AAFX TRADING

Daily Market Lookup

  • The U.S. dollar was largely unchanged Thursday, with activity in the foreign exchange market subdued as investors hold fire amid abundant near term event risk. The most important data release of the day will be the U.S. weekly jobless claims, at 8:30 AM ET (12:30 GMT), which has become the go-to economic indicator to capture the latest impact of the virus. Economists are expecting that claims eased off a little from the huge 6.65 million number the week before, but will still post a rise of 5.25 million, according to forecasts compiled by Investing.com. They will join the almost 10 million Americans who have submitted claims since the end of March. Also of interest will be the meeting of the Organization of the Petroleum Exporting Countries and its allies as they attempt to balance an oversupplied oil market following the slump in global demand on the back of the coronavirus outbreak. Historically, the price of oil is inversely related to the price of the dollar, as when the greenback is strong you need less to buy a barrel of oil, However, the price of oil has also become a function of the demand destruction caused by the Covid-19 outbreak - the more the global economy has shut down, the more oil has fallen and the more the dollar has appreciated as a safe haven. If the major oil producers can get together to agree to cut supply, potentially raising the price of crude, the dollar could be adversely impacted. Finally, eurozone finance ministers are getting together again to try and agree the best way a regional strategy for financing crisis mitigation measures. Disagreements persist over whether to issue joint debt known as ‘coronabonds’ as part of a wider recovery plan.
  • The U.K. government signaled plans to borrow directly from the Bank of England, easing the pressure to immediately sell bonds for the billions it needs to support the economy through the coronavirus pandemic .The Treasury said Thursday that it’s increasing the long-standing “Ways and Means facility,” a short-term overdraft that it can use if needed to smooth its cash flow and support the functioning of markets.While there’s usually only about 400 million pounds ($500 million) in the facility, during the financial crisis, demand at one point reached almost 20 billion pounds. The move, while flagged as temporary, will fan speculation among investors and economists that monetary and fiscal policy makers will work more closely than ever to revive their economies given interest rates are so low and state debts are surging. Such ties have historically been frowned on for fear of igniting inflation and undermining the independence of central banks. In an op-ed for the Financial Times on Sunday, BOE Governor Andrew Bailey rejected the idea of using monetary financing to help contain the economic impact of coronavirus, and said the bank’s policies stop short of such action. The government still intends to use markets as their primary source of funding and the U.K. has already doubled bond sales this month to help fight the crisis. The Institute for Fiscal Studies has predicted borrowing may be on course to top 175 billion pounds -- the equivalent of 8% of GDP -- if the economy “only” shrinks by 5% this year. Measures already announced include a package that pays 80% of furloughed workers wages and grants for small businesses. It said any drawings would be repaid as soon as possible and before the end of the year.
  • Oil prices rose on Thursday on expectations the world's largest oil producers would agree to cut production at a meeting later in the day as the industry grapples with a coronavirus-driven collapse in global oil demand. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - a group known as OPEC+ - are set to convene a video conference meeting on Thursday. The meeting is expected to be more successful than their gathering in March, where they failed to agree to extend supply cuts and triggered a price war between Saudi Arabia and Russia. Hopes of an agreement to cut between 10 million and 15 million bpd rose after media reports suggested Russia was ready to reduce its output by 1.6 million bpd and Algeria's energy minister said he expected a "fruitful" meeting. Such a sizable reduction would be far bigger than any production cut OPEC has ever agreed on before. Following the OPEC+ meeting, energy ministers from the Group of 20 major economies are set to meet to find ways to help ease the impact of the COVID-19 pandemic on global energy markets. However with oil prices having lost half their value since the start of the year and oil demand forecast to slide as much as 30%, analysts are sceptical about how effective an OPEC+ cut would be in shoring up prices. UBS expects oil demand this quarter to fall by about 20 million bpd, down 20% from a year earlier. Given the rapidly rising oil inventories, the market is likely to be still awash with cheap oil even when demand recovers. U.S. Energy Information Administration data on Wednesday showed crude stocks rose by 15.2 million barrels, their biggest ever one-week rise. Saudi Arabia and Russia still need to resolve differences over plans for deep global oil production cuts, a Russian source and an OPEC source said on Thursday, hours before the start of talks between OPEC, Russia and others over efforts to prop up prices. Two Russian sources said the maximum Russian oil production cut under any global pact on supplies would be 2 million barrels per day (bpd) Saudi, Russia still at odds over plans for oil cuts hours before talks: sources.

 

 
Intraday RESISTANCE LEVELS
9th 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 30.50 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
9th 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 29.00-28.50 28.00 27.00-26.10
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 (9th 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$1656.81/oz and low of US$1641.41/oz. Gold up 0.170% at US$1643.94/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  

1592.75

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 Wednesday made its intraday high of US$15.11/oz and low of US$14.86/oz settled up by 0.107% at US$14.90/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 Wednesday made an intra‐day high of US29.81/bbl, intraday low of US$27.77/bbl and settled up by 5.471% to close at US$29.45/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     29.00-28.50
S2     28.00
S3     27.00-26.10

Intraday Resistance Levels
R1     30.50
R2     31.00
R3     32.30-33.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.963 Sell
20-DMA   26.03 Buy
50-DMA   38.95 Sell
100-DMA   48.75 Sell
200-DMA   52.30 Sell
STOCH(5,3)   79.130 Buy
MACD(12,26,9)   -3.327 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday an intraday low of US$1.0829/EUR, high of US$1.0901/EUR and settled the day up by 0.314% to close at US$1.0856/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 Wednesday made an intra‐day low of US$1.2287/GBP, high of US$1.2419/GBP and settled the day up by 0.374% to close at US$1.2377/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 v
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY108.49/USD and made an intraday high of JPY109.09/USD and settled the day up by 0.0579% at JPY108.81/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

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