AAFX TRADING

Daily Market Lookup

  • The euro and Italian bonds declined after European Union finance ministers failed to agree on joint measures to cushion the region’s economy against the impact of the coronavirus crisis. The common currency fell against most Group-of-10 peers, while benchmark debt yields in Italy, seen as the most vulnerable economy to the pandemic, jumped to a three-week high. German bunds, a haven asset, rallied in contrast following the failure after a teleconference that lasted more than 16 hours. Markets had been expecting a package of stimulus measures totaling around half a trillion euros, involving support from the European Stability Mechanism, the European Investment Bank and the European Commission. The euro dropped as much as 0.6% to $1.0830, while Italian 10-year bond yields jumped 18 basis points to 1.80%, the highest level since March 19. German 10-Year yields dipped five basis points to -0.36%.The U.S. dollar is back in demand Wednesday, as investors sought safe havens amid disappointing news surrounding the coronavirus outbreak and the economic damage in Europe becomes apparent. The U.S. recorded its highest single-day increase in virus deaths on Tuesday, with some 1,800 deaths. Governor Andrew Cuomo said that deaths in New York state also rose. This came as a disappointment as the state had previously seen two days of slowing infection rates and fewer deaths. The euro is weakening as Eurozone finance ministers struggle to reach an agreement on how to assist ailing member states hit by the coronavirus. The sticking point appears to be the issuance of common debt instruments to finance the coronavirus-related spending, commonly known as ‘coronabonds’, which France, Italy and Spain in particular are pushing for, while Germany, the Netherlands, Austria and Finland are against. However, the need for aid is becoming more apparent with every passing day. The Bank of France estimated Wednesday that the country’s economy contracted 6% in the first quarter due to the lockdown measures put in place to combat the coronavirus outbreak. That would be the biggest contraction on a quarterly basis since World War II. And these measures don’t look like ending anytime soon, with the Italian press reporting that Italy may not reopen schools before September.
  • The U.S dollar reversed its losses on Wednesday in Asia as investors flocked to safe havens amid increasing numbers of fatalities from the COVID-19 pandemic. New York state and the United Kingdom announced their highest daily death toll overnight, despite the falling number of cases reported in the beginning of the week. New York governor Andrew Cuomo reported 5,489 deaths in the state overnight. “While the virus’ curve is flattening, the economic effects of the corona crisis will linger for years,” Joe Capurso, Commonwealth Bank of Australia currency analyst, told CNBC. “Economies will take time to re-open, some businesses will not re-open, and unemployment will take years to (recover). We think that means the dollar and yen will re-strengthen,” he said.
  • Oil prices swung up in Asia on Wednesday morning as they rebounded from sharp losses during the previous session. Prices dropped overnight as the American Petroleum Institute (API) estimated a huge build of 11.9 million barrels in the U.S. crude oil inventory for the week ending April 3. Investors still worried about an oversupply against plummeting demand as they compared the estimate to analyst forecasts of a 9.3-million-barrel build prepared by Investing.com. They will have to wait and see for the results of OPEC+’s online on Thursday to discuss and attempt to resolve the ongoing price war between Russia and Saudi Arabia. But some are already worried that the meeting will not be enough. Oil rebounded on Wednesday after a two-day fall, lifted by hopes that a meeting between OPEC members and allied producers on Thursday will trigger output cuts to shore up prices that have crumbled amid the coronavirus pandemic. Thursday's videoconference meeting between members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, is widely expected to be more successful than their gathering in early March. That ended in failure to extend cuts, and a price war between Saudi Arabia and Russia amid slumping demand. But doubts remain over the role of the United States in any production curbs. Saudi Arabia, other OPEC member countries and Russia, a grouping known as OPEC+, are likely to agree to cut output, but that accord could be dependent on whether the United States would go along with cuts. The U.S. Department of Energy said on Tuesday that U.S. output is already declining without government action. Iran's Oil Minister, Bijan Zanganeh, said Iran does not agree with holding any OPEC+ meeting without a clear-cut proposal and expected outcome from such talks, according to a letter sent to OPEC and seen by Reuters. U.S. crude production is expected to slump by 470,000 bpd and demand is set to drop by about 1.3 million bpd in 2020, the U.S. Energy Information Administration (EIA) said on Tuesday. U.S. crude inventories jumped by 11.9 million barrels to 473.8 million barrels in the week to April 3, according to data from the American Petroleum Institute (API) released on Tuesday. With a drop in fuel demand amid the virus outbreak, gasoline stocks also rose by 9.4 million barrels, marking the biggest one-week gain in the API figures since January 2017. Official data from the EIA is due at 10:30 a.m. EDT (1430 GMT) on Wednesday.

 

 
Intraday RESISTANCE LEVELS
8th April 2020 R1 R2 R3
GOLD-XAU 1,660-1.669 1,674 1,690-1,704
Silver-XAG 15.30-16.00 16.35 17.00-17.40
Crude Oil 29.00-30.20 31.00 32.30-33.00
EURO/USD 1.0900 1.1010 1.1050-1.1085
GBP/USD 1.2400 1.2500 1.2570-1.2650
USD/JPY 109.40 110.20-110.90 111.50

Intraday SUPPORTS LEVELS
8th April 2020 S1 S2 S3
GOLD-XAU 1,645-1,636 1,630 1,612-1,600
Silver-XAG 15.00-14.40 13.90 13.60-13.00
Crude Oil 28.50-28.00 27.00 26.10-25.30
EURO/USD 1.0850--1.0770 1.0700 1.0630-1.0590
GBP/USD 1.2320--1.2250 1.2180 1.2130-1.2050
USD/JPY 108.30-107.50 106.90 106.50-106.00

Intra-Day Strategy (8th 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 Tuesday made its intraday high of US$1673.56/oz and low of US$1642.27/oz. Gold down 0.654% at US$1647.00/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 positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1645-1600 with risk below 1600, targeting 1655-1664 and 1674-1690-1704. Sell below 1660-1705 keeping stop loss closing above 1705, targeting 1645-1636-1612 and 1600-1590.

 
Intraday Support Levels
S1     1,645-1,636
S2     1,630
S3     1,612-1,600
Intraday Resistance Levels
R1     1,660-1.669
R2     1,674
R3     1,690-1,704

Technical Indicators

Name   Value Action
14DRSI  

53.609

Buy
20-DMA   1581.31 Buy
50-DMA  

1547.90

Buy
100-DMA   1547.90 Buy
200-DMA   1512.98 Buy
STOCH(5,3)   51.621 Sell
MACD(12,26,9)   -3.894 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$15.42/oz and low of US$14.86/oz settled down by 0.140% at US$14.96/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 15.00-11.75 targeting 15.30-16.00 and 16.35-17.00-17.40; stop breakage below 11.75. Sell below 15.30-17.40 with stop loss above 17.40; targeting 15.00-14.40 and 13.90-13.60-13.00.

 
Intraday  Support Levels
S1     15.00-14.40
S2     13.90
S3     13.60-13.00

Intraday  Resistance Levels
R1     15.30-16.00
R2     16.35
R3     17.00-17.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.250 Buy
20-DMA   13.94 Sell
50-DMA   16.15 Sell
100-DMA   16.80 Sell
200-DMA   16.98 Buy
STOCH(5,3)   79.268 Buy
MACD(12,26,9)   -1.150 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US30.06/bbl, intraday low of US$26.95/bbl and settled down by 5.38% to close at US$27.52/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 28.10-25.00 with risk daily closing below 25.00 and targeting 30.20-31.00-32.30 and 33.00-34.00. Sell in between 29.20-34.50 with stop loss at 34.50; targeting 28.75-28.00 and 27.00-26.20-25.30.

 
Intraday Support Levels
S1     28.50-28.00
S2     27.00
S3     26.10-25.30

Intraday Resistance Levels
R1     29.00-30.20
R2     31.00
R3     32.30-33.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.963 Sell
20-DMA   26.04 Buy
50-DMA   39.39 Sell
100-DMA   48.99 Sell
200-DMA   52.43 Sell
STOCH(5,3)   72.130 Buy
MACD(12,26,9)   -3.327 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.0783/EUR, high of US$1.0925/EUR and settled the day up by 0.918% to close at US$1.0890/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 1.0850-1.0530 with risk below 1.0530, targeting 1.0900-1.1010 and 1.1100-1.1150. Sell below 1.0900-1.1150 targeting 1.0850-1.0770-1.0700-1.0630 and 1.0590-1.0530 with stop-loss at daily closing above 1.1200.

 
Intraday Support Levels
S1     1.0850--1.0770
S2     1.0700
S3     1.0630-1.0590

Intraday  Resistance Levels
R1     1.0900
R2     1.1010
R3     1.1050-1.1085

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.562 Buy
20-DMA   1.0925 Buy
50-DMA   1.0973 Buy
100-DMA   1.1034 Buy
200-DMA   1.1063 Buy
STOCH(5,3)   31.758 Buy
MACD(12,26,9)   -0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2164/GBP, high of US$1.2383/GBP and settled the day up by 0.831% to close at US$1.2331/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 1.2400-1.2700 with targets at 1.2700 and 1.2320-.12250-1.2180 and 1.2130-1.2000 stop-loss should be below 1.2700. Buy above 1.2320-1.2050 with targets 1.2400-1.2500 and 1.2570-1.2650 with stop loss closing below 1.1290.

 
Intraday Support Levels
S1     1.2320--1.2250
S2     1.2180
S3     1.2130-1.2050

Intraday Resistance Levels
R1     1.2400
R2     1.2500
R3     1.2570-1.2650

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

49.801

Buy
20-DMA   1.2142 Buy
50-DMA   1.2631 Buy
100-DMA   1.2841 Buy
200-DMA   1.2650 Buy
STOCH(5,3)   30.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY108.66/USD and made an intraday high of JPY109.26/USD and settled the day down by 0.416% at JPY108.75/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 109.40-111.50 with risk above 111.50 targeting 108.30-107.50-106.90 and 106.00-105.50. Long positions above 108.30-105.00 with targets of 109.40-110.20-110.90 and 111.50-112.00 with stop below 105.00.

 
Intraday Support Levels
S1     108.30-107.50
S2     106.90
S3     106.50-106.00

INTRADAY RESISTANCE LEVELS
R1     109.40
R2     110.20-110.90
R3     111.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.904 Buy
20-DMA   108.23 Sell
50-DMA   108.75 Sell
100-DMA   108.95 Sell
200-DMA   108.31 Sell
STOCH(9,6)   69.253 Sell
MACD(12,26,9)   -0.161 Sell

AAFX TRADING
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