AAFX TRADING

Daily Market Lookup

  • The dollar was weaker in early European trade Wednesday, with investors wary ahead of the latest meeting of the Federal Reserve. The U.S. central bank concludes its latest two-day meeting later on Wednesday, and while no major changes are expected the Fed could announce steps to curb the recent rise in bond yields. Most analysts are playing down the chance the Fed will adopt yield curve control to guide 10-year Treasury yields lower, but uncertainty about the outcome of the Fed meeting could keep the dollar under pressure. Elsewhere, GBP/USD traded 1.2766, up 0.3%, not far off a three-month high. Still, it’s debatable how much longer sterling can retain this strength given the uncertainty over its Brexit trade negotiations with the European Union. The bank’s base case remains that the two sides can reach a simple free trade agreement on goods trading (not services), before the year-end, but the risk of a no deal Brexit has risen. The dollar was up on Wednesday morning in Asia on the back of eagerly-awaited details from a U.S. Federal Reserve policy meeting scheduled for later in the day. Although investors expect no major changes, the Fed could announce steps to curb the recent rise in bond yields, which could bring the dollar down. Investors remain positive on both currencies as Australia and New Zealand resume economic activity after lifting their COVID-19 lockdowns, and the Antipodean currencies gained from recent investor optimism over the global economic recovery from COVID-19. But the risk currencies could soon feel an impact as that optimism over the recovery wanes, with the AUD also affected by Australian tensions with China which continue to simmer The dollar nursed losses against most currencies on Wednesday amid some speculation the U.S. Federal Reserve could take steps to curb a recent rise in bond yields at its policy meeting. The Australian and New Zealand dollars pulled back slightly against the greenback but sentiment remained positive as economic activity resumes in both countries following the lifting of coronavirus restrictions. The main focus is a Fed policy meeting later on Wednesday. While no major changes are expected, recent rises in yields have pushed up the dollar due to increasing signs the U.S. economy is stabilising, but a full-fledged recovery from the coronavirus outbreak is still distant. Some analysts are playing down the chance the Fed will adopt yield curve control to guide 10-year Treasury yields lower, but uncertainty about the outcome of the Fed meeting could keep the dollar under pressure. U.S. central bankers on Wednesday will also publish their first economic projections since the coronavirus pandemic set off a recession in February. Estimates are expected to signal a collapse in output this year and near-zero interest rates for the next few years. The Antipodean currencies have been on a stellar run against the greenback due to hopes for economic recovery, prompting some investors to book profits. Some traders are worried about a deterioration in diplomatic relations between Australia and China, which has also weighed on the Aussie. Concerns about progress in trade talks between Britain and the European Union continue to hamper both the euro and the pound. The EU's chief Brexit negotiator, Michel Barnier, is scheduled to speak later on Wednesday, which may yield details that will help determine whether market sentiment will improve.
  • Oil prices fell on Wednesday as an industry report showed a rise in crude and fuel inventories in the United States, renewing concerns about oversupply and slumping fuel demand in the world's largest crude consumer. Both contracts rose to their highest in three months on Monday but some analysts think the market has risen too far, too fast as the coronavirus pandemic sweeps across the world with new infections posting daily highs. U.S. crude inventories climbed 8.4 million barrels in the week to June 5, API data showed, while a Reuters poll of analysts had indicated a draw of 1.7 million barrels. Distillate fuel stockpiles, including diesel fuel and heating oil, rose by 4.3 million barrels, outpacing expectations for a 3 million barrel increase. Official government figures on stockpiles from the Energy Information Administration are due later on Wednesday. While layoffs fell in the U.S. in April, hiring hit a record low indicating it will take many years for a recovery in the labour market in the world's biggest economy. Oil rose in a late rally ahead of inventory data on Wednesday and after Libya once again closed its top oil field shortly after reopening. Crude traded for a loss for most of the session as the market grapples with a surplus of fuels, most notably diesel. But demand optimism got a boost when New Jersey lifted its stay-at-home order and increased gathering limits. New York’s Westchester and Rockland counties entered the second phase of reopening Tuesday, while Long Island is set to do so on Wednesday, and New York City reached a milestone on testing In the latest set of preliminary data on implied demand from the Energy Information Administration, gasoline consumption in the U.S. advanced for a second week, while distillates, including diesel, took a step backward. Usage of those fuels is about 20% below year-ago levels while jet fuel consumption is down much more, almost 80%. Earlier, Saudi Arabia decided to end additional supply curbs this month, and that means the cartel’s total supply reduction this month of almost 11 mn barrels a day will taper gradually in the coming months. Iraq has asked some Asian refiners to consider forgoing prompt shipments of its Basrah crude, raising speculation that OPEC’s second-biggest producer is trying to comply with pledged output cuts. The country and some others were recently pulled up by Saudi Arabia and Russia for pumping above their quotas.

 

 
Intraday RESISTANCE LEVELS
10th June 2020 R1 R2 R3
GOLD-XAU 1,729 1,740 1,748-1554
Silver-XAG 18.00-18.55 18.95 19.60-20.10
Crude Oil 38.90 39.50 40.10-41.00
EURO/USD 1.1360 1.1400 1.1450-1.1495
GBP/USD 1.2720-1.2800 1.2850 1.2870-1.2930
USD/JPY 107.90-108.40 109.40 110.20-111.00

Intraday SUPPORTS LEVELS
10th June 2020 S1 S2 S3
GOLD-XAU 1,704-1,690 1,675 1,664-1,656
Silver-XAG 17.50-16.95 16.50 16.10-15.80
Crude Oil 38.00-37.10 36.60 35.40-33.90
EURO/USD 1.1300-1.1260 1.1235 1.1190-1.1150
GBP/USD 1.2650-1.2600 1.2550 1.2470-1.2410
USD/JPY 107.10-106.20 105.50 105.00-104.50

Intra-Day Strategy (10th 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 Tuesday made its intraday high of US$1700.50/oz and low of US$1677.30/oz. Gold up 0.882% at US$1697.46/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1642) and breakage below will call for 1600. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in oversold 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 1704-1660 with risk below 1660, targeting 1729-1740-1748 and 1654-1660. Sell below 1729-1760 keeping stop loss closing above 1760, targeting 1704-1690-1674 and 1664-1656-1642.

 
Intraday Support Levels
S1     1,704-1,690
S2     1,675
S3     1,664-1,656
Intraday Resistance Levels
R1     1,729
R2     1,740
R3     1,748-1554

Technical Indicators

Name   Value Action
14DRSI  

52.982

Buy
20-DMA   1722.18 Sell
50-DMA  

1702.61

Sell
100-DMA   1646.90 Buy
200-DMA   1572.51 Buy
STOCH(5,3)   63.621 Sell
MACD(12,26,9)   2.894 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$17.75/oz and low of US$17.45/oz settled down by 0.872% at US$17.50/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 200DMA (16.93), breakage below will lead to 16.30. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is approaching overbought region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 17.10-15.40 targeting 18.00-18.40-18.95 and 19.60-20.10; stop breakage below 15.00. Sell below 18.00-20.10 with stop loss above 20.10; targeting 16.90-16.50-16.10 and 15.80-15.40.

 
Intraday  Support Levels
S1     17.50-16.95
S2     16.50
S3     16.10-15.80

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.514 Buy
20-DMA   17.25 Buy
50-DMA   15.92 Buy
100-DMA   16.27 Buy
200-DMA   16.92 Buy
STOCH(5,3)   60.268 Sell
MACD(12,26,9)   -0.541 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US39.22/bbl, intraday low of US$37.22/bbl and settled down by 0.229% to close at US$38.43/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 38.00-33.00 with risk daily closing below 33.00 and targeting 38.00-38.90-39.50 and 40.10-41.00-41.60. Sell in between 38.00-41.40 with stop loss at 42.00; targeting 37.10-36.60-36.10 and 35.20-33.90-33.00.

 
Intraday Support Levels
S1     38.00-37.10
S2     36.60
S3     35.40-33.90

Intraday Resistance Levels
R1     38.90
R2     39.50
R3     40.10-41.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.03 Sell
20-DMA   34.64 Buy
50-DMA   27.86 Buy
100-DMA   35.24 Buy
200-DMA   46.22 Sell
STOCH(5,3)   50.130 Sell
MACD(12,26,9)   3.180 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1240/EUR, high of US$1.1363/EUR and settled the day up by 0.395% to close at US$1.1338/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 1.1300-1.1150 with risk below 1.1150, targeting 1.1360-1.1400-1.1450 and 1.1495-1.1550. Sell below 1.1360-1.1495 targeting 1.1300-1.1260-1.1235 and 1.1190-1.1150-1.1060 with stop-loss at daily closing above 1.1150.

 
Intraday Support Levels
S1     1.1300-1.1260
S2     1.1235
S3     1.1190-1.1150

Intraday  Resistance Levels
R1     1.1360
R2     1.1400
R3     1.1450-1.1495

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.032 Buy
20-DMA   1.0741 Buy
50-DMA   1.0946 Buy
100-DMA   1.0969 Sell
200-DMA   1.1018 Sell
STOCH(5,3)   75.758 Buy
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2617/GBP, high of US$1.2754/GBP and settled the day up by 0.0361% to close at US$1.2726/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 1.2720-1.2930 with targets at 1.2600-1.2550-1.2410 and 1.2320-1.2250-1.2165 stop-loss should be 1.2600. Buy above 1.2600-1.2060 with targets 1.2650-1.2700-1.2770 and 1.2800-1.2850-1.2910 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.2650-1.2600
S2     1.2550
S3     1.2470-1.2410

Intraday Resistance Levels
R1     1.2720-1.2800
R2     1.2850
R3     1.2870-1.2930

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 JPY107.74/USD and made an intraday high of JPY108.55/USD and settled the day down by 0.624% at JPY107.74/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 110.20-113.00 with risk above 113.00 targeting 109.00-108.40-107.90 and 106.90-106.20-105.60. Long positions above 109.40-105.00 with targets of 110.20-110.90 and 111.80-112.50 with stop below 105.00.

 
Intraday Support Levels
S1     107.10-106.20
S2     105.50
S3     105.00-104.50

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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING