AAFX TRADING

Daily Market Lookup

  • Asian shares steadied on Monday as investors caught their breath following another week of escalating U.S.-China trade tensions, with sentiment turning brighter after the United States said it would lift tariffs in North America. The U.S. announced on Friday that it would remove tariffs on Canadian steel and aluminum, prompting Canada’s foreign minister to vow the quick ratification of a new North American trade agreement. The cautious optimism failed to lift Chinese blue chips, which fell 1%. Modest gains on Monday came even as financial markets remained on edge over the intensifying Sino-U.S. trade war, with the Trump administration last week adding Huawei Technologies Co Ltd to a trade blacklist. Noting the festering trade war, continued uncertainty over Brexit and rising tensions between the United States and Iran, McKenna said investors are currently “headline trading.”
  • The dollar added 0.1% to 110.215, building on last week's gains, when it booked its first weekly advance against the Japanese currency in five weeks. The yen dipped on a slight improvement in risk appetite, with data showing the Japanese economy unexpectedly accelerated in the last quarter, defying expectations for a mild contraction. The world's third-biggest economy grew at an annualized rate of 2.1%, government data showed, accelerating slightly from the previous quarter thanks to net export gains. The euro was steady at $1.1155, having dropped last week on comments from Italian Deputy Prime Minister Matteo Salvini that European Union rules harm his country. Investors' focus this week is on the May 23-26 elections for the new European Parliament. Market participants will also watch out European readings for a private purchasing managers' index that measures activity in services and manufacturing due on Thursday, after data last week showed the German economy returned to growth in the first quarter of 2019.
  • The Chinese yuan rose against the U.S. dollar on Monday in Asia. In a report published late Friday, the People’s Bank of China (PBOC) said they would continue with stimulus while keeping the currency steady. In its quarterly monetary policy report, the PBOC said “trade friction and uncertainties in global policy could impact the global economy negatively.” The central bank added that inflation could be driven up if the trade war with the U.S. drags on, damaging household and corporate confidence and causing financial market turbulence. The pair sank to as low as 0.6868 last week amid a rise in the unemployment rate in April and diminishing hopes that the Sino-U.S. trade spat would be ended soon. Last week, the pair fell to the lowest since January after cross-party Brexit talks collapsed and concern grew about the impact Prime Minister Theresa May’s likely resignation would have on Britain’s exit from the EU. Also in focus was the news that the White House said U.S. President Donald Trump is delaying a decision for as long as six months on whether to impose tariffs on imported cars and parts to allow for more time for trade talks with the EU and Japan. Data showed the country’s first quarter GDP came in at 2.1%, outperformed expectations of a 0.2% contraction. However, traders remained cautious as the expansion was mostly due to imports declining faster than exports, likely reflecting weak domestic demand. The U.S. dollar index that tracks the greenback against a basket of other currencies was trading near flat at 97.863. Data on Friday showed U.S. consumer sentiment jumped to a 15-year high in early May on growing confidence over the economy’s outlook, though much of the surge was recorded before the trade war escalation.
  • Oil rose to multi-week highs on Monday after OPEC indicated it would probably maintain production cuts that have helped support prices this year, while tension continued to escalate in the Middle East. Saudi Energy Minister Khalid al-Falih said on Sunday there was consensus among the Organization of the Petroleum Exporting Countries (OPEC) and allied oil producers to drive down crude inventories "gently" but he would remain responsive to the needs of a "fragile market". United Arab Emirates (UAE) Energy Minister Suhail al-Mazrouei earlier told reporters that producers were capable of filling any market gap and that relaxing supply cuts was not the right decision. U.S. President Donald Trump threatened Tehran on Sunday, tweeting that a conflict would be the "official end" of Iran, while Saudi Arabia said it was ready to respond with "all strength" and it was up to Iran to avoid war. The rhetoric follows last week's attacks on Saudi oil assets and the firing of a rocket on Sunday into Baghdad's heavily fortified "Green Zone" that exploded near the U.S. embassy. OPEC, Russia and other non-member producers, an alliance known as OPEC+, agreed to cut output by 1.2 million barrels per day (bpd) from Jan. 1 for six months to prevent inventories from increasing and weakening prices.Another bullish signal was a second week of declines in U.S. drilling operations, with energy companies cutting oil rigs to the lowest since March 2018. The rig count, an early indicator of future output, fell by 3 to 802, General Electric (NYSE:GE) Co's Baker Hughes energy services unit said on Friday. The OPEC will make an official decision on production cuts on June 25. In other news, U.S. President Donald Trump’s tweets that said “If Iran wants to fight, that will be the official end of Iran” were cited as another catalyst for the buying in oil. traders are also paying close attention to the developments in the Sino-U.S. trade war. Last week, oil prices were under some pressure after China’s state-run media expressed impatience over the trade negotiations. Hopes that the trade war would end soon diminished after the U.S. imposed sanctions on Chinese telecom giant Huawei and made it more difficult for the company to conduct business with U.S. firms.

 

 
Intraday RESISTANCE LEVELS
20th May 2019 R1 R2 R3
GOLD-XAU 1,284-1,292 1,300 1,309-1,319
Silver-XAG 14.50-15.05 15.30 15.60-16.00
Crude Oil 63.00 63.65-64.70 65.50
EURO/USD 1.1200-1.1250 1.1280 1.1330-1.1360
GBP/USD 1.2750-1.2780 1.2850 1.2890-1.2930
USD/JPY 110.60 111.50 112.00-112.50

Intraday SUPPORTS LEVELS
20th May 2019 S1 S2 S3
GOLD-XAU 1,276 1,269-1,260 1,254
Silver-XAG 14.20 13.90 13.50-13.20
Crude Oil 62.60 62.00 61.20-60.80
EURO/USD 1.1150 1.1100 1.1070-1.1020
GBP/USD 1.2700-1.2660 1.2600 1.2550
USD/JPY 110.00-109.55 109.05 108.40-107.70

Intra-Day Strategy (20th 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 Friday made its intraday high of US$1298.60/oz and low of US$1284.03/oz. Gold down by 0.776r% at US$1286.50/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 1276-1254 with risk below 1254, targeting 1284-1292-1300 and 1309-1319. Sell below 1284-1319 keeping stop loss closing above 1319, targeting 1276-1269 and 1261-1254.

 
Intraday Support Levels
S1     1,276
S2     1,269-1,260
S3     1,254
Intraday Resistance Levels
R1     1,284-1,292
R2     1,300
R3     1,309-1,319

Technical Indicators

Name   Value Action
14DRSI  

43.638

Buy
20-DMA   1282.31 Buy
50-DMA  

1291.57

Buy
100-DMA   1296.64 Buy
200-DMA   1255.82 Buy
STOCH(5,3)   33.505 Sell
MACD(12,26,9)   0.316 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$14.54/oz and low of US$14.38/oz. Silver settled down by 0.758% at US$14.40/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 14.20-13.50 targeting 14.50-15.05-15.30 and 15.60-15.90; stop breakage below 13.50. Sell below 14.50-16.00 with stop loss above 16.00; targeting 14.20-13.90 and 13.50-13.20.

 
Intraday  Support Levels
S1     14.20
S2     13.90
S3     13.50-13.20

Intraday  Resistance Levels
R1     14.50-15.05
R2     15.30
R3     15.60-16.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   30.5999 Buy
20-DMA   14.80 Sell
50-DMA   15.05 Sell
100-DMA   15.32 Sell
200-DMA   14.91 Sell
STOCH(5,3)   22.246 Sell
MACD(12,26,9)   -0.129 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$63.79/bbl, intraday low of US$62.68/bbl and settled down by 0.688% to close at US$62.86/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 63.00-66.00 with stop loss at 66.00; targeting 62.60-62.00-61.50 and 60.80-60.10-59.60. Buy above 62.60-59.00 with risk daily closing below 59.00 and targeting 63.65-64.70 and 65.50-66.00.

 
Intraday Support Levels
S1     62.60
S2     62.00
S3     61.20-60.80

Intraday Resistance Levels
R1     63.00
R2     63.65-64.70
R3     65.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.700 Sell
20-DMA   62.99 Buy
50-DMA   61.81 Buy
100-DMA   57.54 Buy
200-DMA   60.37 Buy
STOCH(5,3)   71.130 Buy
MACD(12,26,9)   -0.144 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1154/EUR, high of US$1.1183/EUR and settled the day down by 0.147% to close at US$1.1156/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     1.1070-1.1020

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 Friday made an intra‐day low of US$1.2711/GBP, high of US$1.2797/GBP and settled the day down by 0.555% to close at US$1.2720/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     1.2700-1.2660
S2     1.2600
S3     1.2550

Intraday Resistance Levels
R1     1.2750-1.2780
R2     1.2850
R3     1.2890-1.2930

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 Friday made intra‐day low of JPY109.48/USD and made an intraday high of JPY110.18/USD and settled the day up by 0.203% at JPY110.06/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 110.60-113.00 with risk above 113.00 targeting 110.00-109.55-109.05 and 108.40-107.70. Long positions above 110.00-107.70 with targets of 110.00-110.60-111.5 and 111.90-112.25 with stop below 107.50.

 
Intraday Support Levels
S1     110.00-109.55
S2     109.05
S3     108.40-107.70

INTRADAY RESISTANCE LEVELS
R1     110.60
R2     111.50
R3     112.00-112.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.871 Buy
20-DMA   110.76 Sell
50-DMA   111.07 Sell
100-DMA   110.49 Buy
200-DMA   111.43 Sell
STOCH(9,6)   74.955 Sell
MACD(12,26,9)   -0.466 Buy

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