AAFX TRADING

Daily Market Lookup

  • Asian shares hit a five-month high and European equity market futures extended gains on Tuesday after European Union leaders agreed on a massive stimulus plan for their coronavirus-blighted economies. Hopes that vaccines against the COVID-19 disease might be ready by the end of year also supported riskier assets, following promising early data from trials of three potential vaccines. The EU deal, which came after Summit chairman Charles Michel presented compromises on a 750 billion euro recovery fund, is critical to dispel doubts about the bloc’s very future. The risk-on approach in the global markets in the last few months has mainly been boosted by the record levels of stimulus announced by the policymakers to cushion the economic impact of the COVID-19 pandemic and ensuing lockdowns. But some analysts are not convinced about the sustainability of the rally, and the positive sentiment faces reality checks later this month as corporate earnings season gets in full swing in many countries. Harry Richards, fund manager for fixed-income at Jupiter Asset Management said in a note on Tuesday that the economy was still “experiencing stresses that comfortably exceed” those during the global financial crisis. With the announcement of the EU summit outcome, the investor focus has now shifted to possible U.S. stimulus measures to help the economy after $3 trillion in stimulus earlier this year. Advisers to President Donald Trump and congressional Democrats were set to discuss the next steps in responding to the coronavirus crisis on Tuesday. Elsewhere in Asia equity markets, Japan’s Nikkei rose 0.8%, while South Korea’s benchmark KOSPI advanced 1.3%. The Australian stock index was up 2.2%, on track to post its best day since June 16. In the currency market, the Chinese yuan was little changed, trimming an early advance to a four-month top as simmering tensions between Beijing and Washington undercut the boost from extended inflows into the mainland stock market.
  • The dollar has been under pressure Tuesday, with the euro and commodity currencies benefiting from the news that European Union leaders have reached an agreement over a recovery fund for the region and amid renewed hopes for a Covid-19 vaccine. After more than four days of haggling, European Union leaders reached a deal on a massive 750 billion euro stimulus plan for their coronavirus-hit economies, with 390 billion euros as non-repayable grants - down from 500 billion originally proposed - and the rest in repayable loans. Adding to the weakness for safe havens like the dollar was encouraging data from trials of three potential COVID-19 vaccines, including a closely-watched candidate from Oxford University. This comes as the number of coronavirus infections world wide climbed above 14.7 million, with over 609,000 deaths, according to the latest data from Johns Hopkins University. Another currency showing strength Tuesday has been sterling, helped by the positive news from the EU summit as well as ahead of fresh Brexit talks beginning later Tuesday. The aim of reaching an agreement between Britain and the EU on future ties by October is ambitious but achievable, German Foreign Minister Heiko Maas said on Tuesday.
  • Oil saw modest gains on Tuesday morning in Asia over positive results from three potential COVID-19 vaccine candidates. British drugmaker AstraZeneca (LON:AZN) and Oxford University said on Monday that its COVID-19 vaccine induced an immune response in all study participants that received two doses. The other two candidates are being developed by CanSino Biologics alongside China’s military research unit, and German biotech BioNTech and U.S. drugmaker Pfizer. Some cinemas reopened on Monday in China, one of the world's biggest oil importers, in a positive sign of economic recovery in the world's second largest economy. Potential stimulus measures from both the U.S. and Europe also boosted investor sentiment, with hopes that the measures will boost economic recovery and demand for the black liquid. Investors are looking to the American Petroleum Institute (API)'s estimate of crude oil supply, due later in the day. South Sudan is banking on a better year in 2021 after efforts to rebuild its oil industry were knocked by the coronavirus and a collapse in crude prices.“We experienced prices that had never been there before and we are running at a loss” along with private operators, Awow Daniel Chuang, the undersecretary in the Ministry of Petroleum, said in an interview in Juba, the capital. “We have been affected much more than others because South Sudan, being a new country just emerging from war, has a lot of challenges.”South Sudan’s official oil production dropped 20,000 barrels to 170,000 barrels a day as lockdowns to control the pandemic delay the moving of production equipment and materials. The commodity is the landlocked, East African nation’s only major export and its success is crucial to an economy shattered by five years of conflict. Plans to boost output have also been delayed because the nation is an OPEC+ participant that’s expected to contribute to the cartel’s wider supply-cut effort.“We have been getting pressure from OPEC and, of course, we understand the background of this and we are working also to balance our needs, and at the same time cooperate,” Chuang said. “We are always making sure that we cooperate with OPEC so that we control the supply.” The country that gained independence from Sudan less than a decade ago pays fees to its northern neighbor to get its oil to ports. It has negotiated to defer $6 a barrel of the $24.10 a barrel it costs to ship the crude, Chuang said.

 

 
Intraday RESISTANCE LEVELS
21st July 2020 R1 R2 R3
GOLD-XAU 1,822-1,831 1,840 1,849-1858
Silver-XAG 20.50-21.00 21.50 21.90-22.00
Crude Oil 41.20 42.00 43.40-44.20
EURO/USD 1.1450 1.1500 1.1540-1.1600
GBP/USD 1.2760 1.2810-1.2870 1.2950
USD/JPY 107.50-107.90 108.40 109.40-110.20

Intraday SUPPORTS LEVELS
21st July 2020 S1 S2 S3
GOLD-XAU 1,810-1,789 1,780 1,760-1,754
Silver-XAG 20.10-19.60 19.05 18.55-18.00
Crude Oil 40.60-39.50 38.50 37.60-37.10
EURO/USD 1.1400-1.1360 1.1400-1.1360 1.1250-1.1205
GBP/USD 1.2680-1.2600 1.2550 1.2490-1.2430
USD/JPY 106.90-106.50 105.50 105.00-104.30

Intra-Day Strategy (21st 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$1820.47/oz and low of US$1805.58/oz. Gold up 0.580% at US$1816.97/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 1810-1770 with risk below 1770, 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     1,810-1,789
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  

62.982

Buy
20-DMA   1784.32 Buy
50-DMA  

1747.51

Buy
100-DMA   1695.67 Buy
200-DMA   1607.60 Buy
STOCH(5,3)   44.503 Buy
MACD(12,26,9)   18.894 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$19.90/oz and low of US$19.24/oz settled up by 2.91% at US$19.88/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 20.05-17.55 targeting 20.50-21.00 and 21.50-22.00; stop breakage below 17.00. Sell below 20.60-22.00 with stop loss above 22.00; targeting 20.10-19.60-19.05 and 18.55-18.00-17.50.

 
Intraday  Support Levels
S1     20.10-19.60
S2     19.05
S3     18.55-18.00

Intraday  Resistance Levels
R1     20.50-21.00
R2     21.50
R3     21.90-22.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.514 Buy
20-DMA   16.93 Buy
50-DMA   17.19 Buy
100-DMA   16.84 Buy
200-DMA   17.16 Buy
STOCH(5,3)   18.268 Sell
MACD(12,26,9)   0.434 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US41.00/bbl, intraday low of US$39.96/bbl and settled down by 0.171% to close at US$40.71/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 40.10-35.70 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     40.60-39.50
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 Monday an intraday low of US$1.1401/EUR, high of US$1.1467/EUR and settled the day up by 0.384% to close at US$1.1446/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 1.1400-1.1030 with risk below 1.1030, targeting 1.1450-1.1495 and 1.1540-1.1600. Sell below 1.1450-1.1605 targeting 1.1400-1.1360-1.1300 and 1.1235-1.1190 with stop-loss at daily closing above 1.1605.

 
Intraday Support Levels
S1     1.1400-1.1360
S2     1.1400-1.1360
S3     1.1250-1.1205

Intraday  Resistance Levels
R1     1.1450
R2     1.1500
R3     1.1540-1.1600

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.032 Buy
20-DMA   1.1284 Buy
50-DMA   1.1161 Buy
100-DMA   1.1059 Buy
200-DMA   1.1055 Buy
STOCH(5,3)   81.758 Buy
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2517/GBP, high of US$1.2664/GBP and settled the day up by 0.920% to close at US$1.611/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 1.2760-1.2950 with targets at 1.2680-1.2600-1.2490 and 1.2410-1.2320 stop-loss should be 1.2950. Buy above 1.2680-1.2430 with targets 1.2760-1.2810 and 1.2870-1.2950 with stop loss closing below 1.2400.

 
Intraday Support Levels
S1     1.2680-1.2600
S2     1.2550
S3     1.2490-1.2430

Intraday Resistance Levels
R1     1.2760
R2     1.2810-1.2870
R3     1.2950

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

64.904

Buy
20-DMA   1.2517 Buy
50-DMA   1.2461 Buy
100-DMA   1.2413 Sell
200-DMA   1.2696 Sell
STOCH(5,3)   81.940 Sell
MACD(12,26,9)   0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY107.00/USD and made an intraday high of JPY107.52/USD and settled the day up by 0.224% at JPY107.24/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 106.90-106.50-105.60 and 105.00-104.50. Long positions above 107.00-104.00 with targets of 107.90-108.40 and 109.40-110.20 with stop below 105.00.

 
Intraday Support Levels
S1     106.90-106.50
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   43.904 Buy
20-DMA   107.21 Sell
50-DMA   107.45 Sell
100-DMA   107.53 Sell
200-DMA   108.36 Sell
STOCH(9,6)   44.253 Sell
MACD(12,26,9)   -0.1448 Sell

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