AAFX TRADING

Daily Market Lookup

  • The U.S. dollar was down in Asia on Tuesday morning, falling to a two-year low over fresh investor concerns about the U.S. economy’s ability to recover from the impact of COVID-19. The number of global COVID-19 deaths shot past the 650,000 mark, while the number of cases is almost at the 16.4 million mark, as of July 28, according to Johns Hopkins University data. But after Republicans unveiled details of the latest $1 trillion stimulus package on Monday, investors will see whether Republicans and Democrats can reach a consensus to pass the package before some earlier measures due to expire at the end of the week. The euro, which has been on a meteoric rise ever since the EU reached a deal for a EUR750 billion ($879.549 billion) recovery package the week before, also continues to hit the dollar hard. Investors will also be looking to the U.S. Federal Reserve’s meeting on Wednesday, where it is widely expected to take a continuous dovish stance. But some investors were skeptical of the impact any measures announced at the Fed’s meeting would have for the dollar.
  • The dollar bounced off a two-year low on Tuesday as selling pressure faded ahead of a Federal Reserve meeting and as political wrangling over the next U.S. fiscal rescue package moved closer to a conclusion The world's reserve currency has been tumbling since May and was dumped in recent days as cracks in the U.S. coronavirus recovery and crumbling yields sent investors elsewhere. Buyers crept out of the woodwork following a pullback in the gold price halfway through the Asian session, lending the greenback support and pushing other majors off milestone peaks. Most analysts say the reasons for the dollar's broad decline, especially falling real yields, remain intact but that the pace of the drop probably warranted a pause - particularly with a Fed meeting and a U.S. spending package in the offing. On the horizon is a Fed meeting that begins later on Tuesday and Friday's deadline for U.S. Congress to extend unemployment benefits - both unpredictable enough to inject some nerves into bets against the dollar. No policy change is anticipated at the Fed meeting on Wednesday, but investors expect to hear its super-easy outlook reaffirmed and are speculating about a change in emphasis in the forward guidance. One shift could be to average inflation targeting, which would see the Fed aim to push inflation above its 2% target to make up for years of under-shooting. That prospect has pressed on U.S. real yields, sending the yield on inflation-protected 10-year paper to a record-low -0.92% last week, where it has held. A big U.S. fiscal package - currently deadlocked in negotiations between Democrats, who have made a $3 trillion proposal, and Republicans who have tabled a more modest $1 trillion plan - could also boost the dollar if it passes. The current Republican plan would reduce an expanded unemployment benefit from $600 per week to $200 at a time when some 30 million Americans are out of work. U.S consumer confidence and manufacturing data due at 1400 GMT will also give markets the latest read on progress in the U.S. economic recovery. On the virus front, U.S. infection rates may be stabilising, with a 2% drop in the number of new cases last week - but the economic impact of curbs to restrict its spread and of job losses are only beginning to be felt.
  • Oil prices rose for a third straight day on Tuesday, buoyed by support for demand coming from efforts to stimulate the U.S. economy's recovery from the coronavirus crisis and a weakening of the dollar that makes crude cheaper for global buyers. U.S. Senate Republicans on Monday proposed a $1 trillion coronavirus aid package worked out with the White House to revitalise the economy with expanded unemployment benefits for millions due to expire this week, although Democrats urged more support. Further aiding the stimulus, the U.S. Federal Reserve's policy-setting panel meets on Tuesday and Wednesday, where it is expected to reiterate it will keep interest rates near zero for years to come. The U.S. dollar dropped to its lowest in nearly two years against a basket of six other major currencies on the back of a surge in U.S. coronavirus cases. Florida and California have now both overtaken the previous epicentre, New York. Traders will be watching out for U.S. inventory data due from the American Petroleum Institute industry group later on Tuesday and the government on Wednesday. Refined products stockpiles are expected to have declined last week, while crude oil stockpiles are expected to have held steady, five analysts polled by Reuters estimated. On the down side for fuel demand, Europe's largest low-cost airline, Ryanair, on Monday cut its annual passenger target by a quarter after bookings were hit in recent days, and warned a second wave of COVID-19 infections could lower that further.

 

 
Intraday RESISTANCE LEVELS
28th July 2020 R1 R2 R3
GOLD-XAU 1,944-1,950 1,964 1,981-1,990
Silver-XAG 24.40-24.90 25.50 26.10-27.00
Crude Oil 42.00 43.40 44.20-45.00
EURO/USD 1.1750-1.1800 1.1850 1.1900-1.1950
GBP/USD 1.2870 1.2950 1.3015-1.3090
USD/JPY 106.00-106.50 106.90 107.50-107.90

Intraday SUPPORTS LEVELS
28th 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 1.1700-1.1650 1.1620 1.1540-1.1450
GBP/USD 1.2840-1.2760 1.2680 1.2600-1.2550
USD/JPY 105.50-105.00 104.30 103.90-103.10

Intra-Day Strategy (28th 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$1945.54/oz and low of US$1899.49/oz. Gold up 2.14% at US$1941.37/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     1,981-1,990

Technical Indicators

Name   Value Action
14DRSI  

86.982

Buy
20-DMA   1818.33 Buy
50-DMA  

1766.17

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$24.57/oz and low of US$22.65/oz settled up by 0.685% at US$24.56/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 Monday made an intra‐day high of US41.84/bbl, intraday low of US$40.52/bbl and settled up by 0.607% to close at US$41.59/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)   55.130 Buy
MACD(12,26,9)   0.997 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1639/EUR, high of US$1.1780/EUR and settled the day up by 0.954% to close at US$1.1751/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 1.1700-1.1400 with risk below 1.1400, targeting 1.1750-1.1800 and 1.1850. Sell below 1.1750-1.1950 targeting 1.1700-1.1650-1.1620 and 1.1500-1.1450-1.1400 with stop-loss at daily closing above 1.1950.

 
Intraday Support Levels
S1     1.1700-1.1650
S2     1.1620
S3     1.1540-1.1450

Intraday  Resistance Levels
R1     1.1750-1.1800
R2     1.1850
R3     1.1900-1.1950

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$1.2779/GBP, high of US$1.2902/GBP and settled the day up by 0.735% to close at US$1.2881/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 1.2870-1.3090 with targets at 1.2840-1.2760-1.2680 and 1.2600-1.2490-1.2410 stop-loss should be 1.3100. Buy above 1.2840-1.2430 with targets 1.2870-1.2950 and 1.2015-1.3090 with stop loss closing below 1.2400.

 
Intraday Support Levels
S1     1.2840-1.2760
S2     1.2680
S3     1.2600-1.2550

Intraday Resistance Levels
R1     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 Monday made intra‐day low of JPY105.11/USD and made an intraday high of JPY106.09/USD and settled the day down by 0.571% at JPY105.36/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

AAFX TRADING
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