AAFX TRADING

Daily Market Lookup

  • The dollar was little changed in early trading in Europe Tuesday, with no breakthrough in the U.S. fiscal stimulus talks to push it in either direction. Risk appetite was supported somewhat by reports of a decline in hospitalizations in the U.S. due to the Covid-19 virus, strengthening confidence that the pandemic is coming back under control in response to more restrictive measures in the south and west of the country in June and July. Consensus expectations for the ZEW are for a modest decline in the main index to 58 from 59.3 in July, although the more important number will arguably be the sub-index for current conditions, which is expected to improve to -68.8 from -80.9. The euro was also flat against sterling, rising less than 0.1% to 0.8982 after U.K. labor market data showed the biggest fall in employment since 2009 in the three months through July. Some 220,000 jobs were lost and the number of people claiming jobless benefits soared by 94,400, well above the consensus forecast of 10,000 and only partially offset by a downward revision to June’s figures. Dave Ramsden, a member of the Bank of England’s Monetary Policy Council, told The Times in an interview that the Bank is still ready to add stimulus if the economy weakens again. Sterling also edged down by 0.1% against the dollar to $1.3060, keeping some support after a reasonably solid survey from the British Retail Consortium, which suggested that retail sales were 3.2% higher in July than a year ago. Pantheon Economics analyst Samuel Tombs noted that the BRC figures may flatter the underlying trend, since “services spending likely also has benefited from the release of pent-up demand and the running down of “enforced” savings.” He said this was unlikely to continue as the labor market weakens further.
  • The dollar held overnight gains on Tuesday following seven weeks of an almost relentless fall as investors clung to hopes of a bi-partisan stimulus deal in Washington and U.S. bond yields rebounded from multi-month lows. U.S. President Donald Trump on Saturday signed executive orders restoring part of enhanced unemployment payments and suspending payroll taxes. U.S. congressional leaders and Trump administration officials said on Monday they were ready to resume negotiations on a coronavirus aid deal, although it was unclear whether Democrats and Republicans would be able to bridge their differences. Investors are also keeping an eye on the rapidly deteriorating relationship between Washington and Beijing. China imposed sanctions on 11 U.S. citizens, including Republican lawmakers, following Washington's sanctions on Hong Kong and Chinese officials. U.S. Treasury Secretary Steven Mnuchin said companies from China and other countries that do not comply with accounting standards will be delisted from U.S. stock exchanges as of the end of 2021. Elsewhere, the Turkish lira stayed near a record low hit on Friday on concerns about the country's depleting foreign reserves, leading to expectations that the central bank may take more decisive action to stem its fall. With more wild swings in the Turkish currency expected, implied volatilities, calculated from option prices, have soared, with three-month volatility rising to 26.5%, its highest since April last year.
  • Crude oil gained more ground on Tuesday, with prices underpinned by expectations of U.S. stimulus and a rebound in Asian demand as economies reopen. Prices found support after U.S. President Donald Trump tweeted that top congressional Democrats wanted to meet with him on coronavirus-related economic relief. The talks between Democrats and the Trump administration broke down last week. U.S. passenger airline traffic, which was hit hard by the coronavirus pandemic, was down 80% in June from a year earlier, official figures showed, but still nearly twice the levels of May. On Sunday, Saudi Arabian Aramco CEO Amin Nasser said 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. Energy companies have begun taking back millions of barrels of oil from the U.S. government's emergency stockpile after renting storage in the facility to help manage a glut of crude this spring after energy demand collapsed during COVID-19 lockdowns, a Department of Energy website showed on Monday. Oil was up for a second day in a row Tuesday morning in Asia on signs that demand for fuel may be recovering along with renewed hope of a new stimulus package in the U.S. After signing an executive order over the weekend to kick-start $400 per week in unemployment benefits, U.S. President Donald Trump also tweeted that top congressional Democrats wanted to meet with him on COVID-19 economic relief. Indeed, China’s consumer price index (CPI) rose 2.7% in July from a year earlier, according to data from the National Bureau of Statistics released Monday, suggesting economic activity is picking up. In another sign of recovery, the producer price index (PPI) fell 2.4% from a year earlier, a smaller drop than the 3% fall recorded in June. Both numbers suggest economic activity is picking up in the second largest economy in the world Meanwhile, investors will be looking to the crude oil stock estimate from the American Petroleum Institute (API), due later in the day.

 

 
Intraday RESISTANCE LEVELS
11th August 2020 R1 R2 R3
GOLD-XAU 2,002-2,020 2,031 2,045-2,055
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 106.20-106.50 106.90 107.50-108.00

Intraday SUPPORTS LEVELS
11th August 2020 S1 S2 S3
GOLD-XAU 1,989-1,981 1,966 1,954-1,932
Silver-XAG 27.90 27.00 26.55-26.10
Crude Oil 42.00-41.00 40.60 39.50-38.50
EURO/USD 1.1730-1.1690 1.1650 1.5490-1.5450
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 (11th 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 Monday made its intraday high of US$2049.80/oz and low of US$2018.98/oz. Gold down 0.362% at US$2026.75/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     1,989-1,981
S2     1,966
S3     1,954-1,932
Intraday Resistance Levels
R1     2,002-2,020
R2     2,031
R3     2,045-2,055

Technical Indicators

Name   Value Action
14DRSI  

68.098

Buy
20-DMA   1934.10 Buy
50-DMA  

1826.29

Buy
100-DMA   1759.08 Buy
200-DMA   1647.46 Buy
STOCH(5,3)   73.503 Buy
MACD(12,26,9)   66.894 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$29.39/oz and low of US$27.78/oz settled up by 2.28% at US$29.07/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     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 Monday made an intra‐day high of US42.46/bbl, intraday low of US$41.39/bbl and settled up by 1.130% to close at US$42.04/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 Monday an intraday low of US$1.1735/EUR, high of US$1.1800/EUR and settled the day down by 0.428% to close at US$1.1736/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 1.1720-1.1540 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     1.1730-1.1690
S2     1.1650
S3     1.5490-1.5450

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.032 Buy
20-DMA   1.1673 Buy
50-DMA   1.1435 Buy
100-DMA   1.1173 Buy
200-DMA   1.1109 Buy
STOCH(5,3)   20.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3018/GBP, high of US$1.3102/GBP and settled the day up by 0.144% to close at US$1.3071/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 Monday made intra‐day low of JPY105.70/USD and made an intraday high of JPY106.19/USD and settled the day up by 0.143% at JPY105.95/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     106.20-106.50
R2     106.90
R3     107.50-108.00

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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