AAFX TRADING

Daily Market Lookup

  • The U.S. dollar has given back some of its overnight gains in early European trade Friday, but remains in favor as risk aversion still dominates, amid rising Sino-U.S. tensions. U.S. President Donald Trump ratcheted up these tensions in an interview with Fox Business Network on Thursday, stating he was disappointed with China's failure to contain the coronavirus, that this had cast a pall over the trade deal between the two countries. He suggested he could even cut off ties. The deteriorating relationship between these two important countries is the latest potential spanner in the works of global growth, given worries about a second wave of infections and the slow reopening of economies badly hit by the social distancing measures introduced to combat the virus. With this in mind, it may be worth keeping an eye on the Swiss franc and its relationship with the euro, with the single currency hitting an almost five-year low against the franc of 1.0510 - near the level that many deem to be the unofficial line the Swiss National Bank defends. The euro has been bumping against support at the 1.05 level for the last month. British government reiterated its refusal to extend the Brexit transition deadline beyond December. The third round of talks on the post-Brexit trading relationship with the EU winds up today. The dollar eased from a three-week high on Friday but looked set for a modest weekly gain as rising Sino-U.S. tensions and worries about a second wave of coronavirus infections rattled investors. As hopes wavered for a quick global recovery from the pandemic, the trade-sensitive Australian dollar was poised to snap five weeks of gains with a 1% drop, its first weekly loss since early April. The Antipodean pair, like other majors, have struggled for traction in May as investors and authorities weigh optimism about easing virus containment measures against the risk of more infections and the sheer scale of economic damage already wrought. Gradual re-opening of the world's economies has come with a dawning of how deeply the pandemic has damaged supply chains, labour markets and global demand. Data on Friday showed China's April industrial output beating expectations but consumption was stuck in the doldrums. An already-dismal near-term U.S. economic outlook has darkened further in the latest Reuters poll of economists, with a forecast for a 35% annualised second-quarter contraction. And increasing tension between the United States and China is the latest potential spanner in the works of global growth.
  • U.S. retail sales likely endured a second straight month of record declines in April as the novel coronavirus pandemic kept Americans at home, putting the economy on track for its biggest contraction in the second quarter since the Great Depression. The report from the Commerce Department on Friday would add to a historic 20.5 million job losses last month in underscoring the deepening economic slump that analysts warn could take years to recover from. Federal Reserve Chair Jerome Powell on Wednesday warned of an “extended period” of weak growth and stagnant incomes. Businesses around the country are reopening as states and local governments ease travel restrictions, which were imposed in mid-March to slow the spread of COVID-19, the respiratory illness caused by the virus. But establishments are operating well below capacity and there are fears a second wave of COVID-19 infections could keep consumers away from shopping malls. According to a Reuters survey of economists, retail sales probably collapsed 12.0% last month, which would be the second biggest decline since the government started tracking the series in 1992. Retail sales plunged 8.7% in March. Excluding automobiles, gasoline, building materials and food services, retail sales are forecast dropping 4.6% in April after a surprise 1.7% jump in March. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, tumbled at a 7.6% annualized rate in the first quarter, the sharpest drop since the second quarter of 1980. The plunge in consumer spending occurred in the last two months of March, setting it on a sharply lower path heading into the second quarter.
  • Oil was mixed on Friday morning in Asia, giving up some of its gains from the previous session. Investors were skittish as the U.S. Labor Department said overnight that 2.98 million Americans claimed unemployment benefits for the week ended May 9, down from the previous week's 3.18 figure and the sixth straight reported weekly drop. Over 36 million Americans have lost their jobs since the end of March. The black liquid continues to wrestle with its oversupply dilemma as countries such as China, Korea and Hong Kong see a second wave of COVID-19 cases, threatening to send demand down agains while storage tanks fill up. OPEC said on Wednesday it expected global oil demand to shrink by 9.07 million bpd in 2020, with the current quarter expected to see the steepest decline. But despite the production cuts pledged by OPEC+, some American companies and a small group of countries led by Saudi Arabia, some investors worry that it will not be enough. Meanwhile, the U.S. Commodities Futures Trading Commission sounded a warning to exchanges and brokerages on Thursday to prepare for volatility and possible negative pricing as the WTI futures June contract expires on May 19.

 

 
Intraday RESISTANCE LEVELS
15th May 2020 R1 R2 R3
GOLD-XAU 1,740-1,748 1,760 1,774-1,789
Silver-XAG 16.50-16.90 17.60 18.00-18.40
Crude Oil 29.00-29.90 30.50 31.00-32.20
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

Intraday SUPPORTS LEVELS
15th May 2020 S1 S2 S3
GOLD-XAU 1,729-1,720 1,709 1700-1,690
Silver-XAG 16.10-15.60 15.20 14.90-14.40
Crude Oil 28.40-26.50 25.80 25.20-24.00
EURO/USD 1.0800-1.0750 1.0700 1.0630-1.0570
GBP/USD 1.2190-1.2165 1.2100 1.2060-1.2010
USD/JPY 106.90--106.20 105.60 105.00-104.30

Intra-Day Strategy (15th 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$1736.20/oz and low of US$1710.88/oz. Gold up 0.840% at US$1729.99/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 1729-1690 with risk below 1674, targeting 1740-1748-1760 and 1774-1789. Sell below 1740-1789 keeping stop loss closing above 1790, targeting 1729-1720-1700 and 1690-1674.

 
Intraday Support Levels
S1     1,729-1,720
S2     1,709
S3     1700-1,690
Intraday Resistance Levels
R1     1,740-1,748
R2     1,760
R3     1,774-1,789

Technical Indicators

Name   Value Action
14DRSI  

57.609

Buy
20-DMA   1704.45 Buy
50-DMA  

1651.74

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$15.88/oz and low of US$15.43/oz settled up by 1.924% at US$15.83/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     16.10-15.60
S2     15.20
S3     14.90-14.40

Intraday  Resistance Levels
R1     16.50-16.90
R2     17.60
R3     18.00-18.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.370 Buy
20-DMA   15.23 Sell
50-DMA   14.88 Sell
100-DMA   16.35 Sell
200-DMA   16.91 Sell
STOCH(5,3)   92.268 Buy
MACD(12,26,9)   -0.374 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US28.21/bbl, intraday low of US$25.50/bbl and settled up by 7.33% to close at US$27.85/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 28.40-24.00 with risk daily closing below 24.00 and targeting 29.00-29.90-30.50 and 31.00-32.30. Sell in between 29.00-32.20 with stop loss at 32.20; targeting 28.40-26.50-25.80 and 25.80-25.20-24.70.

 
Intraday Support Levels
S1     28.40-26.50
S2     25.80
S3     25.20-24.00

Intraday Resistance Levels
R1     29.00-29.90
R2     30.50
R3     31.00-32.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.117 Sell
20-DMA   21.62 Buy
50-DMA   25.09 Sell
100-DMA   39.11 Sell
200-DMA   47.31 Sell
STOCH(5,3)   55.130 Sell
MACD(12,26,9)   -3.0720 Sell

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.0774/EUR, high of US$1.0823/EUR and settled the day down by 0.125% to close at US$1.0803/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$1.2164/GBP, high of US$1.2240/GBP and settled the day down by 0.0024% to close at US$1.2222/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 1.2320-1.2740 with targets at 1.2180-1.2130 and 1.2060-1.2010 stop-loss should be below 1.2740. Buy above 1.2320-1.2180 with targets 1.2320-1.2410-1.2470 and 1.2500-1.2590-1.2650 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2190-1.2165
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  

39.554

Buy
20-DMA   1.2382 Buy
50-DMA   1.2337 Sell
100-DMA   1.2673 Sell
200-DMA   1.2649 Sell
STOCH(5,3)   5.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY106.76/USD and made an intraday high of JPY107.35/USD and settled the day up by 0.205% at JPY107.23/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
R2     108.30
R3     109.40-110.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.904 Buy
20-DMA   107.10 Buy
50-DMA   107.55 Sell
100-DMA   108.51 Sell
200-DMA   108.22 Buy
STOCH(9,6)   70.253 Sell
MACD(12,26,9)   -0.161 Sell

AAFX TRADING
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