AAFX TRADING

Daily Market Lookup

  • The dollar was down on Friday morning in Asia, with the U.S. struggling to curb its surging number of COVID-19 cases. Combined with the looming expiry of some stimulus measures at the end of July as well as a record number of unemployment claims, investors are casting doubt over the U.S.’ recovery prospects. The number of U.S. cases topped 4 million, with over 15.4 million cases globally as of July 24, according to Johns Hopkins University data. The U.S. reported its first uptick in initial jobless claims since March, with 1.416 million Americans filing for unemployment claims over the last week. The number was higher than analyst forecasts for 1.3 million claims, as well as the previous week’s 1.307 million claims. Franulovich also noted the dollar faces a major hurdle in the coming week, with the U.S. Federal Reserve expected to take a dovish outlook at its policy meeting. Meanwhile, the dollar’s loss was the Euro’s gain, with the European Union reaching agreement on a EUR750 billion ($868.987 billion) COVID-19 rescue package earlier in the week. The agreement boosted the Euro to a 21-month peak against the dollar U.S-China tensions continue to simmer, with China vowing retaliation for the U.S. order for its Houston consulate to close by Friday. But a flight carrying an unspecified number of U.S. diplomats to Shanghai departed on Wednesday evening. The dollar hovered around 22-month lows on Thursday on further signs the economic recovery in the U.S. could be grinding to a halt in the wake of a resurgence in coronavirus cases nationwide. The U.S. is on track for a strong rebound in the third quarter, but signs of rising initial jobless claims and declining footfall at retail stores suggest the recovery has come unstuck. The U.S. Labor Department reported Thursday that 1.4 million people filed for unemployment insurance for the week ended July 18, up 109,000 from the prior week and above economists' estimates of 1.3 million. While weaker footfall "isn't a huge concern" as June data showed retail sales returning to their pre-Covid levels, other indicators including industrial production and employment highlight that overall economic activity "remains significantly below pre-pandemic levels," said Paul Ashworth, chief U.S. economist at Capital Economics. The potential backdrop of a slower-than-expected recovery has dampened investor hopes for a V-shaped economic rebound.
  • Oil prices edged higher on Friday on the back of a weaker U.S. dollar, although demand concerns stemming from rising coronavirus cases and escalating U.S.-China tensions kept a cap on prices. The dollar slid to 22-month lows against a basket of currencies (DXY). A weaker dollar usually spurs buying of commodities priced in the greenback, like oil, because they become cheaper for holders of other currencies The number of Americans filing for unemployment benefits unexpectedly rose to 1.416 million last week for the first time in nearly four months, suggesting U.S. economic recovery is stalling amid a resurgence in COVID-19 cases. The U.S. economic outlook has darkened in the past month amid renewed lockdowns in some states from surging coronavirus cases, according to economists in a Reuters poll who warned of a high risk the job recovery underway reverses by year-end. The United States recorded on Thursday over 1,000 deaths from COVID-19, marking the third straight day the nation passed that grim milestone as the pandemic escalates in its southern and western states. Globally, more than 15 million have been infected and over 620,000 have died. While the rise in infections has fanned fears of renewed government lockdowns, worries that oil demand could be hit have been exacerbated by tensions between the United States and China - the world's top two oil consumers. China ordered the United States to close its consulate in the city of Chengdu on Friday, in a tit-for-tat response to being told to shut its consulate in Houston earlier this week. Relations between Washington and Beijing have deteriorated sharply this year over a range of issues, from trade and technology to the coronavirus, China's territorial claims in the South China Sea and its clampdown on Hong Kong In China, congestion at east coast oil ports is adding to costs for shippers and importers even as fuel demand stalls. Barclays (LON:BARC) Commodities Research has said oil prices could see a correction in the near term if a recovery in fuel demand slows further, especially in the United States The bank lowered its oil market surplus forecast for 2020 to an average 2.5 million barrels-per-day (bpd), from 3.5 million bpd previously.

 

 
Intraday RESISTANCE LEVELS
24th July 2020 R1 R2 R3
GOLD-XAU 1,892-1,900 1,911 1,927
Silver-XAG 22.80 23.50-24.00 24.90
Crude Oil 41.20-42.00 43.40 44.20-45.00
EURO/USD 1.1620-1.1650 1.1700 1.1750-1.1800
GBP/USD 1.2760 1.2810-1.2870 1.2950
USD/JPY 106.90-106.50 107.50 107.90-108.40

Intraday SUPPORTS LEVELS
24th July 2020 S1 S2 S3
GOLD-XAU 1,880-1,866 1,858 1,849-1,840
Silver-XAG 22.00-21.50 20.90 20.10-19.60
Crude Oil 40.60 39.50 38.50-37.60
EURO/USD 1.1540-1.1500 1.1450 1.1400-1.1360
GBP/USD 1.2680-1.2600 1.2550 1.2490-1.2430
USD/JPY 106.00-105.50 105.00 104.30

Intra-Day Strategy (24th 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 Thursday made its intraday high of US$1890.30/oz and low of US$1881.68/oz. Gold up % at US$1886.64/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 1880-1840 with risk below 1840, targeting 1892-1900 and 1911-1927. Sell below 1900-1927 keeping stop loss closing above 1927, targeting 1880-1866-1849 and 1840-1822.

 
Intraday Support Levels
S1     1,880-1,866
S2     1,858
S3     1,849-1,840
Intraday Resistance Levels
R1     1,892-1,900
R2     1,911
R3     1,927

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 Thursday made its intraday high of US$22.76/oz and low of US$22.57/oz settled down by 0.024% at US$22.52/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 22.00-17.55 targeting 22.80-24.00-24.90; stop breakage below 17.50. Sell below 22.80-24.90 with stop loss above 25.00; targeting 22.00-21.50-20.90 and 20.10-19.60-19.05.

 
Intraday  Support Levels
S1     22.00-21.50
S2     20.90
S3     20.10-19.60

Intraday  Resistance Levels
R1     22.80
R2     23.50-24.00
R3     24.90

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 Thursday made an intra‐day high of US40.74/bbl, intraday low of US$39.46/bbl and settled up by 2.18% to close at US$40.65/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 40.60-37.60 with risk daily closing below 37.60 and targeting 41.20-42.00-43.40 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     40.60
S2     39.50
S3     38.50-37.60

Intraday Resistance Levels
R1     41.20-42.00
R2     43.40
R3     44.20-45.00

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 Wednesday an intraday low of US$1.1539/EUR, high of US$1.1628/EUR and settled the day up by 0.181% to close at US$1.1596/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     1.1540-1.1500
S2     1.1450
S3     1.1400-1.1360

Intraday  Resistance Levels
R1     1.1620-1.1650
R2     1.1700
R3     1.1750-1.1800

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 Thursday made an intra‐day low of US$1.2724/GBP, high of US$1.2773/GBP and settled the day up by 0.0628% to close at US$1.2738/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 Thursday made intra‐day low of JPY106.36/USD and made an intraday high of JPY106.85/USD and settled the day down by 0.439% at JPY106.38/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     106.00-105.50
S2     105.00
S3     104.30

INTRADAY RESISTANCE LEVELS
R1     106.90-106.50
R2     107.50
R3     107.90-108.40

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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