AAFX TRADING

Daily Market Lookup

  • Asian stocks bounced back from 9-month lows in volatile trade on Friday after Washington slapped tariffs on Chinese imports, a move many investors fear could be the start of a full-scale trade war between the world's two largest economies. Mainland Chinese shares led Asia's recovery, partly helped by the perception that the tariff measures were already priced in. To be sure, there was some trepidation about what lay ahead. The U.S. tariffs on more than 800 goods from China worth $34 billion took effect at 0401 GMT but its quiet start prompted short-covering by those who had feared for fresh retaliatory measures. China's commerce ministry said in a statement shortly after the deadline passed that it was forced to retaliate, meaning $34 bn worth of imported U.S. goods including autos and agricultural products also faced 25 percent tariffs. Many economists say the direct impact of the tariffs would be contained, given the current strength of the global economy, but investors remained wary. President Donald Trump has warned the United States may ultimately target over $500 bn worth of Chinese goods, an amount that roughly matches its total imports from China last year. U.S. payroll and wage data due later on Friday is the next focus for traders. The minutes from the U.S. Federal Reserve's last policy meeting on June 12-13 showed policymakers discussed whether recession lurked around the corner, and expressed concerns global trade tensions could hit an economy that by most measures looked strong. Tensions between the U.S. and Iran continued to rise as the U.S. Navy said it stood ready to ensure free navigation and the flow of commerce, after Iran's Revolutionary Guards threatened to block oil shipments through the Strait of Hormuz.
  • The dollar stood little changed against its peers on Friday and investor caution prevailed with U.S. tariffs on Chinese goods taking effect and market participants turning their attention to the closely-watched U.S. jobs report due later in the day. The first salvos of a trade conflict between the world’s biggest economic powers were fired on Friday with U.S. tariffs on $34 billion (25.7 billion pounds) in Chinese goods coming into effect. Focus now shifts to retaliatory measures China could employ - Beijing said on Friday it had no choice but to fight back against U.S. bullying on trade - and the potential volatility that could cause in the global financial markets. The single currency gained on Thursday on strong German industrial orders and as Washington softened its trade rhetoric towards European Union automakers. The U.S. Labor Department is expected to report nonfarm payrolls increased 195,000 in June after surging by 223,000 in May. Monthly average hourly earnings likely rose 0.3 percent, which would lift the annual increase to 2.8 percent from 2.7 percent in May. The unemployment rate is forecast holding at an 18-year low of 3.8 percent in June. It has declined three-tenths of a percentage point this year and is near the Fed’s estimate of 3.6 percent by the end of this year. The pound was effectively flat at $1.3224. It had risen to a nine-day peak of $1.3275 on Thursday after Bank of England Governor Mark Carney said he was confident an economic slowdown was temporary, but the rise faded on nervousness before Friday’s government meeting on Brexit policy.
  • Oil prices seesawed on Friday in a nervous market as the United States and China applied a raft of tariffs to each others' goods in an escalating trade war between the world's two biggest economies. Looming over the oil markets is the escalating trade dispute between the United States and China. China immediately retaliated, slapping tariffs on 545 U.S. goods. Meanwhile, major Chinese ports have already delayed clearing goods from the United States, according to several sources. As part of the retaliatory response, Beijing has threatened a 25 percent tariff on U.S. crude imports, although it has not specified an introduction date. American crude shipments to China are around 400K bpd, worth $1 billion a month at current prices. Tariffs would make U.S. oil uncompetitive in China. An executive from China's Dongming Petrochemical Group said he expected Beijing to soon impose the tariff on U.S. oil imports. He added his refinery had canceled U.S. crude orders and would switch to Middle East or West African supplies instead. The potential trade war between the United States and China comes amid a tight oil market. Energy consultancy FGE on Friday issued a warning of looming supply shortages due to U.S. sanctions against Iran, and because of disruptions elsewhere. Even if the U.S. government grants some waivers to allies, FGE estimated 1.7 mn to 2 mn bpd of crude and condensate would be cut out of markets once its sanctions are implemented. U.S. investment bank Jefferies said on Friday it expected "a drop in Iranian exports well in excess of 1 million bpd" due to the U.S. sanctions. Some are already reacting. South Korea, a major buyer of Iranian oil and condensate, will not lift any Iranian oil in July for the first time since August 2012, three sources familiar with the matter said on Friday. Cutting Iran out from oil trading comes amid other disruptions. Although Saudi Arabia and Russia have said they would raise output to make up for disruptions, FGE said "there simply is not enough capacity to make up for Iran's crude losses, plus Venezuela and Libya", and warned of the possibility of oil prices rising to $100 per barrel.

 

 
Intraday RESISTANCE LEVELS
6th July 2018 R1 R2 R3
GOLD-XAU 1,260-1,265 1,271 1,278
Silver-XAG 16.40-16.60 17.00 17.35
Crude Oil 72.50-73.20 74.00 75.00-75.50
EURO/USD 1.1720 1.1950 1.1950
GBP/USD 1.3260-1.3310 1.3390 1.3500
USD/JPY 111.00 111.40-112.00 112.70

Intraday SUPPORTS LEVELS
6th July 2018 S1 S2 S3
GOLD-XAU 1,251 1,240-1,236 1,220
Silver-XAG 16.00 15.60-15.30 14.80
Crude Oil 71.50 70.70-69.60 69.00
EURO/USD 1.1660-1.1600 1.1500 1.1450-1.1365
GBP/USD 1.3200-1.3145 1.3100 1.3050-1.2990
USD/JPY 109.80 109.00 108.50-107.60

Intra-Day Strategy (6th 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 Thursday made its intraday high of US$1259.65/oz and low of US$1251.20/oz. Gold was up by 0.068% at US$1257.40/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 1240-1236 and 1220-1214. Buy above 1240-1214 with risk below 1214, targeting 1251-1260-1265 and 1271-1278.

 
Intraday Support Levels
S1     1,251
S2     1,240-1,236
S3     1,220
Intraday Resistance Levels
R1     1,260-1,265
R2     1,271
R3     1,278

Technical Indicators

Name   Value Action
14DRSI  

25.933

Buy
20-DMA   1272.16 Sell
50-DMA  

1290.45

Sell
100-DMA   1300.90 Sell
200-DMA   1298.98 Sell
STOCH(5,3)   18.534 Sell
MACD(12,26,9)   -13.407 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$16.08 /oz and low of US$15.91/oz. Silver settled down by 0.0498% at US$16.03/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     17.35

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.402 Buy
20-DMA   16.27 Sell
50-DMA   16.42 Sell
100-DMA   16.51 Sell
200-DMA   16.64 Sell
STOCH(5,3)   44.693 Buy
MACD(12,26,9)   -0.1505 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$73.24/bbl, intraday low of US$71.70/bbl and settled down by 1.538% to close at US$71.70bbl.

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 72.00-76.20 with stop loss at 76.20; targeting 71.50-70.70 and 69.60-69.00. Buy above 71.50-69.00 with risk daily closing below 69.60 and targeting 71.90-72.50-73.20 and 74.00-75.00.

 
Intraday Support Levels
S1     71.50
S2     70.70-69.60
S3     69.00

Intraday Resistance Levels
R1     72.50-73.20
R2     74.00
R3     75.00-75.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.134 Sell
20-DMA   69.96 Buy
50-DMA   68.48 Buy
100-DMA   66.49 Buy
200-DMA   62.72 Buy
STOCH(5,3)   31.313 Sell
MACD(12,26,9)   1.409 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1649/EUR, high of US$1.1719//EUR and settled the day up by 0.300% to close at US$1.1689/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 1.1660-1.1300 with risk below 1.1300 targeting 1.1720-1.1800 and 1.1900-1.1950. Sell below 1.1720-1.1950 targeting 1.1660-1.1600-1.1490 and 1.1450-1.1370 with stop-loss at daily closing above 1.1950.

 
Intraday Support Levels
S1     1.1660-1.1600
S2     1.1500
S3     1.1450-1.1365

Intraday  Resistance Levels
R1     1.1720
R2     1.1950
R3     1.1950

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.795 Buy
20-DMA   1.1663 Sell
50-DMA   1.1776 Sell
100-DMA   1.1895 Buy
200-DMA   1.1878 Buy
STOCH(5,3)   82.770 Buy
MACD(12,26,9)   -0.0030 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3203/GBP, high of US$1.3274/GBP and settled the day down by 0.0982% to close at US$1.3220/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 1.3260-1.3500 with targets at 1.3200-1.3145-1.3100 and 1.3060- 1.2990. Buy above 1.3200-1.2920 with targets 1.3260-1.3300 and 1.3360-1.3500 with stop loss closing below 1.2920.

 
Intraday Support Levels
S1     1.3200-1.3145
S2     1.3100
S3     1.3050-1.2990

Intraday Resistance Levels
R1     1.3260-1.3310
R2     1.3390
R3     1.3500

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

46.783

Buy
20-DMA   1.3239 Buy
50-DMA   1.3389 Buy
100-DMA   1.3521 Buy
200-DMA   1.3503 Buy
STOCH(5,3)   79.990 Buy
MACD(12,26,9)   -0.0055 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY110.28/USD and made an intraday high of JPY110.71/USD and settled the day up by 0.153% at JPY110.62/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 111.00-112.70 with risk above 112.70 targeting 109.00-108.40 and 107.60-107.00. Long positions above 109.80-107.60 with targets of 109.80-110.50-111.00 and 111.50-112.00 with stop below 107.00.

 
Intraday Support Levels
S1     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   54.504 Buy
20-DMA   110.24 Buy
50-DMA   109.71 Buy
100-DMA   109.41 Sell
200-DMA   109.72 Sell
STOCH(9,6)   66.457 Sell
MACD(12,26,9)   0.237 Sell

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