AAFX TRADING

Daily Market Lookup

  • The dollar was mired at a more than two-year low on Thursday as the Federal Reserve repeated a pledge to limit damage from the pandemic as surging new coronavirus cases hamper the economy. The Fed's policy statement released at the close of its two-day meeting directly tied the economic recovery to an end the coronavirus health crisis. The dollar has been tumbling on expectations that the Fed will continue its ultra loose monetary policy for years to come and on speculation that it will allow inflation to run higher than it has previously indicated before raising interest rates. The dollar's decline came as investors started to doubt the conventional wisdom that U.S. economic growth and investment returns from the U.S. currency would be higher than many other countries. The U.S. epidemic has intensified since June, with an average of around 65,000 new cases detected each day, putting a brake on the rebound in economic activity and dashing hopes of V-shaped recovery. A government report due out later in the day is expected to show a record 34% drop in annualised economic output last quarter Adding to investor alarm, U.S. congressional Republicans and Democrats were struggling to reach a deal on stimulus and slid toward letting a $600-per-week unemployment benefit lapse when it expires this week. Elsewhere, the Turkish lira dropped to a 2-1/2-month low against the dollar and a record low versus the euro , on rising concerns over depleted reserves and local demand for dollars despite state efforts to stabilise trading.
  • The dollar was down on Thursday morning, edging towards two-year low and reversing some earlier gains after the U.S. Federal Reserve stuck to a widely-expected script as its two-day meeting concluded on Wednesday. The Fed kept interest rates near zero and vowed to use all available tools to support the recovery from the most severe economic downturn “in our lifetime”, Fed Chairman Jerome Powell said at a virtual press conference on Wednesday. The Fed also tied economic recovery to an end to the COVID-19 pandemic, with Powell warning that there are signs that increases in the number of COVID-19 cases are starting to weigh on economic activity. But some investors were already looking ahead to Fed meetings scheduled for later in the year, when bigger changes to the Fed’s strategy could be unveiled. The dollar been on a days-long retreat over expectations that the Fed will continue its current monetary policy, and on speculation that it will allow inflation to run higher than it has previously indicated before raising interest rates The dollar cut its losses on Wednesday even as the Federal Reserve left interest rates unchanged and extended its temporary dollar liquidity swap lines. The Fed kept its benchmark rate within a 0%-to-0.25% range and pledged to keep rates near zero "until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals." The central bank announced it would extend its U.S. dollar liquidity swap lines and temporary repo operations through March 31, 2021. After an initial move lower, the dollar cut some of its losses. The central bank first rolled out the currency stimulus measures when the Covid-19 pandemic struck in March, amid concerns about strains in global dollar funding markets. The weakness in the dollar had been well documented heading into the Fed meeting, with many on Wall Street expecting the central bank to reiterate its commitment to keep rates lower for longer – a commitment that has seen the dollar plunge nearly 10% since hitting a peak in March. The urgency to support the broader market was backed up by Fed Chairman Jerome Powell, who warned that the resurgence in coronavirus cases has hampered the economic outlook.
  • Oil was mixed on Thursday morning in Asia, with prices rising after the U.S. Energy Information Administration (EIA) recorded a huge draw in crude oil inventories. But gains were capped by the U.S. Congress’ squabble over the latest COVID-19 stimulus package as well as rising infections globally. The EIA recorded a 10.612 million-barrel draw in inventories for the week ending July 24, its biggest since 2019. The draw was substantially higher than forecasts for a 0.357 million-barrel build prepared by Investing.com. But ANZ analysts warned in a note that the draw “wasn’t all good news, with signs that demand is still struggling to grow.” Demand is likely to be hampered as fresh outbreaks cause some countries to re-impose lockdown measures. There are almost 17 million COVID-19 cases globally as of July 30, according to Johns Hopkins University data. The Australian city of Melbourne reported a record number of daily cases on Thursday. Meanwhile, investors will be watching out for OPEC’s next move as production cuts of 9.7 million barrels per day agreed upon in April, which were extended in June, are set to ease to a cut of 7.7 million barrels per day from August to December. Weakened demand could also see Saudi Arabia reduce the price of its oil once the cuts are eased.

 

 
Intraday RESISTANCE LEVELS
30th July 2020 R1 R2 R3
GOLD-XAU 1,964 1,981-1,990 2,000
Silver-XAG 24.00-24.40 24.90 25.50-26.10
Crude Oil 42.00 43.40 44.20-45.00
EURO/USD 1.1750-1.1800 1.1850 1.1900-1.1950
GBP/USD 1.2950 1.3015-1.3090 1.3150
USD/JPY 105.50-106.00 106.50 106.90-107.50

Intraday SUPPORTS LEVELS
30th July 2020 S1 S2 S3
GOLD-XAU 1,950-1,944 1,927 1,911-1,900
Silver-XAG 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 1.2900-1.2840 1.2760 1.2680-1.2600
USD/JPY 104.90 104.30 103.90-103.10

Intra-Day Strategy (30th 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 Wednesday made its intraday high of US$1980.74/oz and low of US$1941.29/oz. Gold up 0.771% at US$1969.99/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 1950-1900 with risk below 1880, targeting 1964-1981 and 1990-2000. Sell below 1964-2000 keeping stop loss closing above 2000, targeting 1950-1944-1927 and 1911-1900.

 
Intraday Support Levels
S1     1,950-1,944
S2     1,927
S3     1,911-1,900
Intraday Resistance Levels
R1     1,964
R2     1,981-1,990
R3     2,000

Technical Indicators

Name   Value Action
14DRSI  

87.982

Buy
20-DMA   1836.63 Buy
50-DMA  

1774.65

Buy
100-DMA   1715.98 Buy
200-DMA   1624.58 Buy
STOCH(5,3)   86.503 Sell
MACD(12,26,9)   47.894 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$24.92/oz and low of US$23.26/oz settled down by 0.662% at US$24.28/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     23.50
S2     22.80
S3     22.00-21.50

Intraday  Resistance Levels
R1     24.00-24.40
R2     24.90
R3     25.50-26.10

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 Wednesday made an intra‐day high of US41.63/bbl, intraday low of US$41.63/bbl and settled up by 0.259% to close at US$41.30/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 Tuesday an intraday low of US$1.1711/EUR, high of US$1.1805/EUR and settled the day down by 0.651% to close at US$1.1790/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 Wednesday made an intra‐day low of US$1.2911/GBP, high of US$1.3012/GBP and settled the day up by 0.502% to close at US$1.2995/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 1.2950-1.3090 with targets at 1.2870-1.2760-1.2680 and 1.2600-1.2490-1.2410 stop-loss should be 1.3100. Buy above 1.2870-1.2430 with targets 1.2870-1.2950 and 1.2015-1.3090 with stop loss closing below 1.2400.

 
Intraday Support Levels
S1     1.2900-1.2840
S2     1.2760
S3     1.2680-1.2600

Intraday Resistance Levels
R1     1.2950
R2     1.3015-1.3090
R3     1.3150

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 Wednesday made intra‐day low of JPY104.76/USD and made an intraday high of JPY105.23/USD and settled the day down by 0.162% at JPY104.91/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 105.50-111.00 with risk above 111.00 targeting 104.90-104.50 and 103.90-103.10. Long positions above 105.00-103.00 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     104.90
S2     104.30
S3     103.90-103.10

INTRADAY RESISTANCE LEVELS
R1     105.50-106.00
R2     106.50
R3     106.90-107.50

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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