AAFX TRADING

Daily Market Lookup

  • The U.S. dollar pushed higher Monday, as investors braced for more dire news on the fallout from the coronavirus. The week ahead brings U.S. monthly employment figures and eurozone survey indicators, while governments around the world make tentative steps toward easing lockdowns. One of the currencies hard hit against the greenback Monday has been the euro following a report that the European Union may need to triple the amount of aid currently proposed to tackle the coronavirus crisis. Given the angst that resulted from the discussions to produce the 500 billion euros worth of aid, finding the additional one trillion euros could prove tricky. Meanwhile rising Italian borrowing costs are potentially bringing the matter to a head. Hit hard by the coronavirus crisis and with a debt burden of over 135% of GDP, Italy is widely seen as the eurozone state most in need of largesse from its neighbors, particularly after the region’s politicians failed to agree a sale of coronabonds, a debt instrument which would pool the credit risk of weaker countries like Italy with top-rated ones like Germany. The Financial Times reported that the European Central Bank had held talks with the European Commission about establishing a centrally-backed 'bad bank' to remove toxic loans from banks' balance sheets. It said the proposal faced stiff opposition. The U.S. dollar was up on Monday morning in Asia as investors braced for a tough quarter ahead. But some investors are cautiously hopeful that the worst of the pandemic could be loosening its grip on the global economy.
  • Caution recaptured world markets on Monday as another drubbing for U.S. crude oil futures kicked off a week of data and earnings that will drive home the damage being inflicted by global coronavirus lockdowns. The equity and other major markets however were still trading largely on the newsflow of the European virus numbers gradually coming down, he added U.S. President Donald Trump said on Sunday that Republicans were “close” to getting a deal with Democrats on a support package for small business The United States has by far the world’s largest number of confirmed coronavirus cases, with more than 750,000 infections and over 40,500 deaths, according to a Reuters tally. The Fed has bought nearly $1.3 trillion of Treasuries alone, and many billions of non-sovereign debt it would historically have never gone near. That damage should become all more clear this week with April global purchasing manager data - seen as some of the most forward-looking economic gauges - being published on Thursday. A taster on Monday was that Japan reported its exports down almost 12% in March from a year earlier, with shipments to the United States down over 16%. In the currency markets, the dollar gained broadly as the concerns about global growth boosted the safe-haven appeal of the greenback and weighed on risk-oriented currencies such as the Australian dollar. The dollar’s gains were despite the latest trader positioning data showing investors have been ramping up their short positions or bets against the greenback. Italy’s borrowing costs rose meanwhile, heading back towards last week’s one-month highs, reflecting unease before a European Union summit later this week over how to tackle the economic fallout of the coronavirus crisis. Selling pressure on Italian government bonds has returned in the past week, undoing some of the benefits of the European Central Bank’s massive bond-buying scheme, after euro zone politicians failed to agree to common debt issuance as a means of addressing the crisis. Italian Prime Minister Guiseppe Conte used an interview with Germany’s Sueddeutsche Zeitung on Monday to repeat calls for the EU to issue common euro zone bonds to demonstrate the bloc’s solidarity in the face of the pandemic.
  • Oil continued to slide from the previous session on Monday in Asia as producers continue to grapple with a supply glut. Investors remain unconvinced that OPEC+’s cut of nearly 10 million barrels agreed to in early April will ease oversupply as countries continue to extend lockdowns imposed to prevent the spread of the COVID-19 pandemic and economies contract. David Lennox, resource analyst at Fat Prophets, agreed with Hari. There were also concerns that countries’ storage capacity is rapidly running out Meanwhile in Asia’s oil hub of Singapore Hin Leong Trading requested court protection from its creditors amid allegations it hid around $800 million in losses from futures trading. Crude oil futures fell on Monday, with U.S. futures touching levels not seen since 1999, extending weakness on the back of sliding demand and concerns that U.S. storage facilities will soon fill to the brim amid the coronavirus pandemic. The oil market has been under pressure due to a spate of reports on weak fuel consumption and grim forecasts from the OPEC and the International Energy Agency. The plunge in crude oil prices reflects a glut at the main U.S. storage facilities at Cushing and a big drop in demand, said Michael McCarthy, chief market strategist at CMC Markets in Sydney. Production cuts from OPEC and its allies such as Russia will also kick from May. The group has agreed to reduce output by 9.7 million bpd to stem a growing supply glut after stay-at-home orders and business furloughs to curb the COVID-19 pandemic that has killed more than 164,000 people worldwide sap fuel demand. The oil industry has been swiftly reducing production in the face of an estimated 30% decline in fuel demand worldwide. Saudi Arabian officials have forecast that total global supply cuts from oil producers could amount to nearly 20 million bpd, but that includes voluntary cuts from nations like the United States and Canada, which cannot simply turn on or off production in the same way as most OPEC nations.

 

 
Intraday RESISTANCE LEVELS
20th April 2020 R1 R2 R3
GOLD-XAU 1,690-1,704 1,720 1,729-1.740
Silver-XAG 15.60-16.10 16.70 17.00-17.40
Crude Oil 23.60-25.00 25.60 26.00-27.00
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
20th April 2020 S1 S2 S3
GOLD-XAU 1,674-1,660 1,645 1,635-1,625
Silver-XAG 15.00 14.40 13.90-13.60
Crude Oil 23.00-21.00 20.45 19.90-19.50
EURO/USD 1.0820-1.0770 1.0700 1.0630
GBP/USD 1.2470-1.2400 1.2320 1.2250-1.2180
USD/JPY 107.50-106.90 106.20 105.60-105.00

Intra-Day Strategy (20th 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 Friday made its intraday high of US$1718.60/oz and low of US$1679.77/oz. Gold down 1.99% at US$1683.64/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     1,674-1,660
S2     1,645
S3     1,635-1,625
Intraday Resistance Levels
R1     1,690-1,704
R2     1,720
R3     1,729-1.740

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 Friday made its intraday high of US$15.53/oz and low of US$14.98/oz settled down by 2.21% at US$15.17/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 15.00-13.00 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     15.00
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 Friday made an intra‐day high of US26.95/bbl, intraday low of US$24.68/bbl and settled down by 5.24% to close at US$25.27/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 23.00-19.50 with risk daily closing below 19.50 and targeting 23.60-25.00-25.60 and 26.00-27.00-28.00. Sell in between 23.60-27.30 with stop loss at 27.60; targeting 23.00-21.00-20.45 and 19.90-19.50.

 
Intraday Support Levels
S1     23.00-21.00
S2     20.45
S3     19.90-19.50

Intraday Resistance Levels
R1     23.60-25.00
R2     25.60
R3     26.00-27.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.117 Sell
20-DMA   25.62 Buy
50-DMA   35.93 Sell
100-DMA   46.80 Sell
200-DMA   51.32 Sell
STOCH(5,3)   10.130 Sell
MACD(12,26,9)   -2.053 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.0811/EUR, high of US$1.0891/EUR and settled the day up by 0.3386% to close at US$1.0874/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     1.0820-1.0770
S2     1.0700
S3     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 Friday made an intra‐day low of US$1.2405/GBP, high of US$1.2521/GBP and settled the day up by 0.386% to close at US$1.2503/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     1.2470-1.2400
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 Friday made intra‐day low of JPY107.29/USD and made an intraday high of JPY108.07/USD and settled the day down by 0.345% at JPY107.53/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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