AAFX TRADING

Daily Market Lookup

  • The dollar weakened in early European trade Monday, weighed by worries about the U.S. economic recovery as political tensions rise and ahead of the release of the latest Federal Reserve minutes. The number of unemployment claims dipped below the one million mark late last week for the first time since the Covid-19 outbreak, but this would hardly be cause to celebrate given the grim reality that more than 30 million Americans are out of work. All the time the Covid-19 virus continues to wreak havoc, with the United States surpassing 170,000 coronavirus deaths on Sunday, according to a data from Johns Hopkins University. The country's public health officials and authorities are concerned about a possible fall resurgence in cases amid the start of the flu season, which will likely exacerbate efforts to treat the coronavirus. With the Democratic national convention starting on Monday, traditionally the starting point for November’s presidential election, and the two sides seemingly further away than ever, a compromise that results in a new stimulus package seems an unlikely prospect. The latest bone of contention between the two warring factions centers around the U.S. Postal Service, with the Democrats accusing President Donald Trump of trying to hamstring the cash-strapped organisation to suppress mail-in voting. Of interest this week will be the release of Federal Reserve minutes on Thursday, with markets looking for any hints of a possible change to the central bank's guidance at its next meeting in September. These dollar losses could also be sustained going forward as hedge funds have now turned bearish on the greenback for the first time since May 2018. Net futures and forward positions held by leveraged funds against eight other currencies dropped to minus 7,881 contracts last week, according to data aggregated from the Commodity Futures Trading Commission, Bloomberg reported.
  • The dollar was down on Monday morning, but capped its losses after a meeting between U.S. and Chinese officials, originally scheduled for Saturday, was delayed. Scheduling conflicts reportedly led to the postponement of an online meeting to discuss trade, as well as other issues. Some investors welcomed the news, with the delay leaving the phase one trade deal between the two countries intact for now. Investors are also keeping an eye on the U.S. presidential elections, now less than three months away as the four-day Democratic national convention due to being later in the day. The U.S. Federal Reserve is due to release its minutes on Thursday, with investors on the lookout for any clues to policy changes ahead of the Fed’s September meeting. Investors are expecting more tolerance in the Fed’s approach to inflation, Chris Weston, head of research at Pepperstone, told Reuters. Meanwhile, the number of COVID-19 cases continues a relentless march upwards. There are almost 21.6 million cases globally as of August 17, according to Johns Hopkins University data. Europe reported fresh COVID-19 outbreaks over the weekend, with Italy and Spain ordering nightclubs shut and France warning of an uptick of cases. The fresh outbreaks are also challenging the Euro, which has been on an upward trend since the European Union struck a deal for a EUR750 billion ($888.036 billion) COVID-19 stimulus package in July.
  • Oil prices rose on Monday as China's plans to ship in large volumes of U.S. crude in August and September outweighed concerns over a slowdown in demand recovery after the coronavirus pandemic and an uptick in supplies. Chinese state-owned oil firms have tentatively booked tankers to transport at least 20 million barrels of U.S. crude for August and September, Reuters reported on Friday, as China ramped up energy and farm purchases ahead of a review of the Sino-U.S. trade deal. Record crude imports from the world's top importer and the easing of COVID-19 restrictions globally have supported oil prices, although new waves of coronavirus outbreaks in several countries are expected to cool consumption again. ANZ estimated that demand has risen 8 million barrels per day (bpd) over the past four months to 88 million bpd - still 13 million bpd below this time last year. Investors are looking for more clues on future supply from a meeting this week of a panel representing ministers of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+. The meeting of the panel has been pushed back to Aug. 19, a day later than previously planned. The panel, called the Joint Ministerial Monitoring Committee (JMMC), monitors OPEC+ production curbs agreed earlier this year. Last month the JMMC recommended that cuts be eased from Aug. 1 to about 7.7 million barrels per day (bpd) from a reduction of 9.7 million bpd since May, in line with an earlier OPEC+ agreement. In the United States, meanwhile, the number of oil and natural gas rigs operating last week remained anchored at a record low for a 15th week, even as higher oil prices prompt some producers to start drilling again.

 

 
Intraday RESISTANCE LEVELS
17th August 2020 R1 R2 R3
GOLD-XAU 1,966-1,981 1,989 2,005-2,050
Silver-XAG 27.00-27.90 29.00 29.80-30.50
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
17th August 2020 S1 S2 S3
GOLD-XAU 1,940-1920 1,900 1,890-1,870
Silver-XAG 26.10-26.55 25.10 24.30-23.35
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 106.10-105.50 104.90 104.30-103.90

Intra-Day Strategy (17th 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$1962.12/oz and low of US$1932.21/oz. Gold down 0.458% at US$1944.46/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 1944-1862 with risk below 1860, targeting 1966-1981 and 1989-2005. Sell below 1966-2005 keeping stop loss closing above 2005, targeting 1940-1920-1900 and 1890-1870.

 
Intraday Support Levels
S1     1,940-1920
S2     1,900
S3     1,890-1,870
Intraday Resistance Levels
R1     1,966-1,981
R2     1,989
R3     2,005-2,050

Technical Indicators

Name   Value Action
14DRSI  

56.043

Buy
20-DMA   1956.56 Buy
50-DMA  

1843.89

Buy
100-DMA   1770.91 Buy
200-DMA   1655.02 Buy
STOCH(5,3)   46.503 Buy
MACD(12,26,9)   34.45 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$27.70/oz and low of US$25.72/oz settled down by 6.237% at US$26.43/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 26.10-22.50 targeting 27.00-27.90-29.00 and 29.80-30.50, stop breakage below 22.50. Sell below 27.00-30.00 with stop loss above 30.00; targeting 26.10-25.00-24.30 and 23.35-22.90-22.50.

 
Intraday  Support Levels
S1     26.10-26.55
S2     25.10
S3     24.30-23.35

Intraday  Resistance Levels
R1     27.00-27.90
R2     29.00
R3     29.80-30.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.514 Buy
20-DMA   24.90 Buy
50-DMA   20.81 Buy
100-DMA   18.30 Buy
200-DMA   17.66 Buy
STOCH(5,3)   49.268 Buy
MACD(12,26,9)   1.914 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US42.80/bbl, intraday low of US$41.89/bbl and settled up by 0.439% to close at US$42.37/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$1.1780/EUR, high of US$1.1849/EUR and settled the day up by 0.247% to close at US$1.1814/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 Friday made an intra‐day low of US$1.3047/GBP, high of US$1.3141/GBP and settled the day up by 0.225% to close at US$1.3092/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 Friday made intra‐day low of JPY106.42/USD and made an intraday high of JPY107.03/USD and settled the day down by 0.305% at JPY106.58/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     106.10-105.50
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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