AAFX TRADING

Daily Market Lookup

  • The dollar traded higher in early European trade Wednesday, helped by a jump in U.S. yields ahead of a massive bond auction and amid hopes that the coronavirus outbreak is coming under control. The yield on 10-year U.S. debt climbed by its most in two months overnight ahead of a record $38 billion auction later on Wednesday. The move up in yields is driven by both repositioning ahead of big issuance this week and a sense that the U.S. recovery is broadening and looking more robust, said NAB senior FX strategist Rodrigo Catril, in a Reuters report. Recent reports have suggested a decline in hospitalizations in the U.S. due to the Covid-19 virus, strengthening confidence that the pandemic is coming back under control. Elsewhere, GBP/USD dropped 0.1% to 1.3045 after official figures showed the U.K. economy shrank by a record 20.4% between April and June, the largest contraction reported by any major economy to date. This means the U.K.’s economy, the world's sixth biggest, has entered a recession, its first since the financial crisis, as the previous quarter had also seen a gross domestic production contraction. That said, sterling losses were minor as a sharp slowdown during the height of the lockdowns had been expected, and there were signs of recovery in the month of June alone when gross domestic product grew by 8.7% from May. The dollar was up on Wednesday morning in Asia, with higher U.S. yields and rising hopes of a U.S. economic recovery from COVID-19 supporting the greenback. Yields on 10-year U.S. debt saw their biggest gains in two months on Tuesday, attracting Japanese investors, ahead of a massive $38 billion auction later in the day. Meanwhile, uncertainty surrounding the latest U.S. stimulus measures capped the dollar’s gains, with investors looking to see if Congress can reach a consensus for the measures. The GBP came under pressure after Tuesday's release of labor market data that missed expectations and indicated that British job losses were at their highest level in more than a decade last quarter.
  • The dollar found support on Wednesday, as a jump in U.S. yields pushed it higher against the Japanese yen and investors wagered on a broader and deeper U.S. coronavirus recovery. That attracts investment, particularly from Japan where yields at the front of the curve are pinned around or below zero, and lifted the dollar by half a percent on the yen to 106.53 - where it stayed on Wednesday. Elsewhere in financial markets, focus was on the political holdup in Washington over a new stimulus package, which capped broader investor sentiment. In Asia, the New Zealand dollar hit a three-week low following a fresh coronavirus lockdown in Auckland and ahead of a crucial central bank policy decision due at 0200 GMT. The move up in yields is driven by both repositioning ahead of big issuance this week and a sense that the U.S. recovery is broadening and looking more robust, said NAB senior FX strategist Rodrigo Catril. The dollar index has slumped 9% from a three-year high it hit in March and lost 4% in July alone, leaving investors divided over whether the support the greenback has found in August amounts to a bounce or a pause in its decline. Most analysts expect an expansion of the central bank's bond buying programme beyond the current NZ$60 billion and for negative rates to remain firmly on the table. Elsewhere the pound was under pressure following poor labour market data overnight, which showed British job losses jumping to their highest level in more than a decade last quarter U.S. inflation figures due at 1230 GMT are expected to show consumer price growth drift down to 1.1% on a year-on-year basis from 1.2% in June. Investors are also looking for signs that the political impasse in Washington over the next stimulus programme can be overcome, with the stalemate weighing on U.S. equities overnight as Democrats and Republicans blamed each other for the deadlock.
  • The dollar found support on Wednesday, as a jump in U.S. yields pushed it higher against the Japanese yen and investors wagered on a broader and deeper U.S. coronavirus recovery. The yield on 10-year U.S. debt (US10YT=RR), which rises when bond prices fall, made its steepest gain in two months overnight ahead of a record $38 billion auction later on Wednesday. That attracts investment, particularly from Japan where yields at the front of the curve are pinned around or below zero, and lifted the dollar by half a percent on the yen to 106.53 - where it stayed on Wednesday. Elsewhere in financial markets, focus was on the political holdup in Washington over a new stimulus package, which capped broader investor sentiment. The dollar index has slumped 9% from a three-year high it hit in March and lost 4% in July alone, leaving investors divided over whether the support the greenback has found in August amounts to a bounce or a pause in its decline. Most analysts expect an expansion of the central bank's bond buying programme beyond the current NZ$60 billion and for negative rates to remain firmly on the table. Elsewhere the pound was under pressure following poor labour market data overnight, which showed British job losses jumping to their highest level in more than a decade last quarter. U.S. inflation figures due at 1230 GMT are expected to show consumer price growth drift down to 1.1% on a year-on-year basis from 1.2% in June. Investors are also looking for signs that the political impasse in Washington over the next stimulus programme can be overcome, with the stalemate weighing on U.S. equities overnight as Democrats and Republicans blamed each other for the deadlock.

 

 
Intraday RESISTANCE LEVELS
12th August 2020 R1 R2 R3
GOLD-XAU 1,940-1,954 1,966 1,981-1,989
Silver-XAG 26.10¬.26.55 27.00 27.90-29.00
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 106.90-107.30 108.10 108.90-109.50

Intraday SUPPORTS LEVELS
12th August 2020 S1 S2 S3
GOLD-XAU 1932-1,900 1,890 1,870-1,862
Silver-XAG 25.10-24.30 23.35 22.90-22.50
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 1.3050-1.3015 1.2950 1.2900-1.2840
USD/JPY 106.50-105.50 104.90 104.30-103.90

Intra-Day Strategy (12th 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 Wednesday made its intraday high of US$2029.89/oz and low of US$1901.19/oz. Gold down 5.868% at US$1908.51/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 1920-1862 with risk below 1860, targeting 1940-1954-1966 and 1981-1989-2005. Sell below 1954-2005 keeping stop loss closing above 2005, targeting 1940-1954-1966 and 1981-2005.

 
Intraday Support Levels
S1     1932-1,900
S2     1,890
S3     1,870-1,862
Intraday Resistance Levels
R1     1,940-1,954
R2     1,966
R3     1,981-1,989

Technical Indicators

Name   Value Action
14DRSI  

52.098

Buy
20-DMA   1936.00 Buy
50-DMA  

1829.07

Buy
100-DMA   1761.32 Buy
200-DMA   1649.02 Buy
STOCH(5,3)   27.503 Buy
MACD(12,26,9)   47.94 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$29.24/oz and low of US$24.32/oz settled down by 15.04% at US$24.75/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 25.55-22.50 targeting 26.10-26.55-27.00 and 27.90-29.00, stop breakage below 22.50. Sell below 26.50-30.00 with stop loss above 30.00; targeting 25.90-25.00-24.30 and 23.35-22.90-22.50.

 
Intraday  Support Levels
S1     25.10-24.30
S2     23.35
S3     22.90-22.50

Intraday  Resistance Levels
R1     26.10¬.26.55
R2     27.00
R3     27.90-29.00

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 Tuesday made an intra‐day high of US43.07/bbl, intraday low of US$41.67/bbl and settled up by 1.130% to close at US$41.72/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 Tuesday an intraday low of US$1.1721/EUR, high of US$1.1807/EUR and settled the day up by 0.0213% to close at US$1.1739/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 Tuesday made an intra‐day low of US$1.3040/GBP, high of US$1.3131/GBP and settled the day up by 0.231% to close at US$1.3046/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     1.3050-1.3015
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 Tuesday made intra‐day low of JPY105.87/USD and made an intraday high of JPY106.67/USD and settled the day up by 0.524% at JPY106.48/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     106.50-105.50
S2     104.90
S3     104.30-103.90

INTRADAY RESISTANCE LEVELS
R1     106.90-107.30
R2     108.10
R3     108.90-109.50

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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