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  • U.S. President Donald Trump’s tariff increase to 25% on $200 billion worth of Chinese goods took effect on Friday, and Beijing said it would strike back, ratcheting up tensions as the two sides pursue last-ditch talks to try salvaging a trade deal. China’s Commerce Ministry said it “deeply regrets” the U.S. decision, adding that it would take necessary countermeasures, without elaborating. The hike comes in the midst of two days of talks between top U.S. and Chinese negotiators to try to rescue a faltering deal aimed at ending a 10-month trade war between the world’s two largest economies. Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin talked for 90 minutes on Thursday and were expected to resume talks on Friday. The Commerce Ministry said that negotiations were continuing, and that it “hopes the United States can meet China halfway, make joint efforts, and resolve the issue through cooperation and consultation”. With no action from the Trump administration to reverse the increase as negotiations moved into a second day, U.S. Customs and Border Protection imposed the new 25% duty on affected U.S.-bound cargoes leaving China after 12:01 a.m. EDT (0401 GMT) on Friday Goods in the more than 5,700 affected product categories that left Chinese ports and airports before midnight will be subject to the original 10% duty rate, a CBP spokeswoman said. The grace period was not applied to three previous rounds of tariffs imposed last year on Chinese goods, which had much longer notice periods of at least three weeks before the duties took effect. Trump gave U.S. importers less than five days notice about his decision to increase the rate on the $200 billion category of goods to 25%, which now matches the rate on a prior $50 billion category of Chinese machinery and technology goods. The biggest Chinese import sector affected by the rate hike is a $20 billion-plus category of internet modems, routers and other data transmission devices, followed by about $12 billion worth of printed circuit boards used in a vast array of U.S.-made products. Economists and industry consultants have said it may take three or four months for American shoppers to feel the pinch from the tariff hike but retailers will have little choice but to raise prices on a wide range of goods to cover the rising cost of imports before too long, according to economists and industry consultants.
  • The U.S. dollar fell against its rivals on Tuesday, pressured by a rise in safe-haven currencies as investors fretted over a possible escalation in U.S.-China trade tensions with talks just hours away. The latest round of trade talks, slated for around 5:00 PM ET (21:00 GMT), are fraught with uncertainty as new U.S. tariffs are set to begin just seven hours later, with China reportedly vowing to respond in-kind. Fearing the return of tit-for-tat tariffs between the U.S. and China, traders piled into safe-haven currencies like USD/JPY and USD/CHF to keep the dollar in the red. President Donald Trump earlier this week said he would raise tariffs on $200 billion of Chinese goods on Friday, after member of his trade team accused China of backtracking on promises. Fueling the negative expectations ahead of the talks, CNBC reported that Vice Premier Liu He no longer holds the title of "special envoy" for President Xi Jinping, suggesting he is on a "tighter leash" that would limit his deal-making ability. Lower-than-expected U.S. wholesale inflation also added to the dollar’s woes as it reaffirmed expectations that pace of inflation is unlikely to gather momentum, leaving the Federal Reserve to remain on pause for the immediate future. The Labor Department said Tuesday its core producer price index for final demand increased 0.1% last month, below economists' forecasts. Through the 12 months that ended in April, the core PPI stayed the same as the month before at 2.4%.
  • Oil prices pared earlier gains on Friday following U.S. President Donald Trump's tariff increase on $200 billion worth of Chinese goods took effect, escalating the trade dispute between the world's two biggest economies and oil consumers. Prices had risen more than 1 percent earlier in the day as optimism mounted that the tariffs would be averted after U.S. Trump said he received a "beautiful letter" from Chinese President Xi Jinping. With no move from the Trump administration to reverse the hikes, U.S. Customs and Border Protection imposed the new 25% duty on affected U.S.-bound cargoes leaving China after 12:01 a.m. EDT (0401 GMT) on Friday. Trump threatened to levy the additional tariffs on Sunday on signs that China would not accept portions of the trade agreement that it earlier indicated it accepted. A break down in trade between the world's two largest oil consumers would likely impact oil demand. The two countries combined to make up 34 percent of global oil consumption during the first quarter of 2019, according to data from the International Energy Agency Concerns of rising oil supply on reports of growing stockpiles along with the potential impact on demand has pushed oil prices lower for the week. U.S. crude is heading for a weekly loss of 0.3%, its third week of consecutive declines. Brent is heading for its second weekly loss, down 0.6% However, the efforts by the Organisation of the Petroleum Exporting Countries (OPEC) to crimp supply to reduce global inventories has supported prices. Overall expectations are also that demand in 2019 will rise. The U.S. Energy Information Administration expects global oil demand to rise by 1.4 million barrels per day this year.

 

 
Intraday RESISTANCE LEVELS
10th May 2019 R1 R2 R3
GOLD-XAU 1,286 1,294 1,300-1,309
Silver-XAG 15.05 15.30 15.60-16.00
Crude Oil 62.50 63.00 63.65-64.70
EURO/USD 1.1230 1.1280 1.1330-1.1360
GBP/USD 1.3060-1.3090 1.3150 1.3210-1.3250
USD/JPY 110.00-110.60 111.50 112.00-112.50

Intraday SUPPORTS LEVELS
10th May 2019 S1 S2 S3
GOLD-XAU 1,276-1,269 1,260 1,251-1,244
Silver-XAG 14.70-14.50 14.20 13.90-13.50
Crude Oil 62.00-61.50 60.80 60.00-59.60
EURO/USD 1.1200-1.1150 1.1100 1.1070-1.1020
GBP/USD 1.3010 1.2970-1.2920 1.2890
USD/JPY 109.55-109.05 108.40 107.70

Intra-Day Strategy (10th 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 Thursday made its intraday high of US$1288.14/oz and low of US$1279.54/oz. Gold up by 0.253% at US$1283.76/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1253) and breakage below will call for 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 neutral 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     1,276-1,269
S2     1,260
S3     1,251-1,244
Intraday Resistance Levels
R1     1,286
R2     1,294
R3     1,300-1,309

Technical Indicators

Name   Value Action
14DRSI  

50.016

Buy
20-DMA   1279.62 Sell
50-DMA  

1291.17

Sell
100-DMA   1294.99 Sell
200-DMA   1253.80 Buy
STOCH(5,3)   59.073 Sell
MACD(12,26,9)   -2.758 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$14.85/oz and low of US$14.68/oz. Silver settled down by 0.465% at US$14.74/oz.

Technicals in Focus:

On daily charts, silver is sustaining below200DMA (14.94), 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 overbought region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 14.70-13.50 targeting 15.05-15.30 and 15.60-15.90; stop breakage below 13.50. Sell below 14.90-16.00 with stop loss above 16.00; targeting 14.50-14.20 and 14.00-13.50.

 
Intraday  Support Levels
S1     14.70-14.50
S2     14.20
S3     13.90-13.50

Intraday  Resistance Levels
R1     15.05
R2     15.30
R3     15.60-16.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.980 Buy
20-DMA   14.88 Sell
50-DMA   15.09 Sell
100-DMA   15.33 Sell
200-DMA   14.93 Sell
STOCH(5,3)   48.246 Sell
MACD(12,26,9)   -0.0986 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$62.27/bbl, intraday low of US$60.99/bbl and settled down by 0.644% to close at US$61.46/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 62.00-64.70 with stop loss at 64.70; targeting 61.50-60.80 and 60.10-59.60. Buy above 61.50-59.00 with risk daily closing below 59.00 and targeting 62.50-63.00 and 63.65-64.70.

 
Intraday Support Levels
S1     62.00-61.50
S2     60.80
S3     60.00-59.60

Intraday Resistance Levels
R1     62.50
R2     63.00
R3     63.65-64.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.878 Sell
20-DMA   63.45 Buy
50-DMA   61.24 Buy
100-DMA   56.72 Buy
200-DMA   60.52 Buy
STOCH(5,3)   58.130 Buy
MACD(12,26,9)   0.341 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1172/EUR, high of US$1.1250/EUR and settled the day up by 0.205% to close at US$1.1212/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1261), which become immediate resistance level, break above will target 1.1325-1.1410. 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 in neutral region and giving no directions to consider.

Trading Strategy: Neutral to Buy

Buy above 1.1200-1.1020 with risk below 1.1020, targeting 1.1230 and 1.1280-1.1305-1.1350. Sell below 1.1230-1.1360 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     1.1200-1.1150
S2     1.1100
S3     1.1070-1.1020

Intraday  Resistance Levels
R1     1.1230
R2     1.1280
R3     1.1330-1.1360

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.358 Buy
20-DMA   1.1212 Sell
50-DMA   1.1251 Sell
100-DMA   1.1319 Sell
200-DMA   1.1402 Sell
STOCH(5,3)   69.157 Buy
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2964/GBP, high of US$1.3035/GBP and settled the day up by 0.025% to close at US$1.3007/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2960) 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 neutral territory and giving negative crossover to confirm bearish 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 1.3060-1.3250 with targets at 1.3010-1.2970 and 1.2920-1.2890 stop should be below 1.3300. Buy above 1.3010-1.2850 with targets 1.3060-1.3100-1.3150 and 1.3210-1.3250 with stop loss closing below 1.2850.

 
Intraday Support Levels
S1     1.3010
S2     1.2970-1.2920
S3     1.2890

Intraday Resistance Levels
R1     1.3060-1.3090
R2     1.3150
R3     1.3210-1.3250

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

49.283

Buy
20-DMA   1.3015 Buy
50-DMA   1.3097 Sell
100-DMA   1.2996 Buy
200-DMA   1.2959 Buy
STOCH(5,3)   49.996 Sell
MACD(12,26,9)   0.0052 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY109.46/USD and made an intraday high of JPY110.10/USD and settled the day down by 0.296% at JPY109.76/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (110.64), 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 110.00-113.00 with risk above 113.00 targeting 109.55-109.05 and 108.40-107.70. Long positions above 109.55-107.70 with targets of 110.00-110.60-111.5 and 111.90-112.25 with stop below 107.50.

 
Intraday Support Levels
S1     109.55-109.05
S2     108.40
S3     107.70

INTRADAY RESISTANCE LEVELS
R1     110.00-110.60
R2     111.50
R3     112.00-112.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   27.052 Buy
20-DMA   111.33 Sell
50-DMA   111.26 Sell
100-DMA   110.55 Buy
200-DMA   111.47 Sell
STOCH(9,6)   27.575 Sell
MACD(12,26,9)   -0.303 Buy

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