AAFX TRADING

Daily Market Lookup

  • The U.S. dollar bounced in early European trade Tuesday amid rising risk aversion given the mounting tensions between China and the U.S. over the new security law for Hong Kong. Protests occurred in Hong Kong Wednesday as the national security law - which critics have called a direct attempt to curtail the city's unique freedoms - underwent a second reading in the city’s Legislative Council. U.S. President Donald Trump has promised a U.S. reaction to the law by the end of the week. Meanwhile, China retaliated by threatening countermeasures against any U.S. action, including sanctions. Another currency in focus Wednesday is the euro, after Isabel Schnabel, a member of the European Central Bank’s executive board, in an interview with the Financial Times, made it clear that the central bank is ready to act and use any instrument "if it judges that the medium-term inflation outlook has worsened". This comes as the latest estimates from INSEE, the French national statistics bureau, suggested that France's economy is on course to contract 20% in the second quarter as the country emerges from a nationwide coronavirus lockdown. That would mark a sharp deterioration in France's recession after the euro zone's second-biggest economy contracted 5.8% in the first quarter. The dollar was up on Wednesday morning in Asia with U.S.-China tensions mounting over the latter’s national security laws for Hong Kong and Macau. A planned protest in Hong Kong as the city’s Legislative Council begins to debate a national anthem bill, failed to draw the expected numbers. U.S. President Donald Trump promised a U.S. reaction to the law by the end of the week. Meanwhile, China retaliated by threatening countermeasures against any U.S. action, including sanctions.
  • Gold was down Wednesday morning in Asia, as even the safe-haven asset was infected by the mounting U.S.-China tensions. Protests are planned in Hong Kong on Wednesday as the Legislative Council debates a national anthem bill. The legislature was surrounded by heavy riot police presence and 15 arrests have been made so far. Relations between the U.S. and China soured during the previous week as China tabled national security laws for Hong Kong and Macau. U.S. President Donald Trump is due to reveal his response to the legislation before the end of the week. Meanwhile, China counter-threatened retaliation against any U.S. measures, which could include sanctions and visa restrictions for entities involved with enforcing the laws. Meanwhile, investors will pay attention to U.S. Federal Reserve Chair Jerome Powell’s comments during an online discussion scheduled for Friday.
  • Oil was down on Wednesday morning in Asia on the back of analyst warnings over the fragile demand recovery. The warnings came as the United States heads into its peak demand season. Some states have re-opened after months-long lockdowns and New York City is expected to re-open in June. “Early estimates suggest gasoline demand is down by as much as 30% from last year as people stay close to home,” ANZ Research said in a note. Investor sentiment was further soured by rising U.S.-China tensions. U.S President Donald Trump will unveil the U.S. reaction to China’s national security laws for Hong Kong and Macau, with a day of protests planned in Hong Kong. Trump’s economic adviser Larry Kudlow warned that China was making “a big mistake” with national security legislation on Hong Kong.
  • Oil prices fell on Wednesday on revived concerns over how quickly fuel demand will recover even as coronavirus lockdowns begin to ease in many countries, while U.S.-China tensions added to negative sentiment. The Organization of the Petroleum Exporting Countries and producers including Russia, a grouping referred to as OPEC+, are cutting their output by nearly 10 million barrels per day in May-June to buttress prices as measures to rein in the coronavirus pandemic have slashed fuel demand. In the United States, where some states are opening up after lockdowns, optimism about an increase in demand has supported sentiment, but the recovery is fragile, analysts caution. The Memorial Day holiday just passed typically heralds the start of the peak U.S. demand season. Some analysts and banks are predicting a balanced oil market as soon as June, but that could be too optimistic, according to Eurasia Group. There is ... a significant risk of repeat outbreaks and lockdowns. Even without them, some restrictions - especially on aviation - will remain in place," it said in a note. Still as U.S. demand picks up, however slowly, there are signs that inventories are falling. U.S. crude inventories are forecast to have fallen for a third week last week, according a Reuters poll of analysts. Prices were also under pressure after U.S. President Donald Trump's economic adviser, Larry Kudlow, said China was making "a big mistake" with national security legislation on Hong Kong. Beijing's proposed security law would reduce the territory's separate legal status. China's parliament is expected to approve it by Thursday.

 

 
Intraday RESISTANCE LEVELS
27th May 2020 R1 R2 R3
GOLD-XAU 1,740 1,740 1,748-1,755
Silver-XAG 17.60-18.00 18.40 18.95-19.50
Crude Oil 35.20-36.00 36.60 37.10-37.75
EURO/USD 1.0970 1.1030 1.1060-1.1150
GBP/USD 1.2320-1.2410 1.2470 1.2500-1.2550
USD/JPY 107.90-108.40 109.40 110.20-111.00

Intraday SUPPORTS LEVELS
27th May 2020 S1 S2 S3
GOLD-XAU 1,700 1,690-1,675 1,660
Silver-XAG 16.90-16. 16.10 15.60-15.20
Crude Oil 33.00-32.25 31.00 30.50-29.90
EURO/USD 1.0900-1.0800 1.0750 1.0700-1.0630
GBP/USD 1.2250-1.2165 1.2100 1.2060-1.2010
USD/JPY 107.10-106.20 105.60 105.00-104.30

Intra-Day Strategy (27th 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 Tuesday made its intraday high of US$1735.36/oz and low of US$1708.56/oz. Gold down 0.953% at US$1710.71/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 1700-1660 with risk below 1660, targeting 1709-1720-1740 and 1748-1754. Sell below 1709-1760 keeping stop loss closing above 1760, targeting 1700-1690 and 1674-1660.

 
Intraday Support Levels
S1     1,700
S2     1,690-1,675
S3     1,660
Intraday Resistance Levels
R1     1,740
R2     1,740
R3     1,748-1,755

Technical Indicators

Name   Value Action
14DRSI  

55.609

Buy
20-DMA   1716.77 Buy
50-DMA  

1670.96

Buy
100-DMA   1629.59 Buy
200-DMA   1561.69 Buy
STOCH(5,3)   32.621 Sell
MACD(12,26,9)   -2.894 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$17.43/oz and low of US$17.00/oz settled up by 0.275% at US$17.09/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.
S2     16.10
S3     15.60-15.20

Intraday  Resistance Levels
R1     17.60-18.00
R2     18.40
R3     18.95-19.50

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 Tuesday made an intra‐day high of US34.86/bbl, intraday low of US$33.46/bbl and settled up by 0.859% to close at US$34.16/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 33.00-27.70 with risk daily closing below 27.70 and targeting 35.20-36.00 and 36.60-37.10-37.70. Sell in between 35.20-37.70 with stop loss at 37.70; targeting 33.00-32.25-31.00 and 30.50-29.90-28.40-27.70.

 
Intraday Support Levels
S1     33.00-32.25
S2     31.00
S3     30.50-29.90

Intraday Resistance Levels
R1     35.20-36.00
R2     36.60
R3     37.10-37.75

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.117 Sell
20-DMA   22.13 Buy
50-DMA   24.89 Sell
100-DMA   38.40 Sell
200-DMA   47.45 Sell
STOCH(5,3)   82.130 Sell
MACD(12,26,9)   -3.0720 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.0891/EUR, high of US$1.0995/EUR and settled the day up by 0.818% to close at US$1.0981/EUR.

Technicals in Focus:

EUR/USD on Tuesday an intraday low of US$1.0891/EUR, high of US$1.0995/EUR and settled the day up by 0.818% to close at US$1.0981/EUR.

Trading Strategy: Neutral to Buy

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

 
Intraday Support Levels
S1     1.0900-1.0800
S2     1.0750
S3     1.0700-1.0630

Intraday  Resistance Levels
R1     1.0970
R2     1.1030
R3     1.1060-1.1150

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.032 Buy
20-DMA   1.0851 Buy
50-DMA   1.0897 Buy
100-DMA   1.0970 Sell
200-DMA   1.1015 Sell
STOCH(5,3)   78.758 Buy
MACD(12,26,9)   -0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2174/GBP, high of US$1.2362/GBP and settled the day up by 1.241% to close at US$1.2330/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     1.2250-1.2165
S2     1.2100
S3     1.2060-1.2010

Intraday Resistance Levels
R1     1.2320-1.2410
R2     1.2470
R3     1.2500-1.2550

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

47.554

Buy
20-DMA   1.2308 Buy
50-DMA   1.2270 Sell
100-DMA   1.2600 Sell
200-DMA   1.2650 Sell
STOCH(5,3)   44.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY107.39/USD and made an intraday high of JPY107.91/USD and settled the day down by 0.134% at JPY107.50/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 107.90-110.50 with risk above 110.50 targeting 106.90-106.20-105.60 and 105.00-104.30. 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     107.10-106.20
S2     105.60
S3     105.00-104.30

INTRADAY RESISTANCE LEVELS
R1     107.90-108.40
R2     109.40
R3     110.20-111.00

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

AAFX TRADING
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