AAFX TRADING

Daily Market Lookup

  • The dollar was flat on Monday morning in Asia, with investors awaiting further guidance on the U.S. monetary policy outlook later in the week U.S. Federal Reserve Chairman Jerome Powell is widely expected to discuss monetary policy during the Jackson Hole symposium. The two-day event will open on Thursday. Some investors were cautiously optimistic that the greenback will see short-term gains if Powell provides clearer guidance on Thursday. The euro has been gaining at the dollar’s expense, in the afterglow of the European Union passing a recovery package for its members in July. Globally, central banks, including the Fed, have rolled out unprecedented measures, such as monetary easing, in response to the economic impact of COVID-19. But the pace of global recovery has seen a setback, with countries such as South Korea battling a resurgence of cases, meaning that additional measures could be necessary. The ongoing stall in the U.S. Congress over the latest stimulus measures also continues to dampen investor sentiment, with Democrats and Republicans continuing to play the blame game on Sunday.
  • The dollar steadied against major currencies on Monday as traders looked to more data for a gauge on the health of the global economy and the Federal Reserve's annual Jackson Hole retreat for guidance on the outlook for U.S. monetary policy. Sentiment for the greenback has improved somewhat due to supportive data on business activity and home sales, but there are still concerns that additional monetary easing may be necessary to keep economic growth on track. Currencies showed little reaction to U.S. authorization of a coronavirus treatment that uses blood plasma from recovered patients as many investors are waiting for definitive news of a credible vaccine. Traders in the yuan, and across the broader financial markets, are also nervously watching Sino-U.S. ties as President Donald Trump's wide-ranging diplomatic dispute with China shows no signs of abating. Federal Reserve Chairman Jerome Powell will discuss monetary policy on Thursday at the opening day of the Kansas City Fed's annual symposium. This year the meeting will be held online, and not at the hunting and fishing resort of Jackson Hole, Wyoming because of the coronavirus pandemic. The quantitative easing that the Fed has deployed so far has flooded financial markets with excess liquidity and weighed on the dollar. The world's policymakers have unleashed an unprecedented wave of monetary easing and fiscal support to offset the economic drag caused by the pandemic. However, many countries are now battling a second wave of infections, which could further delay a full-fledged economic recovery. As usual, investors will also be watching out for a further run of data this week for clues on the global economy, including a second estimate of U.S. GDP for the second quarter as well as weekly jobless claims and some second tier Asian indicators. The euro was on the defensive following disappointing manufacturing and services sector data for Europe released on Friday. The common currency's next major hurdle is the release of the closely-watched Ifo sentiment survey on Tuesday. The euro has pulled back slightly from a two-year high versus the dollar reached last week, which makes it vulnerable to short-term profit taking, some analysts say. Net short positions in the dollar declined from a more than nine-year high hit a week earlier, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday, which suggests that the greenback's declines could start to slow. The speculative community has been short the U.S dollar since mid-March. The onshore yuan traded at 6.9196, little changed on the day amid lingering doubts about frayed U.S.-China ties. Trump on Sunday raised the possibility of decoupling the U.S. economy from China as part of a broad-ranging dispute with Beijing over China's role in global trade and advanced technology.
  • Crude oil prices rose on Monday as storms closed in on the Gulf of Mexico, shutting more than half its oil production, and on coronavirus optimism after U.S. regulators approved the use of blood plasma from recovered patients as a treatment option. On Sunday, Hurricane Marco and Tropical Storm Laura tore through the Caribbean and Gulf of Mexico, forcing energy companies to pull workers from offshore platforms and shut down oil output. Producers had shut 58% of the Gulf's offshore oil output and 45% of natural gas supply on Sunday. The region accounts for 17% of total U.S. oil production and 5% of U.S. natural gas output. U.S. President Donald Trump on Sunday hailed FDA authorization of a coronavirus treatment that uses blood plasma from recovered patients, a day after accusing the agency of impeding the rollout of vaccines and therapeutics for political reasons. Also supporting prices was a report by members of the Organization of the Petroleum Exporting Countries (OPEC) and other oil powers, including Russia, that countries in the OPEC+ group that pumped above supply targets from May to July will need to slash output by over a million barrels per day for two months to compensate. Acting as a check on further price gains, the U.S. oil and natural rig count increased this week for the first time since March, with energy firms adding the most oil rigs in seven months, as shale producers start drilling again.

 

 
Intraday RESISTANCE LEVELS
24th August 2020 R1 R2 R3
GOLD-XAU 1,940-1,954 1,971 1,989-2,010
Silver-XAG 27.00-28.10 29.00 29.80-30.50
Crude Oil 43.15 44.10 45.00-46.30
EURO/USD 1.1850-1.1900 1.1955 1.2000-1.2050
GBP/USD 1.3190-1.3250 1.3290 1.3350-1.3400
USD/JPY 106.10-106.90 107.30 108.10-108.90

Intraday SUPPORTS LEVELS
24th August 2020 S1 S2 S3
GOLD-XAU 1924 1,915 1,901-1,885
Silver-XAG 26.10 26.55 25.10-24.30
Crude Oil 42.00-41.00 40.60 39.50-38.50
EURO/USD 1.1800-1.1730 1.1690 1.1610-1.1550
GBP/USD 1.3100-1.3050 1.3015 1.2950-1.2870
USD/JPY 105.50 104.90 104.30-103.90

Intra-Day Strategy (24th 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$1955.83/oz and low of US$1911.34/oz. Gold down 0.313% at US$1940.29/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 1924-1885 with risk below 1885, targeting 1940-1954-1971 and 1989-2010-2021. Sell below 1940-2010 keeping stop loss closing above 2010, targeting 1926-1900-1889 and 1881-1866.

 
Intraday Support Levels
S1     1924
S2     1,915
S3     1,901-1,885
Intraday Resistance Levels
R1     1,940-1,954
R2     1,971
R3     1,989-2,010

Technical Indicators

Name   Value Action
14DRSI  

50.043

Buy
20-DMA   1973.30 Buy
50-DMA  

1862.41

Buy
100-DMA   1785.31 Buy
200-DMA   1665.82 Buy
STOCH(5,3)   50.503 Buy
MACD(12,26,9)   35.45 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$27.53/oz and low of US$26.59/oz settled up by 1.732% at US$26.77/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 27.10-22.50 targeting 28.20-29.00 and 29.80-30.50, stop breakage below 22.50. Sell below 28.00-30.00 with stop loss above 30.00; targeting 27.20-26.10-25.00 and 24.30-23.35.

 
Intraday  Support Levels
S1     26.10
S2     26.55
S3     25.10-24.30

Intraday  Resistance Levels
R1     27.00-28.10
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 US42.97/bbl, intraday low of US$41.48/bbl and settled down by 1.286% to close at US$42.20/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$1.1882/EUR, high of US$1.1882/EUR and settled the day down by 0.525% to close at US$1.1796/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 1.1850-1.1900-1.1950 and 1.2000-1.2100. Sell below 1.1850-1.2050 targeting 1.1800-1.1730-1.1650 and 1.1610-1.1500 with stop-loss at daily closing above 1.1950.

 
Intraday Support Levels
S1     1.1800-1.1730
S2     1.1690
S3     1.1610-1.1550

Intraday  Resistance Levels
R1     1.1850-1.1900
R2     1.1955
R3     1.2000-1.2050

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.032 Buy
20-DMA   1.1811 Buy
50-DMA   1.1531 Buy
100-DMA   1.1253 Buy
200-DMA   1.1145 Buy
STOCH(5,3)   28.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3058/GBP, high of US$1.3254/GBP and settled the day down by 0.928% to close at US$1.3089/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 1.3190-1.3450 with targets at 1.3100-1.3050 and 1.3015-1.2950-1.2870 stop-loss should be 1.3450. Buy above 1.3100-1.2840 with targets 1.3190-1.3250-1.3290 and 1.3350-1.3400 with stop loss closing below 1.2840.

 
Intraday Support Levels
S1     1.3100-1.3050
S2     1.3015
S3     1.2950-1.2870

Intraday Resistance Levels
R1     1.3190-1.3250
R2     1.3290
R3     1.3350-1.3400

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 JPY105.43/USD and made an intraday high of JPY106.06/USD and settled the day down by 0.0236% at JPY105.79/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
S2     104.90
S3     104.30-103.90

INTRADAY RESISTANCE LEVELS
R1     106.10-106.90
R2     107.30
R3     108.10-108.90

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

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