AAFX TRADING

Daily Market Lookup

  • Asian shares suffered a fresh bout of the shakes on Friday as tough words on trade from China’s media drowned out upbeat news on the U.S. economy and corporate earnings. Sentiment had been briefly soothed overnight by better U.S. economic news, with U.S. housing starts surprisingly strong and a welcome pickup in the Philadelphia Federal Reserve’s manufacturing survey. Upbeat results from Walmart burnished the outlook for retail spending, though the giant chain also warned that tariffs would raise prices for U.S. consumers. Sterling was one of the worst performers as Britain’s Prime Minister Theresa May battled to keep her Brexit deal, and her premiership, intact amid growing fears of a disorderly departure from the European Union. Also under pressure was the Australian dollar, losing 1.5% for the week to $0.6890 as investors piled into bets that interest rates would be cut in June. the dollar has also strengthened again versus the Chinese yuan after Beijing’s rhetoric hardened. The offshore yuan fell to a six-month low of 6.9449, while the official rate rose above 6.90 for the first time since December. “We can’t see the U.S. has any substantial sincerity in pushing forward the talks,” an opinion column by the state-owned news agency Xinhua said. “If the U.S. ignores the will of the Chinese people, then it probably won’t get an effective response from the Chinese side.” Figures released earlier this week showed a sharp slowdown in both industrial production and retail sales in April, even before trade negotiations took a turn for the worse.
  • The Bank of Japan may maintain ultra-low rates for a further period of well over a year, governor Haruhiko Kuroda said on Friday, but warned against the idea of propping up the economy through unlimited money-printing to finance government spending. The BOJ last month modified its forward guidance, or a pledge on how it will guide future monetary policy, to say it will maintain current very low interest rates at least until the spring of 2020. Kuroda said while Japan’s economy continues to expand moderately, global growth was showing signs of weakness and hurting exports, output and manufacturers’ business sentiment. “If overseas growth takes longer than expected to pick up, Japanese companies - manufacturers in particular - could become cautious about spending on capital expenditure,” he said. After years of heavy asset buying failed to drive up inflation to its 2% target, the BOJ revamped its policy framework to one targeting interest rates from the pace of money printing in 2016. Under a policy dubbed yield curve control (YCC), the BOJ now pledges to guide short-term interest rates at minus 0.1% and the 10-year government bond yield around zero percent.
  • The U.S. dollar edged down on Friday in Asia but still hovered near a two-week high following the release of robust U.S. housing data and a better-than-expected weekly jobless claims report. The dollar rose earlier in the day after data showed that the number of people applying for unemployment benefits fell to 212,000 from the week prior, indicating that the U.S. economy continues to be strong despite the ongoing trade dispute with China. U.S. homebuilding also increased more than expected in April. Housing starts rose 5.7% to 1.235 million units last month, data showed. China’s stockpile of U.S. government notes, bonds and bills fell by $67.2 billion, a 5.6% decline, the CNBC reported, noting that more aggressive action to cutting could further aggravate trade negotiations. The GBP/USD pair was under pressure after reports that U.K. Prime Minister Theresa May will step down over the summer regardless of whether or not her Brexit withdrawal agreement passes. The prime minister has previously said she would step down if the plan is passed. The pound slipped after Theresa May told party colleagues she would set a timetable for her departure next month, irrespective of whether her proposed EU Withdrawal Agreement passes in the House of Commons at the fourth time of asking. That vote is pencilled in for the first full week of June, and there is little sign of it succeeding. Given the pro-Brexit mood among Conservative party members, it’s likely that May will be replaced by a “Hard Brexiteer” more comfortable with the prospect of leaving the EU without a deal. Reports that the former Foreign Secretary Boris Johnson had confirmed he would run for the leadership were directly responsible for much of sterling’s slide on Thursday.
  • Oil prices rose on Friday in Asia and extended gains into a fourth straight day amid intensifying Middle East tensions. The gain in oil prices today came after Saudi Arabia’s vice-minister of defence and brother of the country’s de facto ruler Khalid bin Salman said on Twitter that a drone attack on Tuesday was ordered by Iran. The report raised concerns that the world’s largest oil-producing region is edging toward another war and boosted oil prices higher. Earlier on Sunday, the Saudis said two of their oil tankers were damaged in attacks carried out on the vessels while they were on the Persian Gulf. Iran, under U.S. sanctions that prevent its oil from being sold anywhere in the world, has openly warned the other oil producers in the Middle East as well as the U.S. in recent weeks of "consequences" for their actions. “Anyone who knows the Middle East knows that there are plenty of tripwires and the risk of escalation is always there,” said Tamar Essner, director for energy at Nasdaq Corporate Solutions in New York. “With every attack that goes off, the risk and the stakes go higher.” U.S. President Donald Trump has told his top advisers he does not want to get the U.S. involved in a war with Iran, Reuters reported on Thursday citing three U.S. officials.

 

 
Intraday RESISTANCE LEVELS
17th May 2019 R1 R2 R3
GOLD-XAU 1,292-1,300 1,309 1,319-1,328
Silver-XAG 14.70-15.05 15.30 15.60-16.00
Crude Oil 63.65-64.70 65.50 66.00
EURO/USD 1.1200-1.1250 1.1280 1.1330-1.1360
GBP/USD 1.2850-1.2890 1.2930 1.2970-1.3010
USD/JPY 110.00-110.60 111.50 112.00-112.50

Intraday SUPPORTS LEVELS
17th May 2019 S1 S2 S3
GOLD-XAU 1,284 1,276 1,269-1,260
Silver-XAG 14.50-14.20 13.90 13.50-13.20
Crude Oil 63.00-62.60 62.00 61.20-60.80
EURO/USD 1.1150 1.1100 1.1200-1.1250
GBP/USD 1.2780-1.2750 1.2720 1.2660
USD/JPY 109.55-109.05 108.40 107.70

Intra-Day Strategy (17th 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$1298.59/oz and low of US$1286.49/oz. Gold down by 0.774% at US$1286.49/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 1284-1260 with risk below 1260, targeting 1300-1309-1319 and 13289-1332. Sell below 1292-1332 keeping stop loss closing above 1332, targeting 1294-1286-1276 ands 1269-1261.

 
Intraday Support Levels
S1     1,284
S2     1,276
S3     1,269-1,260
Intraday Resistance Levels
R1     1,292-1,300
R2     1,309
R3     1,319-1,328

Technical Indicators

Name   Value Action
14DRSI  

49.090

Buy
20-DMA   1282.73 Buy
50-DMA  

1291.73

Buy
100-DMA   1296.72 Buy
200-DMA   1255.85 Buy
STOCH(5,3)   38.505 Sell
MACD(12,26,9)   0.352 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$14.80/oz and low of US$14.51/oz. Silver settled down by 1.503% at US$14.54/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     14.50-14.20
S2     13.90
S3     13.50-13.20

Intraday  Resistance Levels
R1     14.70-15.05
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$63.66/bbl, intraday low of US$62.24/bbl and settled up by 1.516% to close at US$63.26/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 63.60-66.00 with stop loss at 66.00; targeting 63.00-62.00-61.50 and 60.80-60.10-59.60. Buy above 63.00-59.00 with risk daily closing below 59.00 and targeting 63.65-64.70 and 65.50-66.00.

 
Intraday Support Levels
S1     63.00-62.60
S2     62.00
S3     61.20-60.80

Intraday Resistance Levels
R1     63.65-64.70
R2     65.50
R3     66.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.2338 Sell
20-DMA   63.01 Buy
50-DMA   61.82 Buy
100-DMA   57.55 Buy
200-DMA   60.37 Buy
STOCH(5,3)   55.130 Sell
MACD(12,26,9)   -0.144 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1165/EUR, high of US$1.1223/EUR and settled the day down by 0.241% to close at US$1.1173/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 1.1150-1.1020 with risk below 1.1020, targeting 1.1200-1.1230 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     1.1150
S2     1.1100
S3     1.1200-1.1250

Intraday  Resistance Levels
R1     1.1200-1.1250
R2     1.1280
R3     1.1330-1.1360

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.928 Buy
20-DMA   1.1193 Sell
50-DMA   1.1244 Sell
100-DMA   1.1308 Sell
200-DMA   1.1392 Sell
STOCH(5,3)   16.157 Buy
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2786/GBP, high of US$1.2851/GBP and settled the day down by 0.373% to close at US$1.2791/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 1.2850-1.2790-1.2750 and 1.2720-1.2660 stop should be below 1.3100. Buy above 1.2780-1.2660 with targets 1.2850-1.2890-1.2930 and 1.2970-1.3010-1.3060 with stop loss closing below 1.2660.

 
Intraday Support Levels
S1     1.2780-1.2750
S2     1.2720
S3     1.2660

Intraday Resistance Levels
R1     1.2850-1.2890
R2     1.2930
R3     1.2970-1.3010

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

31.947

Buy
20-DMA   1.2964 Buy
50-DMA   1.3060 Sell
100-DMA   1.3013 Buy
200-DMA   1.2955 Buy
STOCH(5,3)   4.996 Sell
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY109.33/USD and made an intraday high of JPY109.69/USD and settled the day up by 0.238% at JPY109.83/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   34.803 Buy
20-DMA   110.74 Sell
50-DMA   111.06 Sell
100-DMA   110.48 Buy
200-DMA   111.43 Sell
STOCH(9,6)   64.955 Sell
MACD(12,26,9)   -0.499 Buy

AAFX TRADING
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING