AAFX TRADING

Daily Market Lookup

  • The U.S. dollar was a little lower in early European trade Thursday, with traders having to balance the potential for more central bank largesse with the vivid illustrations of the damage the coronavirus outbreak has been doing to the global economy. The focus has turned from the Federal Reserve to the European Central Bank, as the governing council has to decide on Thursday if more than 1 trillion euros ($1.1 trillion) in asset purchases and a generous lending plan are enough to keep companies and households afloat. The ECB is meeting on a day that eurozone economies are following the U.S. in announcing the biggest quarterly drops in GDP in over a decade. France's fell 5.8% while Spain's fell 5.2% in the quarter. Figures for the euro zone as a whole are due at 5 AM ET (0900 GMT). The Federal Reserve kept rates unchanged on Wednesday, but expressed a willingness to do more to support the economy if this was needed. U.S. gross domestic product fell 4.8% in the first quarter, the worst economic decline since 2008, exceeding economists’ forecasts for a 4% decline in output, and the second quarter is likely to be far worse.
  • The European Central Bank kept its monetary policy stance largely unchanged on Thursday, leaving both its official interest rates and its various asset purchase schemes untouched. It did, however, ease the conditions of its long-term refinancing operations for banks even further. Specifically, it cut the cost of its so-called TLTRO operations to 0.5% percentage point below the official refinancing rate for a 12-month period starting in June. That rate is dependent on banks meeting certain conditions regarding their lending to the real economy.The ECB also announced a series of seven new funding operations, to be titled PELTROs, to take place from May. Maturities will be staggered between June and September 2021. It also held out the prospect of adding to its bond purchases in the future, if need be. The decisions, which are less radical than some in the market had hoped, come on the same day that new data showed the eurozone economy shrunk by 3.8% in the first three months of the year from the final quarter of 2019. As that number isn't annualized, that represents a much sharper decline than the 4.8% drop in U.S. GDP announced on Wednesday. However, it also reflects the fact that European economies went into lockdown earlier than the U.S. ECB President Christine Lagarde will elaborate further on the decisions at her press conference, which starts at 8:30 AM ET (1230 GMT).
  • The euro stabilised against the U.S. dollar on Friday, having rallied the day before to a two-week high on month-end flows and on news that the European Central Bank will make loans to banks even cheaper. Much of Europe was closed on Friday for the International Workers' Day, as was much of Asia, but a new month brings a new set of worries to investors as coronavirus infections rise to 3.3 million globally, claiming more than 230,000 lives. Analysts attributed the moves to poor equity performance in the United States. Sterling gave up some of the gains it made the day before, trading down 0.4% against both the dollar and the euro, at $1.2550 and 87.31 pence respectively (EURGBP=D3).
  • Oil prices rose on Friday, extending the previous session's gains, as major producers began output cuts to offset a slump in fuel demand triggered by the coronavirus pandemic while data showed U.S. crude inventories grew less than expected. Still, prices gave up some of their earlier gains as May began with more of the volatility that made April one of the most turbulent months in the history of oil trading, when U.S. futures briefly crashed into negative territory. Reflecting the output cuts agreed between OPEC and other major producers like Russia, a grouping known as OPEC+, the imbalance between oil supply and demand is to set to be halved to 13.6 million barrels per day (bpd) in May, and drop further to 6.1 million bpd in June, according to Rystad Energy. Prices are likely to fall further this year even as countries begin to ease restrictions imposed to counter the viral outbreak and the output cuts by big producers will not fix the supply glut, a Reuters poll showed on Thursday. Some analysts estimate the shortfall is as much as around 30 million bpd of demand that has evaporated amid the coronavirus pandemic, with much of the world's population still under some form of economic and social lockdown. That dwarfs the nearly 10 million bpd cuts agreed between the Organization of the Petroleum Exporting Countries (OPEC) and other producers, reductions that officially kick in from Friday. Underlining the difficulties some producers face, Iraq will struggle to meet its quota of cutting output by nearly a quarter, industry sources said, with oil majors that pump the lion's share of the country's production so far resisting calls for cuts. Also supporting prices was data from the U.S. Energy Information Administration data showing crude inventories rose by 9 million barrels last week to 527.6 million barrels, less than the 10.6 million-barrel rise analysts had forecast in a Reuters poll. [EIA/S]

 

 
Intraday RESISTANCE LEVELS
1st May 2020 R1 R2 R3
GOLD-XAU 1,674-1,690 1,700 1,720-1,729
Silver-XAG 14.90-15.60 16.10 16.70-17.00
Crude Oil 20.80-22.00 22.55 23.50-24.00
EURO/USD 1.0900 1.0970 1.1030-1.1060
GBP/USD 1.2590-1.2645 1.2700 1.2740-1.2800
USD/JPY 106.90-107.50 108.30 109.40-110.20

Intraday SUPPORTS LEVELS
1st May 2020 S1 S2 S3
GOLD-XAU 1,670-1,660 1,650 1,644-1,636
Silver-XAG 14.40 13.90 13.60-12.90
Crude Oil 20.00-19.00 18.00 20.80-22.00
EURO/USD 1.0820-1.0750 1.0700 1.0630-1.0570
GBP/USD 1.2550-1.2500 1.2470 1.2400-1.2320
USD/JPY 106.20 105.60-105.00 106.90-107.50

Intra-Day Strategy (1st May 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 Thursday made its intraday high of US$1721.80/oz and low of US$1681.43/oz. Gold down 1.509% at US$1685.75/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 1660-1636 with risk below 1635, targeting 1680-1690-1700 and 1720-1729. Sell below 1680-1729 keeping stop loss closing above 1729, targeting 1670-1660 and 1645-1636.

 
Intraday Support Levels
S1     1,670-1,660
S2     1,650
S3     1,644-1,636
Intraday Resistance Levels
R1     1,674-1,690
R2     1,700
R3     1,720-1,729

Technical Indicators

Name   Value Action
14DRSI  

49.609

Buy
20-DMA   1692.45 Buy
50-DMA  

1637.74

Buy
100-DMA   1591.84 Buy
200-DMA   1539.85 Buy
STOCH(5,3)   15.621 Sell
MACD(12,26,9)   -27.894 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$15.84/oz and low of US$14.59/oz settled down by 2.534% at US$14.91/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 14.40-13.00 targeting 14.90-15.60-16.10 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 15.00-14.40 and 13.90-13.60-13.00.

 
Intraday  Support Levels
S1     14.40
S2     13.90
S3     13.60-12.90

Intraday  Resistance Levels
R1     14.90-15.60
R2     16.10
R3     16.70-17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.370 Buy
20-DMA   15.13 Sell
50-DMA   15.32 Sell
100-DMA   16.52 Sell
200-DMA   16.96 Sell
STOCH(5,3)   39.268 Buy
MACD(12,26,9)   -0.374 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US20.78/bbl, intraday low of US$17.27/bbl and settled up by 17.60% to close at US$20.41/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 20.00-14.10 with risk daily closing below 14.20 and targeting 20.80-22.00-22.75 and 23.50-24.00. Sell in between 20.80-23.50 with stop loss at 23.50; targeting 20.00-19.00-18.00 and 16.30 14.00-12.10-11.50.

 
Intraday Support Levels
S1     20.00-19.00
S2     18.00
S3     20.80-22.00

Intraday Resistance Levels
R1     20.80-22.00
R2     22.55
R3     23.50-24.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   32.117 Sell
20-DMA   16.71 Buy
50-DMA   19.32 Sell
100-DMA   23.84 Sell
200-DMA   24.94 Sell
STOCH(5,3)   41.130 Sell
MACD(12,26,9)   -1.406 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.0832/EUR, high of US$1.09721/EUR and settled the day up by 0.520% to close at US$1.0950/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 1.0820-1.0570 with risk below 1.0570, targeting 1.10900-1.0970 and 1.1030-1.1060. Sell below 1.0900-1.1060 targeting 1.0900-1.0770-1.0700 and 1.0630-1.0570 with stop-loss at daily closing above 1.1100.

 
Intraday Support Levels
S1     1.0820-1.0750
S2     1.0700
S3     1.0630-1.0570

Intraday  Resistance Levels
R1     1.0900
R2     1.0970
R3     1.1030-1.1060

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 Thursday made an intra‐day low of US$1.2428/GBP, high of US$1.2642/GBP and settled the day up by 1.00% to close at US$1.2590/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 1.2500-1.2740 with targets at 1.2470-1.2320-1.2250 and 1.2180-1.2130-1.2050 stop-loss should be below 1.2740. Buy above 1.2470-1.2180 with targets 1.2500-1.2590 and 1.2650-1.2700 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2550-1.2500
S2     1.2470
S3     1.2400-1.2320

Intraday Resistance Levels
R1     1.2590-1.2645
R2     1.2700
R3     1.2740-1.2800

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)   17.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY106.39/USD and made an intraday high of JPY107.49/USD and settled the day up by 0.497% at JPY107.13/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

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.

 
Intraday Support Levels
S1     106.20
S2     105.60-105.00
S3     106.90-107.50

INTRADAY RESISTANCE LEVELS
R1     106.90-107.50
R2     108.30
R3     109.40-110.20

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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