AAFX TRADING

Daily Market Lookup

  • The U.S. dollar has traded lower Wednesday, as currency investors take comfort in the agreement reached over a hefty stimulus package by the U.S., and look to get into currencies perceived as more risky. Senior Democrats and Republicans in the divided U.S. Congress said late Tuesday they had struck a preliminary deal on a $2 trillion stimulus package to limit the economic damage from the coronavirus pandemic. A vote on the relevant bill has been pencilled in for later Wednesday. At 4:50 AM ET (0850 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 101.600, down 0.6% on the day and down over 2% from Monday's high. It's still up more than 2.5% for the month, however. The dollar was also weaker against emerging currencies such as the rand and ruble, while central European currencies also clawed back recent losses against the euro. The euro has also pushed higher against the dollar, with EUR/USD trading at 1.0831, up 0.4%, but its gains have been less pronounced, after the Eurogroup made only timid progress in rolling out the region's fiscal backstop, the European Stability Mechanism, at a meeting on Tuesday. The group, which is made up of the finance ministers from the eurozone countries, dismissed the idea of joint debt instruments at the meeting. These would allow the measures needed to combat the coronavirus in the hard hit, but highly indebted, countries, like Italy and Spain, to be part financed by their richer neighbours While the ECB has come to the rescue by launching a gigantic new package of quantitative easing, it’s clear the extent to which individual countries can combat the pandemic depends on the strength of their balance sheets. Germany offered up over 1 trillion euros to support its own economy earlier this week, but cash-strapped Italy has only managed a 25 billion-euro package. This decision has seen increased pressure on the debt spreads of some of the eurozone countries against the benchmark German paper, and has weighed to a degree on the euro. Europe has become the fiercest battleground in the war against the Covid-19 outbreak, and the news overnight from Italy was not encouraging. Italy’s daily number of fatal cases increased to 743 from 602 the day before, halting the recent trend of decreasing numbers of daily deaths.
  • The dollar halted its decline and gains in riskier currencies petered out on Wednesday as fresh rises in coronavirus cases kept markets on edge and the greenback funding market tight. Foreign exchange markets were in consolidation as the prospect of a huge U.S. stimulus package bolstered Asian stock markets although gains in riskier currencies were tempered. The U.S Federal Reserve's offer of unlimited bond-buying, on top of opening discount dollar funding lines to central banks around the globe, has supported risk sentiment for the past day along with hopes for a huge U.S. fiscal stimulus package. But nerves and still-elevated demand for greenbacks in cash capped further gains in currencies like the Aussie, euro and pound. Spain reported its sharpest increase in cases overnight. India announced a 21-day lockdown of its 1.3 billion population. The World Health Organization said that New York could become the next epicenter of the pandemic. Within funding markets, signs of stress remain as businesses and investors drive enormous demand for dollars to cover liabilities and as a shelter from a maelstrom that has hit nearly every asset class. Cross-currency basis swap spreads, which reflect the cost of borrowing dollars abroad have relaxed for the euro but remain elevated for the yen and Australian dollar , for example.
  • Oil prices continued their rally into Wednesday morning in Asia after the American Petroleum Institute (API) reported a drop in the U.S. crude oil supply. API estimated a surprise draw of 1.247 million barrels in the U.S. crude oil inventory for the week ending March 21, with a build of 2.774 million barrels. This is a much bigger decrease than last week’s 421,000 barrels. Oil prices also got a boost from U.S. moves to halt the economic impact of the COVID-19 pandemic. Following the United States Federal Reserve’s announcement of unprecedented measures to boost the economy on Monday, the U.S. Senate looked close to reaching an agreement on a massive stimulus package on Tuesday. The talks will continue Wednesday. But some analysts struck a note of caution, as demand continues to decrease with more countries imposing lockdowns to curb the spread of COVID-19 while Saudi Arabia and Russia are also no closer to ending their price war. U.S. oil inventories fell slightly last week, according to a measure by the American Petroleum Institute out Tuesday. Stockpiles of crude fell by 1.25 million barrels for the week ended March 20, the API said. The were down about 421,000 the week before, according to API. U.S. distillate stockpiles fell by 1.9 million barrels, while gasoline dropped by 2.6 million barrels.

 

 
Intraday RESISTANCE LEVELS
25th March 2020 R1 R2 R3
GOLD-XAU 1,605-1,612 1,625 1,640-1,654
Silver-XAG 14.50-15.00 15.30 16.00-16.35
Crude Oil 25.30-26.10 27.40 28.00-29.10
EURO/USD 1.0850 1.0900 1.0950-1.1020
GBP/USD 1.1930-1.2000 1.2130 1.2200-1.2250
USD/JPY 110.90 111.50 112.20-113.00

Intraday SUPPORTS LEVELS
25th March 2020 S1 S2 S3
GOLD-XAU 1,590 1,560-1,546 1,536
Silver-XAG 13.90-13.60 13.00 12.30-11.75
Crude Oil 24.30-23.10 22.00 21.00-20.40
EURO/USD 1.0770-1.0700 1.0650 1.0600-1.0560
GBP/USD 1.1805-1.1700 1.1660 1.1930-1.2000
USD/JPY 110.20-109.30 108.30 108.30-107.50

Intra-Day Strategy (25th 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 Tuesday made its intraday high of US$1634.07/oz and low of US$1552.26/oz. Gold up 4.357% at US$1620.73/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 1590-1524 with risk below 1514, targeting 1605-1612 and 1625-1640-1655. Sell below 1605-1654 keeping stop loss closing above 1654, targeting 1590-1560-1546 and 1536-1524.

 
Intraday Support Levels
S1     1,590
S2     1,560-1,546
S3     1,536
Intraday Resistance Levels
R1     1,605-1,612
R2     1,625
R3     1,640-1,654

Technical Indicators

Name   Value Action
14DRSI  

53.609

Buy
20-DMA   1589.38 Buy
50-DMA  

1585.49

Buy
100-DMA   1537.82 Buy
200-DMA   1505.16 Buy
STOCH(5,3)   87.621 Buy
MACD(12,26,9)   -11.052 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$14.30/oz and low of US$13.15/oz settled up by 7.46% at US$14.24/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 13.90-11.75 targeting 14.50-14.80-15.30 and 16.00-16.35; stop breakage below 11.75. Sell below 14.50-16.35 with stop loss above 16.35; targeting 13.90-13.60-13.00 and 12.50-11.75-11.25.

 
Intraday  Support Levels
S1     13.90-13.60
S2     13.00
S3     12.30-11.75

Intraday  Resistance Levels
R1     14.50-15.00
R2     15.30
R3     16.00-16.35

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.250 Buy
20-DMA   15.26 Sell
50-DMA   16.84 Sell
100-DMA   17.06 Sell
200-DMA   17.02 Buy
STOCH(5,3)   93.268 Buy
MACD(12,26,9)   -1.150 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US25.61/bbl, intraday low of US$23.60/bbl and settled up by 1.230% to close at US$24.69/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 24.30-22.00 with risk daily closing below 22.00 and targeting 25.00-26.10 and 27.60-28.50-30.00. Sell in between 25.00-27.40 with stop loss at 28.00; targeting 24.30 and 26.10-27.40.

 
Intraday Support Levels
S1     24.30-23.10
S2     22.00
S3     21.00-20.40

Intraday Resistance Levels
R1     25.30-26.10
R2     27.40
R3     28.00-29.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   28.911 Sell
20-DMA   34.33 Sell
50-DMA   45.50 Sell
100-DMA   52.46 Sell
200-DMA   54.16 Sell
STOCH(5,3)   35.130 Buy
MACD(12,26,9)   -6.460 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.0725/EUR, high of US$1.0887/EUR and settled the day up by 0.526% to close at US$1.0783/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 1.0770-1.0560 with risk below 1.0560, targeting 1.0850-1.0900 and 1.0950-1.1020-1.1100. Sell below 1.0850-1.1100 targeting 1.10770-1.0700-1.0650 and 1.0600-1.0560 with stop-loss at daily closing above 1.1100.

 
Intraday Support Levels
S1     1.0770-1.0700
S2     1.0650
S3     1.0600-1.0560

Intraday  Resistance Levels
R1     1.0850
R2     1.0900
R3     1.0950-1.1020

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.390 Buy
20-DMA   1.1054 Buy
50-DMA   1.1003 Buy
100-DMA   1.1046 Buy
200-DMA   1.1084 Buy
STOCH(5,3)   18.758 Buy
MACD(12,26,9)   0.008 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.1476/GBP, high of US$1.1799/GBP and settled the day up by 1.860% to close at US$1.1747/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 1.1930-1.2250 with targets at 1.1805-1.1700-1.1600 and 1.1500-1.1445-1.1400 stop-loss should be below 1.2250. Buy above 1.1805-1500 with targets 1.1960-1.2000 and 1.2130-1.2200-1.2250 with stop loss closing below 1.1290.

 
Intraday Support Levels
S1     1.1805-1.1700
S2     1.1660
S3     1.1930-1.2000

Intraday Resistance Levels
R1     1.1930-1.2000
R2     1.2130
R3     1.2200-1.2250

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 Tuesday made intra‐day low of JPY110.07/USD and made an intraday high of JPY111.70/USD and settled the day up by 0.065% at JPY111.29/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     110.20-109.30
S2     108.30
S3     108.30-107.50

INTRADAY RESISTANCE LEVELS
R1     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

AAFX TRADING
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