AAFX TRADING

Daily Market Lookup

  • The dollar was down on Monday morning in Asia, giving up some of its gains from earlier in the session. The gains came after some countries’ plans to lift lockdowns curbing the spread of the COVID-19 pandemic boosted investor sentiment. California, Michigan, and Ohio, three of the important states for U.S. manufacturing, took steps to allow factories and some businesses to resume work. The number of U.S. unemployment claims since late March soared above 30 million on Thursday, and Treasury Secretary Steve Mnuchin warned overnight that the U.S. unemployment rate could already have reached 25%. The USD/JPY pair gained 0.16 % to 106.82 after Japan announced a second budget to ease COVID-19's economic impact, including aid for companies struggling to pay rent and more subsidies for those hit by slowing sales. The country also plans to remove 34 prefectures that reported no new cases from the state of emergency designation on May 14.
  • The dollar trimmed its losses on Friday, but experts warn the recent strength of the greenback is on borrowed time, particularly against the euro, as its interest rate advantage is slipping away amid expectations for rates to drop into negative territory next year. The move of lows comes after investors digested a historic loss of U.S. jobs for the month April as the Covid-19 pandemic led to shuttered businesses across the country. The U.S. lost 20.5 million jobs last month, the worst on record, but below economists’ forecast of 22 million. The unemployment rate jumped to 14.7%. But with the parts of the country lifting restriction in recent days, many were quick to suggest that worst was over in the labor market as temporary layoffs made up the bulk of layoffs. Against the backdrop of rising hopes for an economic recovery, the euro is likely to find its footing and recoup some its losses against the greenback, Commerzbank (DE:CBKG) said. In the hunt for yield, meanwhile, investors have favored the U.S. against other countries, some of which have cut rates to below zero. But this advantage is wearing thin, Commerzbank argues, as U.S. fed funds futures contracts are pricing in a negative fed funds rate in 2021 amid expectations for a recession.
  • The White House has begun informal talks with Republicans and Democrats in Congress about what to include in another round of coronavirus relief legislation, officials said on Sunday, while predicting further U.S. jobs losses in the coming months. Officials in President Donald Trump’s administration, including Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow, said they were holding discussions with lawmakers on issues including potential aid to states whose finances have been devastated by the pandemic. Another White House economic adviser, Kevin Hassett, said future legislation could include food aid to help Americans struggling with hunger amid widespread job losses that have ruined the finances of many people. It also could include broadband access for those who lack it, Hassett added. While Democrats, who control the House of Representatives, are moving to unveil new legislation as early as this week, the White House signaled it is in no hurry to pass another relief bill. The April unemployment rate announced by the Labor Department undercounts some out-of-work Americans, economists say. Asked if the country could now be facing a “real” unemployment rate of close to 25 percent, Mnuchin replied: “We could be.” Such a rate also includes people who have lost jobs and are not actively seeking employment and people considered underemployed. Democrats are pushing for another massive relief bill that would include more money for state and local governments, coronavirus testing and the U.S. Postal Service.
  • Oil prices fell on Monday as concern over a persistent glut and economic gloom caused by the coronavirus pandemic combined to cancel out support from supply cuts at some of the world's top producers. Both benchmarks have notched up gains over the past two weeks as countries have eased business and social lockdowns imposed to cope with the coronavirus and fuel demand has rebounded modestly. Oil production worldwide is also declining. But possible signs of a second wave of coronavirus infections in northeast China and South Korea worried investors even as more countries started to pivot towards easing pandemic restrictions in moves that could support oil demand.Goldman Sachs (NYSE:GS) analysts said there was still concern that demand will stay weak in 2021, with worries about a second wave of COVID-19 cases and only a modest increase in personal or corporate travel. Global oil demand has plummeted by about 30% as the coronavirus pandemic curtailed movement across the world, building up inventories globally. Fears that the United States is running out of storage space triggered WTI prices crashing into negative territory last month, prompting some U.S. producers to slash output. In a sign of that impact, the number of operating oil and gas rigs in the world's largest oil producer fell to 74 in the week to May 8, a record low according to data released on Friday from energy services firm Baker Hughes Co (N:BKR) going back to 1940.

 

 
Intraday RESISTANCE LEVELS
11th May 2020 R1 R2 R3
GOLD-XAU 1,709-1,720 1,729 1,740-1,748
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 1.2410-1.2470 1.2500 1.2590-1.2645
USD/JPY 106.90-107.50 108.30 109.40-110.20

Intraday SUPPORTS LEVELS
11th May 2020 S1 S2 S3
GOLD-XAU 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 (11th 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 Friday made its intraday high of US$1723.48/oz and low of US$1700.29/oz. Gold down 0.702% at US$1703.31/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 1709-1720-1729 and 1740-1748. Sell below 1709-1760 keeping stop loss closing above 1760, targeting 1700-1690-1674 and 1660-1645.

 
Intraday Support Levels
S1     1,690
S2     1,674
S3     1,660-1,644
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$15.61/oz and low of US$15.19/oz settled up by 1.502% at US$15.54/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 Friday made an intra‐day high of US25.38/bbl, intraday low of US$24.38/bbl and settled up by 4.45% to close at US$25.62/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 25.20-19.00 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 Friday an intraday low of US$1.0814/EUR, high of US$1.0874/EUR and settled the day up by 0.0341% to close at US$1.0835/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 Friday made an intra‐day low of US$1.2346/GBP, high of US$1.2466/GBP and settled the day up by 0.1086% to close at US$1.2405/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     1.2410-1.2470
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 Friday made intra‐day low of JPY106.21/USD and made an intraday high of JPY106.74/USD and settled the day up by 0.429% at JPY106.69/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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