AAFX TRADING

Daily Market Lookup

  • Asian share markets took a breather on Wednesday as warnings of the worst global recession since the 1930s underlined the economic damage already done even as some countries tried to re-open for business. China moved again to cushion its economy, cutting a key medium-term interest rate to record lows and paving the way for a similar reduction in benchmark loan rates. While not unexpected, it did help MSCI’s broadest index of Asia-Pacific shares outside Japan edge up 0.2% to a fresh one-month top. Even as some U.S. states considered relaxing restrictions, the country’s death toll rose by at least 2,228, a single-day record, according to a Reuters tally. President Donald Trump responded by saying some states could still open shortly or even immediately. He also temporarily halted funding to the World Health Organization, saying it should have done more to head off the pandemic. Much economic damage has already been done, with the International Monetary Fund predicting the world this year would suffer its steepest downturn since the Great Depression of the 1930s. Bruce Kasman, chief economist at JPMorgan, warned such a slowdown would take a heavy toll on corporate earnings. Shares of JPMorgan Chase and Wells Fargo & Co both fell on Tuesday as the banks set aside billions of dollars to cover potential loan losses from the pandemic. Bond markets are still wagering on tough times ahead, along with unlimited support from central banks and a disinflationary pulse from lower energy prices. That drop in yields combined with the vast amounts of cash being created by the Federal Reserve has been a drag on the U.S. dollar in recent sessions. Currencies leveraged to global growth, including the Australian and New Zealand dollars, have led the way higher though the dollar has also lost ground to its major peers. In energy markets, oil prices steadied on hopes for purchases by consumer countries for their strategic stockpiles on a scale not before seen.
  • The U.S. dollar rose in Asia on Wednesday as the U.S. Federal Reserve unleased a massive new lending program overnight. But the greenback faces further stress as the release of U.S. retail sales and industrial production figures later in the day reveal the economic damage caused by the COVID-19 pandemic-induced lockdowns. U.S. President Trump said overnight that he aimed to reopen the country by May 1 as daily fatalities fall. But investors are cautious as the president’s top infectious diseases advisor Anthony Fauci warned that the deadline was “overly optimistic”. The dollar nursed losses on Wednesday as investors cautiously returned to riskier currencies after U.S. President Donald Trump edged toward rolling back some restrictions put in place to contain the coronavirus pandemic. The greenback also remains under pressure following heavy measures by the Federal Reserve to boost dollar supply, however, analysts say it is too early for a full-scale retreat from safe-havens with the public health threat not yet eliminated. Trump on Tuesday said he would speak with governors of all 50 states an authorise them to open their economies in a timely manner. Daily fatalities in the United States from the coronavirus have fallen sharply, and states are making plans to get businesses open again. However, many analysts remain cautious after Trump's top infectious disease adviser said the U.S. president's target for restarting the economy by May 1 was "overly optimistic." Another factor weighing on the dollar is the large amount of greenback liquidity provisions, credit backstops, and monetary easing the U.S. central bank has unleashed in the past month to contain the economic damage caused by the pandemic. The Fed began a massive new lending programme on Tuesday, and the cumulative impact of measures it has taken so far has unleashed a flood of dollars. The U.S. currency faces a further test later Wednesday with the release of retail sales and industrial production, which is likely to provide more evidence of the economic costs of lockdowns. The global economy is expected to shrink by 3.0% this year in a stunning coronavirus-driven collapse, marking the steepest downturn since the Great Depression of the 1930s, the International Monetary Fund said on Tuesday.
  • Oil prices climbed on Wednesday, bouncing back from the previous session's large losses, as investors looked for bargains and supported by hopes that consuming countries will look to fill their strategic reserves. Still, worries about oversupply amid global coronavirus-related lockdowns and a warning from the IMF about a deep recession kept gains in check. Both benchmarks were undercut on Tuesday by worries that a record global output cut by producers would not offset plunging fuel demand due to efforts to contain the coronavirus pandemic. Before the report on U.S. inventories, "they had sold aggressively with expectations for such a build," Saito said. U.S. crude inventories rose by 13.1 mn bbl in the week ended on April 10, data from industry group the American Petroleum Institute showed on Tuesday, more than analyst expectations for a build of 11.7 mn barrels. Hopes for massive purchasing by consuming countries for their strategic stockpiles also lent support. Officials and sources from the Organization of the Petroleum Exporting Countries and its Russia-led allies - a grouping known as OPEC+ - have indicated that the IEA, energy watchdog for the world's most industrialized nations, may announce purchases of up to several million barrels to buoy the record OPEC+ output cut. The U.S. Energy Department said on Tuesday it is negotiating with nine energy companies to store about 23 mn barrels of domestic oil in its Strategic Petroleum Reserve (SPR). U.S. shale oil output is expected to drop by 194,000 Bpd in April, the most on record, according to the U.S. Energy Information Administration. Warnings from the IMF of what could be the steepest global downturn since the Great Depression of the 1930s, however, weighed on financial markets. The global economy is expected to shrink by 3% during 2020 in a stunning coronavirus-driven collapse of activity, the IMF said on Tuesday.

 

 
Intraday RESISTANCE LEVELS
15th 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 27.00-28.00 29.00 29.50-30.50
EURO/USD 1.0970-1.1030 1.1060 1.1090-1.1150
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
15th 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 26.20-25.60 25.00 23.60-23.00
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 (15th 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$1747.44/oz and low of US$1708.93/oz. Gold up 0.859% at US$1725.64/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 Tuesday made an intra‐day high of US29.22/bbl, intraday low of US$26.51/bbl and settled down by 5.681% to close at US$26.99/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 26.20-23.00 with risk daily closing below 23.00 and targeting 27.00-28.00-29.50 and 30.20-31.00-31.50. Sell in between 27.00-30.30 with stop loss at 30.50; targeting 29.00-28.00-27.60 and 27.00-26.20-25.60.

 
Intraday Support Levels
S1     26.20-25.60
S2     25.00
S3     23.60-23.00

Intraday Resistance Levels
R1     27.00-28.00
R2     29.00
R3     29.50-30.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.117 Sell
20-DMA   25.55 Buy
50-DMA   37.52 Sell
100-DMA   47.81 Sell
200-DMA   51.84 Sell
STOCH(5,3)   12.130 Sell
MACD(12,26,9)   -3.053 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.0899/EUR, high of US$1.0986/EUR and settled the day up by 0.630% to close at US$1.0979/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     1.1090-1.1150

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 Tuesday made an intra‐day low of US$1.2495/GBP, high of US$1.2646/GBP and settled the day up by 0.897% to close at US$1.2617/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   1.2647 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 Tuesday made intra‐day low of JPY106.97/USD and made an intraday high of JPY107.75/USD and settled the day down by 0.553% at JPY107.20/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   108.23 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

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