AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged lower Tuesday, with investors taking a cautiously optimistic view of the coronavirus pandemic's progress, and thus drifting out of the safe haven. While the number of confirmed cases of the Covid-19 virus continues to climb, and is rapidly approaching two million globally, the conversation has turned more towards when countries can reopen their economies. In Europe, the two hardest hit countries to date are already loosening their restrictions - Spain has allowed around 300,000 nonessential workers to return to their jobs, while Italy will allow a narrow range of businesses to resume operations this week. In the U.S., states on the east and west coasts are getting together to coordinate gradual economic reopenings as the coronavirus crisis finally appeared to be ebbing. By contrast, France extended its lockdown to May 11, while Germany is expected to likewise later this week. France's Finance Minister Bruno Le Maire was reported earlier as saying he expects French GDP to shrink by 8% this year. Economic restarts ought to be dollar-negative, analysts say. The release earlier Tuesday of better-than-expected Chinese trade data for March, as year-on-year exports and imports contracted less than expected, plays into this theme. Also of interest to the foreign exchange markets was the deal agreed by the Organization of the Petroleum Exporting Countries and its allies to cut output by 9.7 million barrels per day in May and June. The price of oil had become a function of the demand destruction caused by the coronavirus outbreak - the more the global economy shut down, the more oil has fallen and the more the dollar appreciated as a safe haven. The Russian ruble, the most actively traded of the world's 'petrocurrencies' hit its highest in nearly a month Tuesday, despite a sharp escalation in Covid-19 cases domestically. The agreement has only resulted in a small boost to the price of oil to date, but it removes the near-term possibility of a price war, said Danske Bank. The U.S. dollar was down on Tuesday as the COVID-19 pandemic as investors prepare for a difficult earning season. This comes as the U.S. announced on Thursday that over 16 million people claimed unemployment since March 21. The risk-linked currencies received a boost from the jump in oil prices as OPEC+ agreed to a production cut of almost 10 million barrels on Sunday.
  • The dollar inched lower on Tuesday, but gains in riskier currencies were capped as traders fretted about company earnings and braced for Chinese trade data likely to show the sweeping impact of the coronavirus health crisis on economic activity. Hints that the virus may be peaking in the U.S., where states are beginning to plan for re-opening, and in retreat elsewhere are accompanied daily by dire economic reports. Chinese trade data, due mid morning, and U.S. earnings, beginning later on Tuesday with Wall Street banks, herald the first detailed look at the crisis' darkest months Economists polled by Reuters are expecting a slump in Chinese exports to have continued last month and forecast a 14% drop compared with a year earlier, as global demand dived amid lockdowns and business closures around the world. The grim trade report is likely to reinforce views that China's economy sharply contracted in the first quarter for the first time since at least 1992. Though volatility-boosted trading earnings may deliver a silver lining for the banks, earnings for S&P 500 firms are expected to tumble 10.2% in the first quarter, compared with a Jan. 1 forecast of a 6.3% rise.
  • Oil prices rose around 1% on Tuesday after the U.S. Energy Information Administration (EIA) predicted shale output in the world's biggest crude producer would fall by a record amount in April, adding to cuts from other major producers. The Organization of the Petroleum Exporting Countries, along with Russia and other producing countries - known as OPEC+ - agreed over Easter to cut output by 9.7 million barrels per day (bpd) in May and June, equal to about 10% of global supply before the viral outbreak. The United States, the world's biggest producer, is reducing output as well, and other countries are taking the estimated cut in production to about 19.5 million bpd. But analysts, oil industry executives and others say no matter how the numbers are massaged, the reduction will not be enough to match a contraction of around a third of global oil demand due to the outbreak. Inventories, where available, are expected to fill up fast even as some countries among the G20 agreed to buy oil for their national reserves. Still, U.S. production is falling in tandem with a drop in prices and there are signs the coronavirus outbreak may have peaked in some areas of the world. Already there are signs in China, where the virus started and is now largely under control, that demand has returned with data showing that crude oil imports rose 12 percent in March from a year earlier Supporting prices, U.S. shale oil output is expected to have the biggest monthly drop on record during April, the U.S. EIA said on Monday. Production has been sliding for several months, but the declines are expected to accelerate sharply in April with a loss of nearly 200,000 bpd of production, the EIA said. That would bring shale oil output, which has been the driver of the sharp growth in U.S. production, to 8.7 million bpd.

 

 
Intraday RESISTANCE LEVELS
14th April 2020 R1 R2 R3
GOLD-XAU 1,720-1,729 1.740 1,755
Silver-XAG 15.60-16.10 16.70 17.00-17.40
Crude Oil 31.00 31.00 31.50-33.20
EURO/USD 1.0970-1.1030 1.1060 .1090-1.1150
GBP/USD 1.2590 1.2645 1.2700-1.2740
USD/JPY 108.30-109.40 110.20 110.90-111.50

Intraday SUPPORTS LEVELS
14th April 2020 S1 S2 S3
GOLD-XAU 1,704-1,690 1,674 1,660-1,645
Silver-XAG 15.30-15.00 14.40 13.90-13.60
Crude Oil 29.00-28.00 27.60 27.00-25.60
EURO/USD 1.0900-1.0850 1.0770 1.0700-1.0630
GBP/USD 1.2500-1.2400 1.2320 1.2250-1.2180
USD/JPY 107.50-106.90 106.20 105.60-105.00

Intra-Day Strategy (14th 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 Monday made its intraday high of US$1723.63/oz and low of US$1712.16/oz. Gold up 1.496% at US$1712.16/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 negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1704-1645 with risk below 1645, targeting 1,720-1740 and 1755-1774. Sell below 1720-1774 keeping stop loss closing above 1774, targeting 1705-1690-1674 and 1660-1645.

 
Intraday Support Levels
S1     1,704-1,690
S2     1,674
S3     1,660-1,645
Intraday Resistance Levels
R1     1,720-1,729
R2     1.740
R3     1,755

Technical Indicators

Name   Value Action
14DRSI  

66.609

Buy
20-DMA   1605.31 Buy
50-DMA  

1604.75

Buy
100-DMA   1560.90 Buy
200-DMA   1520.98 Buy
STOCH(5,3)   88.621 Sell
MACD(12,26,9)   -3.894 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$15.47/oz and low of US$15.10/oz settled up by 0.2282% at US$15.37/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 15.30-13.00 targeting 15.60-16.10 and 16.70-17.00-17.40; stop breakage below 13.00. Sell below 15.60-17.40 with stop loss above 17.40; targeting 15.30-14.40 and 13.90-13.60-13.00.

 
Intraday  Support Levels
S1     15.30-15.00
S2     14.40
S3     13.90-13.60

Intraday  Resistance Levels
R1     15.60-16.10
R2     16.70
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   16.79 Sell
200-DMA   16.98 Buy
STOCH(5,3)   75.268 Buy
MACD(12,26,9)   -0.374 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US29.67/bbl, intraday low of US$27.157/bbl and settled down by 2.959% to close at US$28.13/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 29.00-25.50 with risk daily closing below 25.50 and targeting 29.50-30.20-31.00 and 31.50-32.30. Sell in between 29.50-32.30 with stop loss at 32.50; targeting 29.00-28.00-27.60 and 27.00-26.20-25.60.

 
Intraday Support Levels
S1     29.00-28.00
S2     27.60
S3     27.00-25.60

Intraday Resistance Levels
R1     31.00
R2     31.00
R3     31.50-33.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.117 Sell
20-DMA   25.66 Buy
50-DMA   38.02 Sell
100-DMA   48.14 Sell
200-DMA   52.00 Sell
STOCH(5,3)   32.130 Sell
MACD(12,26,9)   -3.053 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.0891/EUR, high of US$1.0967/EUR and settled the day down by 0.503% to close at US$1.0909/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1031), which become immediate resistance level, break above will target 1.1090. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish 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 1.0900-1.0630 with risk below 1.0630, targeting 1.0970-1.1030 and 1.1060-1.1150. Sell below 1.0950-1.1150 targeting 1.0900-1.0850-1.0770 and 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     1.0970-1.1030
R2     1.1060
R3     .1090-1.1150

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.562 Buy
20-DMA   1.0904 Buy
50-DMA   1.0968 Buy
100-DMA   1.1031 Buy
200-DMA   1.1060 Buy
STOCH(5,3)   75.758 Buy
MACD(12,26,9)   -0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2447/GBP, high of US$1.2535/GBP and settled the day up by 0.415% to close at US$1.2505/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.2647) is become major resistance level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.2590-1.2740 with targets at 1.2500-1.2400-1.2320 and 1.2250-1.2180-1.2130 stop-loss should be below 1.2740. Buy above 1.2500-1.2130 with targets 1.2500-1.2590-1.2650 and 1.2700-1.2740 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2500-1.2400
S2     1.2320
S3     1.2250-1.2180

Intraday Resistance Levels
R1     1.2590
R2     1.2645
R3     1.2700-1.2740

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

57.288

Buy
20-DMA   1.2160 Buy
50-DMA   1.2571 Sell
100-DMA   1.2819 Sell
200-DMA   1.2647 Sell
STOCH(5,3)   92.940 Buy
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY107.45/USD and made an intraday high of JPY108.51/USD and settled the day down by 0.553% at JPY107.76/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.30), 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 neutral territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 108.40-111.50 with risk above 111.50 targeting 109.00-108.30-107.50-106.90 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     107.50-106.90
S2     106.20
S3     105.60-105.00

INTRADAY RESISTANCE LEVELS
R1     108.30-109.40
R2     110.20
R3     110.90-111.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.904 Buy
20-DMA   108.75 Buy
50-DMA   108.75 Sell
100-DMA   108.95 Sell
200-DMA   108.31 Buy
STOCH(9,6)   52.253 Sell
MACD(12,26,9)   -0.161 Sell

AAFX TRADING
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