AAFX TRADING

Daily Market Lookup

  • The U.S. economy likely lost a staggering 22 million jobs in April, in what would be the steepest plunge in payrolls since the Great Depression and the starkest sign yet of how the novel coronavirus pandemic is battering the world’s biggest economy. A report that is closely watched in any given month but especially so now with non-essential businesses in mandatory shutdowns nationwide to contain the coronavirus, the Labor Department’s monthly employment report on Friday is also expected to show the jobless rate surging to at least 16% last month. That would shatter the post-World War Two record of 10.8% touched in November 1982. The numbers will likely strengthen analysts’ expectations of a slow recovery from the recession caused by the pandemic. It would add to a pile of bleak data on consumer spending, business investment, trade, productivity and the housing market in underscoring the devastation unleashed by lockdowns imposed by states and local governments in mid-March to slow the spread of COVID-19, the respiratory illness caused by the virus. The economic crisis spells trouble for President Donald Trump’s bid for a second term in the White House in November’s election. After the Trump administration was criticized for its initial reaction to the pandemic, Trump is eager to reopen the economy, despite a continued rise in COVID-19 infections and dire projections of deaths The historic dive in April nonfarm payrolls predicted in a Reuters survey anticipates job losses in nearly all sectors of the economy, with larger layoffs in the leisure and hospitality industry - mainly restaurants and bars. It would follow the shedding of 701,000 jobs in March, which ended a record streak of employment gains dating to October 2010. Estimates in the survey ranged to as much as a loss of 35 million. Forecasts for April’s unemployment rate, which was at 4.4% in March, were as high as 22%. There is great uncertainty surrounding last month’s estimates because of the nature and speed of the job losses A total of 26.5 million people had filed claims for jobless benefits and 16.2 million were on unemployment rolls through the week of April 12, when the government canvassed establishments and households for payrolls and the unemployment rate. Eligibility for unemployment benefits has been greatly expanded to include contractors and gig workers among others, overwhelming local employment offices with applications and leading to backlogs. Economists believe the numbers of people applying for unemployment aid and those continuing to receive benefits are understated. Meanwhile, some people might be filing more than one claim, and workers whose hours have been cut because of COVID-19 can also seek unemployment benefits.
  • The U.S. dollar weakened in early European trade Friday as the onslaught of grim economic numbers raised the specter of negative U.S. interest rates, undermining the yield advantage of holding dollar-denominated assets. Thursday’s initial claims report revealed that 3.169 million Americans claimed unemployment last week, meaning more than 33 million have now filed for support since the coronavirus pandemic ripped through the economy. This prompted the yield on the two-year Treasury to settle at a record low on Thursday, finishing the trading session at 0.129%, according to Tradeweb, down from 0.180% at Wednesday’s close. Investors have started to price in the chance of the Federal Reserve cutting official interest rates below zero for the first time ever, with the January fed funds futures contract reaching a peak of 100.025 on Thursday in New York -- a record high -- indicating a policy rate of negative two and a half basis points. Despite the U.S. Federal Reserve saying that it does not view negative rates as “appropriate”, a worsening economic downturn could force the Fed’s arm to expand its crisis response. Economists expect that nonfarm payrolls plunged by 22 million last month. That would be 27-times the worst monthly decline during the Financial Crisis and 11-times the record drop of September 1945, the demobilization of World War II, Bloomberg reported. The dollar retreated on Friday morning in Asia, with investors defying gloomy economic data to buy riskier currencies after some countries loosened lockdown measures. Thursday’s report revealed that 3.169 million Americans claimed unemployment last week, with over 31 million Americans losing their jobs since late March and an unemployment rate of 16%. The dollar was also dealt a blow after U.S short-term bond yields hit a record low. Investors then started to price in the first-ever negative U.S. interest rates. Despite the U.S. Federal Reserve saying that it does not view negative rates as “appropriate”, a worsening economic downturn could force the Fed’s arm to expand its crisis response. Some investors also sold greenbacks ahead of Thursday's data. The GBP/USD pair gained 0.28% to 1.2395 after the Bank of England warned on Thursday that the lockdown in place in the U.K. would lead to the country’s biggest economic slump in over 300 years. BOE also kept the door open for more stimulus in June as it contemplates easing the lockdown next week.

 

 
Intraday RESISTANCE LEVELS
8th May 2020 R1 R2 R3
GOLD-XAU 1,720-1,729 1,740 1,748-1,760
Silver-XAG 15.60 16.10 16.70-17.00
Crude Oil 25.80-26.50 28.40 29.00-29.90
EURO/USD 1.0900-1.0970 1.1030 1.1060-1.1150
GBP/USD 1.2400-1.2470 1.2500 1.2590-1.2645
USD/JPY 106.90-107.50 108.30 109.40-110.20

Intraday SUPPORTS LEVELS
8th May 2020 S1 S2 S3
GOLD-XAU 1,709-1,690 1,674 1,660-1,644
Silver-XAG 15.20-14.90 14.40 13.90-13.60
Crude Oil 25.20-24.00 23.50 22.55-22.00
EURO/USD 1.0800-1.0750 1.0700 1.0630-1.0570
GBP/USD 1.2350-1.2320 1.2240 1.2165-1.2100
USD/JPY 106.20 105.60-105.00 104.30

Intra-Day Strategy (8th 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$1722.01/oz and low of US$1683.25/oz. Gold up 1.88% at US$1715.76/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 1709-1636 with risk below 1635, targeting 1720-1729 and 1740-1748. Sell below 1720-1760 keeping stop loss closing above 1760, targeting 1709-1690-1674 and 1660-1645.

 
Intraday Support Levels
S1     1,709-1,690
S2     1,674
S3     1,660-1,644
Intraday Resistance Levels
R1     1,720-1,729
R2     1,740
R3     1,748-1,760

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$15.41/oz and low of US$14.76/oz settled up by 3.38% at US$15.29/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 15.20-13.00 targeting 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     15.20-14.90
S2     14.40
S3     13.90-13.60

Intraday  Resistance Levels
R1     15.60
R2     16.10
R3     16.70-17.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.370 Buy
20-DMA   15.17 Sell
50-DMA   15.01 Sell
100-DMA   16.43 Sell
200-DMA   16.92 Sell
STOCH(5,3)   68.268 Buy
MACD(12,26,9)   -0.374 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US27.47/bbl, intraday low of US$24.00/bbl and settled down by 3.99% to close at US$24.35/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 24.70-19.00 with risk daily closing below 19.00 and targeting 25.80-26.50-28.40 and 29.00-29.90. Sell in between 25.80-29.90 with stop loss at 30.00; targeting 24.70-23.50-22.55 and 22.00-20.80-20.00.

 
Intraday Support Levels
S1     25.20-24.00
S2     23.50
S3     22.55-22.00

Intraday Resistance Levels
R1     25.80-26.50
R2     28.40
R3     29.00-29.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.117 Sell
20-DMA   21.96 Buy
50-DMA   28.01 Sell
100-DMA   42.11 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 Thursday an intraday low of US$1.0765/EUR, high of US$1.0833/EUR and settled the day up by 0.361% to close at US$1.0831/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 1.0900-1.0970-1.1030 and 1.1060-1.1150. Sell below 1.0900-1.1150 targeting 1.0820-1.0770-1.0700 and 1.0630-1.0570 with stop-loss at daily closing above 1.1100.

 
Intraday Support Levels
S1     1.0800-1.0750
S2     1.0700
S3     1.0630-1.0570

Intraday  Resistance Levels
R1     1.0900-1.0970
R2     1.1030
R3     1.1060-1.1150

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.032 Buy
20-DMA   1.0868 Buy
50-DMA   1.0955 Buy
100-DMA   1.0991 Buy
200-DMA   1.1027 Buy
STOCH(5,3)   8.758 Sell
MACD(12,26,9)   -0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2265/GBP, high of US$1.2417/GBP and settled the day up by 0.1086% to close at US$1.2352/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 1.2350-1.2250 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     1.2350-1.2320
S2     1.2240
S3     1.2165-1.2100

Intraday Resistance Levels
R1     1.2400-1.2470
R2     1.2500
R3     1.2590-1.2645

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 Thursday made intra‐day low of JPY105.98/USD and made an intraday high of JPY106.65/USD and settled the day up by 0.178% at JPY106.24/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     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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