AAFX TRADING

Daily Market Lookup

  • The dollar was on the defensive in early European trade Thursday, with traders turning to perceived riskier currencies amid optimism surrounding a potential Covid-19 vaccine as well as solid economic data. This followed economic data which had suggested that a global recovery is starting to gain momentum: U.S. manufacturing activity rebounded more than expected in June, with the manufacturing activity index by the Institute for Supply Management, released Wednesday, hitting its highest in 14 months. Similar surveys from China, Germany and France all rebounded too. Attention will now shift to the official U.S. employment report, due at 8:30 AM ET (1230 GMT) - a day early due to Friday’s U.S. public holiday - which is expected to show an increase of 3 million nonfarm payrolls in June. However, it’s debatable whether the U.S. economy can sustain its recovery as coronavirus infections surge in many states -- Arizona, California, North Carolina, Tennessee and Texas all had record-high new case reports on Wednesday -- resulting in rolled back efforts to reopen their economies St. Louis Federal Reserve Bank president James Bullard offered up a grave warning about the financial implications if the coronavirus outbreak isn’t contained.
  • The dollar was down on Thursday morning in Asia, retreating on the back of positive results from yet another vaccine candidate for COVID-19. U.S. Pharmaceutical giant Pfizer reported results from early stage human trial for BNT162b1, one of four mRNA candidates currently under development by the company and Germany’s BioNTech, on Wednesday. The results indicated the production of neutralizing antibodies in all the patients who were inoculated after 28 days But some investors predicted gains for the dollar with the ever-rising number of COVID-19 cases globally. There were over 10.6 million cases as of July 2, according to Johns Hopkins University data. California was the latest state to re-implement lockdown measures on Wednesday to curb the increasing number of cases. With the World Health Organization warning that more countries could be forced to re-instate lockdown measures to curb the number of COVID-19 cases, investors are expected to turn to the greenback as well as the yen again.
  • Oil prices rose on Thursday, reversing early losses, as a sharp drop in oil stockpiles outweighed concerns that a spike in U.S. coronavirus infections and revived lockdown measures in California could stall a recovery in fuel demand. U.S. Energy Information Administration data showed U.S. crude inventories fell 7.2 million barrels from a record high last week, far more than analysts had expected, as refiners ramped up production and imports eased. The drop in stockpiles, reports of oil moving out of floating storage and strong manufacturing PMI data across the globe formed a constructive case for oil prices rising, said Jeffrey Halley of OANDA in a daily note. Capping gains, however, analysts also noted that gasoline stockpiles were higher despite expectations of a fall. Meanwhile, new U.S. COVID-19 cases rose by nearly 50,000 on Wednesday, according to a Reuters tally, in the biggest one-day spike since the start of the pandemic. Analysts highlighted worries about the spike in cases in heavily populated U.S. sun belt states, which are among the country's biggest consumers of gasoline. California, meanwhile, rolled back efforts to reopen its economy, banning indoor restaurant dining in much of the state, closing bars and beefing up enforcement of social distancing and other measures. All eyes will be on driving activity in the United States over the upcoming July 4th holiday weekend and how quickly U.S. producers revive shut-in production, analysts said. Oil prices rose on Thursday, reversing early losses, as a sharp drop in oil stockpiles outweighed concerns that a spike in U.S. coronavirus infections and revived lockdown measures in California could stall a recovery in fuel demand. U.S. Energy Information Administration data showed U.S. crude inventories fell 7.2 million barrels from a record high last week, far more than analysts had expected, as refiners ramped up production and imports eased. The drop in stockpiles, reports of oil moving out of floating storage and strong manufacturing PMI data across the globe formed a constructive case for oil prices rising, said Jeffrey Halley of OANDA in a daily note. Capping gains, however, analysts also noted that gasoline stockpiles were higher despite expectations of a fall. Meanwhile, new U.S. COVID-19 cases rose by nearly 50,000 on Wednesday, according to a Reuters tally, in the biggest one-day spike since the start of the pandemic. Analysts highlighted worries about the spike in cases in heavily populated U.S. sun belt states, which are among the country's biggest consumers of gasoline. California, meanwhile, rolled back efforts to reopen its economy, banning indoor restaurant dining in much of the state, closing bars and beefing up enforcement of social distancing and other measures. All eyes will be on driving activity in the United States over the upcoming July 4th holiday weekend and how quickly U.S. producers revive shut-in production, analysts said.

 

 
Intraday RESISTANCE LEVELS
2nd July 2020 R1 R2 R3
GOLD-XAU 1,774-1,789 1,800 1,810-1,820
Silver-XAG 18.00-18.55 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 1.2490-1.2550 1.2600 1.2680-1.2760
USD/JPY 107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
2nd July 2020 S1 S2 S3
GOLD-XAU 1,760-1,754 1,748 1,740-1,727
Silver-XAG 17.50 17.25 ¬16.90-16.30
Crude Oil 39.50-38.50 37.60 37.10-36.50
EURO/USD 1.1250-1.1205 1.1150 1.1090-1.1030
GBP/USD 1.2410-1.2320 1.2250 1.2165-1.2100
USD/JPY 107.50-106.50 105.50 105.00-104.30

Intra-Day Strategy (2nd 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 Wednesday made its intraday high of US$1789.03/oz and low of US$1759.10/oz. Gold down 0.564% at US$1769.66/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 1760-1727 with risk below 1720, targeting 1780-1790-1805 and 1810-1820-1830. Sell below 1774-1830 keeping stop loss closing above 1830, targeting 1760-1754-1748 and 1,740-1,727.

 
Intraday Support Levels
S1     1,760-1,754
S2     1,748
S3     1,740-1,727
Intraday Resistance Levels
R1     1,774-1,789
R2     1,800
R3     1,810-1,820

Technical Indicators

Name   Value Action
14DRSI  

60.982

Buy
20-DMA   1741.84 Sell
50-DMA  

1726.66

Sell
100-DMA   1675.57 Buy
200-DMA   1591.57 Buy
STOCH(5,3)   61.503 Sell
MACD(12,26,9)   15.894 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$18.43/oz and low of US$17.81/oz settled down by 0.973% at US$17.99/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 17.50-17.25-16.90 and 16.50-16.10-15.80.

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

Intraday  Resistance Levels
R1     18.00-18.55
R2     18.95
R3     19.60-20.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.514 Buy
20-DMA   17.67 Buy
50-DMA   16.85 Buy
100-DMA   16.26 Buy
200-DMA   16.87 Buy
STOCH(5,3)   64.268 Sell
MACD(12,26,9)   0.263 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US40.56/bbl, intraday low of US$39.04/bbl and settled down by 0.446% to close at US$39.65/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 Wednesday an intraday low of US$1.1184/EUR, high of US$1.1274/EUR and settled the day up by 0.150% 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     1.1250-1.1205
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 Wednesday made an intra‐day low of US$1.2358/GBP, high of US$1.2489/GBP and settled the day up by 0.599% to close at US$1.2474/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 1.2490-1.2760 with targets at 1.2410-1.2320-1.2250 and 1.2165-1.2100-1.2050 stop-loss should be 1.2900. Buy above 1.2410-1.2100 with targets 1.2490-1.2550-1.2650 and 1.2700-1.2760 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2410-1.2320
S2     1.2250
S3     1.2165-1.2100

Intraday Resistance Levels
R1     1.2490-1.2550
R2     1.2600
R3     1.2680-1.2760

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 Wednesday made intra‐day low of JPY107.35/USD and made an intraday high of JPY108.15/USD and settled the day down by 0.424% at JPY107.46/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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