AAFX TRADING

Daily Market Lookup

  • The dollar was down on Wednesday morning in Asia, with investors continuing the previous session’s retreat from the safe-haven asset as data released on Tuesday indicated increased U.S. inflation. The U.S. Consumer Price Index (CPI) posted a 0.6% increase month-on-month, its highest in almost eight years. The figure beat analyst forecasts prepared by Investing.com, which predicted a 0.5% increase as well as May’s 0.1% decrease. The data eased investor fears of deflationary pressures on the U.S. economy from the COVID-19 economic downturn Meanwhile, investors also cheered Tuesday’s report that U.S. biotech firm Moderna 's experimental COVID-19 vaccine is safe and generated immune responses in all 45 volunteers who are part of the ongoing study. U.S. President Donald Trump said on Tuesday that he has issued the order to end Hong Kong’s preferential trade status. Trump also signed legislation sanctioning Chinese entities involved with enacting the city’s national security laws.
  • The euro rose to a four-month high against the dollar on Wednesday on hopes European Union leaders may agree on stimulus and deepening fiscal integration to shield the economy from the pandemic. The dollar was on the defensive, particularly against other growth-leveraged currencies such as the Australian dollar, following an uptick in U.S. inflation and news of progress in vaccine development for COVID-19. The euro has been helped by hopes the European Union could agree at its summit later this week on a rescue financing package that will limit the economic damage to the bloc from the coronavirus pandemic. The dollar extended losses on Tuesday after U.S. consumer prices rebounded 0.6% month-on-month, the most in nearly eight years, in June, easing worries about deflationary pressures from the economic downturn. Gross domestic product rose by 1.8% in May after falling by a record 20.8% in April, well below forecasts in a Reuters poll. The yen stood at 107.28 yen per dollar , little changed after the Bank of Japan kept monetary policy steady and maintained its stance that the economy would gradually recover from the COVID-19 pandemic. The market has so far taken the latest heightening in U.S.-China tensions in its stride. President Donald Trump signed legislation and an executive order to hold China "accountable" for the national security law it imposed on Hong Kong. Trump also signed a bill approved by the Congress to penalise banks doing business with Chinese officials who implement the new security law. In response, the Chinese foreign ministry said on Wednesday it will impose retaliatory sanctions on U.S. individuals and entities. Diplomatic battles between the two big powers have intensified on several other fronts, such as the COVID-19 pandemic, military operations in the South China Sea and trade.
  • Oil prices rose on Wednesday following a sharp drop in U.S. crude inventories, with the market waiting for next steps from a meeting later in the day on the future level of output cuts by OPEC and its allies. Reflecting a recovery in fuel demand despite the coronavirus pandemic, U.S. crude inventories fell by 8.3 million barrels in the week to July 10, beating analysts' expectations for a decline of 2.1 million barrels, according to data from industry group the American Petroleum Institute. Official numbers from the U.S. Department of Energy's Energy Information Administration (EIA) are due on Wednesday. On supply, the market will be closely watching for news from a meeting of the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries (OPEC) later on Wednesday. Key members of OPEC and allies including Russia, collectively known as OPEC+, are set to decide whether to extend output cuts of 9.7 million barrels per day (bpd) that end in July or ease them to 7.7 million bpd. In June, OPEC and its allies delivered compliance of 107% with their agreed oil output cuts, an OPEC+ source said on Tuesday. Meanwhile, OPEC said in its monthly report that global oil demand would soar by a record 7 million bpd in 2021 as the global economy recovers from the coronavirus pandemic although it would stay below 2019 levels. Oil rose on Wednesday morning in Asia, with investor sentiment improving after the U.S. reported a significant drop in crude oil inventories. The American Petroleum Institute (API) estimated an 8.322 million-barrel draw for the week ended July 10. The draw was bigger than analyst forecasts of a 2.1 million-barrel draw and reversed the previous week’s 2 million-barrel build. Amid the worsening COVID-19 situation globally, OPEC+ is expected to further step up oil production cuts beyond their July expiry date. The organization is due to meet later today to deliberate on the future level of production. The meeting will decide whether to extend output cuts of 9.7 million barrels per day (bpd) due to end in July or decrease the cuts to 7.7 million bpd. Meanwhile, OPEC’s monthly report predicted global oil demand will increase by a record 7 million bpd in 2021 as the global economy recovers from the impacts of COVID-19. But even this estimate is below demand levels in 2019. Investors will now be looking at data from the U.S. Department of Energy’s Energy Information Administration (EIA), due on Wednesday, to see if it corroborates the API data.

 

 
Intraday RESISTANCE LEVELS
15th July 2020 R1 R2 R3
GOLD-XAU 1,822-1,831 1,840 1,849-1858
Silver-XAG 19.60-20.10 20.50 21.00-21.50
Crude Oil 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
15th July 2020 S1 S2 S3
GOLD-XAU 1,800-1,789 1,780 1,760-1,754
Silver-XAG 19.05-18.55 18.00 17.50-17.25
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 1.2550-1.2490 1.2430 1.2320-1.2250
USD/JPY 107.10-106.50 105.50 105.00-104.30

Intra-Day Strategy (15th 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$1810.80/oz and low of US$1799.00/oz. Gold up 0.381% at US$1808.50/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 Tuesday made its intraday high of US$19.28/oz and low of US$18.86/oz settled up by 0.572% at US$19.16/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 19.05-17.55 targeting 19.60-20.10-20.50 and 21.00-21.50; stop breakage below 17.00. Sell below 19.60-21.50 with stop loss above 21.50; targeting 19.05-18.55-18.00 and 17.50-17.25-16.90.

 
Intraday  Support Levels
S1     19.05-18.55
S2     18.00
S3     17.50-17.25

Intraday  Resistance Levels
R1     19.60-20.10
R2     20.50
R3     21.00-21.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   75.514 Buy
20-DMA   18.08 Buy
50-DMA   17.42 Buy
100-DMA   16.29 Buy
200-DMA   16.91 Buy
STOCH(5,3)   76.268 Buy
MACD(12,26,9)   0.434 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US40.73/bbl, intraday low of US$39.26/bbl and settled up by 1.996% to close at US$40.55/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     40.00-39.50
S2     38.50
S3     37.60-37.10

Intraday Resistance Levels
R1     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 Tuesday an intraday low of US$1.1324/EUR, high of US$1.1408/EUR and settled the day up by 0.491% to close at US$1.1398/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 Tuesday made an intra‐day low of US$1.2479/GBP, high of US$1.2562/GBP and settled the day down by 0.0047% to close at US$1.2552/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 1.2550-1.2100 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     1.2550-1.2490
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 Wednesday made intra‐day low of JPY107.11/USD and made an intraday high of JPY107.42/USD and settled the day down by 0.0540% at JPY107.22/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

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