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Daily Market Lookup

  • The dollar crumbled on Monday as cracks in the U.S. economic recovery drove investors away from the world's reserve currency as they increased bets the Federal Reserve could flag another accommodative shift in its outlook this week. The greenback fell to a four-month low against the yen, a new 22-month trough on the euro and a five-year low against the Swiss franc, while gold minted a record high. The Fed meets Tuesday and Wednesday after labour data last week showed the U.S. employment recovery wobbling. No major announcements are anticipated but analysts expect policymakers may begin laying the groundwork for more action in September or the fourth quarter. The U.S. central bank could firm recent hints about the benefits of an average inflation target, which would allow rates to stay lower for longer. The value of short dollar positions hit its highest in two years last week <0#NETUSDFX=>, while the futures market is pricing negative rates in the U.S. next August and no upward movement in the next three years Market sentiment is being clouded by concerns over the global recovery as corona virus cases spike and geopolitical tensions worsen. None of the majors made much headway on the yen and the yuan, a barometer of Sino-U.S. relations, struggled to capitalize on the dollar's weakness. It stayed on the weaker side of 7-per-dollar at 7.0021 in offshore trade. China said it had taken over the premises of the U.S. consulate in Chengdu on Monday after ordering the facility shut in retaliation for being ousted from its consulate in Houston. Elsewhere, investors are also beginning to fret about U.S. political deadlock over the next round of fiscal stimulus with a month-end deadline looming to extend some unemployment benefits. The White House and Senate Republicans agreed on a $1 trillion relief package, but that must be negotiated with Democrats who have been pushing for bigger spending. Last week a recovery in the U.S. job market unexpectedly stalled, while purchasing manager surveys showed Europe's recovery pulling ahead - adding to nerves about any letup in U.S. stimulus. The U.S. dollar was down on Monday morning in Asia, starting the week under pressure from increasing U.S.-China tensions over the latest disagreement between the two countries. The latest tit-for-tat stemmed from the U.S. State Department’s order to close the Chinese Consulate in Houston within 72 hours during the previous week. China retaliated by ordering the U.S. to close its consulate in Chengdu on Friday, with a Monday deadline. U.S. Secretary of State Michael Pompeo stoked the flames further last week when he suggested that Washington and its allies must use “more creative and assertive ways” to change China’s ways. The two countries are also in disagreement over issues such as trade, Hong Kong’s national security law, Xinjiang, and Chinese claims in the South China sea. Meanwhile, investors will be looking to the U.S. Federal Reserve, due to convene later in the week, for clues over the U.S. economic recovery from COVID-19.
  • Oil prices fell on Monday morning in Asia, as the COVID-19 pandemic as well as Sino-U.S. relations took a turn for the worse over the weekend. The U.S. recorded a near record 74,000 new cases of COVID-19 on Friday according to Johns Hopkins University data. More than 1,000 Americans died each day between Tuesday and Friday, the worst death tally since late May. The numbers may lead to further closures and lockdowns and hit at demand for fuel. Also affecting prices is the increasingly tense relationship between the U.S. and China, two of the largest oil consumers in the world. Fears of a full blown diplomatic conflict over the next few months have increased, affecting the value of the dollar and dampening expectations of a sharp increase in demand for fuel. The U.S. and China have both ordered each other to shut a consulate in their respective countries, namely China’s Houston consulate and the U.S. consulate in Chengdu. U.S. Secretary of State Michael Pompeo called for an end of “engagement,” a policy that has defined U.S.-China relations for nearly five decades. Oil prices edged lower on Monday as rising coronavirus cases and tensions between the United States and China pushed investors toward safe-haven assets. The fall in oil mirrored moves in broader financial markets in Asia amid concerns about escalating tensions between the world's two biggest economies following the closures of consulates in Houston and Chengdu. Global coronavirus cases, meanwhile, exceeded 16 million. Still, Brent is on track for a fourth straight monthly gain in July and WTI is set to rise for a third month as unprecedented supply cuts from the Organization of the Petroleum Countries and its allies including Russia propped up prices. Output has also fallen in the United States Oil demand has improved somewhat from the deep trough of the second quarter, supporting prices, although the recovery path is uneven as resumption of lockdowns in the United States and other parts of the world is capping consumption. Investors are also watching for any impact from storm Hanna, which battered the Texas coast over the weekend, threatening heavy rains in Texas and Mexico. Oil and gas producers and refiners said on Friday that they did not expect the storm to affect operations. The rebound in oil prices from lows hit earlier this year has also encouraged the world's top producers to increase output and exports again. The U.S. oil rig count rose last week for the first week since March after producers added one rig, Baker Hughes data showed, a sign that U.S. oil production decline may have bottomed out. Russian oil exports from its western ports are set to rise 36% in August from July, according to the preliminary loading plan and Reuters calculations. The world's top exporter Saudi Arabia again topped the chart of crude suppliers to China in June, supplying 2.16 million barrels per day, or nearly 17% of China's record imports for the month.

 

 
Intraday RESISTANCE LEVELS
27th July 2020 R1 R2 R3
GOLD-XAU 1,944-1,950 1,964 1,978-1,990
Silver-XAG 24.40-24.90 25.50 26.10-27.00
Crude Oil 42.00 43.40 44.20-45.00
EURO/USD 1.1700 1.1750-1.1800 1.1850
GBP/USD 1.2840-1.2870 1.2950 1.3015-1.3090
USD/JPY 106.00-106.50 106.90 107.50-107.90

Intraday SUPPORTS LEVELS
27th July 2020 S1 S2 S3
GOLD-XAU 1,927-1,911 1,900 1,892-1,880
Silver-XAG 24.00-23.50 22.80 22.00-21.50
Crude Oil 41.00-40.60 39.50 38.50-37.60
EURO/USD 1.1650-1.1620 1.1540 1.1500-1.1450
GBP/USD 1.2760-1.2680 1.2600 1.2550-1.2490
USD/JPY 105.50-105.00 104.30 103.90-103.10

Intra-Day Strategy (27th 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 1927-1880 with risk below 1880, targeting 1944-1950-1964 and 1978-1990. Sell below 1944-1990 keeping stop loss closing above 1990, targeting 1927-1911-1900 and 1892-1880-1866.

 
Intraday Support Levels
S1     1,927-1,911
S2     1,900
S3     1,892-1,880
Intraday Resistance Levels
R1     1,944-1,950
R2     1,964
R3     1,978-1,990

Technical Indicators

Name   Value Action
14DRSI  

86.982

Buy
20-DMA   1818.33 Buy
50-DMA  

1710.11

Buy
100-DMA   1710.11 Buy
200-DMA   1619.58 Buy
STOCH(5,3)   93.503 Buy
MACD(12,26,9)   38.894 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$22.90/oz and low of US$22.38/oz settled up by 0.685% at US$22.75/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 24.00-21.55 targeting 24.40-24.90-25.50 and 26.10-27.00; stop breakage below 21.50. Sell below 24.90-27.00 with stop loss above 27.00; targeting 24.00-23.50-22.80 and 22.00-21.50-20.90.

 
Intraday  Support Levels
S1     24.00-23.50
S2     22.80
S3     22.00-21.50

Intraday  Resistance Levels
R1     24.40-24.90
R2     25.50
R3     26.10-27.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   86.514 Buy
20-DMA   19.69 Buy
50-DMA   18.41 Buy
100-DMA   16.64 Buy
200-DMA   17.08 Buy
STOCH(5,3)   88.268 Sell
MACD(12,26,9)   0.831 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US41.67/bbl, intraday low of US$40.68/bbl and settled up by 0.409% to close at US$41.23/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     41.00-40.60
S2     39.50
S3     38.50-37.60

Intraday Resistance Levels
R1     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 Friday an intraday low of US$1.1580/EUR, high of US$1.1657/EUR and settled the day up by 0.518% to close at US$1.1655/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 1.1650-1.1400 with risk below 1.1400, targeting 1.1700-1.1750 and 1.1800-1.1850. Sell below 1.1700-1.1850 targeting 1.1650-1.1620-1.1500 and 1.1450-1.1400-1.1360 with stop-loss at daily closing above 1.1850.

 
Intraday Support Levels
S1     1.1650-1.1620
S2     1.1540
S3     1.1500-1.1450

Intraday  Resistance Levels
R1     1.1700
R2     1.1750-1.1800
R3     1.1850

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 Friday made an intra‐day low of US$1.2517/GBP, high of US$1.2802/GBP and settled the day up by 1.985% to close at US$1.2794/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     1.2760-1.2680
S2     1.2600
S3     1.2550-1.2490

Intraday Resistance Levels
R1     1.2840-1.2870
R2     1.2950
R3     1.3015-1.3090

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.904

Buy
20-DMA   1.2420 Buy
50-DMA   1.2651 Buy
100-DMA   1.2745 Sell
200-DMA   1.2905 Sell
STOCH(5,3)   90.940 Sell
MACD(12,26,9)   0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY105.67/USD and made an intraday high of JPY107.52/USD and settled the day down by 0.811% at JPY106.13/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 106.00-111.00 with risk above 111.00 targeting 105.60-105.00-104.50 and 103.90-103.10. Long positions above 105.50-103.00 with targets of 106.00-106.50-106.90 and 107.90-108.40-109.40 with stop below 105.00.

 
Intraday Support Levels
S1     105.50-105.00
S2     104.30
S3     103.90-103.10

INTRADAY RESISTANCE LEVELS
R1     106.00-106.50
R2     106.90
R3     107.50-107.90

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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