AAFX TRADING

Daily Market Lookup

  • Asian shares stepped back from a 2-1/2 month high on Friday as risk appetite soured on bets that Europe's massive monetary stimulus was nearing an end, compounded by uncertainty over trade relations ahead of a key meeting of global leaders. The European Central Bank will debate next week whether to end bond purchases later this year, the bank's chief economist said on Wednesday, a hawkish message that sent the euro to a three-week top, hit emerging markets, and spurred demand for safe-haven bonds Another major reason for the nerves was the widening rift between the United States and its major trade partners after President Donald Trump imposed import tariffs on steel and aluminum imports last week. Trump seemed in no mood to reconcile when he tweeted, just one day before a Group of Seven summit, that France and Canada imposed "massive tariffs" on their imports from the United States and had non-monetary barriers to trade. The summit takes place on Friday and Saturday in Charlevoix, Quebec. Risk appetite also waned after U.S. jobless claims pointed to a further tightening in labor market conditions, cementing expectations the Federal Reserve will raise benchmark U.S. rates next week and twice again later in the year.
  • The dollar rebounded in morning trade in Asia Friday, although it was still hovering near three-week lows after sliding in the past few days. The yen was under pressure after data showed Japan’s gross domestic product for the first quarter fell 0.2% compared to the previous quarter. Market also look to the Group of Seven summit this weekend to find cues for U.S. trade relations with other peers. Despite the short-lived rally on Friday morning, the dollar index has been sliding since last week, from a high at 94.85 last Wednesday to a three-week low at around 93.40 level this Friday. The dollar was under pressure this week against a firmer euro that bounced back from 10-month lows on the easing political concern in Italy. Geopolitical tensions continued to warm in East Asia, as U.S. President Donald Trump said he may sign an agreement to officially end the Korean War with North Korea’s Kim Jong Un at their upcoming summit next Tuesday in Singapore. Trump even suggested hosting Kim at the White House later this year. Meanwhile, Japan released weaker than expected GDP. The yen was losing ground to the dollar, as the USD/JPY pair added 0.01% to 109.71. The country’s GDP growth figure came in at -0.2% on quarter in the first three months of 2018, compared to the estimated -0.1%. This week’s focus is also on the upcoming G7 summit scheduled this weekend, as trade issues between the U.S. and other countries will continue to garner attention to see if a global trade war is likely to tick start.
  • Gold was trading lower in Asia on Friday as the dollar rebounded.   Supporting the dollar and pressuring gold are expectations of another hike in interest rates when the U.S. Federal Reserve meets next week. With solid economic news continuing to come out of the U.S., the Fed is in a position to take an aggressive stance to tighten monetary policy and stay ahead of inflation. The U.S. reported a string of bullish economic data last week including nonfarm payrolls and the unemployment rate for May, boosting investors’ confidence in the U.S. economy. Higher interest rates generally weigh on gold, because they make it more expensive to hold non-yielding assets.
  • Oil prices reversed earlier gains on Friday and fell as surging U.S. output as well as signs of weakening demand in China weighed on markets, even though supply woes in Venezuela and OPEC's ongoing production cuts offered crude some support. China's May crude oil imports eased away from a record high hit the month before, customs data showed on Friday, with state-run refineries entering planned maintenance. May shipments were 39.05 million tonnes, or 9.2 million barrels per day (bpd), according to the General Administration of Customs. That compared with 9.6 million bpd in April. Further weighing on prices has been surging U.S. output , which hit another record last week at 10.8 million bpd That's a 28 percent gain in two years, or an average 2.3 percent growth rate per month since mid-2016. It puts the United States close to becoming the world's biggest crude oil producer, edging nearer to the 11 million bpd churned out by Russia. The surge in U.S. production has pulled down U.S. WTI crude into a steep discount versus Brent to more than $11 per barrel, its steepest since 2015. Despite Friday's falls, Brent remains more than 15 percent above its level at the start of the year. U.S. investment bank Jefferies said on Friday that the "crude market is tight and spare capacity could dwindle to 2 percent of demand in 2H18, its lowest level since at least 1984". Markets have been tightened by supply trouble in Venezuela, where state-owned oil firm PDVSA is struggling to clear a backlog of around 24 million barrels of crude waiting to be shipped to customers. More generally, Brent has been pushed up by voluntary production cuts led by the Middle East dominated producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) and by top producer Russia, which were put in place in 2017. The group and Russia are due to meet at its headquarters in Vienna on June 22 to discuss production policy.

 

 
Intraday RESISTANCE LEVELS
8th 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 1.3450-1.3500 1.3550 1.3610
USD/JPY 110.00-110.50 111.00 111.50-112.00

Intraday SUPPORTS LEVELS
8th 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 1.1770-1.1700 1.1650 1.1550-1.1450
GBP/USD 1.3400 1.3300-1.3260 1.3160
USD/JPY 109.00-108.50 107.60 107.00

Intra-Day Strategy (8th 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 Thursday made its intraday high of US$1303.07/oz and low of US$1294.77/oz. Gold was up by 0.0431% at US$1297.00/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

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.

 
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 Thursday made its intraday high of US$16.88/oz and low of US$16.62/oz. Silver settled up by 0.240% at US$16.68/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
MACD(12,26,9)   -0.0082 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$66.00/bbl, intraday low of US$64.77/bbl and settled down by 0.7337% to close at US$65.90/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 Thursday made an intraday low of US$1.1771/EUR, high of US$1.1839/EUR and settled the day up by 0.0084% to close at US$1.1797/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

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.

 
Intraday Support Levels
S1     1.1770-1.1700
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   47.654 Buy
20-DMA   1.1770 Sell
50-DMA   1.1925 Sell
100-DMA   1.2010 Buy
200-DMA   1.1927 Buy
STOCH(5,3)   80.040 Buy
MACD(12,26,9)   -0.0066 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3370/GBP, high of US$1.3471/GBP and settled the day up by 0.0745% to close at US$1.3419/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     1.3450-1.3500
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 Thursday made intra‐day low of JPY109.46/USD and made an intraday high of JPY110.25/USD and settled the day down by 0.444% at JPY109.68/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     109.00-108.50
S2     107.60
S3     107.00

INTRADAY RESISTANCE LEVELS
R1     110.00-110.50
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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