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Daily Market Lookup

  • The U.S. dollar was marginally higher in early European trade Wednesday, ahead of an eagerly-anticipated speech by Federal Reserve Chairman Jerome Powell later in the day. Powell will speak as a guest at a streaming event held by the Peterson Institute of International Economics at 9:00 AM ET (13:00 GMT),. a day after U.S. President Donald Trump again pushed the Federal Reserve to adopt negative interest rates, a subject which gained prominence last week when U.S. money market instruments started to price in a chance of the fed funds rate dropping below zero next year. Last week saw U.S. unemployment rise by another three million, bringing the total of people claiming benefits to 33 million since the start of the coronavirus crisis, around the levels of the Great Depression. Consumer prices also dropped 0.8% in April, raising the possibility of deflation as the economy sinks deeper into recession. This has all fueled the debate about policy responses and putting pressure on the Fed to do more. Several members of the Federal Reserve have already expressed their skepticism this week that rates below zero would be an effective remedy for the economic damage of the pandemic. Elsewhere, Sterling came off the three-week low it posted on Tuesday after quarterly GDP data were marginally less bad than expected. The currency remains under pressure, however, after Treasury chief Rishi Sunak unveiled what could be a hugely expensive expansion of the government's wage subsidies for furloughed workers on Tuesday. The dollar also surged against the kiwi after the Reserve Bank of New Zealand announced a big expansion of its quantitative easing program. The dollar was up on Wednesday morning in Asia, with investors anticipating a speech by U.S. Federal Reserve Chair Jerome Powell later in the day. Powell is likely to resist calls for negative rates, a hot issue since U.S. money market instruments started pricing in a chance of negative rates last week. But U.S. consumer prices dropping 0.8% in April raised the possibility of deflation as the economy sinks deeper into recession, fueling the debate about policy responses and putting pressure on the Fed to do more. U.S. President Donald Trump again pushed the Federal Reserve to adopt negative interest rates on Tuesday. Risk-sensitive currencies lacked momentum as a warning from a top U.S. health official about the dangers of reopening the economy too soon served as a reminder of the uncertainties facing an economy which has been ravaged by the novel coronavirus. U.S. President Donald Trump on Tuesday again pushed the Federal Reserve to adopt negative interest rates, a hot topic in financial markets since last week when U.S. money market instruments started to price in a chance of negative rates. U.S. consumer prices dropped 0.8% in April, the biggest since the Great Recession, raising the spectre of deflation as the economy sinks deeper into recession and fuelling the debate about policy responses. Powell will be speaking on current economic issues in a webcast hosted by the Peterson Institute for International Economics at 9:00 a.m. (1300 GMT). Although Fed officials have said they do not see a need to cut interest rates below zero - investors think that will become an option especially if the coronavirus outbreak leads to further deterioration in the U.S. economy. Top U.S. infectious disease advisor Anthony Fauci on Tuesday warned Congress that a premature lifting of lockdowns could lead to additional outbreaks of the deadly coronavirus. His comments cast a shadow on optimism in financial markets in recent weeks that the worst period of the epidemic is over and the economy can only get better. U.S. stock prices also slid, led by high-flying technology shares, adding to the cautious mood on the economic outlook. Official data published on Tuesday showed Britain's death toll from COVID-19 topped 38,000 as of early May, having overtaken Italy as the worst affected country in Europe.
  • Oil prices fell on Wednesday on worries about a possible second wave of coronavirus cases in countries starting to ease lockdowns, while industry data showed a rise in U.S. crude inventories. The concerns overshadowed a further call by Saudi Arabia for larger production cuts to balance the market following a virus-induced demand slump, after OPEC's biggest producer said earlier this week it planned to add to cut output again. U.S. infectious disease expert Anthony Fauci on Tuesday told Congress that easing coronavirus lockdowns may set off new outbreaks of the illness, which has killed 80,000 Americans and badly damaged the world's biggest economy. New outbreaks have been reported in South Korea and in China, where the health crisis started before spreading around the world, prompting governments to lock down billions of people, devastating economies and demand for oil. On the supply side, Saudi Arabia's cabinet has urged OPEC+ countries to reduce oil output further to restore balance in global crude markets, the country's state news agency reported early on Wednesday. On Monday, Saudia Arabia said it would add to planned cuts by reducing production by a further 1mn bpd next month, bringing output down to 7.5 million bpd. The OPEC and other producers such as Russia - a group known as OPEC+ - agreed to cut output by 9.7 mn bpd in May and June, a record reduction, in response to a 30% fall in global fuel demand. In the United States, inventories of crude oil rose by 7.6 million barrels last week to 526.2 million barrels, against analysts' expectations for an increase of 4.1 min barrels Still, stocks of crude at the Cushing, Oklahoma, delivery hub fell by 2.3 mn barrels, API said, which, if confirmed by official data, would be the first drawdown since February, according to ING Economics. Official storage data from the U.S. Energy Information Administration is due later on Wednesday.

 

 
Intraday RESISTANCE LEVELS
13th 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 1.2320-1.2410 1.2470 1.2500-1.2590
USD/JPY 107.60-108.30 109.40 110.20-111.00

Intraday SUPPORTS LEVELS
13th May 2020 S1 S2 S3
GOLD-XAU 1,700-1,690 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 1.2240-1.2165 1.2100 1.2060-1.2010
USD/JPY 106.90-106.20 105.60 105.00-104.30

Intra-Day Strategy (13th 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 Tuesday made its intraday high of US$1710.77/oz and low of US$1693.56/oz. Gold up 0.313% at US$1702.47/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     1,700-1,690
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 Tuesday made its intraday high of US$15.60/oz and low of US$15.31/oz settled down by 0.420% at US$15.38/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 Tuesday made an intra‐day high of US26.73/bbl, intraday low of US$25.00/bbl and settled down by 1.944% to close at US$25.70/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   87.130 Sell
STOCH(5,3)   87.130 Sell
MACD(12,26,9)   -3.0720 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.0783/EUR, high of US$1.0884/EUR and settled the day up by 0.398% to close at US$1.0846/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$1.2257/GBP, high of US$1.2376/GBP and settled the day down by 0.210% to close at US$1.2257/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     1.2240-1.2165
S2     1.2100
S3     1.2060-1.2010

Intraday Resistance Levels
R1     1.2320-1.2410
R2     1.2470
R3     1.2500-1.2590

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 Tuesday made intra‐day low of JPY107.11/USD and made an intraday high of JPY107.68/USD and settled the day down by 0.445% at JPY107.11/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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