AAFX TRADING

Daily Market Lookup

  • The dollar was down in Asia on Wednesday morning, with hopes of a U.S. economic recovery from COVID-19 continuing to diminish. Investors retreated from the greenback as the U.S. Congress failed to reach a consensus over the country’s latest stimulus measures and U.S. yields continue to plummet. Although White House negotiators vowed on Tuesday to work “around the clock” to reach a consensus by the end of this week, U.S. Treasury Secretary Steven Mnuchin warned that “we’re not going anywhere close” to the $3.4 trillion price tag sought by Democrats. The USD/CNY pair fell 0.09% to 6.9656. U.S. and Chinese officials are reported to be meeting to review the implementation of the phase 1 trade deal between the two countries, as well as discussing mutual grievances during an August 15 videoconference. Meanwhile, the dollar’s losses have been the Euro’s gain after the European Union reached a consensus on a COVID-19 rescue package in July. The Euro posted its best month in almost a decade against the greenback in the same month But some investors suggested that a pile-in could provide more support to the greenback, with equity investors still skeptical over the EU package’s ability to kick start the European economic recovery from COVID-19.
  • The dollar was lower in early European trade Wednesday, weighed by doubts about a prompt U.S. economic recovery amid continued political wrangling over the latest U.S. relief plan from the corona virus pandemic. A hardening perception that the U.S. economic rebound is lagging Europe, particularly given how the two regions have responded to the Covid-19 outbreak, has weighed heavily on the dollar in favour of the buoyant single currency. This perception has been given more weight of late by the stalemate in Congress over the proposed new stimulus to boost the hard-hit U.S. economy, while the European Union was recently able to pass a 750-billion-euro package, including the principle of collective debt. Although White House negotiators vowed on Tuesday to work “around the clock” to reach a consensus by the end of this week, U.S. Treasury Secretary Steven Mnuchin warned that “we’re not going anywhere close” to the $3.4 trillion price tag sought by Democrats. The need for more aid is likely to be illustrated with private U.S. payrolls data, due at 8:15 AM ET (1215 GMT), likely to show a slowdown in hiring as the second wave of the coronavirus resulted in various states rolling back their reopening plans. The weekly initial jobless claims data has shown a slight increase in the number of people claiming unemployment benefits over the last couple of weeks, and this could translate into a very disappointing official payrolls release on Friday.
  • Gold was up on Wednesday morning in Asia, continuing to set record highs after breaking past the $2,000 per ounce mark. The price of gold continues to be supported by ongoing weakness in the dollar as well as light-at-the-end-of-the-tunnel of negotiations for a new COVID-related aid package in the U.S. The greenback was down in Asia, giving up gains from Tuesday and adding to investor interest in the yellow metal. At the same time, negotiations in the U.S. for a new aid package appear to be moving forward. A meeting between Democratic leaders and the White House on Tuesday ended on a positive note. Senate Majority Leader Mitch McConnell also said that he is prepared to support a deal even if he does not agree with parts of it. Meanwhile, low interest rates continue to support the relentless march upwards of gold, with some experts predicting a possible negative interest rate environment.
  • Oil was up on Wednesday morning in Asia after the American Petroleum Institute (API) recorded an inventory draw on Tuesday, but gains were capped over a worsening COVID-19 situation globally. The API reported a draw of 8.587 million barrels of crude for the week ending July 31. That was considerably higher than the 3.3 million barrel draw in forecasts prepared by Investing.com. The size of the draw suggests there may be enough demand to absorb an increase in production this month by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) and that could support oil prices. But a huge explosion at Lebanon’s main port Beirut on Tuesday raised concerns about renewed instability in the Middle East, one of the largest oil producers. An investigation into the cause of the explosion is ongoing. Meanwhile, the U.S. recorded more than 1,000 new COVID related deaths yesterday for the ninth day in a row. Australia’s Queensland state also announced that it would close its border with New South Wales today to hold back a second wave of COVID-19, dampening investor hopes of fuel demand recovery. But there are signs that the U.S. Congress could be moving towards approving a COVID-19 aid package quickly after a meeting Tuesday ended on a positive note. Investors will be looking at predictions from the U.S. Energy Information Administration (EIA), due later today.

 

 
Intraday RESISTANCE LEVELS
5th August 2020 R1 R2 R3
GOLD-XAU 2,031-2,037 2,045 2,055-2,090
Silver-XAG 26.55-27.00 27.90 28.50-29.00
Crude Oil 42.00-43.15 44.10 45.00-46.30
EURO/USD 1.1850 1.1900-1.1950 1.2000
GBP/USD 1.3100-1.3160 1.3210 1.3290-1.3350
USD/JPY 106.00 106.50 106.90-107.50

Intraday SUPPORTS LEVELS
5th August 2020 S1 S2 S3
GOLD-XAU 2,020-2,002 1,990 1,981-1,964
Silver-XAG 26.10-25.50 24.90 24.00-23.50
Crude Oil 41.00-40.60 39.50 38.50-37.60
EURO/USD 1.1800-1.1750 1.1700 1.1650-1.1620
GBP/USD 1.3015-1.2950 1.2900 1.2840-1.2760
USD/JPY 105.50-104.90 104.30 103.90-103.10

Intra-Day Strategy (5th August 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$2019.81/oz and low of US$1966.47/oz. Gold up 2.189% at US$2018.50/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 2020-1964 with risk below 1964, targeting 2031-2037-2045 and 2055-2090. Sell below 2031-2090 keeping stop loss closing above 2100, targeting 2020-2002-1990 and 1981-1964-1950.

 
Intraday Support Levels
S1     2,020-2,002
S2     1,990
S3     1,981-1,964
Intraday Resistance Levels
R1     2,031-2,037
R2     2,045
R3     2,055-2,090

Technical Indicators

Name   Value Action
14DRSI  

92.982

Buy
20-DMA   1888.23 Buy
50-DMA  

1801.77

Buy
100-DMA   1737.79 Buy
200-DMA   1636.71 Buy
STOCH(5,3)   92.503 Buy
MACD(12,26,9)   61.894 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$26.02/oz and low of US$24.11/oz settled up by 6.630% at US$25.90/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 20DMA (21.60), breakage below will lead to 19.40. 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 neutral region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 26.00-23.55 targeting 26.55-27.00-27.90 and 28.50-29.00; stop breakage below 21.50. Sell below 27.00-29.00 with stop loss above 29.00; targeting 26.10-25.50-24.00 and 23.50-22.80.

 
Intraday  Support Levels
S1     26.10-25.50
S2     24.90
S3     24.00-23.50

Intraday  Resistance Levels
R1     26.55-27.00
R2     27.90
R3     28.50-29.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.514 Buy
20-DMA   21.60 Buy
50-DMA   19.42 Buy
100-DMA   17.17 Buy
200-DMA   17.29 Buy
STOCH(5,3)   64.268 Buy
MACD(12,26,9)   0.831 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US42.16/bbl, intraday low of US$40.28/bbl and settled up by 1.500% to close at US$41.52/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 40.60-36.50 with risk daily closing below 36.65 and targeting 41.20-42.00 and 43.40-44.00. Sell in between 41.00-44.60 with stop loss at 45.00; targeting 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     42.00-43.15
R2     44.10
R3     45.00-46.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.099 Sell
20-DMA   40.83 Buy
50-DMA   39.16 Buy
100-DMA   32.14 Buy
200-DMA   43.23 Sell
STOCH(5,3)   64.130 Buy
MACD(12,26,9)   0.997 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1720/EUR, high of US$1.1805/EUR and settled the day up by 0.340% to close at US$1.1801/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 1.1800-1.1540 with risk below 1.1540, targeting 1.1850-1.1900-1.1950 and 1.2000-1.2050. Sell below 1.1850-1.2050 targeting 1.1800-1.1720-1.1650 and 1.1500-1.1450-1.1400 with stop-loss at daily closing above 1.1950.

 
Intraday Support Levels
S1     1.1800-1.1750
S2     1.1700
S3     1.1650-1.1620

Intraday  Resistance Levels
R1     1.1850
R2     1.1900-1.1950
R3     1.2000

TECHNICAL INDICATORS
Name   Value Action
14DRSI   73.032 Buy
20-DMA   1.1258 Buy
50-DMA   1.1381 Buy
100-DMA   1.1130 Buy
200-DMA   1.1096 Buy
STOCH(5,3)   45.758 Buy
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2980/GBP, high of US$1.3107/GBP and settled the day up by 0.025% to close at US$1.3012/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 1.3100-1.3350 with targets at 1.3015-1.2950-1.2870 and 1.2760-1.2680-1.2600 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     1.3015-1.2950
S2     1.2900
S3     1.2840-1.2760

Intraday Resistance Levels
R1     1.3100-1.3160
R2     1.3210
R3     1.3290-1.3350

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 Tuesday made intra‐day low of JPY105.63/USD and made an intraday high of JPY106.18/USD and settled the day down by 0.217% at JPY105.71/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 105.50-104.90-104.50 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     105.50-104.90
S2     104.30
S3     103.90-103.10

INTRADAY RESISTANCE LEVELS
R1     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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