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Daily Market Lookup

  • The dollar rose against major currencies on Monday as fresh declines in global stocks and worries about tightening liquidity amid the worsening coronavirus crisis accelerated the flight to cash. The dollar rose against sterling toward its strongest since at least 1985. The U.S. currency hit the highest in almost three years against the euro. The U.S. currency approached an 11-year peak against the New Zealand dollar as the country prepared to enter lockdown for the next 48 hours to contain the virus. The greenback also rose toward a 17-year high against the Australian dollar. U.S. stock futures and oil prices came under further pressure in Asian trading, which pushed the dollar higher as more people are placed under lockdown in an effort to contain the virus, traders said. Investors are also hoping for big fiscal spending to mitigate the damage to the global economy, but uncertainty about the spread of the virus is likely to support the dollar in the future. The greenback closed in on multi-year highs against the Australian and New Zealand dollars as the economic costs of self-isolation triggered the largest intraday decline ever in New Zealand shares. Investors have been liquidating positions in safe-havens and other riskier investments to keep their money in dollars due to the uncertainty caused by the epidemic. Major central banks have ramped up efforts to ease a global dollar funding crunch, but the U.S. currency remains in demand due to the high degree of uncertainty about the unknown flu-like virus. Investors have to pay 71 basis points (bps) over interbank rates to swap 3-month yen into dollars , cross-currency basis swap rates showed on Monday. This is less than a 139 bps premium reached on March 19, but swap rates are still above average. The dollar has also surged against many emerging market currencies, highlighting the growing sense of risk aversion across the globe. Uncertainty about U.S. government stimulus added to the tense mood in Asia. Partisan battles in the U.S. Senate stopped a $1 trillion-plus coronavirus response bill from advancing on Sunday, but talks continued over Democrats' demands for more funding for medical care and state and local efforts to combat the pandemic. The bill is Congress' third effort to blunt the economic toll of a disease that has killed at least 420 people in the United States and sickened more than 33,000. Nearly one in three Americans was ordered to stay home on Sunday to slow the spread of the disease, while Italy banned internal travel as deaths there reached 5,476. U.S. President Donald Trump has approved disaster deceleration requests from New York and Washington, while St. Louis Federal Reserve President James Bullard warned unemployment could reach 30% unless more was done fiscally. Global markets have been upended in recent weeks as the coronavirus spread from central China and governments responded with increasingly strict restrictions on travel and daily life, disrupting businesses and prompting consumers to stay at home and rein in spending. The virus has now been reported in more than 100 countries and has claimed more than 13,000 lives. The U.S. dollar was down on Monday in Asia as stock markets saw sharp losses in the face of an uptick of COVID-19 cases over the weekend. Despite its fall, Yukio Ishizuki, FX strategist at Daiwa Securities, noted that the dollar will continue to be safe haven for investors in the midst of continuing economic turmoil. The Federal Reserve also expanded its currency swap lines to a further nine countries on Thursday.
  • Oil prices plummeted to their lowest levels since 2003 as an anticipated deal between OPEC and the U.S. failed to materialise. On Friday, OPEC Secretary General Mohammad Barkindo invited Texas Railroad Commissioner Ryan Sitton to the organisation’s summer meeting in June. Although this invitation quickly raised hopes for a deal to stabilise oil prices, Sitton attracted criticism as he called for decreased production of Texan crude output for the first time since 1970. Neither Saudi Arabia nor Russia are backing down from their brinkmanship in the ongoing price war, with Kremlin watchers stating that Russian President Vladimir Putin is unlikely to bend to what he perceives as Saudi oil blackmail. The increased supply that both countries are insisting on could soon send prices crashing even lower, as the unabating spread of the COVID-19 pandemic continues to lower demand. American Petroleum Institute Senior Vice President Frank Macchiarola told Bloomberg: “It seems totally irrational that the solution to the disruptive behavior of Saudi Arabia and Russia would be to imitate OPEC.” Oil prices moved higher on Sunday, snapping back from a week of steep declines that saw U.S. West Texas Intermediate crude post its worst week since 1991. Investors are waiting on Washington to agree to an economic stimulus and rescue plan. Prices have dropped as the coronavirus outbreak has slowed worldwide travel and business activity, just as powerhouse producers Saudi Arabia and Russia prepare to ramp up production. The rapid decline in crude prices is wreaking havoc on the financial markets, forcing investors to sell other assets such as Treasuries or equities indiscriminately to cover the losses in their energy positions. WTI crude futures have been cut in half this month. The government has said it is prepared to step in, and on Saturday National Economic Council Director Larry Kudlow said an economic stimulus package will total more than $2 trillion, noting it will be equal to roughly 10% of U.S. economic output. If the bill, which was brought before the Senate on Sunday night passes, oil prices could turn a corner. As traders attempt to quantify what increasingly strict travel restrictions and stay-at-home mandates will mean for longer-term crude demand, prices have swung in either direction. Just as demand drops, the OPEC+ production cuts currently in place expire at the end of the month, meaning nations will soon be allowed to pump as much as they please. Saudi Arabia has announced plans to increase its daily production to a record 12.3 million barrels per day in April. By comparison, the kingdom pumped roughly 9.7 million bpd in February. Russia is among the other OPEC+ nations that has said it, too, could ramp up production.

 

 
Intraday RESISTANCE LEVELS
23rd March 2020 R1 R2 R3
GOLD-XAU 1,498-1,514 1,524 1,536-1,546
Silver-XAG 13.00 13.60 13.90-14.50
Crude Oil 23.10-24.30 26.10 27.40-28.00
EURO/USD 1.0770-1.0850 1.0900 1.0950-1.1020
GBP/USD 1.1660-1.1700 1.1805 1.1900
USD/JPY 110.20-110.90 111.50 112.20-113.00

Intraday SUPPORTS LEVELS
23rd March 2020 S1 S2 S3
GOLD-XAU 1,486 1,474 1,460-1,450
Silver-XAG 12.30-11.75 11.25 10.70-10.20
Crude Oil 22.00-21.00 20.40 19.00-17.80
EURO/USD 1.0700 1.0650 1.0600-1.0560
GBP/USD 1.1600-1.1500 1.1445 1.1400-1.1330
USD/JPY 109.30-108.30 107.50 106.80-106.00

Intra-Day Strategy (23rd March 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 Wednesday made its intraday high of US$1515.86/oz and low of US$1455.19/oz. Gold up 1.778% at US$1498.79/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1483) and breakage above will call for 1492. 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 oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1486-1450 with risk below 1450, targeting 1498-1514-1524 and 1536-1546-1563. Sell below 1500-1560 keeping stop loss closing above 1560, targeting 1498-1486-1474 and 1460-1450.

 
Intraday Support Levels
S1     1,486
S2     1,474
S3     1,460-1,450
Intraday Resistance Levels
R1     1,498-1,514
R2     1,524
R3     1,536-1,546

Technical Indicators

Name   Value Action
14DRSI  

34.609

Buy
20-DMA   1613.27 Buy
50-DMA  

1586.42

Buy
100-DMA   1535.83 Buy
200-DMA   1500.00 Buy
STOCH(5,3)   31.621 Buy
MACD(12,26,9)   -14.052 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$13.00/oz and low of US$11.95/oz settled up by 4.69% at US$12.61/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 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 12.50-10.20 targeting 13.00-13.60-13.90 and 14.50-14.80-15.30; stop breakage below 10.20. Sell below 13.00-15.00 with stop loss above 15.00; targeting 12.50-11.75 and 11.25-10.70-10.20.

 
Intraday  Support Levels
S1     12.30-11.75
S2     11.25
S3     10.70-10.20

Intraday  Resistance Levels
R1     13.00
R2     13.60
R3     13.90-14.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   22.250 Buy
20-DMA   15.90 Sell
50-DMA   17.08 Sell
100-DMA   17.18 Sell
200-DMA   17.04 Buy
STOCH(5,3)   20.268 Sell
MACD(12,26,9)   -0.964 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US28.48/bbl, intraday low of US$22.53/bbl and settled down by 7.27% to close at US$23.70/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 200DMA i.e. 57.76 which is a resistance level and breakage above will call for 58.60. MACD is above zero line and histograms are in increasing mode will bring bullish 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 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 22.00-19.00 with risk daily closing below 19.00 and targeting 23.10-24.30-26.10 and 27.60-28.50-30.00. Sell in between 23.10-27.40 with stop loss at 28.00; targeting 23.10-24.30 and 26.10-27.40.

 
Intraday Support Levels
S1     22.00-21.00
S2     20.40
S3     19.00-17.80

Intraday Resistance Levels
R1     23.10-24.30
R2     26.10
R3     27.40-28.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   20.9112 Sell
20-DMA   38.30 Sell
50-DMA   47.57 Sell
100-DMA   53.11 Sell
200-DMA   54.57 Sell
STOCH(5,3)   34.130 Buy
MACD(12,26,9)   -6.460 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.10636/EUR, high of US$1.0830/EUR and settled the day up by 0.0523% to close at US$1.0690/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1040), which become immediate resistance level, break above will target 1.1100. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving negative crossovers to signal for bearish 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 1.0700-1.0560 with risk below 1.0560, targeting 1.0770-1.0850-1.0900 and 1.0950-1.1020-1.1100. Sell below 1.0770-1.1100 targeting 1.0700-1.0650 and 1.0600-1.0560 with stop-loss at daily closing above 1.1100.

 
Intraday Support Levels
S1     1.0700
S2     1.0650
S3     1.0600-1.0560

Intraday  Resistance Levels
R1     1.0770-1.0850
R2     1.0900
R3     1.0950-1.1020

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.390 Buy
20-DMA   1.1050 Buy
50-DMA   1.1044 Buy
100-DMA   1.1066 Buy
200-DMA   1.1100 Buy
STOCH(5,3)   30.758 Buy
MACD(12,26,9)   0.008 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.1409/GBP, high of US$1.1932/GBP and settled the day up by 1.438% to close at US$1.1629/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.2924) 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 neutral territory and giving positive crossover to confirm bullish 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 1.1600-1.1900 with targets at 1.1600-1.1500-1.1445 and 1.1400-1.1330 stop-loss should be below 1.1290. Buy above 1.1600-1.1330 with targets 1.1660-1.1700-1.1805 and 1.1900-1.1960 with stop loss closing below 1.1290.

 
Intraday Support Levels
S1     1.1600-1.1500
S2     1.1445
S3     1.1400-1.1330

Intraday Resistance Levels
R1     1.1660-1.1700
R2     1.1805
R3     1.1900

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

24.801

Buy
20-DMA   1.2581 Buy
50-DMA   1.2840 Buy
100-DMA   1.2923 Buy
200-DMA   1.2678 Buy
STOCH(5,3)   11.940 Sell
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY109.32/USD and made an intraday high of JPY110.94/USD and settled the day up by 0.046% at JPY110.91/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (107.70), 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 109.30-113.00 with risk above 113.00 targeting 109.30-108.30-107.50 and 106.80-106.00. Long positions above 109.30-105.00 with targets of 110.20-110.90 and 111.50-112.20 with stop below 105.00.

 
Intraday Support Levels
S1     109.30-108.30
S2     107.50
S3     106.80-106.00

INTRADAY RESISTANCE LEVELS
R1     110.20-110.90
R2     111.50
R3     112.20-113.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.805 Buy
20-DMA   107.54 Sell
50-DMA   108.92 Sell
100-DMA   108.95 Sell
200-DMA   108.26 Sell
STOCH(9,6)   89.253 Sell
MACD(12,26,9)   -0.161 Sell

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