AAFX TRADING

Daily Market Lookup

  • The U.S. dollar surged against most major currencies on Monday amid fears that last year's U.S.-China dispute will be re-ignited, this time over the novel coronavirus. U.S. President Donald Trump and Secretary of State Mike Pompeo have pinned the blame for the pandemic on China, where the new coronavirus outbreak is believed to have originated. The latest salvo came from Pompeo on Sunday, who said there was "a significant amount of evidence" that the virus emerged from a laboratory in the central Chinese city of Wuhan. The dollar was also rising against Scandinavian currencies, which are so vulnerable to global trade risks. The Swedish crown was last down 0.6% at 9.8995 versus the dollar and the Norwegian crown was falling by 0.8% at 10.3975 Analysts were debating how the United States might attack China again - with more trade tariffs or even cancelling the payments on the U.S. Treasurys that China owns - but they all agreed the dollar/yuan cross would see higher volatility. The moves extended a dour start for May, which began with Friday's bleak U.S. data and the threat of a fresh trade-war between the world's two biggest economies. Pompeo did not provide evidence, or dispute a U.S. intelligence conclusion that the virus was not man-made. But the comments double down on Washington's pressure on China as U.S. deaths and economic damage mount.
  • The U.S. dollar has seen some buying in early European trade Monday, with the escalating war of words between U.S. and China over the origin of the coronavirus causing a flight to safety. The latest move from U.S. officials to pin the blame on China for the outbreak of the Covid-19 pandemic came from Secretary of State Mike Pompeo Sunday, who stated there was "a significant amount of evidence" that the virus emerged from a laboratory in the central Chinese city of Wuhan, without providing any details. This followed on from President Donald Trump’s threats Friday of fresh trade-war hostilities between the world's two biggest economies, as Washington continued to pile the pressure on Beijing. This comes as the evidence of the economic damage caused by the outbreak mounts - China has reported its first quarterly GDP contraction since such records began, while some 30 million Americans have filed claims for unemployment in the last six weeks. The comments are at odds with the administration's actual actions in recent weeks. It has temporarily suspended levying import tariffs on a range of Chinese products since the pandemic erupted in an effort to avoid raising prices for hard-pressed U.S. consumers. Worries that this spat may turn into another trade war, just a few months after the first round of the trade deal between the two powers was signed ending the last damaging conflict, are hitting risk appetite. The big event of the week for Norway’s currency is Thursday’s Norges Bank meeting, but ahead of this the primary drivers of the krone remain “global prospects for the reopening of the economy, physical oil demand recovery, global asset prices and continued NOK buying by Norges Bank on behalf of the Ministry of Finance,” said analysts at Danske Bank, in a research note.
  • Oil prices fell on Monday, paring last week's gains, on worries a global oil glut may persist amid slumping demand and U.S.-China trade tensions that could restrict an economic recovery even as coronavirus pandemic lockdowns start to ease. The U.S. dollar (DXY) firmed on Monday against a basket of currencies. Oil prices are usually priced in dollars so a stronger greenback makes crude more expensive for buyers with other currencies. The market found support last week on signs of reduced infection rates and as major oil producers led by Saudi Arabia and Russia were set to begin cutting production on May 1. The top two U.S. producers, Exxon Mobil Corp (NYSE:XOM) and Chevron Corp (NYSE:CVX), each said they would cut output by 400,000 barrels per day this quarter. The output cuts combined with the loosening of business restrictions in some U.S. states and cities around the world were expected to ease the global fuel glut and pressure on storage tanks, helping to drive prices up last week. Signs that the cuts may help reduce the reduce the supply overhang have emerged with the narrowing of Brent's contango - the market structure in which later-dated prices are higher than prompt supplies. The six-month spread of Brent futures hit its narrowest in almost a month at a discount of around $6.50, up from a record wide discount of almost $14 in late-March, reflecting decreasing oversupply expectations and making storage for later sale less profitable. However, a threat by U.S. President Donald Trump late last week to consider raising tariffs on China to retaliate for the spread of the coronavirus renewed fears that trade tensions could crimp an economic recovery, putting a lid on oil price gains. U.S drillers cut 53 oil rigs in the week to May 1, bringing the total count down to 325, the lowest since June 2016, energy services firm Baker Hughes said on Friday.

 

 
Intraday RESISTANCE LEVELS
4th May 2020 R1 R2 R3
GOLD-XAU 1,709-1,720 1,729 1,740-1,748
Silver-XAG 15.10-15.60 16.10 16.70-17.00
Crude Oil 20.80-22.00 22.55 23.50-24.00
EURO/USD 1.0970 1.1030-1.1060 1.1150
GBP/USD 1.2470--1.2500 1.2590 1.2645-1.2700
USD/JPY 106.90-107.50 108.30 109.40-110.20

Intraday SUPPORTS LEVELS
4th May 2020 S1 S2 S3
GOLD-XAU 1,690-1,674 1,660 1,644-1,636
Silver-XAG 14.90-14.40 13.90 13.60-12.90
Crude Oil 19.70-19.00 18.00 16.30-15.50
EURO/USD 1.0900-1.0820 1.0750 1.0700-1.0630
GBP/USD 1.2400-1.2320 1.2240 1.2165-1.2100
USD/JPY 105.60-105.00 105.60-105.00 104.30

Intra-Day Strategy (4th 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

old on Friday made its intraday high of US$1705.55/oz and low of US$1670.34/oz. Gold down 0.842% at US$1700.23/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 1700-1636 with risk below 1635, targeting 1710-1720-1729 and 1740-1748. Sell below 1709-1748 keeping stop loss closing above 1748, targeting 1700-1690-1674 and 1660-1645.

 
Intraday Support Levels
S1     1,690-1,674
S2     1,660
S3     1,644-1,636
Intraday Resistance Levels
R1     1,709-1,720
R2     1,729
R3     1,740-1,748

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 Friday made its intraday high of US$15.03/oz and low of US$14.73/oz settled up by 0.042% at US$14.97/oz.

Technicals in Focus:

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

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.

 
Intraday  Support Levels
S1     14.90-14.40
S2     13.90
S3     13.60-12.90

Intraday  Resistance Levels
R1     15.10-15.60
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 Friday made an intra‐day high of US21.89/bbl, intraday low of US$19.56/bbl and settled up by 2.317% to close at US$21.01/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 19.00-14.10 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     19.70-19.00
S2     18.00
S3     16.30-15.50

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.117 Sell
20-DMA   22.04 Buy
50-DMA   28.94 Sell
100-DMA   42.75 Sell
200-DMA   49.31 Sell
STOCH(5,3)   87.130 Sell
MACD(12,26,9)   -3.0720 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.09337/EUR, high of US$1.1018/EUR and settled the day up by 0.273% to close at US$1.0980/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 1.0900-1.0570 with risk below 1.0570, targeting 1.0970-1.1030-1.1060 and 1.1150. Sell below 1.0970-1.1060 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     1.0900-1.0820
S2     1.0750
S3     1.0700-1.0630

Intraday  Resistance Levels
R1     1.0970
R2     1.1030-1.1060
R3     1.1150

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.032 Buy
20-DMA   1.0882 Buy
50-DMA   1.0963 Buy
100-DMA   1.1032 Buy
200-DMA   1.1054 Buy
STOCH(5,3)   78.758 Buy
MACD(12,26,9)   -0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2480/GBP, high of US$1.2599/GBP and settled the day down by 0.681% 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 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 1.2470-1.2740 with targets at 1.2400-1.2320-1.2250 and 1.2180-1.2130-1.2050 stop-loss should be below 1.2740. Buy above 1.2400-1.2180 with targets 1.2500-1.2590 and 1.2650-1.2700 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2400-1.2320
S2     1.2240
S3     1.2165-1.2100

Intraday Resistance Levels
R1     1.2470--1.2500
R2     1.2590
R3     1.2645-1.2700

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.554

Buy
20-DMA   1.2426 Buy
50-DMA   1.2426 Sell
100-DMA   1.2735 Sell
200-DMA   1.2643 Sell
STOCH(5,3)   54.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY106.59/USD and made an intraday high of JPY107.39/USD and settled the day down by 0.2100% at JPY106.89/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 106.90-110.50 with risk above 110.50 targeting 106.20-105.60-105.00 and 104.30. Long positions above 106.90-105.00 with targets of 106.90-107.50-108.30 and 109.40-110.20-110.90 with stop below 105.00.

 
Intraday Support Levels
S1     105.60-105.00
S2     105.60-105.00
S3     104.30

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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