AAFX TRADING

Daily Market Lookup

  • The U.S. dollar continued to retreat on Monday morning in Asia, with the greenback sliding for the third day in a row. The dollar lost ground against most currencies in the region with relatively thin trading ahead of the New Year Holiday on Wednesday. The People’s Bank of China set the reference rate of the yuan at 6.9805, stronger than the 6.9879 fix set on Friday as the yuan continues to strengthen from five months highs. China’s official Purchasing Managers’ Index (PMI) is due to be released on Tuesday followed on Thursday by the Caixin PMI, both of which will give some indication of the state of the Chinese economy. Over the weekend, the PBOC ordered the adoption of a new approach to pricing loans. Lenders will be expected to move towards a new loan prime rate (LPR) starting January 1. The LPR is set at 4.15% for a one-year loan, lower than the current benchmark of 4.35%. Meanwhile, markets continue to look forward to the signing of a phase one trade deal between the U.S. and China but are also looking for any spike in tensions in the Korean peninsula, particularly any missile tests in North Korea around the New Year. The dollar was on the defensive on Monday in light year-end trading after suffering a setback the previous session, as hopes of a U.S.-China trade deal lifted investors' risk appetite, sapping safe-haven demand for the greenback. With Friday's loss, the index's gains for the year have shrunk to under 1%, putting it on track for the smallest annual change in six years. Against the Japanese yen the dollar was treading water at 109.41, on track to end the year where it started in January. The big gainers in recent weeks have been the risk-sensitive and commodity-linked currencies of Australia and New Zealand. Last week, Chinese authorities said Beijing was in close contact with Washington about an initial trade agreement. Prior to those comments, U.S. President Donald Trump had talked up a signing ceremony for the recently struck Phase 1 trade deal. But despite recent rallies, the annual performances of the antipodean currencies are still dreary with the Aussie down 1% so far this year and the kiwi off a shade. The second reason, Gittler said, was that inflation seemed to have bottomed. Bleak European economic data had prompted hedge funds to bet on a weaker euro during 2019, but some strength in recent Eurozone data along with weakness in other currencies have lifted the euro. The common currency has jumped 2.6% in this quarter but that was still not enough to wipe out this year's losses. Sterling was higher after European Commission President Ursula von der Leyen said the European Union may need to extend the deadline for talks about a new trade relationship with Britain. Even with the recent UK general election smoothing the path for Britain's exit from the European Union, Britain's ability to strike a new trading deal between the EU in a relatively short span of time remains a concern for some investors. Later in the day, investors will stay tuned for the Chicago Purchasing Management Index, also known as the Chicago Business Barometer for clues about the health of the U.S. economy.
  • Oil prices rose more than 20% this year but there were no sharp spikes and crude futures barely sniffed $70 a barrel despite attacks on the world's biggest oil producer, sanctions that crippled crude exports of two OPEC members and gigantic supply cuts from big oil producing countries. The price gains in crude oil benchmarks were all in the first quarter of 2019, even as the next several months featured supply shocks that in the past would probably have propelled crude past the $100 mark. Prices are likely to remain rangebound in 2020 as swelling supplies, particularly from the United States, offset cuts from the Organization of the Petroleum Exporting Countries and weakening worldwide demand, brokers and analysts said. U.S. crude oil is on track to end 2019 roughly 35% higher. Since the end of March, it is up just 3%, after rallying early in the year after the United States introduced sanctions on Venezuela. Brent has gained 26%, but is off by 1% since the first quarter. Investors and analysts say U.S. production and weak demand kept prices under control. The United States is on track to be a net petroleum exporter on an annual basis for the first time in 2020. Output is expected to average 13.2 million bpd, an increase of nearly a million bpd from 2019 Investor concern over peak oil demand is expected to weigh on prices next year, particularly as the urgency around action against climate change has increased. Also, a long-term resolution of the U.S.-China trade war seems elusive, keeping market watchers wary of predicting energy demand growth in the world's two largest economies. The U.S. Energy Information Administration expects average crude oil prices will be lower in 2020 than in 2019 because of rising inventories. Outside the United States, production is expected to continue to grow in Brazil, Norway, and Guyana. Notably, the market barely wavered in its view of where prices would end up. Implied volatility, a sign of how the market prices future gyrations in WTI and Brent futures, was largely muted in 2019 after a see-saw 2018, a sign that investors focused on broader supply trends. Oil prices were also supported by declining U.S. crude stocks which fell by 5.5 million barrels in the week to Dec. 20, far exceeding a 1.7-million-barrel drop forecast in a Reuters poll. In the Middle East, the United States carried out air strikes on Sunday in Iraq and Syria against the Kataib Hezbollah militia group, while protesters in Iraq on Saturday forced the closure of its southern Nassiriya oilfield. U.S. officials said the air strikes in response to the killing of a U.S. civilian contractor in a rocket attack on an Iraqi military base were successful, but warned that "additional actions" may still be taken. Iraq's oil ministry said the production halt at the Nassiriya oilfield will not affect the country's exports as it will use additional output from southern oilfields in Basra. Elsewhere, Libyan state oil firm NOC said it is considering the closure of its western Zawiya port and evacuating staff from the refinery located there due to clashes nearby.

 

 
Intraday RESISTANCE LEVELS
23rd April 2020 R1 R2 R3
GOLD-XAU 1519 1,530 1,546-1557
Silver-XAG 18.00 18.40 18.70-19.00
Crude Oil 62.00-62.60 63.00 63.65-63.90
EURO/USD 1.1230 1.1280-1.1350 1.1400
GBP/USD 1.3150-1.3200 1.3250 1.3320-1.3420
USD/JPY 109.50-110.00 110.70 111.50-111.90

Intraday SUPPORTS LEVELS
23rd April 2020 S1 S2 S3
GOLD-XAU 1.508-1,500 1,494 1,486-1,478
Silver-XAG 17.60 17.00 16.50-16.00
Crude Oil 61.40-60.90 60.50 59.70-59.00
EURO/USD 1.1150-1.1110 1.1060 1.0980-1.0930
GBP/USD 1.3060-1.3010 1.2930 1.2850-1.2770
USD/JPY 109.00 108.50 107.80-107.00

Intra-Day Strategy (23rd 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$1515.26/oz and low of US$1507.28/oz. Gold down 0.005% at US$1510.89/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1483) and breakage above will call for 1492. 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 positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1508-1468 with risk below 1468, targeting 1519-1530 and 1546-1557. Sell below 1519-1557 keeping stop loss closing above 1557, targeting 1508-1500-1494 and 1486-1478-1468.

 
Intraday Support Levels
S1     1.508-1,500
S2     1,494
S3     1,486-1,478
Intraday Resistance Levels
R1     1519
R2     1,530
R3     1,546-1557

Technical Indicators

Name   Value Action
14DRSI  

72.882

Buy
20-DMA   1475.00 Buy
50-DMA  

1478.59

Buy
100-DMA   1492.62 Buy
200-DMA   1418.72 Buy
STOCH(5,3)   93.621 Buy
MACD(12,26,9)   9.185 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$17.95/oz and low of US$17.73/oz settled down by 0.601% at US$17.75/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (17.15), breakage above will lead to 17.61. 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 neutral region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 17.60-14.90 targeting 18.10-18.50 and 18.70-19.10; stop breakage below 14.90. Sell below 18.00-19.30 with stop loss above 19.30; targeting 17.60-17.00-16.25 and 16.00-15.70.

 
Intraday  Support Levels
S1     17.60
S2     17.00
S3     16.50-16.00

Intraday  Resistance Levels
R1     18.00
R2     18.40
R3     18.70-19.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   94.313 Buy
20-DMA   16.97 Buy
50-DMA   17.21 Sell
100-DMA   17.46 Sell
200-DMA   16.60 Buy
STOCH(5,3)   94.268 Buy
MACD(12,26,9)   -0.113 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$61.84/bbl, intraday low of US$61.13/bbl and settled down by 0.0162% to close at US$61.54/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 200DMA i.e. 56.35 which is a resistance level and breakage above will call for 57.00-58.00. MACD is above 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 61.40-58.60 with risk daily closing below 58.60 and targeting 61.90-62.50 and 63.00-63.65-63.90. Sell below 61.90-63.90 with stop loss at 64.00; targeting 61.40-60.90-59.70 and 59.00-58.50.

 
Intraday Support Levels
S1     61.40-60.90
S2     60.50
S3     59.70-59.00

Intraday Resistance Levels
R1     62.00-62.60
R2     63.00
R3     63.65-63.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.369 Sell
20-DMA   59.25 Buy
50-DMA   57.58 Buy
100-DMA   56.44 Buy
200-DMA   57.72 Buy
STOCH(5,3)   90.130 Buy
MACD(12,26,9)   1.147 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1092/EUR, high of US$1.1187/EUR and settled the day up by 0.696% to close at US$1.1174/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1040), which become immediate resistance level, break above will target 1.1100. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving negative crossovers to signal for bearish 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 1.1110-1.0890 with risk below 1.0890, targeting 1.1150-1.1200-1.1230 and 1.1280-1.1350. Sell below 1.1150-1.1350 targeting 1.1110-1.1060-1.1030 and 1.0960-1.0860 with stop-loss at daily closing above 1.1300.

 
Intraday Support Levels
S1     1.1150-1.1110
S2     1.1060
S3     1.0980-1.0930

Intraday  Resistance Levels
R1     1.1230
R2     1.1280-1.1350
R3     1.1400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   67.357 Buy
20-DMA   1.1109 Buy
50-DMA   1.1085 Buy
100-DMA   1.1060 Buy
200-DMA   1.1142 Sell
STOCH(5,3)   79.958 Sell
MACD(12,26,9)   -0.001 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2967/GBP, high of US$1.3116/GBP and settled the day up by 0.670% to close at US$1.3077/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2769) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in neutral territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.3150-1.3420 with targets at 1.3060-1.3020-1.2930 and 1.2850-1.2770-1.2690 stop-loss should be below 1.3350. Buy above 1.3060-1.2770 with targets 1.3150-1.3200-1.3250 and 1.3320-1.3400 with stop loss closing below 1.2750.

 
Intraday Support Levels
S1     1.3060-1.3010
S2     1.2930
S3     1.2850-1.2770

Intraday Resistance Levels
R1     1.3150-1.3200
R2     1.3250
R3     1.3320-1.3420

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

56.018

Buy
20-DMA   1.3096 Sell
50-DMA   1.2968 Buy
100-DMA   1.2653 Buy
200-DMA   1.2688 Buy
STOCH(5,3)   71.940 Buy
MACD(12,26,9)   0.0027 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY109.38/USD and made an intraday high of JPY109.62/USD and settled the day down by 0.167% at JPY109.44/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (107.70), 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 oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 109.50-111.70 with risk above 111.90 targeting 109.00-108.50-107.80 and 107.00-106.50. Long positions above 109.10-107.00 with targets of 109.50-110.00 and 110.70-111.30 with stop below 107.00.

 
Intraday Support Levels
S1     109.00
S2     108.50
S3     107.80-107.00

INTRADAY RESISTANCE LEVELS
R1     109.50-110.00
R2     110.70
R3     111.50-111.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.367 Buy
20-DMA   109.14 Sell
50-DMA   108.89 Buy
100-DMA   107.96 Buy
200-DMA   108.71 Sell
STOCH(9,6)   45.253 Buy
MACD(12,26,9)   0.184 Buy

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