AAFX TRADING

Daily Market Lookup

  • U.S. stock futures and commodity prices slipped while bonds rallied on Monday on worries an intensifying Sino-U.S. trade tussle and Washington’s new tariff threats against Mexico could tip the global economy into a recession. A private survey on Chinese manufacturing sector published on Monday suggested a modest expansion in factory activity as export orders bounced from a contraction. Yet economists noted the increase in new export orders point to possible front-loading of U.S.-bound shipments to avoid potential tariff hikes that U.S. President Donald Trump had threatened to slap on another $300 billion of Chinese goods. A run of Chinese data recently, including an official survey on the nation’s manufacturing industry last week, also showed rising pressure across the world’s no. 2 economy. Indeed, factory activity contracted in most Asian countries last month as businesses came under pressure from the bitter trade war between Washington and Beijing. Sino-U.S. tensions escalated during the weekend as the two countries clashed over trade, technology and security. A senior Chinese official and trade negotiator said on Sunday the United States cannot use pressure to force a trade deal on China, refusing to be drawn on whether the leaders of the two countries would meet at the G20 summit to work out an agreement later this month. China will investigate whether FedEx Corp damaged the legal rights and interests of its clients, the official Xinhua news agency said on Saturday, after Chinese telecoms giant Huawei said parcels intended for it were diverted. The comments came after acting U.S. Defence Secretary Patrick Shanahan told the meeting on Saturday that the United States would no longer “tiptoe” around Chinese behavior in Asia. The gloomy economic outlook has prompted traders to increase bets that the U.S. Federal Reserve will cut interest rates sooner rather than later. Fed funds rate futures are now almost fully pricing in two rate cuts this year, one by September, with more than 50 percent chance of a move by July 30-31. JPMorgan now expects the Fed to cut rates twice this year, a major change from its previous forecast that rates will stay on hold until the end of 2020.
  • China’s factory activity expanded at a steady but modest pace in May, a private survey showed, but analysts say front-loading of exports by firms to the United States to avoid higher tariffs masked underlying weakness in the economy. Manufacturers in the world’s second-biggest economy have come under severe pressure recently from an escalating trade dispute with the United States. An official gauge on factory activity last week showed conditions deteriorating as both domestic and external demand slackened. Monday’s Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) also showed only modest expansion at 50.2, unchanged from April, and above economists’ expectations of 50.0. While it marked the third-month the index has stayed above the neutral 50-mark dividing expansion from contraction, output growth slipped and businesses were the least optimistic on production since the survey series began in April 2012. Growth of new orders picked up in May, although the rate of expansion remained marginal. Survey respondents attributed increased sales to stronger foreign demand and new product launches, with new export orders rising at its fastest pace since January after contracting in April.
  • The U.S. dollar was trading near one-week lows against a currency basket on Monday, with the yen and the Swiss franc, seen as safe havens in time of uncertainty, gaining ground as global trade tensions escalated. With the U.S. administration's combative stance on trade widening to countries beyond China, and with China threatening more countermeasures over the weekend, markets have started to price in a sharp slowdown in global growth. Those fears have been reflected in an 11% drop in the price of oil since Thursday. U.S. and Mexican officials are preparing for talks later in the day after U.S. President Donald Trump vowed to impose tariffs on all Mexican imports in an intensifying dispute over migration. On Friday, the Japanese currency had booked its sharpest daily rise in more than two years, climbing a little over 1.2% during the session. The yen is considered a safe haven asset in times of geopolitical and financial turmoil as Japan is the world's biggest creditor nation. The dollar dipped after benchmark 10-year U.S. Treasury yields hit as low as 2.12% on Monday, their lowest since September 2017. German 10-year government bonds have fallen to -0.20%, their lowest ever, on fears that the ruling coalition may collapse after the resignation of Andrea Nahles, as head of the Social Democratic Party, the junior partner in the coalition.
  • Oil prices extended losses on Monday in Asia After a 3% slump last Friday amid tension between Mexico and the U.S. Oil markets lost about 3% on Friday after Trump vowed to impose a tariff on all goods coming from Mexico, starting at 5% and ratcheting higher until the flow of people ceases.Tariff on Mexican imports, larger-than-expected crude inventories data, and an escalating trade war between the U.S. and China were all cited as catalysts for the drop in oil prices. The American Petroleum Institute will release its weekly report on oil stockpiles on Tuesday, while the EIA is due to publish its report the following day. Oil has now fallen around 20% from late April, wiping out about half of its rally in the earlier part of the year, mainly due to the increasingly fraught global trade environment. While a tense situation in the Middle East has been supporting prices somewhat, the White House indicated over the weekend that it would be willing to negotiate with Iran without preconditions. Meanwhile, whether Russia keeps cooperating with Saudi Arabia on production cuts is shaping up as an important price driver over the next few months.

 

 
Intraday RESISTANCE LEVELS
3rd June 2019 R1 R2 R3
GOLD-XAU 1316-1,324 1,331 1,340
Silver-XAG 14.70-15.05 15.30 15.60-16.00
Crude Oil 53.50-54.00 54.80 55.50-56.00
EURO/USD 1.1200 1.1250 1.1280-1.1330
GBP/USD 1.2650-1.2700 1.2780-1.2850 1.2780-1.2850
USD/JPY 109.05-109.50 110.00 110.60-111.50

Intraday SUPPORTS LEVELS
3rd June 2019 S1 S2 S3
GOLD-XAU 1,309-1,300 1,294 1,284-1,276
Silver-XAG 14.30 13.90 13.50-13.20
Crude Oil 52.50-51.90 51.40 50.90-50.00
EURO/USD 1.1150-1.1100 1.1070 1.1020-1.0950
GBP/USD 1.2600 1.2550 1.2500-1.2450
USD/JPY 108.40-107.70 107.00 106.50

Intra-Day Strategy (3rd June 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$1306.89/oz and low of US$1287.90/oz. Gold up by 1.324% at US$1305.37/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 positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1309-1276 with risk below 1276, targeting 1309-1321. Sell below 1316-1340 keeping stop loss closing above 1354, targeting 1309-1300-1294 and 1284-1276.

 
Intraday Support Levels
S1     1,309-1,300
S2     1,294
S3     1,284-1,276
Intraday Resistance Levels
R1     1316-1,324
R2     1,331
R3     1,340

Technical Indicators

Name   Value Action
14DRSI  

67.425

buy
20-DMA   1286.76 Sell
50-DMA  

1287.55

Sell
100-DMA   1296.68 Sell
200-DMA   1260.84 Buy
STOCH(5,3)   80.621 Buy
MACD(12,26,9)   2.940 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$14.56/oz and low of US$14.46/oz. Silver settled up by 0.593% at US$14.56/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 14.30-13.50 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 14.30-13.90 and 13.50-13.20.

 
Intraday  Support Levels
S1     14.30
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   42.244 Buy
20-DMA   14.60 Sell
50-DMA   14.87 Sell
100-DMA   15.21 Sell
200-DMA   14.88 Sell
STOCH(5,3)   37.246 Buy
MACD(12,26,9)   -0.126 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$56.66/bbl, intraday low of US$53.09/bbl and settled down by 5.60% to close at US$53.35/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 53.50-56.00 with stop loss at 56.00; targeting 53.50-54.00-54.80 and 55.50-56.00. Buy above 53.50-56.00 with risk daily closing below 56.00 and targeting 53.50-54.00 and 54.80-55.50-56.00.

 
Intraday Support Levels
S1     52.50-51.90
S2     51.40
S3     50.90-50.00

Intraday Resistance Levels
R1     53.50-54.00
R2     54.80
R3     55.50-56.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   22.196 Sell
20-DMA   60.11 Sell
50-DMA   61.82 Sell
100-DMA   58.65 Sell
200-DMA   59.96 Sell
STOCH(5,3)   6.130 Sell
MACD(12,26,9)   -1.906 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1159/EUR, high of US$1.1189/EUR and settled the day up by 0.360% to close at US$1.1172/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 1.1150-1.0950 with risk below 1.0950, targeting 1.1200-1.1250 and 1.1280-1.1305-1.1350. Sell below 1.1150-1.1360 targeting 1.1100-1.1070 and 1.1020-1.0950 with stop-loss at daily closing above 1.0950.

 
Intraday Support Levels
S1     1.1150-1.1100
S2     1.1070
S3     1.1020-1.0950

Intraday  Resistance Levels
R1     1.1200
R2     1.1250
R3     1.1280-1.1330

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.798 Buy
20-DMA   1.1179 Sell
50-DMA   1.1208 Sell
100-DMA   1.1277 Sell
200-DMA   1.1376 Sell
STOCH(5,3)   44.157 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2558/GBP, high of US$1.2643/GBP and settled the day up by 0.206% to close at US$1.2631/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 1.2650-1.2890 with targets at 1.2600-1.2550 and 1.2500-1.2450 stop should be below 1.2890. Buy above 1.2650-1.2450 with targets 1.2650-1.2700-1.2750 and 1.2850-1.2890 with stop loss closing below 1.2500.

 
Intraday Support Levels
S1     1.2600
S2     1.2550
S3     1.2500-1.2450

Intraday Resistance Levels
R1     1.2650-1.2700
R2     1.2780-1.2850
R3     1.2780-1.2850

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

32.935

Buy
20-DMA   1.2779 Buy
50-DMA   1.2938 Sell
100-DMA   1.3005 Buy
200-DMA   1.2948 Buy
STOCH(5,3)   37.996 Buy
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY108.27/USD and made an intraday high of JPY109.61/USD and settled the day down by 1.212% at JPY108.27/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 109.50-107.70 with targets of 110.00-110.60-111.5 and 111.90-112.25 with stop below 107.50.

 
Intraday Support Levels
S1     108.40-107.70
S2     107.00
S3     106.50

INTRADAY RESISTANCE LEVELS
R1     109.05-109.50
R2     110.00
R3     110.60-111.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   33.317 Buy
20-DMA   109.79 Sell
50-DMA   111.78 Sell
100-DMA   110.58 Buy
200-DMA   111.38 Sell
STOCH(9,6)   31.955 Sell
MACD(12,26,9)   -0.466 Buy

AAFX TRADING
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