AAFX TRADING

Daily Market Lookup

  • Asian shares broke support and caved to a four-month low on Thursday, as concerns grew that the Sino-U.S. trade conflict was fast morphing into a prolonged technology cold war between the world’s two largest economies. Investors worry that the U.S.-China trade dispute, which has already hurt global growth and business investment, could see a further sharp escalation with no signs of a resolution as yet. Late Wednesday, Reuters reported the U.S. administration was considering Huawei-like sanctions on Chinese video surveillance firm Hikvision over the country’s treatment of its Uighur Muslim minority, according to a person briefed on the matter. Treasury Secretary Steven Mnuchin said on Wednesday it would be at least a month before the United States would enact proposed tariffs on $300 billion in Chinese imports as it studies the impact on American consumers. Minutes of the U.S. Federal Reserve’s last meeting out on Wednesday underlined its readiness to be patient on policy “for some time” given the uncertain global outlook The chance of a rate cut seemed to diminish as many Fed policy makers saw recent weakness in inflation as “transitory”, though the latest escalation in the trade war means markets are still wagering on an eventual easing. British Prime Minister Theresa May came under intense pressure after her latest Brexit gambit backfired and fueled calls for her to quit. Prominent Brexit supporter Andrea Leadsom resigned from the government on Wednesday and British media reported May could announce her departure date as early as Friday.
  • The dollar was higher across the board in early trade in Europe Wednesday, as the reportedly imminent exit of British Prime Minister Theresa May over the Brexit shambles depressed the pound and made for an awkward backdrop to European parliament elections that start today. At 03:00 AM ET (0700 GMT), the GBP/USD pair was at $1.2605, a new 2019 low, resuming its fall after Andrea Leadsom, the lawmaker tasked with organizing the government’s business in the House of Commons, resigned rather than introduce May’s revised EU Withdrawal Agreement bill. The Times of London reported that many of May's lawmakers expected May now to resign within the next day or two. The dollar index, which measures the greenback against a basket of six major currencies, was at a new two-year high of 98.13 as the pound slid, although it was also helped by the minutes from the last meeting of the Federal Reserve’s Federal Open Market Committee, which again underlined how far the central bank is from cutting interest rates. That news also pushed the dollar to fresh highs for the year against the Aussie and kiwi overnight, while the Chinese yuan also slid 0.2% on worsening fears over the trade outlook. While the European parliament elections are in focus in Europe, the main market news of the day will come from the string of ‘flash’ purchasing managers’ indexes, which will cast light on whether the world’s manufacturers are overcoming the weak start they had to 2019, or whether the trade frictions between the U.S. and China are having longer-term effects. A preliminary PMI for the euro zone is due at 4 AM ET (0800 GMT), along with the German ifo business climate indexLast month, European Central Bank President Mario Draghi raised the prospect of more support for the struggling euro zone economy if its slowdown persists and Thursday’s survey is likely to add to the concerns of policymakers. IHS Markit’s Flash Composite Purchasing Managers’ Index (PMI), which is considered a good guide to economic health, only nudged up to 51.6 this month from a final April reading of 51.5, below the median expectation in a Reuters poll for 51.7. In part due to factories completing old orders, the small increase in the key composite number was because an index measuring factory output, which feeds into the composite PMI, rose to 49.0 from 48.0. But the flash manufacturing PMI spent its fourth month below the 50 mark separating growth from contraction, falling to 47.7 from 47.9 despite expectations for a rise to 48.1. Suggesting factory managers are growing increasingly pessimistic, they cut staffing levels for the first time since August 2014. The employment index dropped to 49.0 from 50.7. The manufacturing PMI means the sector would have a 0.1-0.2 percentage point drag on an economy currently being supported by a struggling services industry, Williamson said. Growth in the bloc’s dominant services sector slowed and its flash PMI fell to 52.5 from 52.8, confounding expectations in a Reuters poll which predicted a modest rise to 53.0.
  • Oil prices dropped by around 1% on Thursday, extending falls from the previous session amid surging U.S. crude inventories and weak demand from refineries. U.S. crude oil inventories rose last week, hitting their highest levels since July 2017, due to weak refinery demand, the Energy Information Administration said on Wednesday. Commercial U.S. crude inventories rose by 4.7 million barrels in the week ended May 17, to 476.8 million barrels, their highest since July 2017, the EIA data showed. Beyond weak refinery demand for feedstock crude oil, the increase in commercial inventories also came on the back of planned sales of U.S. strategic petroleum reserves (SPR) into the commercial market.U.S. crude oil production climbed by 100,000 barrels per day (bpd) to 12.2 million bpd, putting output near its record of 12.3 million bpd reached late last month. Ole Hansen, head of commodity strategy at Saxo Bank, said “concerns about slowing (oil) demand growth due to the negative impact on the global economy of the U.S.–China trade war” were also weighing on oil prices. Countering these bearish price factors have been escalating political tensions between the United States and Iran, as well as ongoing supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) that started in January in an effort to prop up the market.

 

 
Intraday RESISTANCE LEVELS
23rd May 2019 R1 R2 R3
GOLD-XAU 1,276-1,284 1,292 1,300-1,309
Silver-XAG 14.50-15.05 15.30 15.60-16.00
Crude Oil 61.20-62.00 62.50 63.00-63.65
EURO/USD 1.1200-1.1250 1.1280 1.1330-1.1360
GBP/USD 1.2660-1.2700 1.2750 1.2780-1.2850
USD/JPY 110.60 111.50 112.00-112.50

Intraday SUPPORTS LEVELS
23rd May 2019 S1 S2 S3
GOLD-XAU 1,269-1,260 1,254 1,246
Silver-XAG 14.20 13.90 13.50-13.20
Crude Oil 60.80-60.40 60.00 59.00-58.25
EURO/USD 1.1100 1.1070-1.1020 1.0950
GBP/USD 1.2600-1.2550 1.2500 1.2450
USD/JPY 110.00-109.55 109.05 108.40-107.70

Intra-Day Strategy (23rd 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 Tuesday made its intraday high of US$1277.24/oz and low of US$1272.23/oz. Gold down by 0.108% at US$1273.23/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 1272-1254 with risk below 1254, targeting 1276-1284-1292 and 1300-1309. Sell below 1276-1319 keeping stop loss closing above 1319, targeting 1269-1261 and 1254-1246.

 
Intraday Support Levels
S1     1,269-1,260
S2     1,254
S3     1,246
Intraday Resistance Levels
R1     1,276-1,284
R2     1,292
R3     1,300-1,309

Technical Indicators

Name   Value Action
14DRSI  

40.563

Buy
20-DMA   1282.45 Buy
50-DMA  

1290.21

Buy
100-DMA   1296.53 Buy
200-DMA   1256.75 Buy
STOCH(5,3)   14.505 Sell
MACD(12,26,9)   0.316 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$14.48/oz and low of US$14.42/oz. Silver settled up by 0.0832% at US$14.42/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 Wednesday made an intra‐day high of US$62.97/bbl, intraday low of US$61.07/bbl and settled down by 2.59% to close at US$62.29/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 61.20-63.65 with stop loss at 63.65; targeting 60.80-60.40-60.00 and 59.60-59.00-58.25. Buy above 60.80-58.25 with risk daily closing below 58.00 and targeting 61.20-62.00-62.50 and 63.00-63.65-64.00.

 
Intraday Support Levels
S1     60.80-60.40
S2     60.00
S3     59.00-58.25

Intraday Resistance Levels
R1     61.20-62.00
R2     62.50
R3     63.00-63.65

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.700 Sell
20-DMA   62.55 Buy
50-DMA   61.18 Buy
100-DMA   58.07 Buy
200-DMA   60.32 Buy
STOCH(5,3)   60.130 Sell
MACD(12,26,9)   -0.082 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1147/EUR, high of US$1.1179/EUR and settled the day down by 0.896% to close at US$1.1149/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 1.1100-1.0950 with risk below 1.0950, targeting 1.1200-1.1250 and 1.1280-1.1305-1.1350. Sell below 1.1200-1.1360 targeting 1.1100-1.1070 and 1.1020-1.0950 with stop-loss at daily closing above 1.0950.

 
Intraday Support Levels
S1     1.1100
S2     1.1070-1.1020
S3     1.0950

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 Wednesday made an intra‐day low of US$1.2623/GBP, high of US$1.2718/GBP and settled the day down by 0.346% to close at US$1.2659/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 in oversold territory and giving positive 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 1.2700-1.2890 with targets at 1.2660-1.2600 and 1.2550-1.2500 stop should be below 1.2890. Buy above 1.2660-1.2500 with targets 1.2700-1.2750-1.2850 and 1.2890-1.2930 with stop loss closing below 1.2500.

 
Intraday Support Levels
S1     1.2600-1.2550
S2     1.2500
S3     1.2450

Intraday Resistance Levels
R1     1.2660-1.2700
R2     1.2750
R3     1.2780-1.2850

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

25.947

Buy
20-DMA   1.2925 Buy
50-DMA   1.3029 Sell
100-DMA   1.3013 Buy
200-DMA   1.2954 Buy
STOCH(5,3)   4.996 Buy
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY110.23/USD and made an intraday high of JPY110.62/USD and settled the day up by 0.120% at JPY110.34/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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