AAFX TRADING

Daily Market Lookup

  • The U.S. dollar sold off in early European trade Tuesday amid optimism over the global recovery given positive news of a potential coronavirus vaccine as well as the further reopening of economies, prompting investors to edge out of this safe haven. Late Monday, U.S. biotech company Novavax (NASDAQ:NVAX) said it has begun trials for a coronavirus vaccine in Australia. It expects preliminary results from the Phase 1 clinical trial in July, and upon successful completion Phase 2 will be conducted in several countries, including the United States. Novavax is one of many drugmakers around the world racing to find a way to fight a pandemic that's infected over 5 million people worldwide. This followed news that a drop-off in virus cases led the Japanese government to end its state of emergency, adding to the increasing number of countries that are reopening their economies as the course of the coronavirus slows. Still, ranges are tight as the U.K. and the U.S. return from Monday’s holiday while investors keep a wary eye on the tensions between the U.S. and China and the protests in Hong Kong. The dollar was down on Tuesday morning in Asia, with investor risk appetite increased by ever more countries cautiously loosening lockdowns to curb the COVID-19 virus and increased hopes of economic recovery from the virus’s impact. U.S. biotechnology company Novavax (NASDAQ:NVAX) targets to release clinical trial results for its novel COVID-19 vaccine by July, and will start phase 2 trials in several countries, including the U.S., based on the phase 1 results. But the dollar capped its gains with investors continuing to monitor the U.S.-China relationship. Tensions between the two countries flared up last week after China tabled national security laws for Hong Kong and Macau. The GBP/USD pair gained 0.23% to 1.2210 even after Dominic Cummings, advisor to U.K. Prime Minister Boris Johnson, refused to step down after breaching lockdown rules during Monday’s press conference.
  • German consumer morale improved slightly heading into June after hitting its lowest level on record in the previous month, a survey showed on Tuesday, suggesting that Europe’s largest economy is slowly recovering from the coronavirus pandemic. The GfK consumer sentiment indicator, based on a survey of some 2,000 Germans, remained in negative territory, but rose to -18.9 points from an upwardly revised -23.1 in the previous month. The reading undershot a Reuters poll of analysts who had predicted a somewhat bigger rebound to -18.3. The gradual reopening of many businesses across the country helped to lift the propensity to buy, GfK researcher Rolf Buerkl said. But he added that uncertainty remained high as consumers anticipated a severe recession. The improved consumer climate went hand in hand with a drop in propensity to save. Income expectations rose slightly but remained well below their level from a year ago as unemployment and reduced working hours led to income losses.
  • Oil prices climbed on Tuesday, boosted by increasing faith in the market that producers will to stick to commitments to cut crude supply while demand picks up with more cars back on the road as coronavirus lockdowns are eased around the world. There was no WTI settlement on Monday because of the U.S. Memorial Day holiday. The market was buoyed by comments from Russia reporting its oil output had nearly dropped to its target of 8.5 million barrels per day (bpd) for May and June under its supply cut deal with the Organization of the Petroleum Exporting Countries (OPEC) and other leading producers, a grouping known as OPEC+. OPEC+ countries are set to meet again in early June to discuss maintaining their supply cuts to shore up prices, which are still down around 45% since the start of the year. The big producers agreed in April to cut output by nearly 10 million bpd for May and June. Russia's energy ministry on Monday quoted minister Alexander Novak as saying a rise in fuel demand should help cut the current global surplus of around 7-12 million bpd by June or July. Meanwhile data from energy services firm Baker Hughes (N:BKR) showed the United States' rig count hitting a record low of 318 in the week to May 22, also indicating lower output in the future. Oil was up on Tuesday morning in Asia with Russian expectations of a rebalancing of the market by June or July. Russian Minister of Energy Alexander Novak said overnight that rising fuel demand, as countries loosen lockdowns, could cut the current global oversupply, estimated at 7 to 12 million bpd, within the next two months. Russia also reported that it was close to meeting its production cut target of 8.5 million bpd for May and June. As a member of OPEC, it had pledged to cut production alongside other members of OPEC+ in April. The next OPEC+ meeting is scheduled for June. Investors were buoyed, with production cuts finally making a dent in the black liquid’s oversupply.

 

 
Intraday RESISTANCE LEVELS
26th May 2020 R1 R2 R3
GOLD-XAU 1,740-1,748 1,755 1,766-1,774
Silver-XAG 17.60-18.00 18.40 18.95-19.50
Crude Oil 35.20-36.00 36.60 37.10-37.75
EURO/USD 1.0970 1.1030 1.1060-1.1150
GBP/USD 1.2320-1.2410 1.2500-1.2550 1.2500-1.2550
USD/JPY 107.90-108.40 109.40 110.20-111.00

Intraday SUPPORTS LEVELS
26th May 2020 S1 S2 S3
GOLD-XAU 1,720-1,709 1,700 1,690-1,675
Silver-XAG 16.90-16.50 16.10 15.60-15.20
Crude Oil 33.00-32.25 31.00 30.50-29.90
EURO/USD 1.0900-1.0800 1.0750 1.0700-1.0630
GBP/USD 1.2250-1.2165 1.2060-1.2010 1.2060-1.2010
USD/JPY 107.10-106.20 105.60 105.00-104.30

Intra-Day Strategy (26th 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$1734.71/oz and low of US$1721.30/oz. Gold down 0.365% at US$1728.37/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 1720-1690 with risk below 1690, targeting 1740-1748-1754 and 1766-1774-1789. Sell below 1740-1775 keeping stop loss closing above 1775, targeting 1729-1720 and 1700-1690.

 
Intraday Support Levels
S1     1,720-1,709
S2     1,700
S3     1,690-1,675
Intraday Resistance Levels
R1     1,740-1,748
R2     1,755
R3     1,766-1,774

Technical Indicators

Name   Value Action
14DRSI  

55.609

Buy
20-DMA   1716.77 Buy
50-DMA  

1670.96

Buy
100-DMA   1629.59 Buy
200-DMA   32.621 Buy
STOCH(5,3)   32.621 Sell
MACD(12,26,9)   -2.894 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$17.20/oz and low of US$16,88/oz settled down by 0.588% at US$17.05/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 US34.21/bbl, intraday low of US$32.53/bbl and settled up by 1.0% to close at US$34.08/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 33.00-27.70 with risk daily closing below 27.70 and targeting 35.20-36.00 and 36.60-37.10-37.70. Sell in between 35.20-37.70 with stop loss at 37.70; targeting 33.00-32.25-31.00 and 30.50-29.90-28.40-27.70.

 
Intraday Support Levels
S1     33.00-32.25
S2     31.00
S3     30.50-29.90

Intraday Resistance Levels
R1     35.20-36.00
R2     36.60
R3     37.10-37.75

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.117 Sell
20-DMA   22.13 Buy
50-DMA   24.89 Sell
100-DMA   38.40 Sell
200-DMA   47.45 Sell
STOCH(5,3)   82.130 Sell
MACD(12,26,9)   -3.0720 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.0869/EUR, high of US$1.0913/EUR and settled the day up by 0.0275% to close at US$1.0895/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   44.032 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$1.2163/GBP, high of US$1.2202/GBP and settled the day up by 0.134% to close at US$1.2179/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     1.2250-1.2165
S2     1.2060-1.2010
S3     1.2060-1.2010

Intraday Resistance Levels
R1     1.2320-1.2410
R2     1.2500-1.2550
R3     1.2500-1.2550

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

47.554

Buy
20-DMA   1.2308 Buy
50-DMA   1.2270 Sell
100-DMA   1.2600 Sell
200-DMA   1.2650 Sell
STOCH(5,3)   44.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY107.54/USD and made an intraday high of JPY107.77/USD and settled the day up by 0.098% at JPY107.65/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 107.90-110.50 with risk above 110.50 targeting 106.90-106.20-105.60 and 105.00-104.30. 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     107.10-106.20
S2     105.60
S3     105.00-104.30

INTRADAY RESISTANCE LEVELS
R1     107.90-108.40
R2     109.40
R3     110.20-111.00

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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