AAFX TRADING

Daily Market Lookup

  • The U.S. dollar has edged higher Tuesday, with investors choosing this safe haven amid the coronavirus-inspired uncertainty, especially in the oil markets. The front month May WTI crude contract saw hefty selling Monday, its penultimate trading day before expiry, plunging into negative territory for the first time since trading began as investors and traders desperately sought to avoid delivery given the shortage of storage space for the current glut of oil. The euro is also in focus ahead of Thursday’s virtual meeting of the EU leaders to discuss funding of the economic recovery in the region from the damage done by the coronavirus outbreak. German Chancellor Angela Merkel is likely to come under pressure to agree to help finance the recovery through the issuance of joint debt, a subject which has provoked heated discussions in the Eurogroup meeting of finance ministers that preceded Thursday’s videoconference. On Monday the Spanish government set out its plans to create a 1.5 trillion euro ($1.63 trillion) recovery fund financed through perpetual debt, backed by the EU budget, to aid countries worst-hit by the coronavirus crisis. Although some reports have indicated that Merkel may be ready to accept this plan, the bond markets aren’t buying it with spreads between the low risk German debt and that of the Italian and Spanish equivalents, the two countries hardest hit during this crisis, at one month highs. The dollar was up on Wednesday morning as investors flocked to the safe-haven greenback after a historical slide in oil prices overnight The Antipodean currencies reported losses as investors’ risk sentiment soured following oil’s slump. The two currencies are also closely tied to commodities and therefore sensitive to commodities price movements.
  • Current U.S. economic restrictions may be twice as tough as needed to balance the risks of the coronavirus pandemic against the economic needs of workers, according to research here released on Monday by the Minneapolis Federal Reserve. Pedestrians walk through a park, with the skyline of Manhattan rising behind them, amid the COVID-19 outbreak, in the Queens borough of New York City Titled “Health versus Wealth,” the paper was explicit in its topic and its methodology, setting the “value of a statistical life” at $11.5 mn, in line with other federal agencies like the Department of Transportation. It used that figure to analyze the trade-offs between keeping more workers idled and easing social distancing. The current restrictions, the research concluded, are shifting benefits from younger workers, who would be better off with looser rules, to older individuals for whom protection from the coronavirus is more vital. A middle ground, with more modest restrictions left in place until the end of July, produces the “optimal” outcome, it said. The team noted that ending the shutdown at Easter, as President Donald Trump initially hoped to do, “would have implied an additional 172K death,” more than four times the 40K who have died so far. As it stands, the group estimates that 418K people in the United States would die over the next 18 months or so if economic restrictions are largely lifted by July 1. The Trump administration has relied on estimates of around 60K deaths through early August. The regional Fed did not estimate how many additional deaths would occur if, as the paper suggests and many state governors are considering, restrictions are loosened in the meantime The researchers did, however, conclude that tighter rules on economic activity provide more benefits to the elderly, lowering their death rate and allowing them, for example, to move about more easily in stores, and thus raise their consumption, with lower risk. The best outcome for older individuals, they concluded, is for tight restrictions to remain in place until November. The paper is the latest in a flurry of research on the pandemic, its economic costs and the dilemma of when to relax restrictions that have pushed the economy into a probable recession. But research has also concluded that reopening the economy too soon would be counterproductive and likely result in resurgence of infections.
  • U.S. oil prices hobbled back into positive territory on Tuesday after sinking below $0 for the first time ever, but international benchmark Brent dipped as the global corona virus crisis severely reduces demand for crude. Oil prices have skidded as travel restrictions and lockdowns to contain the spread of the corona virus curbed global fuel use, with demand down 30% worldwide. That has resulted in growing crude stockpiles with storage space becoming harder to find. Following the collapse in oil prices, U.S. President Donald Trump said on Monday that his administration was considering halting Saudi crude oil imports as a way to help the U.S. drilling industry. Faced with the situation, the OPEC and its allies including Russia, a grouping known as OPEC+, have agreed to cut output by 9.7 mn bpd. But that will not take place before May, and the size of the cut is not viewed as big enough to restore market balance. Supply and inventories are expected to tighten in the second half of the year, while "severe storage distress is likely to drive wild price realizations. Meanwhile, U.S. crude inventories were expected to rise by about 16.1 mn barrels in the week to April 17 after posting the biggest one-week build in history, according to five analysts polled by Reuters. Analysts expected gasoline stocks to rise by 3.7 mn barrels last week. The American Petroleum Institute is set to release its data at 4:30 p.m. (2030 GMT) on Tuesday, and the weekly report by the U.S. EIA is due at 10:30 a.m. on Wednesday.

 

 
Intraday RESISTANCE LEVELS
22nd April 2020 R1 R2 R3
GOLD-XAU 1,704 1,720 1,729-1.740
Silver-XAG 15.60-16.10 16.70 17.00-17.40
Crude Oil 21.00-23.00 23.60 25.00-25.60
EURO/USD 1.1030 1.1030 1.1060-1.1090
GBP/USD 1.2550 1.2550 1.2590-1.2645
USD/JPY 108.30-109.40 110.20 110.90-111.50

Intraday SUPPORTS LEVELS
22nd April 2020 S1 S2 S3
GOLD-XAU 1,690-1,674 1,660 1,645-1,635
Silver-XAG 15.00 14.40 13.90-13.60
Crude Oil 20.45 19.90-19.50 19.00
EURO/USD 1.0820-1.0770 1.0700 1.0630
GBP/USD 1.2320-1.2250 1.2180 1.2100-1.2050
USD/JPY 107.50-106.90 106.20 105.60-105.00

Intra-Day Strategy (22nd 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$1702.64/oz and low of US$1671.52/oz. Gold up 1.101% at US$1695.94/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 negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

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

 
Intraday Support Levels
S1     1,690-1,674
S2     1,660
S3     1,645-1,635
Intraday Resistance Levels
R1     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 Monday made its intraday high of US$15.42/oz and low of US$15.03/oz settled up by 0.952% at US$15.26/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 Monday made an intra‐day high of US25.33/bbl, intraday low of US$20.91/bbl and settled down by 13.69% to close at US$21.70/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 20.45-19.00 with risk daily closing below 19.00 and targeting 21.00-23.00-23.60 and 25.00-25.60-26.00. Sell in between 21.00-25.60 with stop loss at 25.60; targeting 20.45-19.90 and 19.50-19.00.

 
Intraday Support Levels
S1     20.45
S2     19.90-19.50
S3     19.00

Intraday Resistance Levels
R1     21.00-23.00
R2     23.60
R3     25.00-25.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   32.117 Sell
20-DMA   25.39 Buy
50-DMA   35.32 Sell
100-DMA   46.42 Sell
200-DMA   51.12 Sell
STOCH(5,3)   12.130 Sell
MACD(12,26,9)   -2.53 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.0840/EUR, high of US$1.0895/EUR and settled the day up by 0.3386% to close at US$1.0859/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     1.1030
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 Monday made an intra‐day low of US$1.2415/GBP, high of US$1.2498/GBP and settled the day down by 0.386% to close at US$1.2428/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 oversold territory and giving negative crossover to confirm bearish 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 1.2400-1.2740 with targets at 1.2320-1.2250-1.2180 and 1.2130-1.2050 stop-loss should be below 1.2740. Buy above 1.2320-1.2050 with targets 1.2400.1.2470-1.2500 and 1.2590-1.2650-1.2700 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2320-1.2250
S2     1.2180
S3     1.2100-1.2050

Intraday Resistance Levels
R1     1.2550
R2     1.2550
R3     1.2590-1.2645

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

48.554

Buy
20-DMA   1.2379 Buy
50-DMA   1.2525 Sell
100-DMA   1.2797 Sell
200-DMA   1.2646 Sell
STOCH(5,3)   -0.0305 Sell
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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