AAFX TRADING

Daily Market Lookup

  • The dollar sold off in early European trade Tuesday, as the Federal Reserve’s move to start purchasing U.S. corporate bonds boosted sentiment at the expense of safe havens. Late Monday the U.S. central bank flew to the rescue once more, stating it will start purchasing investment grade U.S. corporate bonds in a bid to secure companies' access to cash and ensure credit market liquidity. Attention will quickly turn to Fed Chair Jerome Powell’s virtual testimony to the Joint Economic Committee on his economic outlook and recent monetary policy decisions, at 10:00 AM ET (1400 GMT). Elsewhere, USD/JPY rose 0.1% to 107.47 after the Bank of Japan kept monetary settings steady earlier Tuesday, but increased the size of its lending packages for cash-strapped firms to $1 trillion from about $700 billion announced last month. Sterling gained Tuesday, amid optimistic noises out of London and Brussels after Brexit talks between Prime Minister Boris Johnson and European Commission President Ursula von der Leyen. However, the latest round of U.K. employment data were mixed: the jobless rate unexpectedly held steady at 3.9% over the three months to April, whereas many had expected a rise in the unemployment rate to 4.7%. However, the claimant count in May rose by nearly 530,000 and the rise in April's claims was revised up to over 1 million from 857,000.
  • The dollar slipped and riskier currencies rallied on Tuesday as the U.S. Federal Reserve prepared to start its corporate bond buying scheme, while a report flagging the possibility of more fiscal stimulus helped underpin investor sentiment. The Fed said it would start purchasing corporate debt on Tuesday as part of an already announced stimulus scheme, and launched its Main Street Lending Program for businesses The move boosted confidence across asset classes and underpinned risk-sensitive currencies like the Australian and New Zealand dollars. Investor sentiment was further lifted by a Bloomberg News report saying that President Donald Trump's administration is mulling a nearly $1 trillion infrastructure programme to boost the economy, citing anonymous sources. The Fed will make its corporate debt purchases in the secondary market, and said it would also be buying bonds directly from issuers "in the near future". The combined size of the primary and secondary programmes is up to $750 billion. Individual investment grade bonds, with a remaining maturity of five years or less, are eligible for Fed purchase. While Morgan Stanley (NYSE:MS) figures showed that represented only a small percentage of the U.S. corporate debt universe, it proved enough on Tuesday to support investor confidence. Still, markets have a wary eye on Fed Chair Jerome Powell's Senate Banking Committee testimony at 1400 GMT, given his gloomy view on the economic outlook, and on the coronavirus' spread Concerns about the depth of economic damage and a growing second wave of infections triggered a sell-off in riskier assets last week and during Monday's Asian session. The Bank of Japan kept monetary settings steady on Tuesday and stuck to its view that the economy will gradually recover from the coronavirus pandemic. Governor Haruhiko Kuroda is due to hold a news conference at 0630 GMT. Global cases of the novel coronavirus reached over 8 million on Monday, as infections surge in Latin America and the United States and China grapple with fresh outbreaks. Beijing has banned high-risk people from leaving the Chinese capital to stop the spread of a fresh outbreak, while New Zealand reported two new cases related to recent travel from the UK, ending a 24-day streak of no new infections in the country.
  • U.S. retail sales likely experienced a record rise in May as 2.5 million Americans went back to work, although any rebound will retrace only a fraction of the historic drops in March and April amid the coronavirus lockdowns. The monthly report, due to be released by the Commerce Department on Tuesday, is expected to show overall receipts at U.S. retailers jumped 8.0% last month, according to a Reuters poll of economists. That would exceed the previous record increase of 6.7% in October 2001 as Americans resumed spending following what was then a record pullback in the aftermath of the September 11, 2001, attacks on the United States While certainly an eye-catching bounce, it would retrace only about a quarter of the sales drop registered in the record back-to-back declines in the two previous months when widespread stay-at-home orders were imposed to stop the spread of COVID-19, the respiratory illness caused by the novel coronavirus. Sales in April fell 16.4% after tumbling 8.3% in March. The U.S. economy dropped into recession in February as the viral outbreak brought a record-long expansion to an abrupt end. Employment fell by about 22 million in March and April, but payrolls rose unexpectedly in May by just over 2.5 million, supporting the thesis that consumer spending may be recovering and that the worst of the downturn may have passed.

 

 
Intraday RESISTANCE LEVELS
16th 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 38.00 38.90-39.50 40.50
EURO/USD 1.1360 1.1400-1.1450 1.1500
GBP/USD 1.2650 1.2650 1.2720-1.2800
USD/JPY 107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
16th June 2020 S1 S2 S3
GOLD-XAU 1,720-1,704 1,690 1,675-1,664
Silver-XAG 17.25-16.90 16.30 16.00-15.55
Crude Oil 37.10-36.00 34.90 33.90-33.00
EURO/USD 1.1300-1.1260 1.1235 1.1150-1.1090
GBP/USD 1.2470-1.2410 1.2320 1.2240-1.2200
USD/JPY 107.10-106.50 105.50 105.00-104.30

Intra-Day Strategy (16th 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 Monday made its intraday high of US$1734.00/oz and low of US$1703.97/oz. Gold up 0.529% at US$1724.13/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 1720-1670 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     1,720-1,704
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 Monday made its intraday high of US$17.53/oz and low of US$16.93/oz settled down by 1.503% at US$17.36/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 17.00-15.55 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     17.25-16.90
S2     16.30
S3     16.00-15.55

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.514 Buy
20-DMA   17.52 Buy
50-DMA   16.24 Buy
100-DMA   16.25 Buy
200-DMA   16.89 Buy
STOCH(5,3)   29.268 Sell
MACD(12,26,9)   -0.541 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US37.46/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 37.10-30.00 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     37.10-36.00
S2     34.90
S3     33.90-33.00

Intraday Resistance Levels
R1     38.00
R2     38.90-39.50
R3     40.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.03 Sell
20-DMA   35.96 Buy
50-DMA   28.67 Buy
100-DMA   34.54 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 Monday an intraday low of US$1.1225/EUR, high of US$1.1331/EUR and settled the day up by 0.803% to close at US$1.1322/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 1.1300-1.1020 with risk below 1.1020, targeting 1.1360-1.1400- 1.1450 and 1.1495-1.1550. Sell below 1.13-1.1495 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     1.1300-1.1260
S2     1.1235
S3     1.1150-1.1090

Intraday  Resistance Levels
R1     1.1360
R2     1.1400-1.1450
R3     1.1500

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 Monday made an intra‐day low of US$1.2453/GBP, high of US$1.2606/GBP and settled the day up by 0.744% to close at US$1.2603/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     1.2650
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 Monday made intra‐day low of JPY106.99/USD and made an intraday high of JPY107.56/USD and settled the day up by 0.0335% at JPY107.32/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     107.10-106.50
S2     105.50
S3     105.00-104.30

INTRADAY RESISTANCE LEVELS
R1     107.90
R2     108.40
R3     109.40-110.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.904 Buy
20-DMA   107.85 Buy
50-DMA   107.53 Sell
100-DMA   108.13 Sell
200-DMA   108.41 Buy
STOCH(9,6)   37.253 Sell
MACD(12,26,9)   -0.161 Sell

AAFX TRADING
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