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Daily Market Lookup

  • The dollar was up on Thursday morning, with investors turning to the safe-haven asset as U.S.-China tensions flared up overnight. In its latest move, the U.S. suspended flights into the U.S. by Chinese airlines effective from June 16 after China barred American carriers from re-entering China. Relations between the two countries soured after China approved the enactment of national security laws in Hong Kong and Macau last month. Hong Kong’s Legislative Council has started voting on national anthem bill, a precursor to the national security laws. Sterling will lose recent gains against the dollar and weaken further if Britain does not ask for an extension to its Brexit transition period by a June 30 deadline to allow more time for talks on a trade deal with the EU, a Reuters poll found. The currency has strengthened this week, trading at a one-month high of around $1.26 on Wednesday, as Britain indicated that it might be willing to compromise on some sticking points to reach a final Brexit deal. Talks between the two sides, aimed at setting out a new future with Britain outside the European Union for the first time in 47 years, have all but stalled, but there are hopes for a compromise. Britain formally departed the EU on January 31, three and a half years after a surprise referendum vote in favour of leaving, and the transition period - during which Britain remains in the EU single market and customs union - is due to finish at the end of this year. Prime Minister Boris Johnson has until the end of June to ask for an extension and has repeatedly ruled this out. All but two of 23 respondents to an additional question in the poll said sterling would weaken in early July if there is no extension. Still, Reuters polls of economists have repeatedly said the two sides would eventually thrash out a free trade deal and the pound was expected to have strengthened around 1.6% to $1.28 in a year. Britain has suffered the highest death toll in Europe from COVID-19 and a government-imposed lockdown to try and quell the spread of the coronavirus has wreaked havoc on the economy. GDP is expected to contract 17.5% this quarter. Countries across Europe have also seen their economies crippled and the euro common currency will move little against the pound, the poll found. In one month a euro will get you 90 pence and in a year it will be worth 88p.
  • The euro held near multi-month highs against rival majors Thursday on expectations the European Central Bank will expand its bond buying programme later in the day to shore up the coronavirus-stricken economy. The euro's strength helped to push the dollar's index against a basket of key currencies to the lowest level in nearly three months. The European Central Bank is widely expected to increase the size of its 750 billion euro ($669 billion) Pandemic Emergency Purchase Programme (PEPP) as early as Thursday. The ECB delivers its policy decision at 1145 GMT and ECB President Christine Lagarde holds a news conference at 1230 GMT The currency has been bolstered by hopes for European Union-wide fiscal support measures after Germany last month threw its weight behind the idea of a European Union recovery fund, breaking away from its long-held tradition to resist moves towards fiscal integration in the currency bloc That has largely underpinned the euro's rise against the dollar for seven straight sessions until Wednesday, having gained 2.3% during this period. The dollar index having fallen about 1% so far this week as broad improvement in risk sentiment, underpinned by reopening of economies globally, reduced the allure for the greenback. On Wednesday data showed that U.S. private payrolls fell less than expected in May, suggesting layoffs were abating as businesses reopen, though the overall economy's recovery from the COVID-19 pandemic will be slow. Sterling was changing hands at $1.2576 , near its highest levels in over a month, helped by signs that Britain might be willing to compromise on sticking points in Brexit negotiations with the European Union. Britain is expected to indicate flexibility over fisheries and trade rules if the European Union agrees to lessen its demands regarding regulatory alignment and fishing access, the Times newspaper reported on Tuesday as a new round of talks kicks off.
  • Oil prices fell on Thursday, reversing gains in the previous session, on concerns that supply will rise if major producers are unable to agree to extend the depth of output cuts that have supported recent gains. Saudi Arabia and Russia, two of the world's biggest oil producers, have agreed to support extending into July the 9.7 million barrels per day (bpd) in supply cuts backed in April by the OPEC+ group, comprised of the Organization of the Petroleum Exporting Countries and other major producers. However, they failed to agree on holding an OPEC+ meeting on Thursday to discuss the cuts, with OPEC sources saying it would be conditional on countries that have not complied with their targets deepening their cuts. That would imply OPEC+ would go back to what they agreed in April, which was to ease their supply cuts to 7.7 million bpd from July, he said. Further, Saudi Arabia and other Gulf producers Kuwait and the United Arab Emirates are not planning to extend voluntary output cuts of 1.8 million bpd after June, indicating crude supply will rise next month no matter what OPEC+ decides. Surging fuel stockpiles and mixed demand data in the United States, the world's biggest oil user, also weighed on prices because of fears about a slow recovery in U.S. demand as states emerge from coronavirus lockdowns. U.S. Energy Information Administration data on Wednesday showed gasoline stocks rose by 2.8 million barrels, nearly triple what analysts had expected, while distillate stocks rose by 9.9 million barrels, or nearly four times more than expected. Gasoline demand, in terms of product supplied to retailers, rose for a third week by 296,000 bpd to 7.55 million bpd, the EIA data showed. However, the amount of distillate fuel, including diesel used for shipping goods by train and tractor trailer, supplied to retailers fell by 548,000 bpd to 2.718 million bpd, the lowest weekly reading since 1992.

 

 
Intraday RESISTANCE LEVELS
4th June 2020 R1 R2 R3
GOLD-XAU 1,729-1,740 1,748 1,755-1,765
Silver-XAG 18.00-18.55 18.95 19.60-20.10
Crude Oil 37.10-38.00 38.90 39.50-40.10
EURO/USD 1.1235-1.1300 1.1350 1.1400-1.1450
GBP/USD 1.2600 1.2650 1.2720-1.2800
USD/JPY 109.40 110.20-111.00 111.80

Intraday SUPPORTS LEVELS
4th June 2020 S1 S2 S3
GOLD-XAU 1,700 1,694 1,675-1,664
Silver-XAG 17.60 16.90 16.50-16.10
Crude Oil 36.60 36.10 35.20-34.00
EURO/USD 1.1190-1.1150 1.1090 1.1030-1.0970
GBP/USD 1.2550-1.2470 1.2410 1.2350-1.2250
USD/JPY 108.40-107.90 107.10 106.20-105.60

Intra-Day Strategy (4th 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 Wednesday made its intraday high of US$1705.40/oz and low of US$1700.74/oz. Gold down 0.169% at US$1703.62/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     1,700
S2     1,694
S3     1,675-1,664
Intraday Resistance Levels
R1     1,729-1,740
R2     1,748
R3     1,755-1,765

Technical Indicators

Name   Value Action
14DRSI  

52.982

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)   -2.894 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$17.67/oz and low of US$17.46/oz settled down by 0.362% at US$17.59/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 17.60-16.10 targeting 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     17.60
S2     16.90
S3     16.50-16.10

Intraday  Resistance Levels
R1     18.00-18.55
R2     18.95
R3     19.60-20.10

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 Wednesday made an intra‐day high of US37.09/bbl, intraday low of US$36.37/bbl and settled down by 0.784% to close at US$36.66/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 36.60-31.00 with risk daily closing below 31.00 and targeting 37.10-37.90 and 38.90-39.50-40.10. Sell in between 37.10-39.70 with stop loss at 40.10; targeting 36.60-36.10-35.20 and 34.00-33.00-32.25.

 
Intraday Support Levels
S1     36.60
S2     36.10
S3     35.20-34.00

Intraday Resistance Levels
R1     37.10-38.00
R2     38.90
R3     39.50-40.10

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 Wednesday an intraday low of US$1.1199/EUR, high of US$1.1236/EUR and settled the day up by 0.293% to close at US$1.1202/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     1.1190-1.1150
S2     1.1090
S3     1.1030-1.0970

Intraday  Resistance Levels
R1     1.1235-1.1300
R2     1.1350
R3     1.1400-1.1450

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.032 Buy
20-DMA   1.0851 Buy
50-DMA   1.0897 Buy
100-DMA   1.0970 Buy
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 Tuesday made an intra‐day low of US$1.2544/GBP, high of US$1.2616/GBP and settled the day up by 0.191% to close at US$1.2574/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 1.2600-1.2800 with targets at 1.2550-1.2410-1.2320 and 1.2250-1.2165-1.2100 stop-loss should be 1.2600. Buy above 1.2550-1.2060 with targets 1.2600 and 1.2650-1.2700-1.2770 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.2550-1.2470
S2     1.2410
S3     1.2350-1.2250

Intraday Resistance Levels
R1     1.2600
R2     1.2650
R3     1.2720-1.2800

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 Tuesday made intra‐day low of JPY108.81/USD and made an intraday high of JPY109.15/USD and settled the day up by 0.0366% at JPY109.04/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 108.40-111.80 with risk above 112.00 targeting 108.40-107.90-106.90 and 106.20-105.60-105.00. Long positions above 107.90-105.00 with targets of 109.40-110.20-110.90 and 111.80-112.50 with stop below 105.00.

 
Intraday Support Levels
S1     108.40-107.90
S2     107.10
S3     106.20-105.60

INTRADAY RESISTANCE LEVELS
R1     109.40
R2     110.20-111.00
R3     111.80

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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