AAFX TRADING

Daily Market Lookup

  • The dollar was down on Monday morning in Asia, with rising optimism over the global economic recovery from COVID-19 leading investors to retreat from the safe-haven asset even as the number of global cases continues to rise. Johns Hopkins University data indicated that there are over 6 million cases as of June 1. Meanwhile, U.S. President Donald Trump did not move to end phase one of its trade deal with China when he laid out his response to China’s national security law for Hong Kong and Macau on Friday. Investors breathed a sigh of relief that the response has not yet spilled over into a broader trade dispute The dollar has sold off in early European trade Monday, as fewer investors seek this safe haven amid rising optimism about the global economic recovery and as U.S. President Trump offers up a measured response to China’s move to tighten control over Hong Kong. Helping the risk-on tone, an official business survey from China showed its factory activity grew at a slower pace in May but momentum in the services and construction sectors quickened. Additionally, President Trump decided not to end phase one of the U.S.’s trade deal with China when he laid out his response to China’s national security law for Hong Kong and Macau on Friday, although he did vow to end Hong Kong's special status. However, Goldman Sachs sees the yuan falling to its lowest since 2008 over the next three months amid uncertainty over U.S. policy toward China. The euro has continued to strengthen Monday, having been boosted by last week’s EU stimulus package. Markets are also awaiting a meeting of the European Central Bank on Thursday where it is widely expected to raise its asset buying by around 500 billion euros to 1.25 trillion. Also on the rise is sterling, with the U.K. loosening months-long lockdown measures. The government announced the resumption of competitive sport from Monday. Another round of Brexit talks get underway on Tuesday ahead of the June 18-19 EU summit by which time London needs to make up its mind about asking for an extension to the transition agreement.
  • Euro zone manufacturers appear to have passed their nadir, a survey showed on Monday, but activity is still contracting sharply as government-imposed lockdowns due to the coronavirus pandemic keep demand in check. Many countries in the bloc have slowly started to reopen parts of their economies even though cases of the virus — which has infected more than 5.8 million people worldwide and killed over 360,000 — are still being reported. So after crashing to its lowest reading in the survey’s nearly 22-year history in April, IHS Markit’s Manufacturing Purchasing Managers’ Index (PMI) recovered somewhat last month. It rose to 39.4 in May from April’s 33.4, still a long way from the 50 mark that separates growth from contraction and just below an earlier flash reading of 39.5. An index measuring output, which feeds into a composite PMI due on Wednesday, remained weak but did almost double to 35.6 from April’s record low of 18.. But with citizens still encouraged to stay home and many businesses remaining shuttered, forward-looking indicators in the survey suggested the recovery would be slow, echoing the findings in a Reuters poll last month. Headcount was slashed again, backlogs of work were completed at a near-record pace while stockpiles of finished goods were built up, and raw material purchases declined sharply. With hopes the worst has passed, however, purchasing managers were less pessimistic last month. The future output index, which gauges optimism about the 12 months ahead, bounced closer to the breakeven point of 50, registering 44.6 compared to April’s 36.6.
  • Oil prices were little changed on Monday, with the Organization of the Petroleum Exporting Countries (OPEC) considering meeting as soon as this week to discuss whether to extend record production cuts beyond end-June. The price falls come after front-month Brent and WTI prices posted their strongest monthly gains in years in May. Gains were boosted by OPEC crude production dropping to its lowest in two decades, with demand expected to recover as more nations emerge from coronavirus lockdowns. "The focus is very much on OPEC+," OCBC economist Howie Lee said, referring to OPEC and its allies including Russia. OPEC+ agreed in April to reduce output by an unprecedented 9.7 million barrels per day (bpd) in May and June after the coronavirus pandemic ravaged demand. Still, tensions between the United States and China weighed on global financial markets, while traders are also keeping an eye on riots over the weekend that have engulfed major U.S. cities. Saudi Arabia is proposing to extend record cuts from May and June until the end of the year, but has yet to win support from Russia, sources have told Reuters. Algeria, which currently holds the OPEC presidency, has proposed that an OPEC+ meeting planned for June 9-10 be brought forward to facilitate oil sales for countries such as Saudi Arabia, Iraq and Kuwait. Russia has no objection to the meeting being brought forward to June 4. Meanwhile supply in North America is also falling as data from Baker Hughes Co showed that the U.S. and Canada oil and gas rigs count dropped to a record low in the week to May 29. OPEC and Russia are moving closer to a compromise on the duration for extending current oil output cuts and are now discussing a proposal to rollover supply curbs for one to two months, two OPEC+ sources told Reuters on Monday.

 

 
Intraday RESISTANCE LEVELS
1st June 2020 R1 R2 R3
GOLD-XAU 1,740-1,748 1,755 1,765-1,770
Silver-XAG 18.55-18.95 19.60 20.10-20.50
Crude Oil 36.00 36.60-37.10 38.00
EURO/USD 1.1150-1.1200 1.1235 1.1300
GBP/USD 1.2410 1.2470 1.2500-1.2550
USD/JPY 109.40 109.40 110.20-111.00

Intraday SUPPORTS LEVELS
1st June 2020 S1 S2 S3
GOLD-XAU 1,720-1,709 1,700 1,690-1,675
Silver-XAG 18.00-17.60 16.90 16.50-16.10
Crude Oil 35.20-34.00 32.90 32.05-31.00
EURO/USD 1.1060-1.1030 1.0970 1.0900-1.0800
GBP/USD 1.2350-1.2250 1.2165 1.2100-1.2060
USD/JPY 107.10-106.20 105.60 105.00-104.30

Intra-Day Strategy (1st June 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 Friday made its intraday high of US$1737.50/oz and low of US$1712.61/oz. Gold up 0.642% at US$1728.93/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 1720-1660 with risk below 1660, targeting 1740-1748-1754 and 1765-1772. Sell below 1740-1772 keeping stop loss closing above 1772, targeting 1720-1700-1690 and 1674-1660.

 
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     1,765-1,770

Technical Indicators

Name   Value Action
14DRSI  

52.982Buy

Buy
20-DMA   1717.47 Buy
50-DMA  

1678.93

Buy
100-DMA   1632.40 Buy
200-DMA   1563.70 Buy
STOCH(5,3)   28.621 Sell
MACD(12,26,9)   18.00-17.60 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$17.89/oz and low of US$17.24/oz settled up by 3.04% at US$17.85/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 18.00-16.10 targeting 17.60-18.00 and 18.40-18.95; stop breakage below 15.00. Sell below 18.55-20.95 with stop loss above 21.00; targeting 18.00-17.60-16.90 and 16.50-16.10-15.60.

 
Intraday  Support Levels
S1     18.00-17.60
S2     16.90
S3     16.50-16.10

Intraday  Resistance Levels
R1     18.55-18.95
R2     19.60
R3     20.10-20.50

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 Friday made an intra‐day high of US35.85/bbl, intraday low of US$32.45/bbl and settled up by 4.75% to close at US$33.65/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 35.20-31.00 with risk daily closing below 31.00 and targeting 36.00-36.60 and 37.10-37.70. Sell in between 35.20-37.70 with stop loss at 37.70; targeting 35.20-34.00-33.00 and 32.25-31.00-30.50.

 
Intraday Support Levels
S1     35.20-34.00
S2     32.90
S3     32.05-31.00

Intraday Resistance Levels
R1     36.00
R2     36.60-37.10
R3     38.00

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)   1.1060-1.1030 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1066/EUR, high of US$1.1144/EUR and settled the day up by 0.197% to close at US$1.1097/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 1.1060-1.0800 with risk below 1.0630, targeting 1.1150-1.1200 and 1.1235-1.1300. Sell below 1.1150-1.1300 targeting 1.1060-1.1030-1.0900 and 1.0820-1.0770-1.0700 with stop-loss at daily closing above 1.1100.

 
Intraday Support Levels
S1     1.1060-1.1030
S2     1.0970
S3     1.0900-1.0800

Intraday  Resistance Levels
R1     1.1150-1.1200
R2     1.1235
R3     1.1300

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 Friday made an intra‐day low of US$1.2289/GBP, high of US$1.2393/GBP and settled the day up by 0.229% to close at US$1.2342/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 1.2410-1.2550 with targets at 1.2320-1.2250-1.2165 and 1.2100-1.2060 stop-loss should be below 1.2470. Buy above 1.2060-1.1900 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     1.2350-1.2250
S2     1.2165
S3     1.2100-1.2060

Intraday Resistance Levels
R1     1.2410
R2     1.2470
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 Friday made intra‐day low of JPY107.07/USD and made an intraday high of JPY107.89/USD and settled the day down by 0.077% at JPY107.82/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     109.40
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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