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Daily Market Lookup

  • The dollar held firm on Thursday as an increase in coronavirus cases in the United States undermined hopes for a quick turnaround in the pandemic-hit economy and prompted traders to cuts bets on riskier currencies. New daily U.S. virus cases surged to nearly 36,000 in the latest tally, near a record of 36,426 hit in late April. The percentage of positive results in tests is also climbing. The governors of New York, New Jersey and Connecticut ordered travellers from nine other U.S. states to quarantine for 14 days on arrival as COVID-19 showed signs of surging in the southern and western parts of the country. Also souring the mood was news that Washington is considering changing tariff rates for various European products as part of the trading partners' aircraft dispute. Commodity currencies, which had been supported by rally in oil and commodity prices, also took a hit. The rating firm cut Canada's rating to "AA+" from "AAA," citing deterioration of the country's public finances in 2020 because of the COVID-19 pandemic. The International Monetary Fund slashed its 2020 global output forecasts further as it sees deeper and wider damage from the pandemic than first thought. It now expects global output to shrink by 4.9%, compared with a 3.0% contraction predicted in April, with U.S. output now forecast to shrink 8.0%, more than 2 percentage points worse than the April forecast. While massive stimulus by many governments have cushioned initial blows from the pandemic, helping many companies survive lockdowns, investors fear a deeper recession would mean corporate income will not recover as quickly as they have initially hoped. Bob Prince, Co-Chief Investment Officer of Bridgewater Associates, said U.S. stimulus efforts may be able to support corporate cash flows for the summer but that economic risk from the coronavirus pandemic is likely to extend far beyond that. The dollar bounced sharply from session lows on Wednesday on renewed safe-haven demand on fears that the progress over reopening the economy could be rolled back as coronavirus cases continue to mount. The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose 0.48%, to 96.07. Signs of a sharp uptick in Covid-19 cases in the U.S. and abroad have put risk assets on the backfoot, with many fearing a second wave of infections could trigger fresh lockdown measures to contain the outbreak. New York, New Jersey, and Connecticut will require visitors from states with high rates of infections to self-isolate for 14 days, N.Y. Governor Andrew Cuomo said on Wednesday. The restrictions come as hotspots such as California and Florida have reported a daily record in new cases. California reported more than 5,000 new coronavirus cases in its daily update Tuesday, the highest number reported in a day since the pandemic began. Governor Gavin Newsom said he was prepared to reimpose stringent coronavirus restrictions to contain the outbreak. Florida, meanwhile, confirmed those cases in the state jumped by 5,508 on Tuesday, a record, and now total 109,014. The fall in risk sentiment took its roll on both the pound and euro, helping the greenback push higher.
  • Oil prices slipped on Thursday, extending losses of more than 5% in the previous session, weighed down by record high U.S. crude inventories and worries that a rapid resurgence in COVID-19 cases could choke a revival in fuel demand. Wednesday's selloff came after U.S. government data showed crude stockpiles rose by 1.4 million barrels, driving inventories to a record high for a third straight week last week. Analysts, however, said that was mostly due to a flotilla of Saudi cargoes booked by U.S. refiners when prices slumped in March. Those shipments are due to ease soon. Worries about a second wave of COVID-19 cases in several U.S. states, where lockdowns had eased, and a rapid spread of infections in South America and South Asia are expected to keep a lid on fuel demand, market watchers said. The fear is that even if lockdowns are eased, people will stay home because of the perceived health risks. In another reminder of fuel demand woes, Australia's flagship airline, Qantas Airways, said on Thursday it expected little revival in international travel until at least July 2021, as it slashed a fifth of its workforce and grounded 100 planes. It had to happen at these prices, and it has. U.S. crude output was estimated at 11 million barrels per day for the week ended June 19, versus the estimate of 10.5 million bpd the previous week, data from the Energy Information Administration showed. It was the first rise in U.S. production in 13 weeks. It comes after a 20% drop in output that followed the demand destruction for fuel caused by the coronavirus pandemic, after the record highs of 13.1 million bpd set in mid-March. At least 22 of the 50 US states have reported a rise in Covid-19 cases after reopening their economies over the past two months. In Arizona, a particular hotspot, infections shot up 54 percent in a week. These come as more than 2.4 million Americans have already been infected by the coronavirus, with a death toll breaching 123,000. A new model by the University of Washington also predicts 200,000 coronavirus deaths in the United States by Oct. 1. Globally as well, India, South Korea, and New Zealand have all reported higher incidences of Covid-19 in recent weeks The production hike reported by the EIA for the week ended June 19 coincided with the 1.4 million-barrel build in crude stockpiles for the week, versus the 300,000 barrel rise anticipated by forecasters. On the fuel demand side, the EIA reported a decline of nearly 1.7 million barrels in gasoline stockpiles, or about 400,000 more than expected. But to offset that, it also said distillates inventories, led by diesel, rose nearly 250,000 barrels against a forecasted drop of 620,000. Before coronavirus lockdowns hit the U.S. economy, the world’s largest crude producer had been adding about 100,000 bpd to its output each month.

 

 
Intraday RESISTANCE LEVELS
25th 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 37.90-38.90 39.50 40.50-41.20
EURO/USD 1.1300-1.1360 1.1400 1.1450-1.1500
GBP/USD 1.2490 1.2550 1.2600-1.2650
USD/JPY 107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
25th 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 37.10-36.50 35.50 34.60-33.65
EURO/USD 1.1205 1.1150 1.1090-1.1030
GBP/USD 1.2410-1.2320 1.2240 1.2165-1.2100
USD/JPY 107.00-106.50 105.50 105.00-104.30

Intra-Day Strategy (25th 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$1779.25/oz and low of US$1758.76/oz. Gold up 0.494% at US$1759.36/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 Wednesday made its intraday high of US$18.05/oz and low of US$17.35/oz settled down by 2.91% at US$17.37/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 Wednesday made an intra‐day high of US40.451/bbl, intraday low of US$37.33/bbl and settled down by 4.98% to close at US$38.02/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 37.10-34.00 with risk daily closing below 34.00 and targeting 37.90-38.90-39.50 and 40.10-41.00-42.00. Sell in between 37.90-41.10 with stop loss at 42.00; targeting 37.10-36.00 and 34.90-33.90-33.00.

 
Intraday Support Levels
S1     37.10-36.50
S2     35.50
S3     34.60-33.65

Intraday Resistance Levels
R1     37.90-38.90
R2     39.50
R3     40.50-41.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.03 Sell
20-DMA   37.87 Buy
50-DMA   30.30 Buy
100-DMA   33.65 Buy
200-DMA   45.23 Sell
STOCH(5,3)   29.130 Buy
MACD(12,26,9)   2.453 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday an intraday low of US$1.1247/EUR, high of US$1.1325/EUR and settled the day up by 0.506% to close at US$1.1249/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     1.1205
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 Wednesday made an intra‐day low of US$1.2413/GBP, high of US$1.2541/GBP and settled the day down by 0.417% to close at US$1.2416/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     1.2165-1.2100

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 Wednesday made intra‐day low of JPY106.37 /USD and made an intraday high of JPY107.06/USD and settled the day down by 0.490% at JPY107.03/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     107.00-106.50
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   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

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