AAFX TRADING

Daily Market Lookup

  • The dollar held steady against most currencies on Monday as investors awaited data expected to show the U.S. services sector stopped contracting, which would further lift hopea for an economic recovery from the coronavirus pandemic. The euro moved in a narrow range before economic data from Germany and the eurozone that are also forecast to show a sharp rebound in corporate activity and retail sales, which would ease concerns about the economic outlook. The yen fell against most major currencies as gains in Asian share prices encouraged some risk-on trades. A steady rise of new coronavirus infections in the United States has discouraged some investors from taking big positions in the currency market, but most market participants remain focused on the growing likelihood that major economies will continue to recover. The Institute for Supply Management's index for non-manufacturing activity due later on Monday is expected to rise to 50.0 in June from 45.4 in the previous month, indicating activity stopped shrinking. The greenback has been locked in narrow trading ranges recently as concerns about a resurgence in U.S. coronavirus infections offset growing optimism about the economy The euro will come into focus later in the trading day as Germany, the euro zone's largest economy, is scheduled to release industrial orders for May. Retail sales for all of the eurozone will also be released later on Monday. Both indicators are forecast to recover strongly from large declines caused by the spread of the coronavirus. However, the yen could quickly reverse course given the uncertainty surrounding the coronavirus, analysts said. The onshore yuan rose to 7.0490 per dollar on Monday, the highest since April 30. The yuan drew strength from a jump in Chinese share prices to the highest in five years as investors shrugged off concerns about diplomatic tension between the United States and China. Analysts expect the policy rate to stay at 0.25% amid signs Australia's economic downturn will not be as dire as first feared. Recent gains in prices of copper and other commodities that Australia exports, combined with a more positive tone for the RBA, are likely to support the Aussie, analysts say. However, there are still reasons to be cautious about the Aussie. On Monday, Australia's Victoria state said it will close its border with the country's most populous state of New South Wales to contain a sudden spike in coronavirus infections.
  • The dollar was down on Monday morning in Asia, reversing its earlier gains. Investors cautiously retreated from the safe-haven asset amid optimism over U.S. services sector activity data due to be released later in the day. Forecasts prepared by Investing.com predict a reading of 50 for the Institute for Supply Management non-manufacturing purchasing manager’s index (PMI). Meanwhile, the number of COVID-19 cases globally is close to 11.5 million as of July 6, according to Johns Hopkins University data. But investors will monitor the economic ramifications of the country’s two most populous states closing their borders. Victoria announced the closure of its borders with New South Wales to contain a spike in COVID-19 cases.
  • Oil prices offered up a mixed market snapshot on Monday, with Brent crude edging higher, supported by tighter supplies, while U.S. benchmark WTI futures dropped on concern that a spike in coronavirus cases could curb oil demand in the United States. Amid rising numbers of coronavirus cases in 39 U.S. states, a Reuters tally showed that in the first four days of July alone, 15 states reported record increases in new COVID-19 infections with parties over the holiday weekend possibly leading to another spike. For now, analysts at ING bank said data for several cities in affected states show no significant reduction in road traffic week-on-week. The implied volatility for Brent crude has dropped to the lowest since prices started collapsing in March as some in the market remain focused on tightening supplies as production by the Organization of the Petroleum Exporting Countries (OPEC) fell to its lowest in decades with Russian output dropped to near targeted cuts. OPEC and allies including Russia, collectively known as OPEC+, have pledged to slash production by a record 9.7 million barrels per day (bpd) for a third month in July. After July, the cuts are due to taper to 7.7 million bpd until December. U.S. production, the world's largest, is also falling. The number of operating U.S. oil and natural gas rigs fell to an all-time low for a ninth week, although the reductions have slowed as higher oil prices prompt some producers to start drilling again. Oil prices were mixed on Monday morning in Asia as the U.S. reached a record high for new coronavirus cases for the 27th day in a row with twelve states reporting new highs in seven-day case averages. Montana, Delaware and Alaska are experiencing the biggest percentage increase from past records, while South Carolina, Texas, Arizona, Nevada and California reported record numbers of current covid-19 hospitalizations as of July 6. In Europe, supply tightened due to a pledge by OPEC and Russia to extend oil production cuts by a record 9.7 million barrels per day for a third month in July. After July, producers expect to keep in place smaller production cuts of 7.7 million bpd until December.

 

 
Intraday RESISTANCE LEVELS
6th July 2020 R1 R2 R3
GOLD-XAU 1,780-1,789 1,800 1,810-1,820
Silver-XAG 18.55 18.95 19.60-20.10
Crude Oil 41.20-42.00 43.40 44.00-44.60
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
6th July 2020 S1 S2 S3
GOLD-XAU 1,760-1,754 1,748 1,740-1,727
Silver-XAG 18.00-17.50 17.25 ¬16.90-16.30
Crude Oil 40.60-39.50 38.50 37.60-37.10
EURO/USD 1.1250-1.1205 1.1150 1.1090-1.1030
GBP/USD 1.2410-1.2320 1.2250 2165-1.2100
USD/JPY 107.50-106.50 105.50 105.00-104.30

Intra-Day Strategy (6th 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 Thursday made its intraday high of US$1777.03/oz and low of US$1774.67/oz. Gold down 0.0090% at US$1774.67/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 1770-1727 with risk below 1720, targeting 1780-1790-1805 and 1810-1820-1830. Sell below 1780-1830 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     1,780-1,789
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 Friday made its intraday high of US$18.05/oz and low of US$17.91/oz settled up by 0.541% at US$18.00/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     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   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 Friday made an intra‐day high of US40.49/bbl, intraday low of US$39.48/bbl and settled down by 1.207% to close at US$40.29/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 40.60-37.00 with risk daily closing below 37.00 and targeting 41.20-42.00-43.40 and 44.00-45.00. Sell in between 41.20-44.60 with stop loss at 44.60; targeting 40.60-39.50-38.50 and 37.10-36.00.

 
Intraday Support Levels
S1     40.60-39.50
S2     38.50
S3     37.60-37.10

Intraday Resistance Levels
R1     41.20-42.00
R2     43.40
R3     44.00-44.60

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 Friday an intraday low of US$1.12186/EUR, high of US$1.1251/EUR and settled the day up by 0.078% to close at US$1.1247/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 Friday made an intra‐day low of US$1.2437/GBP, high of US$1.2489/GBP and settled the day up by 0.123% to close at US$1.2481/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     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 Friday made intra‐day low of JPY107.42/USD and made an intraday high of JPY107.56/USD and settled the day up by 0.005% at JPY107.49/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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