AAFX TRADING

Daily Market Lookup

  • The dollar held onto gains against the yen on Wednesday ahead of data expected to show U.S. manufacturing activity and hiring continued to recover from the economic shock caused by the coronavirus pandemic. The euro was hemmed into a narrow range as traders awaited data on Germany's manufacturing sector, retail sales, and the jobless rate to gauge the health of the eurozone economy. A surge in coronavirus infections in the U.S. south and southwest has worried some market participants, but most investors are betting this will not be enough to derail a broader rebound in the global economy Sterling bought $1.2394 as it held on firmly to the previous session's gains, but traders may be reluctant to buy the pound further due to worries about Britain's trade negotiations with the European Union. The U.S. Institute for Supply Management's purchasing managers' index (PMI) for manufacturing due later on Wednesday is forecast to show that activity in June continued to recover from an 11-year low marked in April, when the coronavirus paralysed large swathes of the global economy. Investors also await the closely-watched U.S. nonfarm payrolls report on Thursday, which is expected to show the economy added 3 million jobs in June. The dollar has managed to remain strong against the yen due to signs of economic revival, but the greenback has failed to make headway against commodity currencies, showing that some investors remain wary of downside risks. Normally Treasury yields would rise due to an improving economy, but benchmark 10-year yields (US10YT=RR) have moved in a narrow range around 0.65% since mid June, when Federal Reserve Chairman Jerome Powell said policymakers discussed yield curve control, which can be used to cap bond yields. The Swiss franc , a currency traditionally sought as a safe haven during times of heightened risk, also perked up against the greenback, which shows that positive economic data alone is not enough to support broad-based dollar gains. The euro has lacked conviction amid mixed signals about the eurozone economy and limited progress in talks on the future trade relationship between Britain and the EU. Data due later on Wednesday from Germany are expected to show retail sales in Europe's largest economy fell at a slower pace but the manufacturing sector continued to contract, which could hurt sentiment for the euro.
  • The dollar has drifted in early European trade Wednesday, with worries over the resurgence of the Covid-19 virus competing with encouraging economic data for prominence. The U.S. recorded 47,000 infections on Tuesday, its biggest single-day spike since the pandemic began. That said, the foreign exchange market has traded in tight ranges Wednesday, with investors wary ahead of some closely-watched economic data. German retail sales soared 13.9% in May, data showed Wednesday, rebounding strongly after the fall of a revised 6.5% in April, while the Chinese manufacturing sector showed promising signs of recovery, according to the Caixin manufacturing PMI. Later Wednesday, the U.S. Institute for Supply Management's purchasing managers' index for manufacturing is expected to show that activity in June continued to recover from the 11-year low marked in April, while Thursday’s closely-watched U.S. nonfarm payrolls report is forecast to show the economy added 3 million jobs in June. Also of interest will be the release of the FOMC minutes from the June meeting. Elsewhere, Sweden’s Riksbank is set to make its latest rate announcement later Wednesday, but market participants are not expecting a policy change. Elsewhere, the Russian ruble fell to its lowest in over a month after fresh allegations in the U.S. press that it offered Afghan militia bounties for killing U.S. servicemen. The reports have heightened fears that the U.S. will broaden existing sanctions on Russia.
  • Oil prices rose more than 1% on Wednesday after data showed crude inventories in the United States fell much more than expected, suggesting demand is improving even as the coronavirus outbreak spreads around the world. U.S. crude and gasoline stocks declined more than expected last week, while distillate inventories rose, data released by the American Petroleum Institute (API) late on Tuesday showed. Crude inventories dropped by 8.2 million barrels to 537 million barrels, against analysts' forecasts for a draw of 710,000 barrels. Official inventory data from the U.S. government's Energy Information Administration is due out later on Wednesday. Also supporting prices was a drop in output from the Organization of the Petroleum Exporting Countries (OPEC) to the lowest in two decades in June. The 13-member grouping produced an average of 22.62 million barrels per day (bpd) in June after they agreed to cut output, a Reuters survey found, down 1.92 million bpd from May's revised figure. Those producers agreed to more cuts during June than other OPEC members. Prices for later this year are likely to be capped, analysts said, as the world is awash with oil after the coronavirus caused demand for fuel to drop by around a third A Reuters poll of analysts indicated that oil prices will consolidate at around $40 a barrel this year, with a recovery potentially picking up in the fourth quarter. The coronavirus continues to spread around the world with ever increasing rates of infection. Cases now total more than 10 million with more than half a million people dying after catching COVID-19.

 

 
Intraday RESISTANCE LEVELS
1st July 2020 R1 R2 R3
GOLD-XAU 1,790-1,800 1,810 1,820-1,830
Silver-XAG 18.55 18.95 19.60-20.10
Crude Oil 40.60 41.20 42.00-43.40
EURO/USD 1.1300-1.1360 1.1400 1.1450-1.1500
GBP/USD 1.2410 1.2490 1.2550-1.2600
USD/JPY 107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
1st July 2020 S1 S2 S3
GOLD-XAU 1,780-1,770 1,760 1,754-1,748
Silver-XAG 18.00-17.50 17.25 ¬16.90-16.30
Crude Oil 39.50-38.50 37.60 37.10-36.50
EURO/USD 1.1205 1.1150 1.1090-1.1030
GBP/USD 1.2320-1.2250 1.2165 1.2100-1.2050
USD/JPY 107.50-106.50 105.50 105.00-104.30

Intra-Day Strategy (1st July 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$1785.80/oz and low of US$1764.48/oz. Gold up 0.547% at US$1779.43/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 1780-1720 with risk below 1720, targeting 1790-1805 and 1810-1820-1830. Sell below 1790-1830 keeping stop loss closing above 1830, targeting 1780-1770-1760 and 1754-1740.

 
Intraday Support Levels
S1     1,780-1,770
S2     1,760
S3     1,754-1,748
Intraday Resistance Levels
R1     1,790-1,800
R2     1,810
R3     1,820-1,830

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$17.94/oz and low of US$17.67/oz settled up by 0.0673% at US$17.82/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 18.00-15.55 targeting 18.40-18.95 and 19.60-20.10; stop breakage below 15.00. Sell below 18.50-20.10 with stop loss above 20.10; targeting 18.00-17.25-16.90 and 16.50-16.10-15.80.

 
Intraday  Support Levels
S1     18.00-17.50
S2     17.25
S3     ¬16.90-16.30

Intraday  Resistance Levels
R1     18.55
R2     18.95
R3     19.60-20.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.514 Buy
20-DMA   17.68 Buy
50-DMA   16.80 Buy
100-DMA   16.26 Buy
200-DMA   16.89 Buy
STOCH(5,3)   88.268 Sell
MACD(12,26,9)   -0.301 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US40.06/bbl, intraday low of US$38.72/bbl and settled up by 0.590% to close at US$39.72/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 39.10-34.00 with risk daily closing below 34.00 and targeting 39.50-40.60 and 41.20-42.00-43.40. Sell in between 39.50-43.40 with stop loss at 43.40; targeting 38.00-37.10-36.00 and 34.90-33.90-33.00.

 
Intraday Support Levels
S1     39.50-38.50
S2     37.60
S3     37.10-36.50

Intraday Resistance Levels
R1     40.60
R2     41.20
R3     42.00-43.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   61.870 Sell
20-DMA   38.40 Buy
50-DMA   31.45 Buy
100-DMA   33.32 Buy
200-DMA   44.94 Sell
STOCH(5,3)   48.130 Buy
MACD(12,26,9)   1.819 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1190/EUR, high of US$1.1261/EUR and settled the day up by 0.0676% to close at US$1.1233/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 Tuesday made an intra‐day low of US$1.2257/GBP, high of US$1.2400/GBP and settled the day up by 0.833% to close at US$1.2399/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 1.2320-1.2600 with targets at 1.2250-1.2165-1.2100 and 1.2050-1.2000 stop-loss should be 1.2900. Buy above 1.2250-1.1200 with targets 1.2320-1.2410-1.2490 and 1.2550-1.2650-1.2700 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2320-1.2250
S2     1.2165
S3     1.2100-1.2050

Intraday Resistance Levels
R1     1.2410
R2     1.2490
R3     1.2550-1.2600

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

46.554

Buy
20-DMA   1.2517 Buy
50-DMA   1.2413 Buy
100-DMA   1.2462 Sell
200-DMA   1.2680 Sell
STOCH(5,3)   42.940 Sell
MACD(12,26,9)   0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY107.51/USD and made an intraday high of JPY107.97/USD and settled the day down by 1.505% at JPY107.91/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 107.90-111.00 with risk above 111.00 targeting 107.50-106.50-105.60 and 105.00-104.50. Long positions above 107.50-104.00 with targets of 107.90-108.40 and 109.40-110.20 with stop below 105.00.

 
Intraday Support Levels
S1     107.50-106.50
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   52.904 Buy
20-DMA   107.58 Buy
50-DMA   107.37 Sell
100-DMA   107.90 Sell
200-DMA   108.37 Buy
STOCH(9,6)   82.253 Sell
MACD(12,26,9)   -0.1448 Sell

AAFX TRADING
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