AAFX TRADING

Daily Market Lookup

  • The dollar has strengthened in early European trade Monday, with investors seeking out this safe haven after the Covid-19 outbreak forced the biggest reversal of U.S. economic reopening to date and the U.S. and China squared off over territorial disputes in the South China Sea. The number of Covid-19 cases globally has now passed the 13 million mark, according to Johns Hopkins University data, jumping by one million cases over the last five days. This has resulted in demand for the dollar as hopes of a quick economic recovery fall, with some countries, including the U.S., re-imposing lockdown measures to curb the spread of the virus. Adding to demand for the greenback Tuesday has been the fresh tensions between the U.S. and China, the two global superpowers, this time over China’s ambitions in the South China Sea. Sterling sold off Tuesday, not helped by signs of a very tepid recovery from the Covid-19 crisis in May after lockdown restrictions began to ease. Gross domestic product rose by just 1.8% in May after slumping by a record 20.3% in April, Britain's first full month of lockdown. This was a smaller rise than the average 5.5% increase widely expected. The euro has generally been in demand of late, climbing 0.7% against the dollar this week, trading just below a one-month high reached on Monday. The single currency is “consolidating its role as the most overbought currency in the G10 ahead of a busy period in the eurozone, with the European Central Bank meeting and the EU summit on the Recovery Fund possibly revamping EUR volatility in the coming days,” said Francesco Pesole, FX Strategist at ING, in a research note. Elsewhere, the Polish central bank holds a meeting later Tuesday, but is not expected to change its reference rate so soon after the presidential election. The dollar was up on Tuesday morning in Asia, with investors turning to the safe-haven asset as COVID-19 cases continue their relentless climb and U.S.-China tensions simmer. The number of COVID-19 cases globally passed the 13 million mark as of July 14, according to Johns Hopkins University data. The dollar got an additional boost as investor hopes of a quick economic recovery diminished further, with some countries re-imposing lockdown measures to curb the spread of the virus. Adding to the list of recent differences between the U.S. and China over trade and Hong Kong’s national security laws, U.S. Secretary of State Michael Pompeo issued a statement on Monday rejecting Chinese claims in the South China Sea. Pompeo’s statement came on the back of China’s recent military exercises in the contested waters around the South China Sea’s Paracel Islands. China hit back on Tuesday morning, rejecting the U.S. statement and calling Pompeo’s accusations of China bullying its neighbors “completely unjustified”. The two other issues also threaten to sour relations between the two countries.
  • Oil prices fell on Tuesday on worries that new clampdowns on businesses to stem surging U.S. coronavirus cases could threaten fuel demand recovery and expectations that OPEC+ might ease output cuts from August in an upcoming meeting. California's governor on Monday ordered bars to shut and restaurants, movie theatres, zoos and museums to cease indoor operations as coronavirus cases and hospitalizations soared. The most populous state's two largest school districts, in Los Angeles and San Diego, also said they would teach only online when classes resume in August. California's moves follow the recent reinstatement of some restrictions in other states, such as Florida and Texas. The market will be watching the next move from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, whose Joint Ministerial Monitoring Committee will meet on Wednesday to recommend the next level of cuts. Under the existing agreement, OPEC+ is set to taper its record supply cut of 9.7 million barrels per day (bpd) to 7.7 million bpd from August through December. The oil market is getting closer to balance as demand gradually rises, OPEC's secretary general said on Monday. Citi analysts said implementing a 2 million bpd increase in output from August could weigh on the market given demand uncertainties, adding to risks from a potential for increased Libyan output, a return of 20% to 30% of curbed North American production, and an end to China's crude buying spree China's June crude oil imports hit records on both monthly and daily bases, data showed on Tuesday. The market will also be closely watching data on fuel consumption due later on Tuesday from the American Petroleum Institute industry group and on Wednesday from the U.S. Energy Information Administration. Analysts estimate U.S. gasoline stockpiles fell by 900,000 barrels and crude oil inventories by 2.3 million barrels in the week to July 10, a preliminary Reuters poll showed. Separately, Yemeni Houthi forces hit a large oil facility in southern Saudi Arabia in drone and missile attacks overnight, a Houthi military spokesman said late on Monday. There has been no Saudi confirmation of whether anything was hit.

 

 
Intraday RESISTANCE LEVELS
14th July 2020 R1 R2 R3
GOLD-XAU 1,822-1,831 1,840 1,849-1858
Silver-XAG 19.05 19.60-20.10 20.50
Crude Oil 40.00-41.20 42.00 43.40-44.20
EURO/USD 1.1360 1.1400 1.1450-1.1500
GBP/USD 1.2600-1.2680 1.2760 1.2810-1.2870
USD/JPY 107.50-107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
14th 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 39.50-38.50 37.60 37.10-35.70
EURO/USD 1.1300-1.1250 1.1205 1.1150-1.1090
GBP/USD 1.2490 1.2430 1.2320-1.2250
USD/JPY 107.10-106.50 105.50 105.00-104.30

Intra-Day Strategy (14th 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 Monday made its intraday high of US$1797.74/oz and low of US$1797.74/oz. Gold up 0.198% at US$1801.62/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 Monday made its intraday high of US$19.36/oz and low of US$18.70/oz settled up by 0.434% at US$19.02/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 18.50-15.55 targeting 19.10-19.60-20.10 and 20.50-21.00; stop breakage below 15.00. Sell below 191.0-20.10 with stop loss above 20.10; targeting 18.55-18.00-17.50 and 17.25-16.90-16.50.

 
Intraday  Support Levels
S1     18.55-18.00
S2     17.50
S3     17.25-16.90

Intraday  Resistance Levels
R1     19.05
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 Monday made an intra‐day high of US40.84/bbl, intraday low of US$39.65/bbl and settled down by 2,046% to close at US$39.67/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 39.50-35.70 with risk daily closing below 35.00 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     39.50-38.50
S2     37.60
S3     37.10-35.70

Intraday Resistance Levels
R1     40.00-41.20
R2     42.00
R3     43.40-44.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.0994 Sell
20-DMA   39.63 Buy
50-DMA   35.71 Buy
100-DMA   32.11 Buy
200-DMA   44.18 Sell
STOCH(5,3)   53.130 Sell
MACD(12,26,9)   1.206 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.1300/EUR, high of US$1.1374/EUR and settled the day up by 0.144% to close at US$1.1343/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 Monday made an intra‐day low of US$1.2549/GBP, high of US$1.2665/GBP and settled the day down by 0.565% to close at US$1.2553/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 1.2600-1.2950 with targets at 1.2490-1.2410 and 1.2320-1.2250-1.2165 stop-loss should be 1.2950. Buy above 1.2490-1.2100 with targets 1.2600-1.2680-1.2760-1.2810 and 1.2870-1.2950 with stop loss closing below 1.2100.

 
Intraday Support Levels
S1     1.2490
S2     1.2430
S3     1.2320-1.2250

Intraday Resistance Levels
R1     1.2600-1.2680
R2     1.2760
R3     1.2810-1.2870

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 Monday made intra‐day low of JPY106.78/USD and made an intraday high of JPY107.31/USD and settled the day up by % at JPY107.28/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 107.00-111.00 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     107.10-106.50
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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