AAFX TRADING

Daily Market Lookup

  • The dollar weakened in early European trade Thursday, with traders seeking out riskier currencies as a bet on economic growth, denting safe-haven demand for the U.S. currency. Lingering worries about the spread of the coronavirus could keep some currency pairs in a tight range, but the dollar's losses are gradually increasing as sentiment favors riskier bets on long-term economic growth. With this in mind, focus will quickly turn to the release of the weekly unemployment data from the U.S. later in the session. Jobs trends have been positive as states and cities come back from Covid lockdowns, but some areas have now been forced to slow down or reverse reopenings. Initial jobless claims are expected to be 1.4 million for the week ending July 3, which would be about even with the prior week. Finance ministers from the euro area are due to meet Thursday, ahead of a summit of their leaders on July 17-18, amid optimism there will be an agreement allowing the proposed 750 billion euro recovery fund to be distributed to the economies hit hardest by Covid-19. Sterling has also shown some strength, with the greenback close to a three-week low against the pound. Helping this move was the U.K. government’s announcement of its latest pandemic economic rescue plan, to the tune of 30 billion pounds ($38 billion). That said, further gains may prove tricky, particularly against the single currency. Elsewhere, the USD/CNY pair slid 0.2% to 6.9878. The yuan was boosted by better-than expected inflation data for June, with producer prices falling 3% year-on-year. The drop in the PPI was smaller compared with the previous month’s drop of 3.7% and the 3.2% drop analysts had generally forecast. However, the pair is being supported most by the rally in Chinese stocks, which continued for an eighth straight day on Thursday. The dollar was down on Thursday morning in Asia, with investors retreating from the safe-haven asset over increased hopes of an economic recovery. But the increase was capped by ever-increasing COVID-19 numbers. Over 12 million cases globally as of July 9, according to Johns Hopkins University data, with some countries re-imposing lockdown measures.
  • Federal Reserve officials raised fresh doubts on Wednesday about the durability of the U.S. recovery, while new business surveys highlighted developing risks from the relentless coronavirus pandemic. Enhanced unemployment benefits that have proved key to replacing spendable income amid record setting unemployment are due to expire this month. Facing that “fiscal cliff,” the economy is also grappling with a surge of COVID-19 cases to record levels. Not all Fed officials are gloomy. St. Louis Fed President James Bullard said on CNBC he felt that face masks will become “ubiquitous” to tame the pandemic, and many lost jobs will be regained by year’s end. But Bullard may be the outlier among his colleagues at the central bank. Bostic told the Rotary Club of Columbus, Georgia, he was concerned not so much that states in his southern region had tried to reopen too fast, but without due care about how to manage the riskiest activities. Caseloads are now surging in places like Florida, and high frequency data on small businesses, for example, “are suggesting the energy for reopening businesses and for just general activity is starting to level off,” he said. The comments from Fed officials, suggesting the seemingly rapid rebound in jobs, retail sales and some other measures of activity in May and June may not persist, were reinforced in two business surveys released on Wednesday. Overall optimism among the CFOs did improve compared to the first weeks of the pandemic, though. That is in line with other surveys among households and businesses that suggest people feel the deepest economic risks from the pandemic have been avoided.
  • Oil prices drifted lower on Thursday as concerns about renewed COVID-19 lockdowns in the United States outweighed signs of a recovery in U.S. gasoline demand. Oil prices rose on Wednesday as data from the U.S. Energy Information Administration showed U.S. gasoline stockpiles fell by 4.8 million barrels last week, much more than analysts had expected, as demand climbed to 8.8 million barrels per day (bpd), highest since March 20. A spike in COVID-19 cases across several U.S. states, however, raised the prospect of renewed lockdowns that would likely hold back any sustained recovery in fuel demand. That has kept the benchmark crude contracts in tight ranges this week, although holding above $40 a barrel. Gasoline demand was falling in areas where lockdowns were being reinstated in the United States, while demand on the U.S. East Coast, where coronavirus infections were under control, was recovering well, Shaw said The United States reported more than 58,000 new COVID-19 cases on Wednesday, the biggest increase ever reported by a country in a single day, with infections climbing in 42 out of 50 states, according to a Reuters tally. The market is also in a holding pattern ahead of a meeting on July 15 of the market monitoring panel of the Organization of the Petroleum Exporting Countries (OPEC) and its allies Together called OPEC+, the producers could decide to pare or extend their record 9.7 million bpd supply cut from August. The panel has been pressing OPEC+ over-producers, such as Iraq and Nigeria, to improve their compliance with the curb. Angola has agreed to comply fully with its supply commitments, moving to cut more over July to September to make up for previous excess production, OPEC sources said this week. Meanwhile, OPEC member Libya, which has been blockaded since January, is trying to resume exports, with Libya's National Oil Corp lifting force majeure at the Es Sider oil terminal on Wednesday. An oil tanker, however, was prevented from entering the port.

 

 
Intraday RESISTANCE LEVELS
9th July 2020 R1 R2 R3
GOLD-XAU 1,822-1,831 1,840 1,849-1858
Silver-XAG 18.95 19.60-20.10 20.50
Crude Oil 41.20-42.00 43.40 44.00-44.60
EURO/USD 1.1360 1.1400 1.1450-1.1500
GBP/USD 1.2680-1.2760 1.2810 1.2870-1.2950
USD/JPY 107.50-107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
9th July 2020 S1 S2 S3
GOLD-XAU 1,800-1,789 1,780 1,760-1,754
Silver-XAG 18.55-18.00 17.50 17.25-16.90
Crude Oil 40.00-39.50 38.50 37.60-37.10
EURO/USD 1.1300-1.1250 1.1205 1.1150-1.1090
GBP/USD 1.2600 1.2490 1.2450-1.2320
USD/JPY 106.50 105.50 105.00-104.30

Intra-Day Strategy (9th 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$1817.99/oz and low of US$1791.43/oz. Gold up 0.738% at US$1807.45/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 1800-1727 with risk below 1720, targeting 1822-1831-1840 and 1849-1858. Sell below 1822-1858 keeping stop loss closing above 1858, targeting 1800-1789-1780 and 1760-1754-1748.

 
Intraday Support Levels
S1     1,800-1,789
S2     1,780
S3     1,760-1,754
Intraday Resistance Levels
R1     1,822-1,831
R2     1,840
R3     1,849-1858

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   1597.60 Buy
STOCH(5,3)   90.503 Buy
MACD(12,26,9)   16.894 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$18.75/oz and low of US$18.20/oz settled up by 2.51% at US$18.69/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     18.55-18.00
S2     17.50
S3     17.25-16.90

Intraday  Resistance Levels
R1     18.95
R2     19.60-20.10
R3     20.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.514 Buy
20-DMA   17.86 Buy
50-DMA   17.17 Buy
100-DMA   16.28 Buy
200-DMA   16.89 Buy
STOCH(5,3)   88.268 Buy
MACD(12,26,9)   0.359 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US41.10/bbl, intraday low of US$40.33/bbl and settled down by 0.546% to close at US$40.33/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 Wednesday an intraday low of US$1.1261/EUR, high of US$1.1351/EUR and settled the day up by 0.502% to close at US$1.1328/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 1.1300-1.1030 with risk below 1.1030, targeting 1.1360-1.1400 and 1.1450-1.1495. Sell below 1.1360-1.1495 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     1.1300-1.1250
S2     1.1205
S3     1.1150-1.1090

Intraday  Resistance Levels
R1     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$1.2622/GBP, high of US$1.2622/GBP and settled the day up by 0.551% to close at US$1.2609/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 1.2680-1.2950 with targets at 1.2600-1.2490-1.2410 and 1.2320-1.2250-1.2165 stop-loss should be 1.2950. Buy above 1.2600-1.2100 with targets 1.2680-1.2760-1.2810 and 1.2870-1.2950 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2600
S2     1.2490
S3     1.2450-1.2320

Intraday Resistance Levels
R1     1.2680-1.2760
R2     1.2810
R3     1.2870-1.2950

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 Wednesday made intra‐day low of JPY107.19/USD and made an intraday high of JPY107.70/USD and settled the day down by 0.240% at JPY107.25/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 107.50-111.00 with risk above 111.00 targeting 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     106.50
S2     105.50
S3     105.00-104.30

INTRADAY RESISTANCE LEVELS
R1     107.50-107.90
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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