AAFX TRADING

Daily Market Lookup

  • Asian share markets turned higher on Thursday following a media report the United States and China have tentatively agreed to a truce in their trade war, ahead of a closely-watched meeting between the two nations this weekend. The South China Morning Post (SCMP), citing sources, said in Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports. On Wednesday, U.S. President Donald Trump said a trade deal with his Chinese counterpart Xi Jinping was possible this weekend though he was prepared to impose tariffs on virtually all remaining Chinese imports if talks fail. Relations between Washington and Beijing have spiraled downward since talks collapsed in May, when the United States accused China of reneging on pledges to reform its economy. The ongoing trade war has already rattled investors who have ditched shares for the safety of bonds and gold this year. It has also prompted the U.S. Federal Reserve to pause its rate tightenings and, in fact, signal a cut as soon as next month. Many traders said they expected the market to remain in a narrow range until after the weekend meeting of G20 leaders in Osaka, Japan where Trump is also holding bilateral talks with other nations Trump weighed into U.S. monetary policy on Wednesday, accusing Federal Reserve Chairman Jerome Powell of doing a “bad job” and “out to prove how tough he is” by not cutting interest rates. Markets are convinced the Fed will indeed ease at its next meeting in July, but had to scale back bets on a half-point cut following cautious comments from various policy makers.
  • The U.S. dollar rose while the Japanese yen fell on Thursday in Asia ahead of the highly anticipated G-20 summit that is set to kick off tomorrow. U.S. President Donald Trump warned on Wednesday that additional tariffs could be imposed on Chinese goods if he is not happy with the progress made in trade talks this weekend. His comments came after Treasury Secretary Steven Mnuchin said he thinks “there is a path” for Trump and Chinese leader Xi Jinping to make a trade deal. The two leaders will meet on Saturday morning to discuss trade-related issues, the White House confirmed. The greenback was under some pressure earlier this week as markets dialled back expectations for aggressive rate cuts after Federal Reserve Chairman Jerome Powell said the central bank is "insulated from short-term political pressures," pushing back against Trump's demands for a significant rate cut. Overnight, Trump told Fox News that Powell was doing "a bad job" in not cutting rates, and compared him to European Central Bank President Mario Draghi, who said last week that the Eurozone economy would need further stimulus if inflation failed to pick up. Amundi, the region’s biggest money manager, is betting the greenback is due for a correction as the Federal Reserve shifts toward more dovish policy. Aberdeen Standard Investments says the “tailwinds” that boosted the dollar, such as higher bond yields and strong growth in the U.S., are now dissipating. The currency may extend its slide should this week’s Group-of-20 summit fail to ease global trade tensions, according to UBS Global Wealth Management. A gauge of the dollar’s strength slumped 1.5% in June, snapping a four-month rally that was the longest since 2015, as Fed Chair Jerome Powell signaled the the central bank is gearing up to cut interest rates to support the world’s largest economy. Benchmark U.S. Treasury yields hit the lowest level since 2016 last week, narrowing the premium over Germany and Japan U.S. rate differentials versus other markets are now less attractive once adjusted for volatility, according to Koenig, who has short positions in the greenback against “a variety of currencies” including the yen, euro and Canadian dollar. Leaders of G-20 nations will meet for a two-day summit in Osaka, Japan, starting Friday to hash out differences in trade and currency policies among other topics. The focus lies on U.S. President Donald Trump and his Chinese counterpart Xi Jinping. If they fail to diffuse tensions that have roiled global markets in recent months, the world economy runs the risk of losing $1.2 trillion, according to calculations by Bloomberg Economics. While UBS Global Wealth has a dollar short position against the yen, it also has tactical strategies in place including a long-greenback allocation versus its Australian counterpart to profit from rising trade tensions and the slowdown in Australia.
  • Oil fell on Thursday, erasing some of the previous session's strong gains, as traders await the G20 summit in Japan and a meeting of OPEC and other oil producers to decide on an extension of output cuts. Oil prices rose more than 2% on Wednesday to their highest in about a month, buoyed by U.S. government data showing a larger-than-expected drawdown in crude stocks as exports hit a record high and surprise drops in refined product stockpiles However, traders said concerns that a hoped-for breakthrough on trade at the G20 may not eventuate and some nervousness about continued output cuts were crimping follow-through buying. Almost immediately after the G20 summit ends on Saturday, the Organization of the Petroleum Exporting Countries (OPEC) meets on Monday to discuss an extension of production cuts to support prices. The day after that OPEC members meet with other producers including Russia in a grouping known as OPEC+, which agreed in December to reduce supply by 1.2 million barrels per day from Jan. 1. The agreement is due to expire on June 30. Crude inventories in the United States, the largest producer and consumer of oil, fell 12.8 million barrels last week, the Energy Information Administration said, far surpassing analyst expectations for a decrease of 2.5 million barrels. That was the most since September 2016, according to the statistical arm of the Department of Energy. Net U.S. crude imports fell last week by 1.2 million barrels per day (bpd). Overall crude exports rose to 3.8 million bpd, beating the previous record of 3.6 million bpd in February.

 

 
Intraday RESISTANCE LEVELS
27th June 2019 R1 R2 R3
GOLD-XAU 1,415-1,425 1,433 1.440-1,450
Silver-XAG 15.35-15.60 16.00 16.20-16.50
Crude Oil 59.50-60.20 61.00 61.70-62.50
EURO/USD 1.1390-1.1420 1.1450 1.1500-1.1550
GBP/USD 1.2700-1.2760 1.2790 1.2830-1.2870
USD/JPY 108.00 109.05 109.50-110.00

Intraday SUPPORTS LEVELS
27th June 2019 S1 S2 S3
GOLD-XAU 1,405 1,392-1,380 1,374
Silver-XAG 15.05 14.60 14.30-13.90
Crude Oil 58.70-58.10 57.35 56.90-56.60
EURO/USD 1.1350 1.1320 1.1280-1.1220
GBP/USD 1.2650 1.2600-1.2500 1.2450
USD/JPY 107.60-107.00 106.50 106.00-105.50

Intra-Day Strategy (27th 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 Wednesday made its intraday high of US$1424.39/oz and low of US$1401.84/oz. Gold down by 0.141% at US$1408.93/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1303) and breakage below will call for 1296-1288. MACD is above zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in overbought 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 1425-1380 with risk below 1380, targeting 1433-1440-1450 and 1456-1465. Sell below 1433-1465 keeping stop loss closing above 1433, targeting 1425-1415-1405 and 1392-1380.

 
Intraday Support Levels
S1     1,405
S2     1,392-1,380
S3     1,374
Intraday Resistance Levels
R1     1,415-1,425
R2     1,433
R3     1.440-1,450

Technical Indicators

Name   Value Action
14DRSI  

77.644

Buy
20-DMA   1350.64 Buy
50-DMA  

1308.43

Buy
100-DMA   1306.85 Buy
200-DMA   1274.09 Buy
STOCH(5,3)   81.621 Sell
MACD(12,26,9)   25.975 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$15.36/oz and low of US$15.16/oz. Silver settled down by 0.554% at US$15.24/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (14.93), 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 15.05-13.20 targeting 15.35-15.60-15.90 and 16.20-16.50; stop breakage below 13.20. Sell below 15.35-16.90 with stop loss above 16.90; targeting 15.35-15.05-14.60 and 14.30-13.90.

 
Intraday  Support Levels
S1     15.05
S2     14.60
S3     14.30-13.90

Intraday  Resistance Levels
R1     15.35-15.60
R2     16.00
R3     16.20-16.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.283 Buy
20-DMA   14.94 Buy
50-DMA   14.81 Buy
100-DMA   15.10 Buy
200-DMA   14.94 Buy
STOCH(5,3)   65.246 Sell
MACD(12,26,9)   0.159 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$59.94/bbl, intraday low of US$58.63/bbl and settled up by 0.617% to close at US$59.15/bbl.

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 59.50-62.50 with stop loss at 62.50; targeting 58.70-58.10-57.35 and 56.90-56.00-55.50. Buy above 56.60-55.00 with risk daily closing below 55.00 and targeting 59.50-60.20an d61.00-61.70-62.50.

 
Intraday Support Levels
S1     58.70-58.10
S2     57.35
S3     56.90-56.60

Intraday Resistance Levels
R1     59.50-60.20
R2     61.00
R3     61.70-62.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.917 Sell
20-DMA   54.42 Sell
50-DMA   59.15 Sell
100-DMA   58.84 Sell
200-DMA   58.74 Sell
STOCH(5,3)   96.130 Buy
MACD(12,26,9)   -0.209 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1346/EUR, high of US$1.1390/EUR and settled the day up by 0.023% to close at US$1.1368/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.1349), which become immediate resistance level, break above will target 1.1320-1.1280. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought 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 1.1350-1.1175 with risk below 1.1175, targeting 1.1390-1.1420-1.1450 and 1.1500-1.1550. Sell below 1.1390-1.1550 targeting 1.1350-1.1320 and 1.1280-1.1220 with stop-loss at daily closing above 1.1540.

 
Intraday Support Levels
S1     1.1350
S2     1.1320
S3     1.1280-1.1220

Intraday  Resistance Levels
R1     1.1390-1.1420
R2     1.1450
R3     1.1500-1.1550

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.331 Buy
20-DMA   1.1271 Buy
50-DMA   1.1221 Buy
100-DMA   1.1259 Buy
200-DMA   1.1347 Sell
STOCH(5,3)   83.157 Sell
MACD(12,26,9)   0.0037 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2661/GBP, high of US$1.2706/GBP and settled the day up by 0.019% to close at US$1.2684/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 1.2790-1.12950 with targets at 1.2760-1.2700-1.2650 and 1.2600-1.2500-1.2475 stop should be below 1.2870. Buy above 1.2650-1.2400 with targets 1.2700-1.2750-1.2790 and 1.2830-1.2870 with stop loss closing below 1.2400.

 
Intraday Support Levels
S1     1.2650
S2     1.2600-1.2500
S3     1.2450

Intraday Resistance Levels
R1     1.2700-1.2760
R2     1.2790
R3     1.2830-1.2870

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

45.948

Buy
20-DMA   1.2665 Buy
50-DMA   1.2798 Sell
100-DMA   1.2950 Buy
200-DMA   1.2923 Buy
STOCH(5,3)   62.175 Buy
MACD(12,26,9)   -0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY107.09/USD and made an intraday high of JPY107.84/USD and settled the day up by 0.570% at JPY107.77/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 108.00-111.00 with risk above 111.00 targeting 107.60-107.00-106.50 and 106.00-105.50. Long positions above 107.60-105.50 with targets of 108.00-109.05 and 109.50-110.00-110.60 with stop below 106.00.

 
Intraday Support Levels
S1     107.60-107.00
S2     106.50
S3     106.00-105.50

INTRADAY RESISTANCE LEVELS
R1     108.00
R2     109.05
R3     109.50-110.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.190 Buy
20-DMA   108.80 Sell
50-DMA   110.13 Sell
100-DMA   110.47 Buy
200-DMA   111.15 Sell
STOCH(9,6)   60.955 Sell
MACD(12,26,9)   -0.5704 Buy

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