AAFX TRADING

Daily Market Lookup

  • Asian share markets took a step back on Wednesday as the White House took a tough line on trade talks with China, while a looming reading on U.S. inflation could shuffle the odds for an early cut in interest rates there. Data on Chinese inflation showed the annual pace picked up to a 15-month high of 2.7%, but mainly because of surging pork prices. Excluding food, inflation rose only 1.6% and suggested there was plenty of scope for more stimulus. The Hong Kong market lost 1.5% as thousands of demonstrators stormed roads next to government offices to protest against a proposed extradition bill. President Donald Trump said on Tuesday he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five “major points” which he did not specify. He also took aim at the Federal Reserve, saying interest rates were “way too high” and the central bank had “no clue”. Fed policymakers will meet on June 18-19 against the backdrop of rising trade tensions, slowing U.S. growth and a sharp step-down in hiring in May that have led markets to price in at least two rate cuts by the end of 2019. That might change depending on what U.S. consumer price data show later in the session. Headline inflation is seen slowing a touch to 1.9%, with core steady at 2.1%. All the uncertainty around trade saw Wall Street break a six-day winning streak to end flat on Tuesday. The Dow eased a tiny 0.05%, while the S&P 500 lost 0.03% and the Nasdaq 0.01%. Trump also put currency markets on edge by tweeting that the euro and other currencies were “devalued” against the dollar, putting the United States at a “big disadvantage”.
  • Underlying U.S. producer prices increased solidly for a second straight month in May, boosted by a surge in the cost of hotel accommodation and gains in portfolio management service fees. The report from the Labor Department on Tuesday likely will support the Federal Reserve’s view that recent weak price readings are probably transitory, and that inflation will gradually move toward the U.S. central bank’s 2 percent target. Producer prices excluding food, energy and trade services rose 0.4% last month, matching April’s gain, the government said. The so-called core PPI increased 2.3% in the 12 months through May after rising 2.2% in April Weaker energy and food prices, however, partially offset the increase in prices of services last month. That led the producer price index for final demand to edge up 0.1% in May after gaining 0.2% in April. In the 12 months through May, the PPI climbed 1.8%, slowing from April’s 2.2% advance. Economists polled by Reuters had forecast the PPI would nudge up 0.1% in May and rise 2.0% on a year-on-year basis. Fed policymakers are scheduled to meet on June 18-19 against the backdrop of rising trade tensions, slowing growth and a sharp step-down in hiring in May that has led financial markets to price in at least two interest rate cuts by the end of 2019. President Donald Trump in early May slapped additional tariffs of up to 25% on $200 billion of Chinese goods, prompting retaliation by Beijing. Trump on Monday threatened further duties on Chinese imports if no deal was reached when he meets Chinese President Xi Jinping at a G20 summit later this month in Japan. Fed Chairman Jerome Powell said last week that the U.S. central bank was closely monitoring the implications of the trade tensions on the economy and would “act as appropriate to sustain the expansion.” A rate cut is not expected next Wednesday. Trump on Tuesday renewed his attack on the Fed and described low inflation as “a beautiful thing.” The Fed’s preferred inflation measure, the core personal consumption expenditures (PCE) price index, increased 1.6 percent in the year to April after gaining 1.5% in March. Data for May will be released later this month. Last month, wholesale energy prices fell 1.0% after rising 1.8% in the prior month. Goods prices slipped 0.2% last month after gaining 0.3% in April. Wholesale food prices fell 0.3% in May, led by a 32.1% tumble in the cost of eggs. Core goods prices were unchanged for a second straight month. Upcoming data will be closely watched for the effects of the latest tariff on Chinese goods. Previous duties impacted prices for machinery, equipment and some household furniture goods.
  • Oil prices fell more than 1% on Wednesday, weighed down by a weaker oil demand outlook and a rise in U.S. crude inventories despite growing expectations of ongoing OPEC-led supply cuts. The U.S. Energy Information Administration (EIA) cut its forecasts for 2019 world oil demand growth and U.S. crude oil production in a monthly report released on Tuesday. The EIA lowered its 2019 world oil demand growth forecast by 160,000 barrels per day (bpd) to 1.22 million bpd and wound back its forecast for 2019 U.S. crude production to 12.32 million bpd, 140,000 bpd less than the May forecast. A surprise increase in U.S. crude stockpiles also kept oil prices under pressure. U.S. crude inventories rose by 4.9 million barrels in the week ended June 7 to 482.8 million barrels, according to data from the American Petroleum Institute (API) on Tuesday. That compared with analysts’ expectations for a decrease of 481,000 barrels. Official data from the Energy Information Administration (EIA) is due at 10:30 a.m. EDT (1430 GMT) on Wednesday. Alongside concerns about rising supply, ongoing trade tensions between the United States and China, the world’s two biggest oil consumers, weighed on prices. U.S. President Donald Trump said on Tuesday he was holding up a trade deal with China. With the next meeting of the Organization of the Petroleum Exporting Countries (OPEC) set for the end of June, the market is eyeing whether the world’s major oil producers would prolong their supply cuts.OPEC, along with non-members including Russia in a group called OPEC+, have limited their oil output by 1.2 million bpd since the start of the year to prop up prices. The Energy Minister for the United Arab Emirates Suhail bin Mohammed al-Mazroui said on Tuesday that OPEC members were close to reaching an agreement on continuing production cuts. OPEC is set to meet on June 25, followed by talks with its allies led by Russia on June 26. But Russia suggested a date change to July 3 to 4, sources within the group previously told Reuters.

 

 
Intraday RESISTANCE LEVELS
12th June 2019 R1 R2 R3
GOLD-XAU 1,334-1,340 1,346 1,350-1,357
Silver-XAG 15.05 15.30 15.60-16.00
Crude Oil 53.50-54.00 54.80 55.50-56.00
EURO/USD 1.1330-1.1390 1.1440 1.1500
GBP/USD 1.2750 1.2780-1.2850 1.2900
USD/JPY 109.05-109.50 110.00 110.60-111.50

Intraday SUPPORTS LEVELS
12th June 2019 S1 S2 S3
GOLD-XAU 1,324-1316 1,309 1,300-1,294
Silver-XAG 14.60-14.30 13.90 13.50-13.20
Crude Oil 52.50 51.90-51.40 51.00
EURO/USD 1.1280-1.1250 1.1200 1.1150-1.1100
GBP/USD 1.2700-1.2650 1.2600 1.2750
USD/JPY 108.00-107.70 107.00 106.50

Intra-Day Strategy (12th 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 Tuesday made its intraday high of US$1329.79/oz and low of US$1319.82/oz. Gold down by 0.061% at US$1326.67/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 positive 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 1324-1294 with risk below 1294, targeting 1334-1340-1346 and 1350-1357. Sell below 1334-1356 keeping stop loss closing above 1354, targeting 1324-1316-1309 and 1300-1294.

 
Intraday Support Levels
S1     1,324-1316
S2     1,309
S3     1,300-1,294
Intraday Resistance Levels
R1     1,334-1,340
R2     1,346
R3     1,350-1,357

Technical Indicators

Name   Value Action
14DRSI  

67.338

Buy
20-DMA   1301.89 Buy
50-DMA  

1291.61

Buy
100-DMA   1299.93 Buy
200-DMA   1265.15 Buy
STOCH(5,3)   31.621 Buy
MACD(12,26,9)   12.142 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$14.78/oz and low of US$14.63/oz. Silver settled up by 0.470% at US$14.73/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 oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 14.70-13.20 targeting 15.05-15.30 and 15.60-15.90; stop breakage below 13.20. Sell below 15.05-16.00 with stop loss above 16.00; targeting 14.30-13.90 and 13.50-13.20.

 
Intraday  Support Levels
S1     14.60-14.30
S2     13.90
S3     13.50-13.20

Intraday  Resistance Levels
R1     15.05
R2     15.30
R3     15.60-16.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.976 Buy
20-DMA   14.61 Sell
50-DMA   14.80 Sell
100-DMA   15.16 Sell
200-DMA   14.89 Buy
STOCH(5,3)   37.246 Sell
MACD(12,26,9)   -0.0126 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$54.18/bbl, intraday low of US$53.08/bbl and settled down by 0.570% to close at US$53.19/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 52.50-51.90 and 51.40-51.00. Buy above 52.50-51.00 with risk daily closing below 51.00 and targeting 53.50-54.00-54.80 and 55.5-56.00.

 
Intraday Support Levels
S1     52.50
S2     51.90-51.40
S3     51.00

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.696 Sell
20-DMA   57.08 Sell
50-DMA   60.79 Sell
100-DMA   58.67 Sell
200-DMA   59.41 Sell
STOCH(5,3)   54.130 Buy
MACD(12,26,9)   -2.436 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1300/EUR, high of US$1.1330/EUR and settled the day down by 0.0971% to close at US$1.1310/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 1.1280-1.1075 with risk below 1.1075, targeting 1.1305-1.1350 and 1.1390-1.1440. Sell below 1.1310-1.1440 targeting 1.1250-1.1200-1.1100 and 1.1070-1.1020 with stop-loss at daily closing above 1.0950.

 
Intraday Support Levels
S1     1.1280-1.1250
S2     1.1200
S3     1.1150-1.1100

Intraday  Resistance Levels
R1     1.1330-1.1390
R2     1.1440
R3     1.1500

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.3553 Buy
20-DMA   1.1199 Buy
50-DMA   1.1213 Buy
100-DMA   1.1273 Sell
200-DMA   1.1367 Sell
STOCH(5,3)   82.157 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2669/GBP, high of US$1.2731/GBP and settled the day up by 0.291% to close at US$1.2721/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 1.2750-1.2900 with targets at 1.2700-1.2650-1.2600 and 1.2550-1.2500 stop should be below 1.2890. Buy above 1.2700-1.2500 with targets 1.2700-1.2750 and 1.2850-1.2890 with stop loss closing below 1.2500.

 
Intraday Support Levels
S1     1.2700-1.2650
S2     1.2600
S3     1.2750

Intraday Resistance Levels
R1     1.2750
R2     1.2780-1.2850
R3     1.2900

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

44.555

Buy
20-DMA   1.2687 Buy
50-DMA   1.2880 Sell
100-DMA   1.2989 Buy
200-DMA   1.2941 Buy
STOCH(5,3)   52.996 Buy
MACD(12,26,9)   -0.0094 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY108.34/USD and made an intraday high of JPY108.79/USD and settled the day up by 0.0793% at JPY108.50/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 109.00-113.00 with risk above 113.00 targeting 108.00-107.70-107.00 and 106.50-106.00. Long positions above 108.05-107.70 with targets of 109.05-109.50 and 110.00-110.60-111.5 with stop below 107.50.

 
Intraday Support Levels
S1     108.00-107.70
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   27.317 Buy
20-DMA   109.79 Sell
50-DMA   110.78 Sell
100-DMA   110.58 Buy
200-DMA   111.35 Sell
STOCH(9,6)   7.955 Sell
MACD(12,26,9)   -0.466 Buy

AAFX TRADING
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