AAFX TRADING

Daily Market Lookup

  • The dollar was under pressure on Wednesday, after upbeat data in Europe boosted the euro and helped stoke hopes for a global economic recovery, underpinning appetite for riskier currencies. IHS Markit's June euro zone Flash Composite Purchasing Managers' Index, a broad gauge of economic activity, beat expectations with a bounce to 47.5 on Tuesday from May's 31.9. Although that is still below the 50 mark separating growth from contraction, the improvement in business sentiment - together with upbeat data in Britain and the United States - lent support to a sense that growth is returning at pace. The next test comes from a German business confidence survey due at 0800 GMT, with markets expecting another strong rebound. In the meantime, the positive signals seem enough to offset worries about a resurgence in U.S. coronavirus cases, and to draw bets - reflected in a rising gold price - on broad dollar weakness. Against a basket of currencies (=USD) the dollar was flat at 96.653, just above a one-week low touched on Tuesday. The trade-exposed Korean won was up half a percent and the Aussie's rise put it near the top of a range it has held for weeks The British pound found support, recovering from a three-month low touched against the euro on Tuesday (EURGBP=) and holding steady against the dollar at $1.2514. The moves extend markets' stubborn optimism in the face of spiking coronavirus cases in the United States, Germany and elsewhere. For a second week Texas, Arizona and Nevada set records in their coronavirus outbreaks and 10 other states from Florida to California were grappling with surging infections. Australia's Victoria state has re-imposed restrictions on gatherings amid an upswing in new cases there and German has imposed localised lockdowns after an outbreak at a meatpacking plant. So far the market assumes there is a very high bar to shutting down entire economies again, so the impact on business activity will not be too great - at least as yet.
  • The dollar weakened in early European trade Wednesday, with traders seeking riskier currencies, latching more on to the signs of economic growth rather than the increasing number of coronavirus cases. These moves came after the release of better than expected PMI data Tuesday in Europe, the U.K. and the U.S., which lifted sentiment. There’s also the Covid-19 virus to consider, with the number of cases mounting worldwide and with several U.S. states seeing record infections. That said, sterling has struggled to post gains against the dollar amid worries that the U.K. government is opening up the economy too quickly. On Tuesday Prime Minister Boris Johnson announced that pubs, restaurants, cinemas and hairdressers in England will be able to reopen from 4 July. The four countries that make up the United Kingdom are regulated separately when it comes to health matters. However, both the government's chief scientific adviser Sir Patrick Vallance and the chief medical officer for England Professor Chris Whitty stressed Mr Johnson's plan was not "risk-free". Additionally, a number of influential health leaders have signed an open letter published in the British Medical Journal Wednesday, warning that the U.K. runs a "real risk" of a second wave of coronavirus.
  • Oil futures were mixed on Wednesday as concerns about oversupply in the market, stoked by an rise in U.S. crude inventories, were offset by a drop in gasoline stocks that lifted hopes for fuel demand recovery amid the re-opening of the global economy. U.S. crude inventories rose by a much bigger than expected 1.7 million barrels last week, according to industry group the American Petroleum Institute (API), well ahead of analysts' expectations for a 300,000-barrel build. However, U.S. gasoline and distillate inventories fell, the data showed, feeding optimism that fuel consumption is picking up as some economies ease lockdowns imposed to contain the coronavirus pandemic. U.S. government data will be released on Wednesday. On Tuesday, both Brent and WTI contracts traded at their highest levels since prices collapsed in early March. Global oil consumption has started to recover as economies emerge from lockdown, while the Organization of the Petroleum Exporting Countries (OPEC) and allied producers - a grouping known as OPEC+ - have slashed output and U.S. shale producers have shut in wells. Still, the market remains concerned about a rising number of coronavirus cases in the United States and elsewhere, said Kazuhiko Saito, chief analyst at Fujitomi Co. New cases of COVID-19 rose 25% in the United States in the week ended June 21 and the death toll in Latin America passed 100,000 on Tuesday, according to a Reuters analysis and tally. China, the world's top crude importer, is also expected to slow crude imports in the third quarter, after record purchases in recent months, as higher oil prices hurt demand and refiners worry about a second virus outbreak.

 

 
Intraday RESISTANCE LEVELS
24th June 2020 R1 R2 R3
GOLD-XAU 1,770-1,780 1,790 1,800-1,810
Silver-XAG 18.00-18.55 18.95 19.60-20.10
Crude Oil 40.50-41.20 42.00 43.50-44.00
EURO/USD 1.1300-1.1360 1.1400 1.1450-1.1500
GBP/USD 1.2490 1.2550 1.2600-1.2650
USD/JPY 107.00-107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
24th June 2020 S1 S2 S3
GOLD-XAU 1,760-1,754 1,748 1,740-1,720
Silver-XAG 17.50-17.25 16.90 ¬16.30-16.00
Crude Oil 39.50 38.90 37.90-37.10
EURO/USD 1.1250-1.1205 1.1150 1.1090-1.1030
GBP/USD 1.2410-1.2320 1.2240 1.2490
USD/JPY 106.50 105.50 105.00-104.30

Intra-Day Strategy (24th 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$1770.93/oz and low of US$1747.28/oz. Gold up 0.783% at US$1766.97/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     1,760-1,754
S2     1,748
S3     1,740-1,720
Intraday Resistance Levels
R1     1,770-1,780
R2     1,790
R3     1,800-1,810

Technical Indicators

Name   Value Action
14DRSI  

64.982

Buy
20-DMA   1727.36 Sell
50-DMA  

1718.84

Sell
100-DMA   1663.34 Buy
200-DMA   1583.91 Buy
STOCH(5,3)   78.503 Sell
MACD(12,26,9)   7.894 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$17.64/oz and low of US$17.64/oz settled up by 1,014% at US$17.89/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 Tuesday made an intra‐day high of US41.61/bbl, intraday low of US$39.74/bbl and settled down by 1.723% to close at US$39.92/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 40.50-34.00 with risk daily closing below 34.00 and targeting 38.90-39.50-40.10 and 41.00-42.00. Sell in between 40.50-44.10 with stop loss at 44.10; targeting 39.50-38.00-37.10-36.00 and 34.90-33.90-33.00.

 
Intraday Support Levels
S1     39.50
S2     38.90
S3     37.90-37.10

Intraday Resistance Levels
R1     40.50-41.20
R2     42.00
R3     43.50-44.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.03 Sell
20-DMA   37.40 Buy
50-DMA   28.83 Buy
100-DMA   33.91 Buy
200-DMA   45.43 Sell
STOCH(5,3)   69.130 Buy
MACD(12,26,9)   2.453 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1232/EUR, high of US$1.1348/EUR and settled the day up by 0.424% to close at US$1.1307/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 1.1250-1.1030 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     1.1250-1.1205
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$1.2431/GBP, high of US$1.2531/GBP and settled the day up by 0.417% to close at US$1.2518/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 1.2490-1.2900 with targets at 1.2410-1.2320-1.2250 and 1.2165-1.2100 stop-loss should be 1.2900. Buy above 1.2410-1.1200 with targets 1.2490-1.2550-1.2650 and 1.2700-1.2770 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2410-1.2320
S2     1.2240
S3     1.2490

Intraday Resistance Levels
R1     1.2490
R2     1.2550
R3     1.2600-1.2650

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.554

Buy
20-DMA   1.2530 Buy
50-DMA   1.2418 Buy
100-DMA   1.2495 Sell
200-DMA   1.2683 Sell
STOCH(5,3)   33.940 Buy
MACD(12,26,9)   0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY106.06/USD and made an intraday high of JPY107.21/USD and settled the day down by 0.362% at JPY106.51/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 107.00-111.00 with risk above 111.00 targeting 106.50-105.60 and 105.00-104.50. Long positions above 106.50-104.00 with targets of 107.00-107.90-108.40 and 109.40-110.20 with stop below 105.00.

 
Intraday Support Levels
S1     106.50
S2     105.50
S3     105.00-104.30

INTRADAY RESISTANCE LEVELS
R1     107.00-107.90
R2     108.40
R3     109.40-110.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.904 Buy
20-DMA   107.61 Buy
50-DMA   107.38 Sell
100-DMA   108.00 Sell
200-DMA   108.38 Buy
STOCH(9,6)   35.253 Sell
MACD(12,26,9)   -0.161 Sell

AAFX TRADING
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