AAFX TRADING

Daily Market Lookup

  • Asian shares struggled to find their footing on Thursday as confidence was shaken after the U.S. government hit Chinese telecoms giant Huawei with severe sanctions, threatening to further strain Sino-U.S. trade ties. Bucking the downtrend, Chinese shares recovered on hopes of supportive government policy after opening in negative territory, with the Shanghai Composite Index last trading up 0.5%.Asian shares had steadied in early trade on news that U.S. President Donald Trump was planning to delay tariffs on auto imports, providing much needed relief to markets hit by a flare-up in trade tensions and weak U.S. and Chinese economic data. Late on Wednesday, the U.S. Commerce Department said it was adding Huawei Technologies Co Ltd and 70 affiliates to its “Entity List” - a move that bans the company from acquiring components and technology from U.S. firms without government approval.The gains came despite weak economic data out of both Beijing and Washington. China reported surprisingly weaker growth in retail sales and industrial output for April, with overall retail sales posting the slowest increase since May 2003. In the United States, retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods, while industrial production fell 0.5% in April, the third drop this year Fed funds rate futures are fully pricing in a rate cut by the end of this year and more than a 50% chance of a move by September.
  • U.S. retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods, pointing to a slowdown in economic growth after a temporary boost from exports and inventories in the first quarter. The moderation in economic activity was underscored by other data on Wednesday showing a drop in industrial production last month as manufacturers, especially in the automotive sector, worked off stockpiles of unsold merchandise. Growth is slowing as the stimulus from the White House’s $1.5 trillion tax cut package fades. President Donald Trump’s escalating trade war with China, which triggered a steep U.S. stock market sell-off, is also seen hurting business confidence and undercutting spending on equipment. Following the weak reports on Wednesday, the Atlanta Federal Reserve cut its second-quarter GDP growth estimate to a 1.1% annualized rate from a 1.6% pace. The economy grew at a 3.2% rate in the January-March period. The Commerce Department said retail sales slipped 0.2% last month after surging 1.7% in March, which was the largest increase since September 2017. Economists polled by Reuters had forecast retail sales gaining 0.2% in April. Retail sales in April increased 3.1% from a year ago. Consumer spending accounts for more than two-thirds of economic activity. While March’s strong core retail sales set consumer spending on an upward trajectory in the second quarter, last month’s weakness suggested a moderate pickup in spending. But consumption remains underpinned by a strong labor market, marked by the lowest unemployment rate in nearly 50 years.
  • The dollar was little changed against a basket of currencies, while U.S. Treasury prices rose. Stocks on Wall Street turned higher after a report that Trump might delay a decision to impose auto tariffs. In a separate report on Wednesday, the Federal Reserve said industrial production fell 0.5% in April after rising 0.2% in March. The third drop in production this year was led by manufacturing. Output at factories declined 0.5% as motor vehicles and parts production tumbled 2.6%. Manufacturing production was unchanged in March. Automobile assembly plants are cutting back production as slowing sales have led to a glut of vehicles in showrooms. Production was also hammered by a 1.8% tumble in aircraft and parts output last month. The drop, which was the largest since 2013, probably is the result of Boeing cutting production of its troubled 737 MAX aircraft. Another report from the Commerce Department on Wednesday showed motor vehicle and parts inventories rising 7.8% year-on-year in March, keeping the inventory-to-sales ratio at an elevated 2.29 months. With the retail sales report showing sales at auto dealerships dropping 1.1% in April, the inventory overhang could last for a while. Weak auto sales combined with a 0.2% fall in online and mail-order sales and a 1.9% tumble in building materials and garden equipment receipts to hold down retail sales in April.
  • Oil prices extended gains on Thursday in Asia amid tensions in the Middle East linked to stealth attacks on Saudi oil tankers and pipelines. Intensifying tensions in the Middle East were cited as pushing oil prices higher. Meanwhile, the Energy Information Administration reported a surprise increase in U.S. stockpiles, but the inventory data was largely overshadowed by the situation in Middle East. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) rose by 5.4 million barrels last week, versus expectations for a decline of 800,000 barrels, the EIA said Wednesday. In the previous week, crude inventories fell by almost 4 million barrels. An report published by the American Petroleum Institute sent both WTI and Brent lower on Wednesday as it said said U.S. crude stockpiles surged more than 8 million barrels last week versus a drawdown expected by the market. In other news, the Paris-based International Energy Agency said in its monthly report that it predicts the world will require very little extra oil from OPEC this year as booming U.S. output will offset falling exports from Iran and Venezuela. The IEA estimated growth in global oil demand to average 1.3 million barrels per day in 2019. In contrast, U.S. production of oil and condensates alone was forecast to rise by an average of 1.7 million bpd this year, it said.

 

 
Intraday RESISTANCE LEVELS
16th May 2019 R1 R2 R3
GOLD-XAU 1,300-1,309 1,319 1,328-1,332
Silver-XAG 15.05 15.30 15.60-16.00
Crude Oil 62.60 63.00 63.65-64.70
EURO/USD 1.1250 1.1280 1.1330-1.1360
GBP/USD 1.2890-1.2930 1.2970 1.3010-1.3060
USD/JPY 110.00-110.60 111.50 112.00-112.50

Intraday SUPPORTS LEVELS
16th May 2019 S1 S2 S3
GOLD-XAU 1,292-1,286 1,276 1,269-1,260
Silver-XAG 14.70-14.50 14.20 13.90-13.50
Crude Oil 62.00-61.20 60.80 60.00-59.60
EURO/USD 1.1200-1.1150 1.1100 1.1070-1.1020
GBP/USD 1.2790-1.2750 1.2720 1.2660
USD/JPY 109.55-109.05 108.40 107.70

Intra-Day Strategy (16th 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$1300.82/oz and low of US$1292.97/oz. Gold down by 0.0293% at US$1296.35/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 1286-1260 with risk below 1260, targeting 1300-1309-1319 and 13289-1332. Sell below 1300-1332 keeping stop loss closing above 1332, targeting 1294-1286-1276 ands 1269-1261.

 
Intraday Support Levels
S1     1,292-1,286
S2     1,276
S3     1,269-1,260
Intraday Resistance Levels
R1     1,300-1,309
R2     1,319
R3     1,328-1,332

Technical Indicators

Name   Value Action
14DRSI  

54.610

Buy
20-DMA   1281.67 Buy
50-DMA  

1291.65

Buy
100-DMA   1296.32 Buy
200-DMA   1255.07 Buy
STOCH(5,3)   74.073 Sell
MACD(12,26,9)   0.452 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$14.84/oz and low of US$14.76/oz. Silver settled up by 0.135% at US$14.78/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   14.93 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 Wednesday made an intra‐day high of US$62.52/bbl, intraday low of US$561.02/bbl and settled up by 1.251% to close at US$62.28/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 62.60-64.70 with stop loss at 64.70; targeting 62.00-61.50-60.80 and 60.10-59.60. Buy above 62.00-59.00 with risk daily closing below 59.00 and targeting 62.60-63.00 and 63.65-64.70.

 
Intraday Support Levels
S1     62.00-61.20
S2     60.80
S3     60.00-59.60

Intraday Resistance Levels
R1     62.60
R2     63.00
R3     63.65-64.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.980 Sell
20-DMA   63.07 Buy
50-DMA   61.55 Buy
100-DMA   57.17 Buy
200-DMA   60.42 Buy
STOCH(5,3)   31.130 Sell
MACD(12,26,9)   -0.144 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1177/EUR, high of US$1.1223/EUR and settled the day down by 0.026% to close at US$1.1199/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     1.1250
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 Tuesday made an intra‐day low of US$1.2825/GBP, high of US$1.2922/GBP and settled the day down by 0.488% to close at US$1.2839/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 1.2890-1.3100 with targets at 1.2790-1.2750 and 1.2720-1.2660 stop should be below 1.3100. Buy above 1.2800-1.2660 with targets 1.2890-1.2930-1.2970 and 1.3010-1.3060-1.3100 with stop loss closing below 1.2650.

 
Intraday Support Levels
S1     1.2790-1.2750
S2     1.2720
S3     1.2660

Intraday Resistance Levels
R1     1.2890-1.2930
R2     1.2970
R3     1.3010-1.3060

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.772

Buy
20-DMA   1.2987 Buy
50-DMA   1.3071 Sell
100-DMA   1.3011 Buy
200-DMA   1.2957 Buy
STOCH(5,3)   3.996 Sell
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY109.14/USD and made an intraday high of JPY109.69/USD and settled the day down by 0.0036% at JPY109.58/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

AAFX TRADING
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