AAFX TRADING

Daily Market Lookup

  • The dollar pushed higher in early European trade Friday, reprising its role as a safe haven amid renewed tensions between the U.S. and China, but gains are likely to be capped by the stalemate in the U.S. Congress over the latest stimulus package ahead of the release of the official monthly jobs report. EUR/USD was down 0.3% at 1.1842, despite German and French industrial production both handsomely beating expectations for June. Germany's exports also rose 12.7% on the month in June. The data all point to a considerable rebound in activity at the end of the second quarter. U.S. President Donald Trump ratcheted up already-heightened tensions with Beijing, and fueled some demand for the dollar, by announcing late Thursday that his administration was banning U.S. transactions with two popular Chinese apps, Tencent's WeChat and ByteDance's Tiktok. Tension has been simmering between the two powers for months, with the United States unhappy with China's handling of the novel coronavirus outbreak and moves to curb freedoms in Hong Kong. That said, these gains look temporary as sentiment has turned against the greenback due to a combination of rising U.S. coronavirus infections, a steady decline in Treasury yields, and more immediately a lack of consensus in Washington over additional fiscal stimulus. U.S. Republicans and Democrats have so far failed to reach an agreement on the size and makeup of a new fiscal stimulus package that many think is needed to prevent the U.S. economy from losing more momentum. Jobless claims data released Thursday still showed over 31 million Americans claiming benefits, and the non-farm payrolls release later on Friday is expected to show U.S. job creation slowed in July, with expectations for an increase of 1.6 million jobs in the month, a sharp slowdown from the record 4.8 million in June. The Turkish central bank has delivered 1,575 basis points of interest-rate cuts in nine consecutive steps since July 2019, in attempting to boost growth while driving borrowing costs adjusted for inflation below zero.
  • The dollar nursed losses against major currencies on Friday ahead of the U.S. non-farm payrolls report, which some investors fear could reinforce the view that momentum in the world's largest economy is slowing. Sentiment has turned against the greenback due to a combination of rising U.S. coronavirus infections, a steady decline in Treasury yields, and a lack of consensus in Washington over additional fiscal stimulus. Analysts say the dollar will continue to fall, particularly against the euro, the yen and Swiss franc, as expectations for a V-shaped recovery from the coronavirus epidemic fade and investors take a more sanguine view of markets. Non-farm payrolls due later on Friday are widely expected to show U.S. jobs creation slowed in July from the previous month, indicating a resurgence in coronavirus infections is undermining the economic recovery there. U.S. Republicans and Democrats have so far failed to reach an agreement on the cost of fiscal stimulus measures that many investors say is necessary to prevent the economy form losing more momentum. U.S. President Donald Trump on Thursday issued an executive order banning transactions with ByteDance, the Chinese company that owns the video-sharing app TikTok, saying the app is a threat to national security. Trump also said he will ban transactions with Chinese firm Tencent Holdings Ltd (HK:0700), which owns the WeChat messaging app. The bans will start in 45 days and mark an escalation of a row over China's ambitions in the technology sector. The yuan took the news in its stride, holding steady at 6.9568 per dollar , but speculation about retaliation from Beijing could hurt risk sentiment further.
  • Oil was down on Friday morning in Asia as some of the biggest oil producing members of the Organization of the Petroleum Exporting Countries and Allies (OPEC+) vouched to fully commit to production cuts. The Iraqi state news agency said on Friday that Saudi Arabia and Iraq have stressed that they will fully commit to cutting production under an earlier OPEC deal reached in April that cut production by 9.7 million bpd. Under that deal, Iraq is expected to cut output by 1.06 million barrels, pushing oil prices up. Earlier on Thursday, Iraq also pledged to make additional production cuts of about 400,000 bpd to compensate for its overproduction over the past months in violation of the OPEC+ supply reduction pact. The impact of COVID-19 on fuel demand also continue to affect countries around the world contributing to the drop in the black liquid.
  • The Institute for Health Metrics and Evaluation said that the U.S. is now forecasting 295,011 deaths by December. Meanwhile, global COVID-19 cases surpassed 19 million and the U.S. death toll to date surpassed 160,000, according to Johns Hopkins University data, creating fresh fears that drastic lockdowns may be imposed again.

 

 
Intraday RESISTANCE LEVELS
7th August 2020 R1 R2 R3
GOLD-XAU 2,055-2,079 2,090 2,105
Silver-XAG 29.00-29.35 30.00 30.30-31.00
Crude Oil 43.15 44.10 45.00-46.30
EURO/USD 1.1850-1.1900 1.1950 1.2000-1.2060
GBP/USD 1.3160 1.3210 1.3290-1.3350
USD/JPY 106.00 106.50 106.90-107.50

Intraday SUPPORTS LEVELS
7th August 2020 S1 S2 S3
GOLD-XAU 2,045-2,037 2,031 2,020-2,002
Silver-XAG 28.50-27.90 27.00 26.55-26.10
Crude Oil 42.00-41.00 40.60 39.50-38.50
EURO/USD 1.1800 1.1750 1.1700-1.1650
GBP/USD 1.3100-1.3015 1.2950 1.2900-1.2840
USD/JPY 105.50-104.90 104.30 103.90-103.10

Intra-Day Strategy (7th 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 Thursday made its intraday high of US$2069.64/oz and low of US$2034.35/oz. Gold up 1.118% at US$2061.37/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 2045-2000 with risk below 2000, targeting 2055-2079 and 2090-2105. Sell below 2055-2105 keeping stop loss closing above 2100, targeting 2045-2031 2020 and 2002-1990.

 
Intraday Support Levels
S1     2,045-2,037
S2     2,031
S3     2,020-2,002
Intraday Resistance Levels
R1     2,055-2,079
R2     2,090
R3     2,105

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 Thursday made its intraday high of US$29.06/oz and low of US$26.78/oz settled up by 7.192% at US$28.81/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 28.50-25.55 targeting 29.00-29.35-30.00 and 30.30-31.00 stop breakage below 25.50. Sell below 27.90-30.00 with stop loss above 30.00; targeting 27.00-26.10-25.50 and 24.00-23.50.

 
Intraday  Support Levels
S1     28.50-27.90
S2     27.00
S3     26.55-26.10

Intraday  Resistance Levels
R1     29.00-29.35
R2     30.00
R3     30.30-31.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   84.514 Buy
20-DMA   22.48 Buy
50-DMA   19.69 Buy
100-DMA   17.48 Buy
200-DMA   17.38 Buy
STOCH(5,3)   95.268 Buy
MACD(12,26,9)   2.097 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US42.77/bbl, intraday low of US$41.77/bbl and settled down by 0.776% to close at US$42.01/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 42.00-38.50 with risk daily closing below 36.65 and targeting 43.10-44.10-45.00 and 46.30. Sell in between 43.00-46.30 with stop loss at 46.30; targeting 42.00-41.00-40.60 and 39.50-38.50.

 
Intraday Support Levels
S1     42.00-41.00
S2     40.60
S3     39.50-38.50

Intraday Resistance Levels
R1     43.15
R2     44.10
R3     45.00-46.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.099 Sell
20-DMA   41.06 Buy
50-DMA   39.57 Buy
100-DMA   32.50 Buy
200-DMA   43.09 Sell
STOCH(5,3)   62.130 Buy
MACD(12,26,9)   0.738 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday an intraday low of US$1.1817/EUR, high of US$1.1915/EUR and settled the day up by 0.515% to close at US$1.1876/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
S2     1.1750
S3     1.1700-1.1650

Intraday  Resistance Levels
R1     1.1850-1.1900
R2     1.1950
R3     1.2000-1.2060

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 Thursday made an intra‐day low of US$1.3110/GBP, high of US$1.3184/GBP and settled the day up by 0.215% to close at US$1.3141/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 1.3160-1.3350 with targets at 1.3100-1.3015-1.2950 and 1.2870-1.2760-1.2680 stop-loss should be 1.3100. Buy above 1.3100-1.2840 with targets 1.3160-1.3200-1.3290 and 1.3350 with stop loss closing below 1.2400.

 
Intraday Support Levels
S1     1.3100-1.3015
S2     1.2950
S3     1.2900-1.2840

Intraday Resistance Levels
R1     1.3160
R2     1.3210
R3     1.3290-1.3350

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

80.904

Buy
20-DMA   1.2824 Buy
50-DMA   1.2641 Buy
100-DMA   1.2471 Sell
200-DMA   1.2704 Sell
STOCH(5,3)   72.940 Sell
MACD(12,26,9)   0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY105.31/USD and made an intraday high of JPY105.69/USD and settled the day down by 0.111% at JPY105.54/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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