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Daily Market Lookup

  • The U.S. dollar drifted lower in early European trade Tuesday, continuing the sharp losses seen overnight as signs of progress in the search for a Covid-19 vaccine sparked growing risk appetite. The positive update bolstered hopes that a vaccine may be found sooner rather than later, prompting investors to dump the safe haven dollar for currencies which may offer greater reward. Federal Reserve chairman Jerome Powell is to testify on Tuesday before the Senate Banking Committee, alongside Treasury Secretary Steven Mnuchin, to update government officials on the economic stimulus programs approved so far.The thorny issue of negative interest rates could be raised, and Powell is expected to repeat that a negative policy rate is not on the cards right now. Also of note was the news late Monday that France and Germany are proposing a 500 billion euro ($545 billion) European recovery fund to be distributed to EU countries worst affected by Covid-19, with the funds provided as grants rather than loans. This marks a shift in position by Germany, who had previously rejected the idea of nations sharing debt. Other EU countries must agree with the proposal, however, and the idea of shared debt has proved an extremely difficult hurdle to pass in the past. While the U.S. central bank members are doing their best to rule out the possibility of negative interest rates, their U.K. equivalents are doing exactly the opposite. Over the weekend the Bank of England's chief economist, Andy Haldane, said the central bank was looking more urgently at negative interest rates, while rate-setter Silvana Tenreyro Monday talked up the benefits of such rates, citing the experience of other countries in Europe. This comes as the number of Britons seeking jobless benefits soared by 856,500 to more than 2 million in April, the most on record. The dollar was down on Tuesday morning in Asia after U.S. drugmaker Moderna (NASDAQ:MRNA) announced “positive” results for its potential COVID-19 vaccine on Monday. All 45 phase one trial participants developed antibodies to the virus after two doses. Meanwhile, U.S. Federal Reserve Chair Jerome Powell is scheduled to speak on the state of U.S. economic recovery from the virus on Tuesday, where he is expected to press for future fiscal support. The USD/JPY pair rose 0.06% to 107.40 as investors wait for Japanese industrial production data for March to be released later in the day. A data release from Monday showed the Japanese economy shrinking at an annualized rate of 3.4% between January and March.
  • Oil prices rose on Tuesday, extending gains for a fourth straight session, amid signs that producers are cutting output as promised just as demand picks up, stoked by more countries easing out of curbs imposed to counter the coronavirus pandemic. The June WTI contract expires on Tuesday, but there was little sign of a repeat of the historic plunge below zero seen a month ago on the eve of the May contract's expiry amid signs that demand for crude and derived fuels is recovering from its nadir. The market was also boosted by signs that output cuts agreed by the Organization of the Petroleum Exporting Countries (OPEC) and others including Russia, a group known as OPEC+, are being implemented on the ground. OPEC+ has cut its oil exports sharply in the first half of May, companies that track the shipments said, suggesting a strong start in complying with a new production cut agreement. In further support for prices, U.S. production is also falling, with crude output from seven major shale formations expected to fall by a record 197,000 barrels per day in June to 7.822 million barrels per day. That would be the lowest since August 2018, according to the U.S. Energy Information Administration. Oil was mixed on Tuesday morning, the last day of trading for the WTI futures June contract in Asia. Investors are nervously waiting and preparing for a potential re-run of the last trading day of the May contract, when prices touched negative territory for the first time since records were kept. Since then, demand has improved with some countries loosening lockdowns to curb the COVID-19 virus and trying to restart their economies. OPEC+ also pledged production cuts, in effect since May 1, and several countries led by Saudi Arabia have pledged further production cuts from June onwards. But, with storage tanks almost full and the fragile recovery in demand shattered by some countries reporting a second wave of virus cases, Masiu struck a less positive note.

 

 
Intraday RESISTANCE LEVELS
19th May 2020 R1 R2 R3
GOLD-XAU 1,740-1,748 1,766 1,774-1,789
Silver-XAG 17.60-18.00 18.40 18.95-19.50
Crude Oil 32.25 33.00 35.20-36.00
EURO/USD 1.0970 1.1030 1.1060-1.1150
GBP/USD 1.2260-1.2320 1.2410 1.2470-1.2500
USD/JPY 108.30 108.30 109.40-110.20

Intraday SUPPORTS LEVELS
19th May 2020 S1 S2 S3
GOLD-XAU 1,729-1,720 1,709 1,700-1,690
Silver-XAG 16.90-16.50 16.10 15.60-15.20
Crude Oil 31.00-30.50 29.90 29.00-28.40
EURO/USD 1.0900-1.0800 1.0750 1.0700-1.0630
GBP/USD 1.2210-1.2165 1.2100 1.2060-1.2010
USD/JPY 106.90-106.20 105.60 105.00-104.30

Intra-Day Strategy (19th 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$1765.00/oz and low of US$1727.42/oz. Gold down 0.710% at US$1731.98/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 1728-1690 with risk below 1690, targeting 1740-1748-1766 and 1774-1789-1800. Sell below 1740-1800 keeping stop loss closing above 1800, targeting 1729-1720-1700 and 1690-1680.

 
Intraday Support Levels
S1     1,729-1,720
S2     1,709
S3     1,700-1,690
Intraday Resistance Levels
R1     1,740-1,748
R2     1,766
R3     1,774-1,789

Technical Indicators

Name   Value Action
14DRSI  

59.609

Buy
20-DMA   1712.90 Buy
50-DMA  

1655.12

Buy
100-DMA   1617.74 Buy
200-DMA   1555.05 Buy
STOCH(5,3)   19.621 Sell
MACD(12,26,9)   -27.894 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$17.55/oz and low of US$16.64/oz settled up by 0.929% at US$16.94/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 16.90-15.00 targeting 17.60-18.00 and 18.40-18.95; stop breakage below 15.00. Sell below 17.60-18.95 with stop loss above 18.50; targeting 16.90-16.50-16.10 and 15.60-14.40.

 
Intraday  Support Levels
S1     16.90-16.50
S2     16.10
S3     15.60-15.20

Intraday  Resistance Levels
R1     17.60-18.00
R2     18.40
R3     18.95-19.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   75.370 Buy
20-DMA   15.36 Sell
50-DMA   14.88 Sell
100-DMA   16.35 Sell
200-DMA   16.91 Sell
STOCH(5,3)   96.268 Buy
MACD(12,26,9)   -0.374 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US33.09/bbl, intraday low of US$29.56/bbl and settled up by 6.450% to close at US$32.29/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 30.50-26.50 with risk daily closing below 26.50 and targeting 31.00-32.35 and 33.00-34.00-35.20. Sell in between 31.00-35.20 with stop loss at 35.20; targeting 30.50-29.90-28.40 and 26.50-25.80.

 
Intraday Support Levels
S1     31.00-30.50
S2     29.90
S3     29.00-28.40

Intraday Resistance Levels
R1     32.25
R2     33.00
R3     35.20-36.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.117 Sell
20-DMA   22.13 Buy
50-DMA   24.89 Sell
100-DMA   39.40 Sell
200-DMA   47.88 Sell
STOCH(5,3)   95.130 Sell
MACD(12,26,9)   -3.0720 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.0798/EUR, high of US$1.0926/EUR and settled the day up by 0.939% to close at US$1.0911/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 1.0900-1.0630 with risk below 1.0630, targeting 1.0970-1.1030 and 1.1060-1.1150. Sell below 1.0970-1.1150 targeting 1.0900-1.0820-1.0770-1.0700 and 1.0630-1.0570 with stop-loss at daily closing above 1.1100.

 
Intraday Support Levels
S1     1.0900-1.0800
S2     1.0750
S3     1.0700-1.0630

Intraday  Resistance Levels
R1     1.0970
R2     1.1030
R3     1.1060-1.1150

TECHNICAL INDICATORS
Name   Value Action
14DRSI   1.0851 Buy
20-DMA   1.0851 Buy
50-DMA   1.0897 Buy
100-DMA   1.0970 Sell
200-DMA   1.1015 Sell
STOCH(5,3)   78.758 Buy
MACD(12,26,9)   -0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2075/GBP, high of US$1.2226/GBP and settled the day up by 0.924% to close at US$1.2192/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 1.2100-1.2470 with targets at 1.2100-1.2060-1.2010 and 1.1955-1.1900 stop-loss should be below 1.2470. Buy above 1.2100-1.1900 with targets 1.2165-1.2210-1.2320 and 1.2410-1.2470-1.2500 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2210-1.2165
S2     1.2100
S3     1.2060-1.2010

Intraday Resistance Levels
R1     1.2260-1.2320
R2     1.2410
R3     1.2470-1.2500

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.554

Buy
20-DMA   1.2337 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 Monday made intra‐day low of JPY107.06/USD and made an intraday high of JPY107.49/USD and settled the day up by 0.206% at JPY107.29/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     108.30
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

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