AAFX TRADING

Daily Market Lookup

  • The dollar reversed its small earlier gains on Monday morning, with investors facing the possibility of renewed lockdowns as COVID-19 cases spiked over the weekend. Sunday saw a record 183,020 cases globally, according to the World Health Organization, with fears of a second wave of cases and a return of restriction measures to curb the number of cases. The number of global cases is almost 9 million, according to Johns Hopkins University data. Meanwhile, the Reserve Bank of New Zealand will announce its latest benchmark interest rates settings on Wednesday. The central bank is widely expected to keep rates at 0.25%, but investors will be looking for any mention of future negative rates, as well as the tone of the announcement. Some investors expected sentiment to be risk-adverse for the coming week. The U.S. dollar touched a three-week high and commodity currencies were stalled on Monday, as renewed worries about a second wave of coronavirus infections sent investors into safer assets. Moves were modest, as few expect spiking case numbers to prompt fresh lockdowns at this point. But with the World Health Organization reporting a record increase in global cases on Sunday, especially in the Americas, and Apple Inc (O:AAPL) protectively closing 11 U.S. stores last week, there was no immediate cause for optimism either. Barclays expects continued pressure on the kiwi, but said gains in the euro are possible if Purchasing Managers Index (PMI) data due on Tuesday beats expectations and recommended going long on euro/dollar, with a $1.14 target Total global coronavirus cases are now over 8.7 million and focus has been on whether this may drive fresh lockdowns. While that is seen as unlikely, localised restrictions have been re-imposed in Beijing to contain an outbreak there and Australia's Victoria state has also re-imposed limits on gatherings to contain a spike in cases. Besides Tuesday's PMI data and German sentiment surveys, also due on Tuesday, investors will also be looking to U.S. consumer sentiment figures to gauge whether encouraging signs of recovery from May can be sustained. A jump in net short bets on the U.S. dollar last week to their highest since 2018 suggests investors are positioned for the world's rapid economic recovery to continue apace - leaving plenty of room for surprises on the downside. At the same time, a slowdown in global central banks drawing on the U.S. Federal Reserve's emergency dollar funding lines could also provide dollar support. While the reduction in central bank currency swaps, on one hand, suggests a return to normality, it also marks a pullback in one aspect of the Fed's enormous support for global markets.
  • Oil prices slid on Monday as concern grew that a record rise in coronavirus infections worldwide could stall a recovery in fuel demand, outweighing tighter supplies from major producers. Both contracts rose about 9% last week and Brent crude futures have flipped into backwardation, so that oil for immediate delivery costs more than that to be provided later, usually an indication of tightening supply. In Canada and the United States, the number of operating oil and natural gas rigs fell to a record low last week, even as higher oil prices prompt some producers to start drilling again. The OPEC+ group, consisting of the Organization of the Petroleum Exporting Countries and its allies, including Russia, has yet to decide whether to extend a record supply cut of 9.7 million barrels per day (bpd) for a fourth month in August. However, Iraq and Kazakhstan pledged to comply better with oil production cuts during an OPEC+ panel on Thursday. Oil prices have also been supported by a recovery in fuel demand globally following a collapse in April-May during virus shutdowns, as nations worldwide resume economic activity. Still, the World Health Organization reported a record jump in global infections on Sunday, with the biggest increase seen in North and South America Spikes in virus infections in some regions, such as the Chinese capital of Beijing and Australia's second-most populous state of Victoria, have prompted curbs on movement to limit the spread.
  • Gold was up on Monday morning in Asia, hitting its highest point since May with a surging number of COVID-19 cases globally dampening hopes of a quick economic recovery. The World Health Organization reported a record 183,020 cases on Sunday, with almost 9 million global cases as of June 22, according to Johns Hopkins University data. Investor sentiment further soured after two U.S. Federal Reserve officials warned that the U.S. could see another rise in the unemployment rate if the virus is not brought under control, with the road to economic recovery expected to be longer and harder than the expectations of a swift path. Meanwhile, geopolitical developments also gave gold, viewed as a safe store of value during times of political and financial uncertainty, a boost. China released details on Saturday of the national security laws it plans to enact in Hong Kong and Macau, with the details revealing that Beijing will have broad powers to enforce the laws. The laws could be enacted sooner than expected, with the National People’s Congress Standing Committee announcing a rare move to meet for a second time from June 28 to 30 after wrapping up its bimonthly meeting over the weekend.

 

 
Intraday RESISTANCE LEVELS
22nd June 2020 R1 R2 R3
GOLD-XAU 1,754-1,760 1,770 1,780-1,790
Silver-XAG 18.00-18.55 18.95 19.60-20.10
Crude Oil 40.50-41.20 42.00 43.50
EURO/USD 1.1300-1.1360 1.1400 1.1450-1.1500
GBP/USD 1.2470 1.2550 1.2600-1.2650
USD/JPY 107.40-107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
22nd June 2020 S1 S2 S3
GOLD-XAU 1,748-1,740 1,720 1,754-1,760
Silver-XAG 17.50-17.25 16.90 ¬16.30-16.00
Crude Oil 39.50-38.90 37.10-36.00 37.10-36.00
EURO/USD 1.1205 1.1150 1.1400
GBP/USD 1.2410-1.2320 1.2240 1.2165-1.2100
USD/JPY 106.50 105.50 105.00-104.30

Intra-Day Strategy (22nd 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$1745.14/oz and low of US$1720.55 /oz. Gold up 1.35% at US$1744.00/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 1748-1690 with risk below 1690, targeting 1654-1660-1770 and 1780-1790. Sell below 1760-1790 keeping stop loss closing above 1800, targeting 1740-1729-1704 and 1690-1674.

 
Intraday Support Levels
S1     1,748-1,740
S2     1,720
S3     1,754-1,760
Intraday Resistance Levels
R1     1,754-1,760
R2     1,770
R3     1,780-1,790

Technical Indicators

Name   Value Action
14DRSI  

60.982

Sell
20-DMA   1721.34 Sell
50-DMA  

1716.88

Sell
100-DMA   1659.34 Buy
200-DMA   1580.91 Buy
STOCH(5,3)   78.503 Sell
MACD(12,26,9)   7.894 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$17.79/oz and low of US$17.34/oz settled up by 1.434% at US$17.60/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 17.50-15.55 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     17.50-17.25
S2     16.90
S3     ¬16.30-16.00

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 Friday made an intra‐day high of US40.57/bbl, intraday low of US$38.49/bbl and settled up by 1.087% to close at US$39.40/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 39.50-34.00 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     39.50-38.90
S2     37.10-36.00
S3     37.10-36.00

Intraday Resistance Levels
R1     40.50-41.20
R2     42.00
R3     43.50

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 Friday an intraday low of US$1.1167/EUR, high of US$1.1253/EUR and settled the day down by 0.253% to close at US$1.1176/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 1.1200-1.1030 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     1.1205
S2     1.1150
S3     1.1400

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 Friday made an intra‐day low of US$1.2343/GBP, high of US$1.2455/GBP and settled the day down by 0.610% to close at US$1.2347/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 1.2470-1.2900 with targets at 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     1.2410-1.2320
S2     1.2240
S3     1.2165-1.2100

Intraday Resistance Levels
R1     1.2470
R2     1.2550
R3     1.2600-1.2650

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

47.554

Buy
20-DMA   1.2511 Buy
50-DMA   1.2423 Buy
100-DMA   1.2507 Sell
200-DMA   1.2682 Sell
STOCH(5,3)   19.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY106.76/USD and made an intraday high of JPY107.05/USD and settled the day down by 0.0925% at JPY106.86/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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