AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trade Wednesday, with the safe haven currency in demand as a resurgence of the coronavirus in the United States cast doubt over the strength of the economic rebound There are almost 11.8 million COVID-19 cases globally as of July 8, according to Johns Hopkins University data, of which the U.S. has the highest known numbers of cases and deaths in the world. A number of Federal Reserve officials expressed concern Tuesday that the surge in infections could adversely impact the economy just as some stimulus programmes are set to expire. Atlanta Federal Reserve Bank President Raphael Bostic warned that the spike in the number of cases has made business owners “nervous again” and that ‘there is a real sense this might go on longer than we have planned for.” Elsewhere, GBP/USD gained 0.2% to 1.2559 after Prime Minister Boris Johnson said that the U.K. remains committed to working hard to find an agreement over trade with the EU. Chancellor of the Exchequer Rishi Sunak is due to announce details of the country's latest fiscal stimulus package later Wednesday. Sterling has gained around 0.6% this week against the dollar and 0.4% against the euro, but still remains one of the weakest G7 currencies as doubts still remain as to whether a trade deal will be signed by the end of the year.
  • A surge in coronavirus cases that threatens to pinch consumer spending and job gains just as some stimulus programs are due to expire has Federal Reserve policymakers worried, with at least one pledging more support ahead from the U.S. central bank. There is “no limit” to the amount of bond buying the Fed can do, he said, adding that the Fed could also ease policy further with forward guidance and will keep its lending backstops in place as long as needed. While evidence of an economic rebound in May and June was “very welcome,” Clarida said, the Fed is following the course of the virus closely as it will determine the course of the economy. At an event sponsored by the National Association of Business Economists, San Francisco Fed President Mary Daly sounded a similar tone. After large swathes of the U.S. economy reopened and trillions of dollars in fiscal stimulus passed by Congress in March began to reach the unemployed and hard-hit businesses, the economy created 7.5 million jobs in May and June. Those gains mean the labor market is “in better shape than I thought it might be – but it’s nowhere close to where we need to be,” Daly said. U.S. firms today employ 14.7 million fewer people than in February, government data show, and unemployment, at 11.1%, is higher than it was in any downturn since the Great Depression. With the virus still circulating, there’s a limit to how much people will want to risk their health eating out or undertaking other potentially risky economic activity, she and others said. Florida, Texas and California are among roughly two dozen states that have experienced an alarming rise in infections in the past two weeks, and their governors have forced some businesses to shut down again to quell the spread. A Fed survey released on Tuesday morning showed Americans may be hunkering down for a longer-than-expected fight against the virus and its economic fallout. The poll of 1,869 people, which took place between June 3 and 12 as the first signs emerged of a newly growing coronavirus caseload, showed 46% of respondents think it will take more than a year for conditions to return to normal. That is up from 35% in an April survey. At the end of July, some of the government programs to support businesses and families during the pandemic will expire, including a $600-a-week addition to unemployment benefits that has shored up spending among low-income households particularly
  • Oil prices were down on Wednesday morning in Asia as a build in crude inventory in the U.S. compounded fears that the continuously increasing number of COVID-19 cases will curb the economic recovery and demand. The API announced a 2 million-barrel build in crude oil supplies for the week ended July 3, much higher than the draw of 3.7m barrels in forecasts prepared by Investing.com API announced an 8.156 mn-barrel draw the previous week Investor fears of oversupply were raised with increasing COVID-19 numbers dampening global demand. Almost 11.8 million cases have been reported globally as of July 8, according to Johns Hopkins University data. OPEC+ production cuts are due to expire at the end of July at the current level although there are plans for smaller cuts to remain in place through to the end of the year. Key ministers are due to discuss the matter next week, but Abu Dhabi National Oil’s plans to boost oil exports in August could be an indication that the cuts will be eased. Prices were little changed in the previous session and have been held in a narrow band over the past two weeks as concerns about a spike in coronavirus cases globally tempers optimism about a recovery in fuel demand. U.S. crude oil stockpiles rose last week, against expectations for a draw, although gasoline and distillate inventories fell more than expected, data from industry group the American Petroleum Institute showed on Tuesday. The EIA said on Tuesday U.S. crude oil production is expected to fall by 600K bpd in 2020, a smaller decline than the 670K bpd it forecast previously. However, it also expected global oil demand would recover through the end of 2021, predicting demand of 101.1 mn bpd by the fourth quarter of next year. Meanwhile, the number of confirmed coronavirus cases in the United States pushed past 3 mn on Tuesday, according to a Reuters tally.

 

 
Intraday RESISTANCE LEVELS
8th July 2020 R1 R2 R3
GOLD-XAU 1,800-1,810 1,820 1,831-1,840
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 1.2500 1.2600 1.2680-1.2760
USD/JPY 107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
8th July 2020 S1 S2 S3
GOLD-XAU 1,789-1,780 1,760 1,754-1,748
Silver-XAG 18.00-17.50 17.25 16.90-16.30
Crude Oil 40.00-39.50 38.50 37.60-37.10
EURO/USD 1.1250-1.1205 1.1150 1.1090-1.1030
GBP/USD 1.2490-1.2450 1.2320 1.2250-1.2165
USD/JPY 107.50-106.50 105.50 105.00-104.30

Intra-Day Strategy (8th 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$1797.44/oz and low of US$1773.41/oz. Gold up 0.665% at US$1793.97/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 1790-1727 with risk below 1720, targeting 1800 -1810-1820 and 1832-1840. Sell below 1790-1830 keeping stop loss closing above 1830, targeting 1780-1760-1754 and 1748-1,740.

 
Intraday Support Levels
S1     1,789-1,780
S2     1,760
S3     1,754-1,748
Intraday Resistance Levels
R1     1,800-1,810
R2     1,820
R3     1,831-1,840

Technical Indicators

Name   Value Action
14DRSI  

68.982

Buy
20-DMA   1757.32 Buy
50-DMA  

1732.51

Buy
100-DMA   1683.67 Buy
200-DMA   90.503 Buy
STOCH(5,3)   90.503 Buy
MACD(12,26,9)   16.894 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$18.35/oz and low of US$17.97/oz settled up by 0.06% at US$18.23/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 Tuesday made an intra‐day high of US40.95/bbl, intraday low of US$39.93/bbl and settled down by 0.546% to close at US$40.42/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 40.00-37.00 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     40.00-39.50
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   62.870 Sell
20-DMA   38.95 Buy
50-DMA   33.85 Buy
100-DMA   32.75 Buy
200-DMA   44.54 Sell
STOCH(5,3)   74.130 Sell
MACD(12,26,9)   1.819 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1258/EUR, high of US$1.1331/EUR and settled the day down by 0.319% to close at US$1.1272/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$1.2461/GBP, high of US$1.2591/GBP and settled the day up by 0.400% to close at US$1.2539/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 1.2500-1.2760 with targets at 1.2490-1.2410-1.2320 and 1.2250-1.2165-1.2100 stop-loss should be 1.2900. Buy above 1.2500-1.2100 with targets 1.2550-1.2650 and 1.2700-1.2760 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2490-1.2450
S2     1.2320
S3     1.2250-1.2165

Intraday Resistance Levels
R1     1.2500
R2     1.2600
R3     1.2680-1.2760

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

54.904

Buy
20-DMA   1.2473 Buy
50-DMA   1.2424 Buy
100-DMA   1.2437 Sell
200-DMA   1.2684 Sell
STOCH(5,3)   77.940 Sell
MACD(12,26,9)   0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY107.24/USD and made an intraday high of JPY107.78/USD and settled the day up by 0.169% at JPY107.50/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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