AAFX TRADING

Daily Market Lookup

  • A flight to safety bid pushed the dollar higher against its peers on Thursday after dire retail and factory data showed the severity of the collapse in U.S. economic activity caused by the novel coronavirus outbreak. U.S. data showing retail sales fell 8.7% in March, the biggest decline since tracking began in 1992, underlined fears that damage to the economy from the virus outbreak will be deep and protracted. Consumer spending accounts for more than two-thirds of U.S. economic activity. Separately, a report from the Federal Reserve showed manufacturing output plummeted 6.3% last month, the biggest decrease since February 1946. The New York Federal Reserve also reported that its Empire State manufacturing index, which tracks activity in the sector for New York State, fell to an all-time low. The grim numbers poured cold water on recent improvements in market sentiment and hopes the outbreak may be nearing its peak with many developed countries looking to re-open their economies as soon as next month. The death toll from the coronavirus in the United States approached 31,000 on Wednesday as governors began cautiously preparing Americans for a post-virus life that would likely include public face coverings as the "new normal". Governors of about 20 U.S. states where the pandemic has had a low impact believe they may be ready to start the process of reopening their economies by President Donald Trump's May 1 target date, but a labour union chief has warned against re-opening before making sure it is safe.
  • The U.S. dollar has been in demand in European trade Thursday, as illustrations of the severity of the collapse in global economic activity prompted a flight to safety bid. Overnight the International Monetary Fund forecast that growth in Asia will stall at zero percent in 2020. Yet Asia is still expected to do better than other regions in terms of economic activity, he added. This follows on from very weak retail sales figures in the U.S. as the March numbers dropped a record 8.7%, and ahead of the weekly initial jobless claims release with another 5.1 million Americans expected to file for unemployment. Also of interest is the rise of Italian bond yields after the idea of 'corona bonds' failed to gain traction among EU finance ministers last week. Rising yields among the European periphery will put the euro itself under pressure. Italy has been the hardest hit by the coronavirus outbreak in Europe, placing its already stretched public finances under severe stress. Its government, along with the leaders of the likes of France and Spain, had suggested the idea of pan-European debt that would help collectively pay for recovery from the coronavirus - to no avail. Italian 10-year yields are now back above 1.8%, said Danske Bank, in a research note, the highest since before the ECB initiated its Pandemic Emergency Purchase Programme.
  • Millions more Americans likely sought unemployment benefits last week, lifting total filings for claims over the past month above an astounding 20 million, which would underscore the deepening economic slump caused by the novel coronavirus outbreak. Thursday’s weekly jobless claims report from the Labor Department will follow dismal data on Wednesday showing a record drop in retail sales in March and the biggest decline in factory output since 1946 Economists are predicting the economy, which they believe is already in recession, contracted in the first quarter at its sharpest pace since World War II. Weekly jobless claims, the most timely data on the economy’s health, are being closely watched for clues on the depth of the downturn, when the waves of layoffs may let up and when a recovery might start. Initial claims for state unemployment benefits probably totaled 5.105 million in the week ended April 11, according to a Reuters survey of economists — a staggering number even though lower than the previous week’s 6.606 million. Estimates in the survey were as high as 8 million. Going by the average forecast, last week’s claims data would bring the cumulative unemployment benefits claims to more than 20 million since the week ending March 21 Economists are divided on whether the anticipated second straight weekly decline in claims suggests that filings peaked at a record 6.867 million in the week ended March 28, or that overwhelmed state employment offices were unable to process the flood of applications.
  • Oil prices were up in Asia on Thursday as they rallied from a drop to their lowest levels in 18 years during the previous session. International Brent oil futures slid almost 7%, whilst U.S.. The International Energy Agency (IAE) warned of a 29 million barrel per day dive in April oil demand in its monthly report, levels not seen in over two decades. In addition, the EIA said overnight that the U.S. crude oil inventory jumped by 19.2 million barrels for the week ending April 10. In forecasts prepared by Investing.com, analysts had predicted an increase of 11.676 million barrels. The API also estimated a 13.1-million-barrel increase on Tuesday. Even as oil producers including Saudi Arabia and Russia agreed to production cuts as part of the OPEC+ deal reached on April 5, the numbers pointed to an unenviable oversupply as the COVID-19 virus continues to hit demand.

 

 
Intraday RESISTANCE LEVELS
16th 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 1.0900-1.0970 1.1030 1.1060-1.1090
GBP/USD 1.2550-1.2590 1.2645 1.2700-1.2740
USD/JPY 108.30-109.40 110.20 110.90-111.50

Intraday SUPPORTS LEVELS
16th 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 1.0850 1.0770 1.0700-1.0630
GBP/USD 1.2480-1.2400 1.2320 1.2250-1.2180
USD/JPY 107.50-106.90 106.20 105.60-105.00

Intra-Day Strategy (16th 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$1731.21/oz and low of US$1707.48/oz. Gold down 0.69% at US$1714.46/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 Wednesday made its intraday high of US$15.76/oz and low of US$15.25/oz settled down by 1.618% at US$15.44/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 Wednesday made an intra‐day high of US27.72/bbl, intraday low of US$25.48/bbl and settled down by 5.927% to close at US$25.83/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 Wednesday an intraday low of US$1.0855/EUR, high of US$1.0990/EUR and settled the day down by 0.647% to close at US$1.0908/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     1.0850
S2     1.0770
S3     1.0700-1.0630

Intraday  Resistance Levels
R1     1.0900-1.0970
R2     1.1030
R3     1.1060-1.1090

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.562 Buy
20-DMA   1.0900 Buy
50-DMA   1.0960 Buy
100-DMA   1.1026 Buy
200-DMA   1.1054 Buy
STOCH(5,3)   53.758 Buy
MACD(12,26,9)   -0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2435/GBP, high of US$1.2629/GBP and settled the day down by 0.808% to close at US$1.2511/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     1.2480-1.2400
S2     1.2320
S3     1.2250-1.2180

Intraday Resistance Levels
R1     1.2550-1.2590
R2     1.2645
R3     1.2700-1.2740

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

53.554

Buy
20-DMA   1.2260 Buy
50-DMA   1.2554 Sell
100-DMA   1.2812 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 Wednesday made intra‐day low of JPY106.92/USD and made an intraday high of JPY107.86USD and settled the day up by 0.227% at JPY107.44/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

AAFX TRADING
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