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Daily Market Lookup

  • The dollar edged down on Monday as optimism about the re-opening of economies hit by the coronavirus pandemic boosted risk appetite, lifting commodity currencies such as the Norwegian krone. The gradual easing of lockdowns has fuelled optimism across global markets despite fresh trade tensions between the United States and China. Policymakers are bracing for the nation's worst postwar slump. Investors were also looking to Purchasing Managers' Index surveys due across major economies later this week for the next insight into the outlook. A week-long deadlock over a post-Brexit trade deal with the European Union and increasing focus on the possibility of negative rates. The Bank of England's chief economist, Andy Haldane, did not rule such a move, in an interview with the Telegraph newspaper published on Saturday. The U.S. dollar has seen some selling in early European trade Monday, but from lofty heights as tensions between China and the U.S. continue to simmer and Japan enters recession White House trade advisor Peter Navarro added to the bad blood between the U.S. and China over the weekend when he suggested in an interview with ABC's “This Week” that Beijing sent "hundreds of thousands of Chinese on aircraft to Milan, New York and around the world” to spread the virus after hiding it from the world for two months. The Trump administration has been keen to paint China as the bad guys regarding the outbreak and spread of the coronavirus, not least against the backdrop of the November Presidential election, which is now less than six months away. Late Friday, the U.S. moved to block chip supplies to Huawei Technologies, part of its plan to stop the Chinese telecom giant's rollout of 5G mobile broadband. The official yuan rate, which is highly sensitive to relations between the world's two biggest economies, was on the back foot, falling to its lowest level since early April. Elsewhere, Japan's economy has fallen into recession for the first time in four and a half years. The world's third-largest economy shrank 3.4% from January to March, the second straight quarter of decline. And the second quarter is expected to look far worse, with economists looking for the fall in gross domestic product of 22% the biggest decline on record. The uncertainty over a post-Brexit trade deal with the EU has continued to weigh. Also, the Bank of England's chief economist Andrew Haldane said over the weekend that the Bank is looking again at negative interest rates after having rejected the tool earlier.
  • European stock markets rose on Monday and oil prices climbed to their highest in more than a month as a loosening of corona virus shutdowns boosted market sentiment, even as the deadly outbreak has yet to be fully contained. Warm weather is enticing much of the world to emerge from corona virus lockdowns as centers of the outbreak from New York to Italy and Spain gradually lift restrictions that have kept millions cooped up for months. However, the weekend also saw anti-lockdown protestors in countries such as the United States, Germany, England and Poland arguing the government restrictions demolish personal liberties and are wrecking economies. Governments must balance the economic incentive to re-open businesses and allow people to go out and about with the risk of triggering a deadly second wave of the virus, which has killed more than 300,000 people and spread to at least 210 countries. There were still lots of obstacles to a rapid recovery, however, with Federal Reserve Chairman Jerome Powell saying in an interview on Sunday that a U.S. economic recovery may stretch deep into 2021. The most important data for the U.S. economy now are the “medical metrics” around the corona virus pandemic, he said. Already rocky U.S.-China relations also saw tensions increase over the weekend, as the United States raised threats over telecoms equipment giant Huawei Technologies and China’s treatment of journalists in Hong Kong. U.S. lawmakers and officials are crafting proposals to push American companies to move operations or key suppliers out of China that include tax breaks, new rules, and carefully structured subsidies. Japan’s preliminary GDP data showed that the world’s third biggest economy contracted an annualized 3.4% in the first quarter, slipping into a recession for the first time in more than five years.
  • Oil prices climbed by more than $1 a barrel on Monday, supported by output cuts and signs of gradual demand recovery amid easing coronavirus curbs, with U.S. oil showing no signs of last month's contract expiry price rout. The June WTI contract expires on Tuesday, but there was little indication of WTI repeating the historic plunge below zero seen last month on the eve of the May contract's expiry amid signs that demand for crude and derived fuels is recovering from its nadir. Production is also falling as U.S. energy firms cut the number of oil and natural gas rigs operating to an all-time low for a second consecutive week. Oklahoma, running out of space. The Chicago Mercantile Exchange, which hosts trading in WTI futures, brokerages and the United States Oil Fund LP, the largest oil-focused exchange-traded product in the country, have all taken steps that reduce open positions ahead of the WTI contract's expiry. The positive mood was reinforced as U.S. Federal Reserve Chairman Jerome Powell issued an optimistic outlook for economic recovery later this year. Also supporting oil prices are production cuts by the OPEC and its allies, including Russia, a grouping known as OPEC+. The world's top exporter Saudi Arabia announced last week that it would cut an additional 1 million barrels per day in June, while OPEC+ wants to maintain existing oil cuts beyond June when the group is next due to meet. Kuwait and Saudi Arabia have agreed to halt oil production from the joint Al-Khafji field for one month, starting from June 1, Kuwait's Al Rai newspaper reported on Saturday.

 

 
Intraday RESISTANCE LEVELS
18th May 2020 R1 R2 R3
GOLD-XAU 1,766 1,774-1,789 1,800
Silver-XAG 17.60 18.00-18.40 18.95
Crude Oil 31.00-32.25 33.00 35.20-36.00
EURO/USD 1.0900-1.0970 1.1030 1.1060-1.1150
GBP/USD 1.2165-1.2210 1.2320 1.2410-1.2470
USD/JPY 107.60 108.30 109.40-110.20

Intraday SUPPORTS LEVELS
18th May 2020 S1 S2 S3
GOLD-XAU 1,748-1,740 1,729 1,720-1,709
Silver-XAG 16.90-16.50 16.10 15.60-15.20
Crude Oil 30.50--29.90 29.00 28.40-26.50
EURO/USD 1.0800-1.0750 1.0700 1.0630-1.0570
GBP/USD 1.2100-1.2060 1.2010 1.1955
USD/JPY 106.90-106.20 105.60 105.00-104.30

Intra-Day Strategy (18th May 2020)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Buy
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$1751.58/oz and low of US$1728.34/oz. Gold up 0.754% at US$1742.88/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1596) and breakage below will call for 1550. MACD is below zero line but histograms are increasing trend and it will bring upward 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 negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1748-1690 with risk below 1690, targeting 1766-1774 and 1789-1800. Sell below 1766-1800 keeping stop loss closing above 1800, targeting 1748-1740-1729 and 1720-1700-1690.

 
Intraday Support Levels
S1     1,748-1,740
S2     1,729
S3     1,720-1,709
Intraday Resistance Levels
R1     1,766
R2     1,774-1,789
R3     1,800

Technical Indicators

Name   Value Action
14DRSI  

66.609

Buy
20-DMA   1711.90 Buy
50-DMA  

1655.12

Buy
100-DMA   1617.74 Buy
200-DMA   1555.05 Buy
STOCH(5,3)   19.621 Sell
MACD(12,26,9)   -27.894 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$16.70/oz and low of US$16.70/oz settled up by 4.97% at US$16.63/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 100DMA (17.55), breakage below will lead to 17.30. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in overbought region, indicating buy signal for now. The Stochastic Oscillator is in overbought region and giving negative crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 16.90-15.00 targeting 17.60-18.00 and 18.40-18.95; stop breakage below 15.00. Sell below 17.60-18.95 with stop loss above 18.50; targeting 16.90-16.50-16.10 and 15.60-14.40.

 
Intraday  Support Levels
S1     16.90-16.50
S2     16.10
S3     15.60-15.20

Intraday  Resistance Levels
R1     17.60
R2     18.00-18.40
R3     18.95

TECHNICAL INDICATORS
Name   Value Action
14DRSI   75.370 Buy
20-DMA   15.36 Sell
50-DMA   14.88 Sell
100-DMA   16.35 Sell
200-DMA   16.91 Sell
STOCH(5,3)   96.268 Buy
MACD(12,26,9)   -0.374 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US29.78/bbl, intraday low of US$25.50/bbl and settled up by 7.33% to close at US$29.68/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 40.00 which is a resistance level and breakage above will call for 44.00. MACD is below zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving positive crossover for confirmation of bullish stance; while the RSI is in neutral region and more downside can be expected to reach the oversold region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 30.50-26.50 with risk daily closing below 26.50 and targeting 31.00-32.35 and 33.00-34.00-35.20. Sell in between 31.00-35.20 with stop loss at 35.20; targeting 30.50-29.90-28.40 and 26.50-25.80.

 
Intraday Support Levels
S1     30.50--29.90
S2     29.00
S3     28.40-26.50

Intraday Resistance Levels
R1     31.00-32.25
R2     33.00
R3     35.20-36.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.117 Sell
20-DMA   22.13 Buy
50-DMA   24.89 Sell
100-DMA   39.40 Sell
200-DMA   47.88 Sell
STOCH(5,3)   95.130 Sell
MACD(12,26,9)   -3.0720 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.0774/EUR, high of US$1.0850/EUR and settled the day up by 0.125% to close at US$1.0819/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1031), which become immediate resistance level, break above will target 1.1090. 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 right now.

Trading Strategy: Neutral to Buy

Buy above 1.0820-1.0570 with risk below 1.0570, targeting 1.0900-1.0970-1.1030 and 1.1060-1.1150. Sell below 1.0900-1.1150 targeting 1.0820-1.0770-1.0700 and 1.0630-1.0570 with stop-loss at daily closing above 1.1100.

 
Intraday Support Levels
S1     1.0800-1.0750
S2     1.0700
S3     1.0630-1.0570

Intraday  Resistance Levels
R1     1.0900-1.0970
R2     1.1030
R3     1.1060-1.1150

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.032 Buy
20-DMA   1.0841 Buy
50-DMA   1.0902 Buy
100-DMA   1.0972 Buy
200-DMA   1.1016 Buy
STOCH(5,3)   -0.0047 Sell
MACD(12,26,9)   -0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2099/GBP, high of US$1.2237/GBP and settled the day down by 0.932% to close at US$1.2107/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.2647) is become major resistance 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 negative crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.2100-1.2470 with targets at 1.2100-1.2060-1.2010 and 1.1955-1.1900 stop-loss should be below 1.2470. Buy above 1.2100-1.1900 with targets 1.2165-1.2210-1.2320 and 1.2410-1.2470-1.2500 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2100-1.2060
S2     1.2010
S3     1.1955

Intraday Resistance Levels
R1     1.2165-1.2210
R2     1.2320
R3     1.2410-1.2470

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.554

Buy
20-DMA   1.2337 Buy
50-DMA   1.2337 Sell
100-DMA   1.2673 Sell
200-DMA   1.2649 Sell
STOCH(5,3)   5.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY106.84/USD and made an intraday high of JPY107.42/USD and settled the day down by 0.186% at JPY107.03/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.30), 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 neutral territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 106.90-110.50 with risk above 110.50 targeting 106.20-105.60-105.00 and 104.30. Long positions above 106.90-105.00 with targets of 106.90-107.50-108.30 and 109.40-110.20-110.90 with stop below 105.00.

 
Intraday Support Levels
S1     106.90-106.20
S2     105.60
S3     105.00-104.30

INTRADAY RESISTANCE LEVELS
R1     107.60
R2     108.30
R3     109.40-110.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.904 Buy
20-DMA   107.10 Buy
50-DMA   107.55 Sell
100-DMA   108.51 Sell
200-DMA   108.22 Buy
STOCH(9,6)   70.253 Sell
MACD(12,26,9)   -0.161 Sell

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