AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trade Monday, following Friday’s better-than-expected employment report. However, gains are likely to be short-lived as doubts remain about the U.S. economic recovery.Non-farm payrolls rose by 1.763 million in July, against the estimated 1.6 million increase, data showed on Friday. The unemployment rate also fell to 10.2% in July, compared to June’s reading of 10.5%. While this was a better than expected result, “the risk is this eases the pressure on politicians to agree on an immediate fiscal deal,”said analyst James Knightley at ING, in a research note. U.S. President Donald Trump kept his promise to take executive action if the U.S. Congress failed to reach a consensus over the country’s latest stimulus measures, signing four executive orders over the weekend related to Covid-19 economic relief. The orders would provide an extra $400 per week in unemployment payments, less than the $600 per week passed earlier in the crisis. However, doubts remain about the legality of the orders and whether they would have the desired impact. Meanwhile, White House officials and congressional Democrats on Sunday expressed a willingness to compromise on another stimulus package to bolster the stalled economy, but said no talks were planned. From a technical point of view, looking at the dollar index, the recent “price action lends credence to our view that a technical consolidative/corrective phase is at hand,” said Marc Chandler, Chief Market Strategist at Bannockburn Global Forex. “Further near-term dollar recovery looks likely but does not change our longer-term bearish outlook.”
  • The dollar edged higher in early European trade Monday, following Friday’s better-than-expected employment report. However, gains are likely to be short-lived as doubts remain about the U.S. economic recovery. Non-farm payrolls rose by 1.763 million in July, against the estimated 1.6 million increase, data showed on Friday. The unemployment rate also fell to 10.2% in July, compared to June’s reading of 10.5%. While this was a better than expected result, “the risk is this eases the pressure on politicians to agree on an immediate fiscal deal,”said analyst James Knightley at ING, in a research note. U.S. President Donald Trump kept his promise to take executive action if the U.S. Congress failed to reach a consensus over the country’s latest stimulus measures, signing four executive orders over the weekend related to Covid-19 economic relief. The orders would provide an extra $400 per week in unemployment payments, less than the $600 per week passed earlier in the crisis. However, doubts remain about the legality of the orders and whether they would have the desired impact. Meanwhile, White House officials and congressional Democrats on Sunday expressed a willingness to compromise on another stimulus package to bolster the stalled economy, but said no talks were planned.
  • Oil rose on Monday, supported by an improvement in Chinese factory data and rising energy demand as countries eased coronavirus-related lockdowns, but traders remained cautious due to U.S.-China tensions and uncertainty over a U.S. stimulus package. Saudi Arabian Aramco (SE:2222) Chief Executive Amin Nasser said on Sunday that he sees oil demand rebounding in Asia as economies gradually open up. China's factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, adding to signs of recovery in the world's second-largest economy. Iraq said on Friday it would cut its oil output by a further 400,000 barrels per day in August and September to compensate for its overproduction in the past three months. The move would help it comply with its share of cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+. However, uncertainty over U.S. fiscal stimulus put some pressure on prices. President Trump signed a series of executive orders to extend unemployment benefits after talks with Congress broke down. U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin said on Sunday they were open to restarting the talks. Adding to the uncertainty were ongoing tensions between Washington and Beijing. Trump signed two executive orders banning WeChat and TikTok in 45 days' time while announcing sanctions on 11 Chinese and Hong Kong officials. Markets will now keep an on a China-U.S. meeting on trade talks scheduled for this weekend. Oil was up on Monday morning in Asia after Iraq said it would step up production cuts and U.S. President Donald Trump took executive action on economic aid for Americans hit by the COVID-19 pandemic, reigniting hopes for a recovery in fuel demand. Iraq, a key member of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), announced on Friday that it will be stepping up production cuts to compensate for failing to comply with a deal made in April to limit oil production. The country will cut  production by 400,000 barrels per day in August and September. Energy ministers from Saudi Arabia and Iraq also said in a joint statement that they would work together to improve the stability of global oil markets. Over the weekend, Trump signed executive orders to provide up to $400 per week in supplemental unemployment benefits to millions of jobless Americans, although the number is less than the $600 from the previous bill which expired July 31. The measures also included a suspension of the collection of payroll taxes for social security and other federal programs until the end of this year. It is unclear how easy to implement those orders will be.

 

 
Intraday RESISTANCE LEVELS
10th August 2020 R1 R2 R3
GOLD-XAU 2,045-2,055 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 1.1800-1.1850 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
10th August 2020 S1 S2 S3
GOLD-XAU 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 1.1750-1.1700 1.1650 1.5490
GBP/USD 1.3065-1.3015 1.2950 1.2900-1.2840
USD/JPY 105.50-104.90 104.30 103.90-103.10

Intra-Day Strategy (10th 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 Friday made its intraday high of US$2075.04/oz and low of US$2015.47/oz. Gold up 1.379% at US$2034.96/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 2037-2000 with risk below 2000, targeting 2045-2055-2079 and 2090-2105. Sell below 2055-2105 keeping stop loss closing above 2100, targeting 2045-2031 2020 and 2002-1990.

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

Technical Indicators

Name   Value Action
14DRSI  

78.098

Buy
20-DMA   1925.10 Buy
50-DMA  

1820.92

Buy
100-DMA   1754.65 Buy
200-DMA   1645.05 Buy
STOCH(5,3)   73.503 Buy
MACD(12,26,9)   66.894 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 Friday made an intra‐day high of US42.35/bbl, intraday low of US$41.23/bbl and settled down by 1.057% to close at US$41.63/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 Friday an intraday low of US$1.1754/EUR, high of US$1.1882/EUR and settled the day down by 0.759% to close at US$1.1786/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 1.1750-1.1540 with risk below 1.1540, targeting 1.1800-1.1850-1.1900 and 1.1950-1.2000. Sell below 1.1800-1.2050 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     1.1750-1.1700
S2     1.1650
S3     1.5490

Intraday  Resistance Levels
R1     1.1800-1.1850
R2     1.1900
R3     1.1950-1.2000

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 Friday made an intra‐day low of US$1.3008/GBP, high of US$1.3149/GBP and settled the day down by 0.950% to close at US$1.3051/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 1.3065-1.3015-1.2950 and 1.2870-1.2760-1.2680 stop-loss should be 1.3100. Buy above 1.3065-1.2840 with targets 1.3100-1.3160-1.3200 and 1.3290-1.3350 with stop loss closing below 1.2400.

 
Intraday Support Levels
S1     1.3065-1.3015
S2     1.2950
S3     1.2900-1.2840

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

70.904

Buy
20-DMA   1.2871 Buy
50-DMA   1.2666 Buy
100-DMA   1.2501 Sell
200-DMA   1.2705 Sell
STOCH(5,3)   52.940 Sell
MACD(12,26,9)   0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY105.31/USD and made an intraday high of JPY106.04/USD and settled the day up by 0.362% at JPY105.91/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 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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