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Daily Market Lookup

  • Asian markets marked time on Thursday with two major centers - Japan and China - shut for holidays while the dollar held on to overnight gains after the U.S. central bank poured cold water on rate cut expectations. Trading in Japan will resume next Tuesday while China will be back in action on Monday. Global equities markets have scaled new highs since the start of the year largely on expectations of easy monetary policies around the world while a positive tone on U.S.-China trade negotiations has also aided sentiment. But analysts are now wondering whether this strong run can continue. Irigoyen was referring to a well-known adage, “sell in May and go away”, which warns investors to dump their equities holdings in May ahead of the northern hemisphere summer trading lull and switch to fixed income in a bid to maximize returns Investors are keeping a close eye on first-quarter earnings for clues on the health of the U.S. corporate sector. In currency markets, the greenback took a breather following strong gains overnight after the U.S. Federal Reserve kept the target range for its policy rate unchanged at its May meeting. Markets had anticipated the Fed would signal a “precautionary cut” to stoke inflation but “the statement gave almost nothing away in this respect,” Anna Stupnytska, global economist for Fidelity International said in an emailed statement. Dollar hawks also received a boost from early data on the labor market, as a report by payrolls processor ADP showed U.S. private employers added 275,000 jobs in April, well above the 180,000 estimate. Still, reports on construction spending and U.S. manufacturing came in weaker than expected, sending conflicting signals about the strength of the economy. In commodities, oil prices declined after data showed U.S. crude production output set a new record last week but the losses were capped by the intensifying crisis in Venezuela and the stopping of Iranian oil sanction waivers by Washington.
  • The U.S. Federal Reserve on Wednesday held interest rates steady and signaled little appetite to adjust them any time soon, taking heart in continued job gains and economic growth and the likelihood that weak inflation will edge higher. Fed policymakers said ongoing economic growth, a strong labor market and an eventual rise in inflation were still “the most likely outcomes” as the U.S. expansion nears its 10-year mark. The policy statement, and particularly Powell’s insistence the Fed saw no compelling reason to consider a rate cut in response to weak inflation, prompted a modest selloff in stock markets and pushed bond yields higher. The S&P 500 index fell 0.75 percent, its largest daily decline since mid-March. Interest rate futures also reversed direction, signaling a lower degree of confidence the next Fed move would be a rate cut, exactly the point Powell was driving at in a “stay-the-course” message, said analysts at Cornerstone Macr The Fed also trimmed the amount of interest it pays banks on excess reserves to 2.35 percent from 2.40 percent in an effort to ensure its key overnight lending rate, the federal funds rate, remains within the current target band. The most recent data showed a measure of underlying inflation running at 1.6 percent, which would be a problem if it meant households and businesses had doubts about the economy’s strength and were less willing to spend and invest. Powell told reporters the decline in so-called core inflation was likely mostly due to transient factors, and he predicted it would rise back to the 2 percent target. The Fed raised rates four times in 2018 and, as late as December, had anticipated further rises in borrowing costs this year. Early this year it halted its tightening campaign on concerns about weak data in the United States and abroad. The federal funds rate is the amount banks charge each other for overnight loans, and is the rate the Fed targets as its main way of controlling other borrowing costs in the economy. It neared the upper end of the target range last week, prompting the change in the interest paid on excess reserves. Wednesday’s policy decision was unanimous, a sign that the Fed remains steady in its pledge to keep interest rates unchanged until incoming economic data provide a compelling reason to do otherwise.
  • Oil prices fell on Thursday in Asia after a weekly U.S. Energy Information Administration (EIA) report showed U.S. crude stockpiles rose much more than expected Crude stockpiles rose by 9.9 million barrels in the week to April 26, six times more than the forecasts for a build of 1.5 million, the EIA said in its regular weekly report. The EIA said gasoline inventories rose by 0.9 million barrels, compared to expectations for a draw of 1 million barrels. Distillate stockpiles dropped by 1.3 million barrels, compared to forecasts for a decline of 193,000 barrels. U.S. crude production, meanwhile, rose by 100,000 barrels, to a record high of 12.3 million barrels per day The fall in oil prices today were relatively modest as U.S. sanctions on Iranian and Venezuelan oil and unplanned outages in Libya and Angola continued to provide some support. Meanwhile, analysts at Bernstein Energy said current price levels reflected the average marginal cost for most listed oil producers. U.S. crude stockpiles last week rose to their highest since September 2017, jumping by 9.9 million barrels to 470.6 barrels, as production set a record high of 12.3 million barrels per day (bpd), while refining activity rates fell, the Energy Information Administration (EIA) said on Wednesday. Outside the United States, however, oil markets remained tight amid the political crisis in Venezuela, tighter U.S. sanctions against Iran that allow no more exemptions from May, and as the Organization of the Petroleum Exporting Countries (OPEC) continues to withhold supply in order to prop up prices. Oman's energy minister Mohammed bin Hamad al-Rumhy said on Wednesday it was OPEC's goal to extend the cuts, which were started in January, when they next meet in June.

 

 
Intraday RESISTANCE LEVELS
2nd May 2019 R1 R2 R3
GOLD-XAU 1,276-1,286 1,294 1,300-1,309
Silver-XAG 14.80-15.05 15.30 15.60-16.00
Crude Oil 63.65 64.20 65.00-65.60
EURO/USD 1.1220 1.1280-1.1330 1.1360
GBP/USD 1.3060-1.3100 1.3150 1.3210
USD/JPY 112.00-112.50 113.00 113.70

Intraday SUPPORTS LEVELS
2nd May 2019 S1 S2 S3
GOLD-XAU 1,269 1,260 1,251-1,244
Silver-XAG 14.50 14.20-13.90 13.50
Crude Oil 63.00-61.83 60.80 60.00-59.60
EURO/USD 1.1175-1.1150 1.1100 1.1070-1.1020
GBP/USD 1.3010-1.2970 1.2920 1.2850-1.2800
USD/JPY 111.50-110.60 110.00 109.55-109.05

Intra-Day Strategy (2nd May 2019)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Wednesday made its intraday high of US$1287.20/oz and low of US$1272.75/oz. Gold down by 0.525% at US$1276.59/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1283) and breakage below will call for 1254-1247. MACD is above zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is in neutral region and more upside 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: Buy on Dips

Based on the charts and explanations above; buy above 1278-1244 with risk below 1244, targeting 1286-1294 and 1300-1309. Sell below 1286-1309 keeping stop loss closing above 1310, targeting 1269-1261 and 1251-1244.

 
Intraday Support Levels
S1     1,269
S2     1,260
S3     1,251-1,244
Intraday Resistance Levels
R1     1,276-1,286
R2     1,294
R3     1,300-1,309

Technical Indicators

Name   Value Action
14DRSI  

39.335

Buy
20-DMA   1284.50 Sell
50-DMA  

1300.00

Sell
100-DMA   1292.74 Buy
200-DMA   1252.08 Buy
STOCH(5,3)   39.073 Sell
MACD(12,26,9)   -5.758 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$14.94/oz and low of US$14.58/oz. Silver settled down by 1.676% at US$14.65/oz.

Technicals in Focus:

On daily charts, silver is sustaining below200DMA (15.12), breakage above will lead to 15.60. 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 negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 14.50-13.50 targeting 14.80-15.05-15.30 and 15.60-15.90; stop breakage below 13.50. Sell below 14.80-16.00 with stop loss above 16.00; targeting 14.50-14.20 and 14.00-13.50.

 
Intraday  Support Levels
S1     14.50
S2     14.20-13.90
S3     13.50

Intraday  Resistance Levels
R1     14.80-15.05
R2     15.30
R3     15.60-16.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.142 Buy
20-DMA   15.02 Sell
50-DMA   15.26 Sell
100-DMA   15.31 Buy
200-DMA   14.96 Sell
STOCH(5,3)   69.246 Sell
MACD(12,26,9)   -0.0440 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$63.93/bbl, intraday low of US$62.78/bbl and settled up by 0.299% to close at US$63.61/bl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 55.88 which is a resistance level and breakage above will call for 59.60. MACD is above zero line and histograms are in decreasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in oversold region and giving negative crossover for confirmation of bearish 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 63.00-65.60 with stop loss at 65.60; targeting 61.80-60.80 and 60.10-59.60. Buy above 61.80-59.60 with risk daily closing below 59.60 and targeting 63.00-63.65-64.20 and 65.00-65.60.

 
Intraday Support Levels
S1     63.00-61.83
S2     60.80
S3     60.00-59.60

Intraday Resistance Levels
R1     63.65
R2     64.20
R3     65.00-65.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.250 Sell
20-DMA   63.96 Buy
50-DMA   60.38 Buy
100-DMA   55.82 Buy
200-DMA   60.77 Buy
STOCH(5,3)   23.130 Sell
MACD(12,26,9)   1.106 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1186/EUR, high of US$1.1264/EUR and settled the day down by 0.164% to close at US$1.1194/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1364), which become immediate resistance level, break above will target 1.1560-1.1600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider.

Trading Strategy: Neutral to Buy

Buy above 1.1175-1.1360 with risk below 1.1330, targeting 1.1150-1.1200 and 1.1280-1.1305-1.1350. Sell below 1.1200-1.1360 targeting 1.1175-1.1140-1.1100 and 1.1070-1.1020 with stop-loss at daily closing above 1.1020.

 
Intraday Support Levels
S1     1.1175-1.1150
S2     1.1100
S3     1.1070-1.1020

Intraday  Resistance Levels
R1     1.1220
R2     1.1280-1.1330
R3     1.1360

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.804 Buy
20-DMA   1.1231 Sell
50-DMA   1.1276 Sell
100-DMA   1.1330 Sell
200-DMA   1.1421 Sell
STOCH(5,3)   44.157 Sell
MACD(12,26,9)   -0.009 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3027/GBP, high of US$1.3101/GBP and settled the day up by 0.153% to close at US$1.3048/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2977) 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 approaching overbought territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.2900-1.3200 with targets at 1.2850-1.2800 and 1.2770-1.2700 and stop should be below 1.3300. Buy above 1.2850-1.2700 with targets 1.2900-1.2970-1.3010 and 1.3060-1.3100 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.3010-1.2970
S2     1.2920
S3     1.2850-1.2800

Intraday Resistance Levels
R1     1.3060-1.3100
R2     1.3150
R3     1.3210

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

53.111

Buy
20-DMA   1.3009 Sell
50-DMA   1.3104 Sell
100-DMA   1.2977 Buy
200-DMA   1.2960 Buy
STOCH(5,3)   81.996 Buy
MACD(12,26,9)   0.0052 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY111.04/USD and made an intraday high of JPY111.60/USD and settled the day down by 0.035% at JPY111.36/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (110.42), which is initial support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is in oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 112.00-113.70 with risk above 113.70 targeting 111.50-111.00-110.60 and 110.10-109.55-109.05. Long positions above 111.50-109.05 with targets of 111.90-12.25 and 113.00-113.70 with stop below 107.50.

 
Intraday Support Levels
S1     111.50-110.60
S2     110.00
S3     109.55-109.05

INTRADAY RESISTANCE LEVELS
R1     112.00-112.50
R2     113.00
R3     113.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.5601 Buy
20-DMA   111.69 Buy
50-DMA   111.36 Buy
100-DMA   110.72 Buy
200-DMA   111.50 Buy
STOCH(9,6)   29.575 Buy
MACD(12,26,9)   0.0864 Buy

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