AAFX TRADING

Daily Market Lookup

  • Chinese stocks slipped on Monday, handing back some hard-won gains from a bounce late last week as worries mount ahead of a U.S. move to impose $34 billion of tariffs on Chinese exports. Markets are jittery ahead of a July 6 deadline when the United States is due to impose the tariffs on Chinese exports. Beijing is expected to respond with tariffs of its own on U.S. goods. Still, June represented the worst month for Chinese stocks in more than two years and the yuan's biggest monthly fall on record. Chen Xiaopeng, an analyst with Sealand Securities, said more pessimism was on the cards for Chinese stock investors with the country's economic outlook hurt by prospects of a full-blown trade war between Beijing and Washington. Uncertainties will reinforce investors' inclination to "huddle together for warmth" in outperforming sectors such as consumers and healthcare, Chen said. Hong Kong's markets were closed on Monday for a public holiday to mark the 21st anniversary of the former British colony's return to Chinese rule. If the yuan's decline intensifies, Morgan Stanley (NYSE:MS) economists wrote in a note on Monday that the Chinese central bank, the People's Bank of China, may step up intervention.
  • The euro slipped back in Asian trade on Monday after German Chancellor Angela Merkel was dealt a fresh blow when her interior minister offered to quit in an escalating row over migration policy. Interior Minister Horst Seehofer, who has called for tougher border controls, said he was ready to step down as minister and as chair of his Christian Social Union (CSU), junior coalition partner in Merkel's government. The euro had gained on Friday after European Union leaders hammered out an agreement on migration that investors hoped would ease pressure on Merkel. The Japanese currency was unmoved by the Bank of Japan's tankan business sentiment survey, which showed a slight dip in big Japanese manufacturers' sentiment. The dollar has been supported by the relative strength of the U.S. economy and the prospects of further rate hikes from the Federal Reserve. Data on Friday showed so-called core personal consumption expenditures (PCE) price index, the Fed's preferred gauge of U.S. inflation, rose 2.0 percent from a year earlier, the biggest gain since April 2012. That kept alive expectations that the Fed will raise rates at least once and possibly twice by the end of year. The official survey on China's manufacturing sector published on Saturday suggested growth in the sector slowed slightly in June after a better-than-expected performance in May. Investors are now looking to the results of Congressional elections, where National Regeneration Movement (MORENA), a party that has only existed formally since 2014, could be close to a majority. The UK manufacturing PMI is due for release today at 0830GMT and is expected to show that the pace of expansion in the activity slowed down again in June after May’s upturn. The index is expected to arrive at 54.0 versus 54.4 booked previously.
  • Oil prices fell by more than 1 percent on Monday as supplies from top exporter Saudi Arabia rose and as signs of an economic slowdown in Asia dented the outlook for demand. U.S. President Donald Trump wrote in a tweet on Saturday that Saudi Arabia's King Salman bin Abdulaziz Al Saud had agreed to produce more oil. The White House later walked back on the president's comments, saying the king said his country can raise oil production if needed. Saudi Arabia's output is up by 700,000 barrels per day (bpd) from May, a Reuters survey found on Friday, and close to its 10.72 million bpd record from November 2016, more than making up for disruptions elsewhere within the OPEC. Voluntary supply cuts by OPEC and some non-OPEC suppliers like Russia have tightened world oil markets since 2017, and unplanned disruptions from Canada to Venezuela and Libya along with upcoming new U.S. sanctions against major exporter Iran have sparked concerns of supply shortfalls Despite the apparent supply relief from Saudi Arabia, oil markets remain tense over escalating trade disputes between the United States and other major economies including China, the European Union, India and Canada. Asia's main economic hub around China, Japan and South Korea all reported a slowdown in export orders in June amid an escalating trade dispute with the United States.Trump warned close U.S. allies in an interview that aired on Sunday with a threat to sanction European companies that do business with Iran.

 

 
Intraday RESISTANCE LEVELS
2nd July 2018 R1 R2 R3
GOLD-XAU 1,251 1,260-1,265 1,271
Silver-XAG 16.40-16.60 17.00 17.40-17.70
Crude Oil 72.50 73.20 74.00-75.00
EURO/USD 1.1650 1.1700 1.1820-1.1900
GBP/USD 1.3200 1.3260-1.3310 1.3390
USD/JPY 111.00 111.40-112.00 112.70

Intraday SUPPORTS LEVELS
2nd July 2018 S1 S2 S3
GOLD-XAU 1,245-1,236 1,220 1,214
Silver-XAG 16.00 15.60-15.30 14.80
Crude Oil 71.90 70.70 69.60-69.00
EURO/USD 1.1600 1.1500-1.1450 1.1365
GBP/USD 1.3145-1.3100 1.3050 1.2990-1.2920
USD/JPY 110.50-109.80 109.00 108.50-107.60

Intra-Day Strategy (2nd July 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$1255.47/oz and low of US$1245.88/oz. Gold was up by 0.374% at US$1252.69/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 oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Based on the charts and explanations above; sell below 1251-1271 keeping stop loss closing above 1290 and targeting 1245-1236 and 1220-1214. Buy above 1245-1214 with risk below 1214, targeting 1251-1260-1265 and 1271-1278.

 
Intraday Support Levels
S1     1,245-1,236
S2     1,220
S3     1,214
Intraday Resistance Levels
R1     1,251
R2     1,260-1,265
R3     1,271

Technical Indicators

Name   Value Action
14DRSI  

25.226

Buy
20-DMA   1272.00 Sell
50-DMA  

1290.38

Sell
100-DMA   1300.87 Sell
200-DMA   1298.79 Sell
STOCH(5,3)   16.4578 Sell
MACD(12,26,9)   -13.539 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$16.15/oz and low of US$15.94/oz. Silver settled down by 0.814% at US$16.09/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (16.69), 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 oversold region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 16.00-14.90 targeting 16.35-16.60-17.00 and 17.75-18.20; stop breakage below 15.00. Sell below 16.60-18.20 with stop loss above 18.20; targeting 16.60-16.30-16.00 and 15.60-15.00.

 
Intraday  Support Levels
S1     16.00
S2     15.60-15.30
S3     14.80

Intraday  Resistance Levels
R1     16.40-16.60
R2     17.00
R3     17.40-17.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   36.537 Buy
20-DMA   16.33 Sell
50-DMA   16.45 Sell
100-DMA   16.53 Sell
200-DMA   16.65 Sell
STOCH(5,3)   20.447 Buy
MACD(12,26,9)   0.1392 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$73.64/bbl, intraday low of US$72.13/bbl and settled up by 1.309% to close at US$73.47/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 72.50-75.00 with stop loss at 75.00; targeting 71.90-70.70 and 69.60-69.00-68.10. Buy above 72.50-68.10 with risk daily closing below 68.10 and targeting 71.90-72.50-73.00 and 74.00-75.00.

 
Intraday Support Levels
S1     71.90
S2     70.70
S3     69.60-69.00

Intraday Resistance Levels
R1     72.50
R2     73.20
R3     74.00-75.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.310 Sell
20-DMA   68.85 Buy
50-DMA   67.82 Buy
100-DMA   66.01 Buy
200-DMA   62.33 Buy
STOCH(5,3)   89.673 Buy
MACD(12,26,9)   1.214 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1557/EUR, high of US$1.1689/EUR and settled the day up by 0.147% to close at US$1.1684/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 1.1650-1.1700 and 1.1820-1.1900. Sell below 1.1650-1.1900 targeting 1.1500-1.1490-1.1450 and 1.1370-1.1300 with stop-loss at daily closing above 1.1900.

 
Intraday Support Levels
S1     1.1600
S2     1.1500-1.1450
S3     1.1365

Intraday  Resistance Levels
R1     1.1650
R2     1.1700
R3     1.1820-1.1900

TECHNICAL INDICATORS
Name   Value Action
14DRSI   456.275 Buy
20-DMA   1.1661 Sell
50-DMA   1.1790 Sell
100-DMA   1.1909 Buy
200-DMA   1.1885 Buy
STOCH(5,3)   53.712 Buy
MACD(12,26,9)   -0.0046 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3068/GBP, high of US$1.3212/GBP and settled the day up by 1.040% to close at US$1.3209/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 positive crossover to confirm bullish 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 1.3145-1.3300 with targets at 1.3100-1.3060 and 1.2990-1.2920. Buy above 1.3100-1.2920 with targets 1.3145-1.3200-1.3260 and 1.3300-1.3360 with stop loss closing below 1.2920.

 
Intraday Support Levels
S1     1.3145-1.3100
S2     1.3050
S3     1.2990-1.2920

Intraday Resistance Levels
R1     1.3200
R2     1.3260-1.3310
R3     1.3390

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

40.145

Buy
20-DMA   1.3252 Buy
50-DMA   1.3420 Buy
100-DMA   1.3547 Buy
200-DMA   1.3514 Buy
STOCH(5,3)   40.006 Buy
MACD(12,26,9)   -0.0079 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY110.75/USD and made an intraday high of JPY110.94/USD and settled the day up by 0.271% at JPY110.75/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 109.80-112.00 with risk above 112.00 targeting 109.00-108.40 and 107.60-107.00. Long positions above 109.00-107.00 with targets of 109.80-110.50-111.00 and 111.50-112.00 with stop below 107.00.

 
Intraday Support Levels
S1     110.50-109.80
S2     109.00
S3     108.50-107.60

INTRADAY RESISTANCE LEVELS
R1     111.00
R2     111.40-112.00
R3     112.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.250 Buy
20-DMA   110.17 Buy
50-DMA   109.64 Buy
100-DMA   109.37 Sell
200-DMA   109.70 Sell
STOCH(9,6)   84.240 Sell
MACD(12,26,9)   0.236 Sell

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