AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trade Friday, with investors seeking this safe haven amid fears of a second wave of the Covid-19 outbreak and the possibility of renewed lockdowns to curb the spread. These fears have grown with the U.S. reporting more than 2 million Covid-19 cases as of June 12 and a number of the more populous states reporting increased numbers of infections. That said, “the bar for turning to lockdowns again seems very high, though. Not least in the U.S., where there is strong opposition to this,” Danske added. Additionally, the market was still digesting a grim picture of the U.S. economic recovery painted by the U.S. Federal Reserve after it concluded its policy meeting on Wednesday. Elsewhere, sterling has weakened across the board after data showed that Britain's economy shrank by a record 20.4% in April from March as the country spent the month in a tight coronavirus lockdown. Financial Times reported Thursday that the high level summit between U.K. PM Boris Johnson, European Commission President Ursula von der Leyen and European Council President Charles Michel is set to take place on June 15. The dollar was up on Friday, with the U.S. reporting more than 2 million COVID-19 cases as of June 12 and triggering renewed fears of a second wave of cases. Investors were also spooked by the possibility of renewed lockdowns to curb the spread. The market was still digesting a grim picture of the U.S. economic recovery painted by the U.S. Federal Reserve after it concluded its policy meeting on Wednesday. But some investors suggested that factors other than the Fed’s grim analysis contributed to stocks’ losses from its recent rally. There are almost 7.5 million cases worldwide according to Johns Hopkins University data.
  • U.S. consumer sentiment perked up in early June as households cheered the reopening of businesses and a surprise rebound in hiring, though they did not expect a significant improvement in the economy amid fears of a resurgence in COVID-19 infections. The National Bureau of Economic Research, the arbiter of U.S. recessions, declared on Monday that the economy slipped into recession in February. The University of Michigan’s consumer sentiment index increased to a reading of 78.9 from 72.3 in May. It said “few consumers anticipate the reestablishment of favorable economic conditions anytime soon.” Two-thirds of consumers in the survey expected “bad times financially” during the year ahead, while half anticipated a “renewed downturn. In addition to concerns about a second wave of COVID-19 infections, consumers also worried that persistently high unemployment could slow the economic recovery. Though the economy created 2.5 million jobs in May, an employment gap of nearly 20 million remains since March when nonessential businesses were shuttered to slow the spread of COVID-19. Layoffs are more than double their peak during the 2007-09 Great Recession. Consumers’ inflation perceptions in the past months have been driven by higher food prices, amid meat shortages caused by COVID-19 outbreaks at processing plants. Deflation fears were further assuaged by a separate report from the Labor Department on Friday showing import prices rose 1.0% in May, the largest gain since February 2019, after falling 2.6% in April. Import prices, which exclude tariffs, were driven by higher costs for petroleum products and food. The Federal Reserve, which tracks the core personal consumption expenditures price index for its 2% inflation target, sharply lowered its inflation projections on Wednesday. The U.S. central bank projected core inflation rising 1.0% this year and picking up to 1.5% in 2021. Back in December, it forecast inflation at 1.9% this year and 2% in 2021.
  • After six weeks of trading virtually one-way, some serious volatility might be returning to oil as the market starts paying attention to the record stockpiles in U.S. crude, and hefty builds in fuel products like diesel, that hedge funds and other bullish investors had ignored for weeks. Oil’s crash was sparked by fears of a second coronavirus wave in the United States as the total number of Covid-19 cases topped 2 million, after a surge in infections in at least five of the 50 U.S. states after five weeks of declines across the country. The potential for a second wave of infections from the Covid-19 virus across the U.S. could prompt another at least partial shutdown. If that wasn’t enough, Federal Reserve Chairman Jay Powell said on Wednesday the central bank might leave U.S. interest rates at near zero until the end of 2022. While a longer stretch of stimulus will be positive to markets, the Fed Chair’s remarks were also taken as caution that recovery from the pandemic could drag longer than thought. Adding to the concerns of oil investors were U.S. commercial crude oil inventories, which grew by 5.72 million barrels last week, according to data from the Energy Information Administration. Just as startling as the crude stockpiles were distillate inventories led by diesel. These soared by 1.6 million barrels last week, bringing inventories to nearly 53 million barrels over the past nine weeks. Some were less pessimistic in their outlook for oil though. Despite the surge in distillate stocks, Goldman Sachs (NYSE:GS) said demand for gasoline - one of the most important components of oil - was steadily picking up. Goldman also noted that crack spreads - or the profit derived by refiners -- have started to recover, although they remain below historical average levels. The reopening of credit markets to refiners have also helped, as some have sought incremental liquidity to weather the downturn, while many have issued incremental debt.

 

 
Intraday RESISTANCE LEVELS
15th June 2020 R1 R2 R3
GOLD-XAU 1,740-1,748 1,754 1,760-1,770
Silver-XAG 18.00-18.55 18.95 19.60-20.10
Crude Oil 37.10 38.00 38.90-39.50
EURO/USD 1.1260-1.1300 1.1360 1.1400-1.1450
GBP/USD 1.2550-1.2600 1.2650 1.2720-1.2800
USD/JPY 107.10-107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
15th June 2020 S1 S2 S3
GOLD-XAU 1,729-1,704 1,690 1,675-1,664
Silver-XAG 17.40-16.95 16.50 16.10-15.80
Crude Oil 36.00-34.90 33.90 37.10
EURO/USD 1.1235-1.1190 1.1150 1.1090-1.1020
GBP/USD 1.2470-1.2410 1.2320 1.2240-1.2200
USD/JPY 106.50 105.50-105.00 104.30

Intra-Day Strategy (15th 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$1742.95/oz and low of US$1722.03/oz. Gold up 0.281% at US$1730.66/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 1729-1670 with risk below 1670, targeting 1740-1748 and 1654-1660. Sell below 1740-1770 keeping stop loss closing above 1770, targeting 1729-1704-1690 and 1674-1664.

 
Intraday Support Levels
S1     1,729-1,704
S2     1,690
S3     1,675-1,664
Intraday Resistance Levels
R1     1,740-1,748
R2     1,754
R3     1,760-1,770

Technical Indicators

Name   Value Action
14DRSI  

55.982

Buy
20-DMA   1723.18 Sell
50-DMA  

1705.61

Sell
100-DMA   1648.90 Buy
200-DMA   1573.51 Buy
STOCH(5,3)   87.621 Sell
MACD(12,26,9)   4.894 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$17.73/oz and low of US$17.37/oz settled down by 0.850% at US$17.47/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 17.50-15.40 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     17.40-16.95
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 Friday made an intra‐day high of US37.13/bbl, intraday low of US$34.67/bbl and settled up by 0.41% to close at US$36.60/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 36.00-30.00 with risk daily closing below 30.00 and targeting 37.10-38.00 and 38.90-39.50-40.10. Sell in between 36.00-40.10 with stop loss at 40.10; targeting 34.90-33.90-33.00 and 32.10-30.80.

 
Intraday Support Levels
S1     36.00-34.90
S2     33.90
S3     37.10

Intraday Resistance Levels
R1     37.10
R2     38.00
R3     38.90-39.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   760.03 Sell
20-DMA   35.44 Buy
50-DMA   28.36 Buy
100-DMA   34.86 Buy
200-DMA   46.04 Sell
STOCH(5,3)   34.130 Sell
MACD(12,26,9)   2.723 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1211/EUR, high of US$1.1339/EUR and settled the day down by 0.383% to close at US$1.1254/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 oversold territory and giving negative crossovers to signal for bearish 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 1.1235-1.1020 with risk below 1.1020, targeting 1.1300-1.1360-1.1400 and 1.1450-1.1495-1.1550. Sell below 1.1300-1.1495 targeting 1.1235-1.1190-1.1150 and 1.1090-1.1020 with stop-loss at daily closing above 1.1500.

 
Intraday Support Levels
S1     1.1235-1.1190
S2     1.1150
S3     1.1090-1.1020

Intraday  Resistance Levels
R1     1.1260-1.1300
R2     1.1360
R3     1.1400-1.1450

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.032 Buy
20-DMA   1.1121 Buy
50-DMA   1.0964 Buy
100-DMA   1.0974 Sell
200-DMA   1.1021 Sell
STOCH(5,3)   45.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2472/GBP, high of US$1.2652/GBP and settled the day down by 0.492% to close at US$1.2539/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 1.2550-1.2900 with targets at 1.2470-1.2410 and 1.2320-1.2250-1.2165 stop-loss should be 1.2900. Buy above 1.2470-1.2200 with targets 1.2550-1.2650-1.2700 and 1.2770 -1.2800-1.2850 with stop loss closing below 1.2200.

 
Intraday Support Levels
S1     1.2470-1.2410
S2     1.2320
S3     1.2240-1.2200

Intraday Resistance Levels
R1     1.2550-1.2600
R2     1.2650
R3     1.2720-1.2800

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

54.554

Buy
20-DMA   1.2434 Buy
50-DMA   1.2408 Buy
100-DMA   1.2535 Sell
200-DMA   1.2677 Sell
STOCH(5,3)   37.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY107.79/USD and made an intraday high of JPY108.67/USD and settled the day up by 0.211% at JPY108.53/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 107.10-111.00 with risk above 111.00 targeting 106.80-106.20-105.60 and 105.00-104.50. Long positions above 106.50-104.00 with targets of 107.10-107.90-108.40 and 109.40-110.20-110.90 with stop below 105.00.

 
Intraday Support Levels
S1     106.50
S2     105.50-105.00
S3     104.30

INTRADAY RESISTANCE LEVELS
R1     107.10-107.90
R2     108.40
R3     109.40-110.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.904 Buy
20-DMA   107.86 Buy
50-DMA   107.59 Sell
100-DMA   108.17 Sell
200-DMA   108.40 Buy
STOCH(9,6)   11.253 Sell
MACD(12,26,9)   -0.161 Sell

AAFX TRADING
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