AAFX TRADING

Daily Market Lookup

  • The dollar edged lower in early European trade Thursday, ahead of two major monetary developments in Europe. The European Central Bank will announce the results of its latest long-term lending operation, which is the first at which banks can borrow at the new lower limit of as low as 1%. Given the doubts over the effectiveness of negative interest rates, a high take-up would constitute a vote of confidence in the ability of the ECB to keep supporting the economy through monetary policy (and vice versa). ECB board member Isabel Schnabel last week trailed expectations of around 1.4 trillion euros in demand. Sterling edged lower in early trading Thursday, amid expectations that the central bank will boost its quantitative easing program by between 100 and 150 billion pounds. The U.K. economy has been particularly hard hit by the coronavirus outbreak, and is forecast to shrink the most of all G7 economies this year by the Organization for Economic Cooperation and Development Norway's central bank is also scheduled to meet later Thursday, and is widely expected to keep its benchmark interest rates unchanged at 0.0%. The central bank operations are taking place against a backdrop of a spike in new Coronavirus cases in the U.S. and China, which has hit risk-sensitive currencies this week. As such, the latest weekly U.S. jobless claims at 8:30 AM ET (1230 GMT) may play a big role in whether greed or fear sets the tone for the rest of the day.
  • The dollar held its earlier gains on Thursday morning in Asia, amid growing concern over the spike in COVID-19 cases in China and the U.S. Beijing reported 21 new cases linked to an outbreak at the Xinfadi market on Wednesday, while Texas reported an 11% jump in hospitalizations on the same day. The spikes pointed to a troubling trend as the number of cases in both countries had been falling since May, and triggered investor concerns about the risks of resuming economic activity before a cure for the virus is developed Some investors remained optimistic about the dollar and yen despite their retreats. The GBP/USD pair gained 0.01% to 1.2555, with the pound trading in a narrow range ahead of the Bank of England’s policy meeting later in the day. The central bank is widely expected to give its quantative easing program a boost of at least GBP 100 billion ($125.515 billion) amid an economy hard hit by COVID-19 and tough negotiations for a free trade agreement European Union.
  • A second wave of layoffs amid weak demand and fractured supply chains is likely keeping new U.S. applications for unemployment benefits elevated, supporting views that the economy faces a long and difficult recovery from the COVID-19 recession. The Labor Department’s weekly jobless claims report on Thursday, the most timely data on the economy’s health, is expected to sketch a picture of continued labor market distress even though employers hired a record 2.5 million workers in May as businesses reopened after shuttering in mid-March to slow the spread of COVID-19. Millions are still collecting unemployment checks. Federal Reserve Chair Jerome Powell told lawmakers this week that “significant uncertainty remains about the timing and strength of the recovery.” The economy fell into recession in February. Initial claims for state unemployment benefits likely totaled a seasonally adjusted 1.3 million for the week ended June 13, down from 1.542 million in the prior week, according to a Reuters survey of economists. The 11th straight weekly drop would push claims further away from a record 6.867 million in late March. Still, claims would be roughly double their peak during the 2007-09 Great Recession. Initial claims will cover the week during which the government surveyed establishments for the nonfarm payrolls component of June’s employment report. But economists cautioned that claims were no longer a good predictor of job growth.
  • Oil prices fell around 1% on Thursday as a spike in new coronavirus cases in China and the United States renewed fears that a recovery in fuel demand could stall, even as lockdowns ease. Worries about fuel demand rose after a surge in coronavirus cases led Beijing to cancel flights and shut schools and several U.S. states, including Texas, Florida and California, reported sharp increases in new cases. A rise in U.S. crude stockpiles to a record high for a second week in a row also weighed on sentiment, even though U.S. government data showed inventories of gasoline and distillate, which include diesel and heating oil, fell. While prices dipped, they are likely to remain in the $35 to $40 band they have been trading in so far in June, with the Organization of the Petroleum Exporting Countries and its allies, a grouping called OPEC+, mostly sticking to promised supply cuts, U.S. shale producers holding back output, and fuel demand gradually improving, analysts said. OPEC+ compliance with crude production cut commitments in May was 87%, two OPEC+ sources said on Wednesday However, OPEC warned in a monthly report the market would remain in surplus in the second half of 2020 even as demand improves, as it now expects supply from outside the group to be about 300,000 barrels per day higher than earlier thought.

 

 
Intraday RESISTANCE LEVELS
18th 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 38.90-39.50 40.50 41.00-42.00
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
18th 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 37.90-37.10 36.00 34.90-33.90
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 (18th 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$1730.17/oz and low of US$1712.28/oz. Gold up 0.130% at US$1725.20/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 Wednesday made its intraday high of US$17.59/oz and low of US$17.31/oz settled up by 0.309% at US$17.48/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 Wednesday made an intra‐day high of US38.95/bbl, intraday low of US$37.42/bbl and settled up by 0.624% to close at US$38.05/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 38.10-34.00 with risk daily closing below 34.00 and targeting 38.90-39.50-40.10 and 41.00-42.00. Sell in between 38.90-42.10 with stop loss at 42.10; targeting 38.00-37.10-36.00 and 34.90-33.90-33.00.

 
Intraday Support Levels
S1     37.90-37.10
S2     36.00
S3     34.90-33.90

Intraday Resistance Levels
R1     38.90-39.50
R2     40.50
R3     41.00-42.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.03 Sell
20-DMA   36.25 Buy
50-DMA   28.91 Buy
100-DMA   34.39 Buy
200-DMA   45.77 Sell
STOCH(5,3)   64.130 Buy
MACD(12,26,9)   2.453 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1206/EUR, high of US$1.1293/EUR and settled the day up by 0.177% to close at US$1.1242/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 1.1235-1.1030 with risk below 1.1030, targeting 1.1300-1.1360-1.1400 and 1.1450-1.1495. 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
S2     1.1150
S3     1.1090-1.1030

Intraday  Resistance Levels
R1     1.1300-1.1360
R2     1.1400
R3     1.1450-1.1500

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.032 Buy
20-DMA   1.1187 Buy
50-DMA   1.0996 Buy
100-DMA   1.0984 Sell
200-DMA   1.1025 Sell
STOCH(5,3)   23.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2509/GBP, high of US$1.2588/GBP and settled the day down by 0.267% to close at US$1.2555/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 1.2600-1.2900 with targets at 1.2550-1.2470-1.2410 and 1.2320-1.2250-1.2165 stop-loss should be 1.2900. Buy above 1.2550-1.2200 with targets 1.2650-1.2700 and 1.2770 -1.2800-1.2850 with stop loss closing below 1.2200.

 
Intraday Support Levels
S1     1.2550-1.2470
S2     1.2410
S3     1.2320-1.2240

Intraday Resistance Levels
R1     1.2600
R2     1.2650
R3     1.2720-1.2800

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.554

Buy
20-DMA   1.2488 Buy
50-DMA   1.2424 Buy
100-DMA   1.2521 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 Wednesday made intra‐day low of JPY106.94/USD and made an intraday high of JPY107.63/USD and settled the day down by 0.0167% at JPY106.99/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 107.50-111.00 with risk above 111.00 targeting 106.90-106.20-105.60 and 105.00-104.50. Long positions above 106.90-104.00 with targets of 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
S3     105.00-104.30

INTRADAY RESISTANCE LEVELS
R1     107.40-107.90
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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