AAFX TRADING

Daily Market Lookup

  • The dollar edged lower in European trading Thursday, with investors seemingly prepared to move out of the safe haven into riskier currencies ahead of key U.S. unemployment data. The outbreak of the pandemic has caused developed economies to virtually close down as governments attempt social distancing policies to stem the spreading of the virus. The starkest evidence of the economic damage caused came last week when weekly U.S. initial jobless claims, one of the earliest gauges of economic trends, jumped to 3.28 million, blowing past the previous record of 695,000 set in 1982. This week’s numbers are released at 8:30 AM ET (1230 GMT), with another 3.5 million claims expected. Obviously these are poor numbers, but if there can be a positive slant, it may be that a large number of claims means that displaced workers are availing themselves of the backstop support provided in the stimulus bill. That would keep much-needed disposable income in the economy. Additionally, the price of oil climbed sharply Thursday after President Donald Trump stated late Wednesday that Russia and Saudi Arabia would make a deal to end their price war within a "few days". Global oil prices have fallen by roughly two-thirds this year, hitting hard the finances of the countries that depend on oil revenue for funding. Some vulnerable emerging market currencies have come under extreme pressure recently as wide current account deficits, low credit ratings and limited foreign currency reserves heighten capital flight risks. The South African rand hit record lows while the Turkish lira sank to a two-year low. Thursday’s more positive tone has allowed these to post small recoveries. The U.S dollar rose in Asia on Thursday as investors continued to look for safe havens. U.S President Donald Trump warned Americans to brace for a "rough two weeks” overnight as the World Health Organization said that the number of global COVID-19 cases topped 800,000 as of April 1. Data prepared by Investing.com predicts that another 3.5 million Americans filed for unemployment benefits as the U.S. announces its weekly initial jobless claims later today.
  • The number of Americans filing claims for unemployment benefits likely shot to a record high for a second week in a row as more jurisdictions enforced stay-at-home measures to curb the coronavirus pandemic, which economists say has pushed the economy into recession. Thursday’s weekly jobless claims report from the Labor Department, the most timely data on the economy’s health, is expected to show that claims blew past the previous week’s record 3.3 million. It will likely reinforce economists’ views that the longest employment boom in U.S. history probably ended in March. More than 80% of Americans are under some form of lockdown, up from less than 50% a couple of weeks ago, leaving state employment offices overwhelmed by an avalanche of applications. The United States has the highest number of confirmed cases of COVID-19, the respiratory illness caused by the virus, with nearly 188,000 people infected. Almost 4,000 people in the country have died from the illness, according to a Reuters tally. Initial claims for state unemployment benefits probably raced to a seasonally adjusted 3.50 million for the week ended March 28, according to a Reuters survey of economists. Estimates in the survey were as high as 5.25 million. Claims data for the week ended March 21 is likely to be revised higher as many state employment offices reported challenges processing applications. Applications for unemployment benefits peaked at 665,000 during the 2007-2009 recession, during which 8.7 million jobs were lost. Economists say the country should brace for jobless claims to continue escalating, partly citing generous provisions of a historic $2.2 trillion fiscal package signed by President Donald Trump last Friday and the federal government’s easing of requirements for workers to seek benefits. According to a Reuters survey of economists, the government report on Friday is likely to show nonfarm payrolls dropped by 100,000 jobs last month after a robust increase of 273,000 in February. The unemployment rate is forecast to rise three-tenths of a percentage point to 3.8% in March.
  • Crude oil futures surged on Thursday after U.S. President Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their oil price war and Russian President Vladimir Putin called for a solution to "challenging" oil markets. Trump said he had talked recently with the leaders of both Russia and Saudi Arabia and believed the two countries would make a deal to end their price war within a "few days" - lowering production and bringing prices back up. He also said he would be meeting with oil executives, where he is expected to discuss a range of options to help the industry amid the sharp hit to demand as the coronavirus outbreak has hammered industrial activity and kept cars off the road. Speaking at a government meeting on Wednesday, Putin said that both oil producers and consumers should find a solution that would improve the "challenging" situation of global oil markets. Some analysts cautioned there is still a long way to go before any output cut agreement is struck. With markets facing 15 million barrels per day (bpd) of oversupply in the second quarter and storage maxing out in April, extraordinary curtailments of oil supply will be needed in May and June, said Kang Wu, head of Asia analytics at S&P Global Platts. Saudi Arabia's crude supply rose on Wednesday to a record of more than 12 million barrels per day, two industry sources said, despite a plunge in demand and U.S. pressure on the kingdom to stop flooding the market. U.S. shale producer Whiting Petroleum Corp, once the largest oil producer in North Dakota, on Wednesday became the first publicly traded casualty of the oil price collapse as it filed for Chapter 11 bankruptcy.

 

 
Intraday RESISTANCE LEVELS
2nd April 2020 R1 R2 R3
GOLD-XAU 1,600 1,612 1,625-1,640
Silver-XAG 14.40-15.00 15.30 16.00-16.35
Crude Oil 24.00 25.30-26.10 27.00
EURO/USD 1.1010-1.1050 1.1085 1.1150-1.1200
GBP/USD 1.2500 1.2570 1.2650-1.2700
USD/JPY 107.50-108.30 109.00 110.20-110.90

Intraday SUPPORTS LEVELS
2nd April 2020 S1 S2 S3
GOLD-XAU 1,574-1,560 1,547 1,536-1,528
Silver-XAG 13.90 13.60 13.00-12.30
Crude Oil 23.50-23.10 22.00 21.00-20.45
EURO/USD 1.0900-1.0850 1.0770 1.0700-1.0630
GBP/USD 1.2400-1.2320 1.2250 1.2180-1.2130
USD/JPY 106.90 106.50-106.00 105.50

Intra-Day Strategy (2nd April 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$1599.82/oz and low of US$1568.40/oz. Gold down 1.041% at US$1590.55/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 1590-1546 with risk below 1546, targeting 1605-1625-1640-1655 and 1664-1675-1690. Sell below 1605-1654 keeping stop loss closing above 1654, targeting 1590-1560 and 1546-1536.

 
Intraday Support Levels
S1     1,574-1,560
S2     1,547
S3     1,536-1,528
Intraday Resistance Levels
R1     1,600
R2     1,612
R3     1,625-1,640

Technical Indicators

Name   Value Action
14DRSI  

50.609

Buy
20-DMA   1587.61 Buy
50-DMA  

1591.02

Buy
100-DMA   1544.82 Buy
200-DMA   1510.92 Buy
STOCH(5,3)   39.621 Sell
MACD(12,26,9)   -11.052 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$14.12/oz and low of US$13.80/oz settled down by 0.0860% at US$13.93/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
S2     13.60
S3     13.00-12.30

Intraday  Resistance Levels
R1     14.40-15.00
R2     15.30
R3     16.00-16.35

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.250 Buy
20-DMA   14.53 Sell
50-DMA   16.46 Sell
100-DMA   16.90 Sell
200-DMA   16.99 Buy
STOCH(5,3)   37.268 Buy
MACD(12,26,9)   -1.150 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US23.05/bbl, intraday low of US$21.83/bbl and settled up by 3.167% to close at US$22.68/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 23.50-20.00 with risk daily closing below 20.00 and targeting 24.00-25.30 and 26.10 and 27.60-28.50-30.00. Sell in between 23.10-27.40 with stop loss at 28.00; targeting 23.10-24.30-25.00 and 26.10-27.40.

 
Intraday Support Levels
S1     23.50-23.10
S2     22.00
S3     21.00-20.45

Intraday Resistance Levels
R1     24.00
R2     25.30-26.10
R3     27.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   31.911 Sell
20-DMA   27.20 Sell
50-DMA   41.32 Sell
100-DMA   53.02 Sell
200-DMA   53.02 Sell
STOCH(5,3)   42.130 Buy
MACD(12,26,9)   -6.327 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday an intraday low of US$1.10901/EUR, high of US$1.1038/EUR and settled the day down by 0.594% to close at US$1.0961/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 1.0900-1.0700 with risk below 1.0700, targeting 1.0900-1.10850-1.1150 and 1.1170-1.1200-1.1250. Sell below 1.1010-1.1200 targeting 1.0900-1.0850a and 1.0770-1.0700-1.0630 with stop-loss at daily closing above 1.1200.

 
Intraday Support Levels
S1     1.0900-1.0850
S2     1.0770
S3     1.0700-1.0630

Intraday  Resistance Levels
R1     1.1010-1.1050
R2     1.1085
R3     1.1150-1.1200

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.673 Buy
20-DMA   1.1048 Buy
50-DMA   1.0994 Buy
100-DMA   1.1044 Buy
200-DMA   1.1078 Buy
STOCH(5,3)   80.758 Buy
MACD(12,26,9)   0.008 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2329/GBP, high of US$1.2442/GBP and settled the day up by 0.269% to close at US$1.2370/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 1.2500-1.2700 with targets at 1.2400-1.2320-1.2250 and 1.2180-1.2130-1.2000 stop-loss should be below 1.2570. Buy above 1.2400-1.2000 with targets 1.2500-1.2570 and 1.2650-1.2700 with stop loss closing below 1.1290.

 
Intraday Support Levels
S1     1.2400-1.2320
S2     1.2250
S3     1.2180-1.2130

Intraday Resistance Levels
R1     1.2500
R2     1.2570
R3     1.2650-1.2700

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

51.801

Buy
20-DMA   1.2252 Buy
50-DMA   1.2678 Buy
100-DMA   1.2859 Buy
200-DMA   1.2656 Buy
STOCH(5,3)   86.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY106.91/USD and made an intraday high of JPY107.93/USD and settled the day up by 0.340% at JPY107.15/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 107.50-111.00 with risk above 111.00 targeting 106.90-105.50. Long positions above 107.50-105.00 with targets of 107.50-108.30-109.00 and 110.20-110.90-111.50 with stop below 105.00.

 
Intraday Support Levels
S1     106.90
S2     106.50-106.00
S3     105.50

INTRADAY RESISTANCE LEVELS
R1     107.50-108.30
R2     109.00
R3     110.20-110.90

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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