy
20-DMA   1.3425 Buy
50-DMA   1.3604 Buy
100-DMA   1.3672 Buy
200-DMA   1.3565 Buy
STOCH(5,3)   89.496 Buy
MACD(12,26,9)   -0.0088 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY109.76/USD and made an intraday high of JPY110.26/USD and settled the day down by 0.0364% at JPY110.17/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 110.50-112.90 with risk above 112.90 targeting 109.60-109.00-108.40 and 107.60-107.00. Long positions above 109.60-106.60 with targets of 110.50-111.00 and 111.50-112.00 with stop below 106.60.

 
Intraday Support Levels
S1     110.00
S2     109.00-108.50
S3     107.60

INTRADAY RESISTANCE LEVELS
R1     110.50
R2     111.00
R3     111.50-112.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.242 Buy
20-DMA   109.56 Buy
50-DMA   109.01 Buy
100-DMA   108.99 Sell
200-DMA   109.59 Sell
STOCH(9,6)   94.043 Sell
MACD(12,26,9)   0.194 Sell

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