AAFX TRADING

Daily Market Lookup

  • Asian shares won some respite on Tuesday after Washington temporarily eased trade restrictions imposed last week on China’s Huawei, although fears of a further escalation in tensions kept investors on edge. Still, an increasingly acrimonious atmosphere between the world’s two biggest economies has led investors to abandon any hopes of an early resolution, a sea change from just a few weeks ago when a deal was considered to be within reach. Markets showed scant reaction to a speech by Federal Reserve Chairman Jerome Powell, who dismissed comparisons between the rise of business debt to record levels in recent years and the conditions in U.S. mortgage markets that preceded the 2007-to-2009 economic crisis. In the foreign exchange market, major currencies were on the sidelines for now. The euro was under pressure ahead of the European election this weekend but was little moved at $1.1158, off Monday’s low of $1.1150, its lowest since May 3. The British pound was listless near four-month lows, trading at $1.2723, just a stone’s throw from Friday’s low of $1.2714, as embattled UK Prime Minister Theresa May struggled to pull together a Brexit deal.
  • The dollar was steady near a 2-1/2-week high on Tuesday, supported by higher U.S.-yields and its safe-haven status, with growing worries that the U.S.-China trade war could worsen following Washington's crackdown on China's Huawei Technologies. Global equities have taken a hit this week, with share prices in chipmakers falling in the wake of the U.S. moves against Huawei. Federal Reserve Chair Jerome Powell said on Monday that it was premature to make a judgment about the impact trade and tariff issues could have on monetary policy. The euro was flat at $1.1165 after slipping to $1.1150 the previous day, its lowest since May 3. The single currency is expected to remain on a nervous footing through the May 23-26 European parliamentary election. The dollar hit a fresh three-week high against its developed-market peers in early trading in Europe Tuesday, after Federal Reserve Chairman Jerome Powell indirectly argued against cutting interest rates in the near term due to the already-high level of corporate debt. Even so, he pushed back against suggestions that the corporate debt situation resembled the days before the financial crisis in 2007, saying the comparison was “not fully convincing”. In part, that reflected a sharp rise against the Aussie and kiwi after Reserve Bank of Australia Governor Philip Lowe said the bank would examine the case for cutting its cash rate at its next policy meeting in June. Elsewhere, the Chinese yuan remained broadly stable as the trade tension between the U.S. and China subsided marginally. The Commerce Department said it would offer U.S. companies a temporary exemption – in specific cases - from the ban on selling to telecoms giant Huawei that was at the heart of Monday’s volatility. Europe’s stock markets opened with a modest relief rally. In Europe, both the euro and the British pound remain under pressure from the revived threat of a ‘Hard Brexit’ and from the rhetoric around the European parliament elections that start on Thursday. The EUR/USD pair was down 0.2% at $1.1149 while GBP/USD was also down 0.2% at a four-month low of $1.2703, amid reports that the moderate wing of the Conservative Party aims to stop the next party leader (and Prime Minister) from taking the U.K. out of the EU without transitional arrangements. The news underlines how hard it will be to break the political deadlock around Brexit.
  • Oil prices rose on Tuesday on escalating U.S.-Iran tensions and amid expectations that producer club OPEC will continue to withhold supply this year. But gains were checked by concerns that a prolonged trade war between Washington and Beijing could lead to a global economic slowdown. U.S. President Donald Trump on Monday threatened Iran with "great force" if it attacked U.S. interests in the Middle East. This came after a rocket attack in Iraq's capital Baghdad, which Washington suspects to have been organized by militia with ties to Iran. Iran said on Tuesday that it would resist U.S. pressure, declining further talks under current circumstances. The tension comes amid an already tight market as the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers have been withholding supply since the start of the year to prop up prices. A meeting has been scheduled for June 25-26 to discuss the policy, but the group is now considering moving the event to July 3-4, according to OPEC sources on Monday, with its de-facto leader Saudi Arabia signaling a willingness to continue withholding output. Price gains were constrained by pressure on financial markets, which have this week been weighed down by worries that the United States and China are digging in for a long, costly trade war that could result in a broad global slowdown. Singapore, seen as a bellwether for the health of the global economy, on Tuesday posted its lowest quarterly growth in nearly a decade of 1.2 percent year-on-year. Growth in Thailand, a key Asian emerging market, also slowed to a multi-year low.

 

 
Intraday RESISTANCE LEVELS
21st 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 63.65-64.70 65.50 66.00
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
21st 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 63.00-62.60 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 (21st 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$1278.95/oz and low of US$1273.59/oz. Gold up by 0.001% at US$1277.61/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 Monday made its intraday high of US$14.46/oz and low of US$14.37/oz. Silver settled down by 0.389% at US$14.45/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 Monday made an intra‐day high of US$63.94/bbl, intraday low of US$62.58/bbl and settled up by 0.174% to close at US$63.25/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 63.65-66.00 with stop loss at 66.00; targeting 62.60-62.00-61.50 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   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 Monday made an intraday low of US$1.1149/EUR, high of US$1.1174/EUR and settled the day up by 0.051% to close at US$1.1161/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 Monday made an intra‐day low of US$1.2713/GBP, high of US$1.2765/GBP and settled the day down by 0.047% to close at US$1.2722/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  

1.2964

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 Monday made intra‐day low of JPY109.80/USD and made an intraday high of JPY110.31/USD and settled the day down by 0.0281% at JPY110.05/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

AAFX TRADING
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