AAFX TRADING

Daily Market Lookup

  • Asian stocks rose on Tuesday, tracking a late Wall Street rally as governments eased coronavirus lockdowns while oil extended gains on expectations fuel demand would begin to pick up. Michael McCarthy, chief market strategist at CMC markets, cautioned against reading too much into the day’s moves in Asia, with few meaningful leads for investors. The upturn followed more optimistic statements from the governors of California and New York for reopening businesses. Several other countries including Spain, Italy, Nigeria, India, and Malaysia also tentatively eased lockdowns. Analysts at Commonwealth Bank of Australia said the structure of the oil price rises, with bigger gains in nearer-dated contracts, suggested expectations of more production cuts and a restoration of fuel demand later this year. They added, though, that this meant prices are highly unlikely to recover the big falls since the start of the year. The optimism about an economic recovery from the coronavirus outbreak outweighed, at least briefly, the latest war of words between China and the United States, which had dragged down Asian and European shares on Monday. An internal Chinese report warns that Beijing faces a rising wave of worldwide hostility in the wake of the outbreak that could tip relations with the United States into confrontation, people familiar with the paper told Reuters.
  • The U.S. dollar edged lower in early European trade Tuesday, as a senior official in the Trump administration tried to ease tensions between the U.S. and China over the handling of the coronavirus outbreak. Deputy national security adviser Matthew Pottinger insisted Monday the United States is not considering “punitive measures” against China over its handling of the pandemic, taking a more conciliatory stance after some of the recent hostility toward Beijing from other members of the U.S. government, including the President himself The aggressive stance from the U.S. administration had raised fears over the weekend of another trade war between the two most powerful economies in the world, resulting in flows into the dollar as a safe haven. Also of note Tuesday will be movements of the euro given the ruling by the German constitutional court on the legality of the ECB’s public sector purchase program is scheduled for 4 AM ET (0800 GMT). The German court is not expected to rule the program illegal, as the European Court of Justice has already ruled in favor, but it could impose restrictions on the Deutsche Bundesbank's participation in ECB bond-buying The U.S. dollar was down on Tuesday morning in Asia, with stocks up as some countries reopened their economies the day before. Trump threatened tariffs, or even reneging on U.S. debt obligations, as potential retaliatory measures against China As China continues to refute accusations from top U.S. officials that the virus originated in a Wuhan lab, an internal Chinese report warned that Beijing faced a rising wave of worldwide hostility in the wake of COVID-19 that could tip relations with the United States into confrontation.
  • Oil prices climbed in early trade on Tuesday, adding to gains in the previous session, on expectations that fuel demand will begin to pick up as some U.S. states and nations in Europe and Asia start to ease coronavirus lockdown measures. Prospects improved for fuel demand as some U.S. states and several countries, including Italy, Spain, Portugal, India and Thailand, began allowing some people to go back to work and opened up construction sites, parks and libraries. Global oil demand probably collapsed by as much as 30% in April, analysts have said, and the recovery is likely to be slow, especially with airlines expected to remain largely grounded for months to come With Saudi Arabia, Russia other major producers and companies slashing output, the market shrugged off a decision by the Texas energy regulator to cancel a vote on mandating a 20% output cut in the United States' biggest oil-producing state. The Texas Railroad Commission had been due to hold the vote on Tuesday, but Commissioner Ryan Sitton was unable to win support from his fellow commissioners for the plan. The proposal was strongly opposed by oil trade groups and major shale producers. Oil was up on Tuesday morning in Asia, building on its gains from the previous session. Demand for the black liquid continues to rise cautiously. This comes as some countries kickstart economic activity after emerging from weeks-long lockdowns to curb the spread of the COVID-19 virus.
  • The production cuts agreed to by OPEC+ members in early April, in addition to cuts from some U.S. producers, have played their part in reducing output, with second quarter productions levels expected to see a 17-year low. But as worldwide fuel demand fell by an estimated 30% in April due to the lockdowns, crude oil can expect to face weaker demand for several more months. Investors will also continue to keep a close eye on the increased U.S.-China tensions as the two countries dispute the origins of the COVID-19 virus.

 

 
Intraday RESISTANCE LEVELS
5th May 2020 R1 R2 R3
GOLD-XAU 1,709-1,720 1,729 1,740-1,748
Silver-XAG 14.90-15.60 16.10 16.70-17.00
Crude Oil 24.00-24.70 25.80 26.50-28.40
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
5th May 2020 S1 S2 S3
GOLD-XAU 1,690-1,674 1,660 1,644-1,636
Silver-XAG 14.40 13.90 13.60-12.90
Crude Oil 23.50-22.55 24.00-24.70 24.00-24.70
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 106.20 105.60-105.00 104.30

Intra-Day Strategy (5th 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 Monday made its intraday high of US$1713.32/oz and low of US$1691.79/oz. Gold down 0.051% at US$1700.97/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 1690-1636 with risk below 1635, targeting 1710-1720-1729 and 1740-1748. Sell below 1700-1748 keeping stop loss closing above 1748, targeting 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   1539.85 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 Monday made its intraday high of US$15.05/oz and low of US$14.68/oz settled down by 0.042% at US$14.74/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 14.60-13.00 targeting 14.90-15.60-16.10 and 16.70-17.00-17.40; stop breakage below 13.00. Sell below 14.90-17.40 with stop loss above 17.40; targeting 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 Monday made an intra‐day high of US22.74/bbl, intraday low of US$19.72/bbl and settled up by 9.00% to close at US$22.46/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 23.50-19.00 with risk daily closing below 19.00 and targeting 24.00-24.70 and 25.80-26.50-28.40. Sell in between 24.00-28.40 with stop loss at 28.40; targeting 23.50-22.55-22.00 and 20.80-20.00-19.00.

 
Intraday Support Levels
S1     23.50-22.55
S2     24.00-24.70
S3     24.00-24.70

Intraday Resistance Levels
R1     24.00-24.70
R2     25.80
R3     26.50-28.40

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)   -3.0720 Sell
MACD(12,26,9)   -3.0720 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.0894/EUR, high of US$1.0976/EUR and settled the day down by 0.512% to close at US$1.0906/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 Monday made an intra‐day low of US$1.2404/GBP, high of US$1.2486/GBP and settled the day down by 0.337% to close at US$1.2441/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

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.

 
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   1.2439 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 Monday made intra‐day low of JPY106.62/USD and made an intraday high of JPY107.06/USD and settled the day down by 0.0271% at JPY106.67/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     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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