AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trade Wednesday, but the overall trend is one of weakness, particularly against the single currency after the EU stimulus deal improved sentiment towards the euro. This follows the European Union leaders agreeing a substantial stimulus plan to help the countries of the region rebuild their economies from the damage caused by the Covid-19 pandemic. At the same time, there is a perception that U.S. lawmakers are struggling to reach consensus on the next round of stimulus measures to boost American consumers and businesses. The EU summit agreement is pretty significant, analysts at ING noted, in a research note, as the emergence of grants points to solidarity, while common bonds points to integration. That said, “with the EUR-specific good news now being largely in the price, we expect the next leg of the EUR/USD upside to come from the dollar side,” ING added, “with the U.S. currency's downtrend caused by a combination of loose monetary policy from the Federal Reserve (note the dollar lost its key advantage which has kept it supported in prior years - the meaningful interest rate differential), the twin deficit and the U.S. Presidential election uncertainty.“ The dollar was down on Wednesday morning, with investors retreating from the safe haven asset as the U.S. is struggling to reach a consensus on further stimulus measures. Tuesday saw the U.S. Congress continuing discussions to extend unemployment benefits, due to expire at the end of July, and provide more funding to schools. Disagreements over how much to spend on these measures to combat the economic impact of COVID-19 is widening the gap between Republicans and Democrats. A $3 trillion relief bill passed two months ago by the Democrat-majority House of Representatives has largely been ignored by the Republican-majority Senate. But House Speaker Nancy Pelosi warned that the $1 trillion package proposed by Republicans is not sufficient. Meanwhile, across the Pond, Europe’s leaders reached agreement on a EUR750 billion ($860.637) stimulus package at the EU Summit after over four days of negotiations. Thee 27-member bloc also passed a EUR1 trillion budget to be used between 2021 and 2027 to counter a recession not seen on the continent since World War Two. Some Investors were not optimistic about the U.S. coming to a consensus on the measures. Risk appetite has improved greatly this week as progress in developing vaccines for the novel coronavirus reduced the U.S. dollar's safe-harbour appeal. Investors also expect a massive amount of fiscal spending to support growth in major economies but could easily be disappointed if any stimulus falls short of expectations.
  • Oil was down on Wednesday morning in Asia as the American Petroleum Institute (API) reported a build in crude inventories in the U.S. and Europe reached a breakthrough in its stimulus discussions. The API estimated on Tuesday a build in crude oil inventories of 7.544 million barrels for the week. This build-up in inventories put downward pressure in oil prices. Also dampening investor sentiment was the worsening COVID-19 situation in the U.S., which recorded over 1,000 deaths for the first time since June on Tuesday with in a 24-hour period, Deaths now rising again in 21 states and the countrywide death toll is closing in on 142,000. In his first COVID-19 briefing in months, U.S. President Donald Trump admitted that the outbreak would probably get worse before it gets better. Also dampening investor sentiment, the U.S. Congress remains in disagreement over a new stimulus package after the current package expires at the end of the month. Senate Majority Leader Mitch McConnell is expected to unveil a proposal for a $1 trillion package. Meanwhile, European leaders took a massive step towards sharing COVID-19 financial burdens among the E.U.'s 27 countries, agreeing to create a EUR750 billion ($860.637) recovery fund. They also agreed to borrow and spend together to pull the E.U. economy out of the deep recession caused by the virus outbreak, boosting investor hopes for economic and fuel demand recovery.
  • A dollar at four-month lows helped gold prices tick up to nine-year highs on Wednesday morning in Asia. Investors seem to be looking for a safe haven as the number of COVID-19 cases and deaths in the U.S. continues to climb, while the Congress struggles to agree on a new stimulus bill after the current one ends at the end of the month. Continued turmoil in U.S.-China relations may also be supportive of gold. Relations took a turn for the worse this week after the U.S. Justice Department accused China on Tuesday of sponsoring hackers who are targeting labs developing COVID-19 vaccines on Tuesday.

 

 
Intraday RESISTANCE LEVELS
22nd July 2020 R1 R2 R3
GOLD-XAU 1858-1,866 1,880 1,890-1,900
Silver-XAG 22.00 22.80 23.50-24.00
Crude Oil 42.00 43.40-44.20 45.00
EURO/USD 1.1540-1.1600 1.1650 1.1700-1.1750
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
22nd July 2020 S1 S2 S3
GOLD-XAU 1,849-1,840 1,822 1,810-1,789
Silver-XAG 21.50-20.90 20.10 19.60-19.05
Crude Oil 41.20-40.60 39.50 38.50-37.60
EURO/USD 1.1500-1.1450 1.1400 1.1360-1.1300
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 (22nd 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$1843.39/oz and low of US$1815.70/oz. Gold up 1.352% at US$1841.49/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 1849-1800 with risk below 1770, targeting 1858-1866-1880 and 1890-1900. Sell below 1858-1900 keeping stop loss closing above 1900, targeting 1849-1840-1822 and 1810-1800.

 
Intraday Support Levels
S1     1,849-1,840
S2     1,822
S3     1,810-1,789
Intraday Resistance Levels
R1     1858-1,866
R2     1,880
R3     1,890-1,900

Technical Indicators

Name   Value Action
14DRSI  

62.982

Buy
20-DMA   1791.65 Buy
50-DMA  

1752.60

Buy
100-DMA   1700.37 Buy
200-DMA   1611.60 Buy
STOCH(5,3)   .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 21.50-17.55 targeting 22.00-24.00; stop breakage below 24.00. 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     21.50-20.90
S2     20.10
S3     19.60-19.05

Intraday  Resistance Levels
R1     22.00
R2     22.80
R3     23.50-24.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   85.514 Buy
20-DMA   18.84 Buy
50-DMA   17.99 Buy
100-DMA   16.46 Buy
200-DMA   17.00 Buy
STOCH(5,3)   85.268 Sell
MACD(12,26,9)   0.831 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US42.49/bbl, intraday low of US$40.73/bbl and settled up by 1.734% to close at US$41.46/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 41.20-37.60 with risk daily closing below 37.60 and targeting 42.00-43.40 and 44.00-45.00. Sell in between 42.00-44.60 with stop loss at 45.00; targeting 41.20-40.60-39.50 and 38.50-37.10.

 
Intraday Support Levels
S1     41.20-40.60
S2     39.50
S3     38.50-37.60

Intraday Resistance Levels
R1     42.00
R2     43.40-44.20
R3     45.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.099 Sell
20-DMA   40.25 Buy
50-DMA   37.62 Buy
100-DMA   31.73 Buy
200-DMA   43.82 Sell
STOCH(5,3)   63.130 Sell
MACD(12,26,9)   1.206 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday 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 1.1500-1.1300 with risk below 1.1300, targeting 1.1540-1.1600 and 1.1650-1.1700-1.1750. Sell below 1.1540-1.1750 targeting 1.1500-1.1450-1.1400 and 1.1360-1.1300-1.1235 with stop-loss at daily closing above 1.1750.

 
Intraday Support Levels
S1     1.1500-1.1450
S2     1.1400
S3     1.1360-1.1300

Intraday  Resistance Levels
R1     1.1540-1.1600
R2     1.1650
R3     1.1700-1.1750

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 Tuesday made an intra‐day low of US$1.2767/GBP, high of US$1.2767/GBP and settled the day up by 0.556% to close at US$1.2730/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 Tuesday made intra‐day low of JPY107.36/USD and made an intraday high of JPY107.52/USD and settled the day down by 0.414% at JPY106.79/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   107.2143.904z 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

AAFX TRADING
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