AAFX TRADING

Daily Market Lookup

  • The U.S. dollar was marginally lower in early European trade Monday, consolidating after hitting a two-week high against its major peers overnight amid growing fears about a second wave of coronavirus infections. As countries around the world gradually ease restrictions in an effort to restart their economies, investors are becoming anxious about a second wave of infections. The central Chinese city of Wuhan, where the pandemic originated, reported five new cases on Monday, its first new cases since its lockdown was lifted, while South Korea, the Asian poster child on how to deal with the virus, has had to combat a new spike in cases. In Europe, Germany's Robert Koch Institute reported that the "reproduction rate" - the number of people each person infected with the coronavirus goes on to infect - had risen to 1.1. Any rate above 1 means the virus is spreading exponentially. The greenback was also buoyed by a steepening U.S. yield curve, as Federal Reserve officials talked down the prospect of negative rates - St. Louis Fed President James Bullard said Monday that negative rates stateside would be “problematic.” His counterparts from Atlanta and Chicago, Raphael Bostic and Charles Evans, were similarly dismissive. Two more more Fed speakers are scheduled to talk late Tuesday - Philadelphia's Patrick Harker and Cleveland's Loretta Mester - and they are likely to weigh in on the issue. One of the biggest losing currencies Tuesday was the Australian dollar, giving up its recent gains after China suspended meat imports from four Australian abattoirs, fueling concerns that escalating tensions between the two nations are damaging Australia’s most important trading relationship. The dollar was up on Tuesday morning in Asia, with U.S. Treasury yields and fears of a second wave of COVID-19 cases increasing investor demand for dollars. South Korea reported 27 new cases for May 11, breaking a streak of single-digit cases as it eased social distancing measures. The cases, stemming from a nightclub in Itaewon, led the government to postpone reopening high schools for the academic year.
  • The dollar rose to a two-week high against major peers on Tuesday, propelled by rising U.S. bond yields and increasing safe-haven demand amid growing fears about a second wave of coronavirus infections, which sent riskier currencies lower. The biggest loser was the Australian dollar, which dropped about 0.8% to a one-week low, while the kiwi extended falls. The greenback was buoyed by a steepening U.S. yield curve, as Federal Reserve officials talked down the prospect of negative rates, and as the bond market braces for an immense borrowing spree from the U.S. Treasury. At the same time, progress on plans to re-open economies has been overshadowed by worries about fresh infections of COVID-19 as easing of restrictions in South Korea and Germany were soon met by spikes in new cases there. The dollar has closely tracked investors' risk aversion through the coronavirus crisis. However, rising longer-tenor yields as Washington prepares to borrow some $3 trillion this quarter have added some carry-trade attraction to the currency as well. The unconfirmed report in The Australian newspaper, citing unnamed industry sources, was vague about the reason but comes as tension over the origin and handling of the coronavirus chill relations between Australia and its biggest trading partner. Besides virus headlines, markets are looking to Chinese consumer inflation data due at 0130 GMT, where an annual rise of 3.7% is expected, according to a Reuters poll of economists. Fed officials James Bullard and Patrick Harker are due to make remarks at 1300 GMT and 1400 GMT, respectively, ahead of a highly anticipated speech from chairman Jerome Powell on Wednesday.
  • Oil futures rose on Tuesday, boosted by an unexpected commitment from Saudi Arabia to deepen production cuts in June in a bid to help drain the glut in the global market that has built up as the coronavirus pandemic crushed fuel demand Saudi Arabia said overnight it would cut production by a further 1 million barrels per day (bpd) in June, slashing its total production to 7.5 million bpd, down nearly 40% from April The United Arab Emirates and Kuwait committed to cut production by another 180,000 bpd in total. Kazakhstan has also ordered producers in large and mid-sized oil fields including Tengiz and Kashagan to cut oil output by around 22% in the May to June period. Still, the moves to deepen cuts raised questions for some about why the further cuts were needed. The cuts, combined with the world's biggest economies relaxing coronavirus restrictions and stoking a gradual recovery in fuel demand, are expected to ease pressure on crude storage capacity. However, in the wake of new outbreaks of the coronavirus, including in China and South Korea, the market is wary of a second wave of COVID-19 cases spurring renewed lockdowns. Data showing China's April factory prices fell at the sharpest rate in four years also added to investor jitters as it revealed weak industrial demand. Inventory data this week will be key to extending the recent rally in oil prices, analysts said. U.S. crude inventories likely rose by about 4.3 million barrels in the week to May 8, a preliminary Reuters poll showed, ahead of reports from the American Petroleum Institute industry group on Tuesday and the U.S. Energy Information Administration on Wednesday.

 

 
Intraday RESISTANCE LEVELS
12th 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 107.60-108.30 109.40 110.20-111.00

Intraday SUPPORTS LEVELS
12th May 2020 S1 S2 S3
GOLD-XAU 1700-1,690 1,674 1,660-1,644
Silver-XAG 14.40 14.40 13.90-13.60
Crude Oil 25.20-24.00 23.50 25.80-26.50
EURO/USD 1.0800-1.0750 1.0700 1.0630-1.0570
GBP/USD 1.2320 1.2240 1.2165-1.2100
USD/JPY 106.90-106.20 105.60 105.00-104.30

Intra-Day Strategy (12th 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$1711.95/oz and low of US$1691.78/oz. Gold down 0.150% at US$1696.95/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     1700-1,690
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  

1591.84

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 Monday made its intraday high of US$15.60/oz and low of US$15.26/oz settled up by 0.0259% at US$15.44/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     14.40
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 Monday made an intra‐day high of US26.48/bbl, intraday low of US$24.56/bbl and settled down by 1.944% to close at US$25.11/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     25.80-26.50

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 Monday an intraday low of US$1.0799/EUR, high of US$1.0849/EUR and settled the day down by 0.0341% to close at US$1.0806/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 Monday made an intra‐day low of US$1.2281/GBP, high of US$1.2436/GBP and settled the day down by 0.602% to close at US$1.2331/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     1.2320
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 Monday made intra‐day low of JPY106.47/USD and made an intraday high of JPY107.72/USD and settled the day up by 1.0347% at JPY107.60/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     106.90-106.20
S2     105.60
S3     105.00-104.30

INTRADAY RESISTANCE LEVELS
R1     107.60-108.30
R2     109.40
R3     110.20-111.00

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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