AAFX TRADING

Daily Market Lookup

  • The dollar weakened in early European trade Thursday, amid fading hopes for additional economic stimulus while inflation figures surprised to the upside. Weighing on the greenback has been the inability of the U.S. lawmakers to come to any sort of consensus regarding the country’s latest Covid-19 stimulus package, a deal that many feel is necessary to keep the economic recovery on track. U.S. President Donald Trump accused Democrats on Wednesday of not wanting to negotiate over the package, with Republican and Democratic negotiators trading barbs and blame as negotiations ended without a result for the fifth day. On Tuesday, Richmond Fed President Thomas Barkin stated that the economy could take another downturn if U.S. policymakers fail to provide more financial aid. He was backed up Wednesday by Federal Reserve Bank of Boston President Eric Rosengren, who said he "strongly" supported taking additional fiscal action to help businesses and households survive the crisis. But, added more spending should be combined with more robust efforts to contain the virus. U.S. deaths caused by Covid-19 topped 166,000 as of Aug. 13, with confirmed cases rising by more than 4% in the past week, according to data collected by Johns Hopkins University. Adding to the problems facing the dollar were the latest inflation figures, with strong numbers from both the consumer and producer sides. With the Federal Reserve already committed to keeping its benchmark rates at these very lows for some time, the pressure is building on U.S. real yields.
  • The dollar was down on Thursday morning in Asia, reversing its gains from the day before over the U.S. Congress’ inability to reach a consensus for the country’s latest COVID-19 stimulus package. U.S. President Donald Trump went so far as to accuse Democrats on Wednesday of not wanting to negotiate over the package, with Republican and Democratic negotiators trading barbs and blame as negotiations ended without a result for the fifth day. COVID-19 continues to impact U.S. economic recovery, with almost 5.2 million cases in the U.S. alone as of August 13, according to Johns Hopkins University and millions unemployed. Although investors have swung between optimism and pessimism over the stalled package, some argued that U.S. economic recovery depended on both sides reaching an agreement. The AUD/USD pair was up 0.08% to 0.7167, with the Australian Bureau of Statistics releasing a positive jobs report for July earlier in the day. The report said that 114,700 jobs were added in July, beating analyst expectations of 40,000 jobs prepared by Investing.com. July’s unemployment rate of 7.5% also beat expectations. But the country’s fight against COVID-19 goes on, although the country was poised to report its lowest one-day rise in the number of cases in more than three weeks on Thursday. The USD/CNY pair was up 0.03% to 6.9383, with Chinese officials widely expected to bring up Trump’s ban of the TikTok and WeChat apps, due to be enforced in September, during an online meeting with U.S. officials on Saturday. The two sides will also discuss trade, as well as air other grievances, during the meeting.
  • Crude oil prices slipped on Thursday after OPEC said it expected demand for fuels to fall more than expected, although U.S. government data showing a fall in inventories suggested demand is returning despite the coronavirus pandemic. The Organization of the Petroleum Exporting Countries (OPEC)said in a monthly report that world oil demand will fall by 9.06 million bpd this year, more than the 8.95 million bpd decline expected a month ago. Still, U.S. crude oil, gasoline and distillate inventories fell last week as refiners ramped up production and demand improved, a government report showed. [EIA/S] U.S. fuel demand rose to 19.37 million barrels per day last week, the highest since March, data from the Energy Information Administration (EIA) showed, while crude output fell to 10.7 million barrels per day (bpd) from 11 million bpd. Crude inventories fell by 4.5 million barrels, compared with analysts' expectations in a Reuters poll for a 2.9 million-barrel drop. The EIA's downward revision on Tuesday to a key U.S. oil production forecast for this year is helping support prices. U.S. crude production is forecast decline by 990,000 bpd this year to 11.26 million bpd, steeper than the 600,000 bpd decline it forecast last month, which indicated that world oil demand remains questionable. Increasing uncertainty over a stalemate in Washington on a stimulus package to support recovery from the deepest impact of the coronavirus pandemic may also weigh on prices, analysts said.

 

 
Intraday RESISTANCE LEVELS
13th 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 1.1850 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
13th August 2020 S1 S2 S3
GOLD-XAU 1920-1,900 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 1.1800-1.1730 1.1690 1.1650-1.5490
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 (13th 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$1949.29/oz and low of US$1862.45/oz. Gold up 0.261% at US$1914.78/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     1920-1,900
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 Wednesday made its intraday high of US$26.27/oz and low of US$23.36/oz settled up by 2.80% at US$25.42/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 Wednesday made an intra‐day high of US43.10/bbl, intraday low of US$41.72/bbl and settled up by 2.05% to close at US$42.68/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$1.1710/EUR, high of US$1.1816/EUR and settled the day up by 0.375% to close at US$1.1783/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 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     1.1800-1.1730
S2     1.1690
S3     1.1650-1.5490

Intraday  Resistance Levels
R1     1.1850
R2     1.1900
R3     1.1950-1.2000

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.032 Buy
20-DMA   1.1713 Buy
50-DMA   1.1456 Buy
100-DMA   1.1190 Buy
200-DMA   1.1169 Buy
STOCH(5,3)   36.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3004/GBP, high of US$1.3066/GBP and settled the day down by 0.127% to close at US$1.3031/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 JPY106.25/USD and made an intraday high of JPY107.76/USD and settled the day up by 0.404% at JPY107.32/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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