AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trade Wednesday, gaining back some recent losses, but these gains could be short-lived ahead of comments from Federal Reserve chair Jerome Powell from the annual Jackson Hole retreat later in the week. These fundamental drivers were illustrated Tuesday by the German Ifo survey showed stronger-than-expected business sentiment, while U.S. consumer confidence tumbled to the lowest in more than six years due to concern about the coronavirus-induced job losses. Overnight, the German government said it will extend its job support scheme through the end of next year, while French Prime Minister Jean Castex said his government will announce new stimulus measures on September 3. Additionally, data due to be released later in the day is expected to show that U.S. durable goods orders slowed in July, with 4.3% growth month-on-month forecast for July. Orders grew by 7.6% month-on-month in June. Attention is now focusing on U.S. Federal Reserve Chairman Jerome Powell, and his speech at Thursday’s Jackson Hole symposium, for guidance on the Fed's strategy moving forward. Elsewhere, GBP/USD was flat at 1.3150, having risen 0.7% against the dollar on Tuesday, with sterling shrugging off a lack of progress in trade negotiations between Britain and the European Union. The dollar was flat on Wednesday morning in Asia, gaining back some of its earlier losses on the back of disappointing U.S. data. August’s Conference Board (CB) consumer confidence index fell to 84.8, its lowest level since May 2014, with COVID-19-induced high unemployment contributing to the fall. The reading was much lower than forecast of 93, prepared by Investing.com, and was also lower than July’s reading of 91.7. On the back Tuesday’s disappointment, data due to be released later in the day is expected to show that U.S. durable goods orders slowed down in July, with a 4.3% growth month-on-month forecasted for July. Orders grew by 7.6% month-on-month in June Attention is now focusing on U.S. Federal Reserve Chairman Jerome Powell, and his speech at Thursday’s Jackson Hole symposium, for guidance on the Fed's response to the figures.
  • The dollar nursed losses against most currencies on Wednesday as traders braced for U.S. data expected to show a slowdown in durable goods orders and a key speech by Federal Reserve Chairman Jerome Powell. The yuan rose toward a seven-month high after U.S. and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal, which eased concerns about a diplomatic standoff between the world's two-largest economies. The greenback took a hit after data on Tuesday showed U.S. consumer confidence tumbled to the lowest in more than six years due to concern about the coronavirus-induced job losses. Traders will look to Powell's speech on Thursday at the annual Jackson Hole retreat to determine what steps the Fed is willing to take to safeguard a fragile economic recovery. Sterling has managed to shrug off a lack of progress in trade negotiations between Britain and the European Union. The dollar managed to hold onto slim gains against the yen , last trading at 106.51 due to a slight rise in long-term U.S. Treasury yields. Powell's speech at Jackson Hole - held online due to the coronavirus outbreak - is by far the biggest event of the week, but the data calendar leading up to Thursday has been discouraging Data later on Wednesday is forecast to show growth in U.S. durable goods orders slowed in July, following from the U.S. consumer confidence report for August, which fell to the lowest since May 2014 - highlighting policymakers' concerns about the economy. Trading in other currencies could be subdued due to a lack of major economic releases during the Asian session.
  • Oil was mixed on Wednesday morning in Asia, with producers shutting off most offshore output in the Gulf of Mexico ahead of Hurrican Laura. As many as 310 offshore facilities have been evacuated, and around 84% of Gulf of Mexico offshore production has been shut down as the industry prepares for a major hurricane strike. Laura poses the region’s biggest storm threat since Hurricane Katrina in 2005, which caused a 90% shutdown. But other investors sounded a more ominous note. But prices were boosted by the optimism over U.S.-China relations, with officials from both countries reaffirming commitment to their phase one trade deal. China’s recommitment to the deal could see a potential boost in flows between two of the world's largest oil consumers. Also capping losses was Tuesday’s data from the American Petroleum Institute (API) predicting a fall in crude oil supplies. API reported a draw of 4.5 million barrels, slightly larger than the previous week’s 4.26 million-barrel draw. Investors now await inventory data from the U.S. Energy Information Administration (EIA), due later in the day. Brent crude oil prices rose on Wednesday, lifted by U.S. producers shutting most of their offshore output in the Gulf of Mexico ahead of Hurricane Laura and optimism over China-U.S. trade talks. But gains were capped amid renewed concern over the coronavirus pandemic, which has squeezed fuel demand, after reports from Europe and Asia of patients being re-infected with COVID-19, raising concerns about future immunity. The U.S. energy industry on Tuesday was preparing for a major hurricane strike. Producers evacuated 310 offshore facilities and shut 1.56 million barrels per day (bpd) of crude output, 84% of Gulf of Mexico's offshore production - near the 90% outage that Hurricane Katrina brought 15 years ago.

 

 
Intraday RESISTANCE LEVELS
26th August 2020 R1 R2 R3
GOLD-XAU 1924-1,940 1,954 1,971-1,989
Silver-XAG 27.00-28.10 29.00 29.80-30.50
Crude Oil 44.10 45.00-46.30 47.00
EURO/USD 1.1850-1.1900 1.1955 1.2000-1.2050
GBP/USD 1.3190 1.3250 1.3290-1.3350
USD/JPY 106.90 107.30 108.10-108.90

Intraday SUPPORTS LEVELS
26th August 2020 S1 S2 S3
GOLD-XAU 1,915-1,901 1,885 1,874-1,867
Silver-XAG 26.10 26.55 25.10-24.30
Crude Oil 43.15-42.00 41.00 40.60-39.50
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 106.10-105.50 104.90 104.30-103.90

Intra-Day Strategy (26th 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 Tuesday made its intraday high of US$1937.43/oz and low of US$1914.21/oz. Gold down 0.0456% at US$1927.41/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 1915-1867 with risk below 1867, targeting 1924-1940-1954 and 1971-1989-2010. Sell below 1915-2010 keeping stop loss closing above 2010, targeting 1900-1889 and 1881-1866.

 
Intraday Support Levels
S1     1,915-1,901
S2     1,885
S3     1,874-1,867
Intraday Resistance Levels
R1     1924-1,940
R2     1,954
R3     1,971-1,989

Technical Indicators

Name   Value Action
14DRSI  

47.043

Buy
20-DMA   1968.85 Buy
50-DMA  

1874.50

Buy
100-DMA   1793.86 Buy
200-DMA   1672.71 Buy
STOCH(5,3)   14.503 Buy
MACD(12,26,9)   12.45 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$26.79/oz and low of US$26.05/oz settled down by 0.206% at US$26.53/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 Tuesday made an intra‐day high of US43.61/bbl, intraday low of US$42.41/bbl and settled up by 2.219% to close at US$43.38/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 43.15-38.50 with risk daily closing below 36.65 and targeting 44.10-45.00 and 46.30-47.00. Sell in between 44.10-47.30 with stop loss at 47.30; targeting 43.15-42.00-41.00 and 40.60-39.50-38.50.

 
Intraday Support Levels
S1     43.15-42.00
S2     41.00
S3     40.60-39.50

Intraday Resistance Levels
R1     44.10
R2     45.00-46.30
R3     47.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.099 Sell
20-DMA   42.14 Buy
50-DMA   41.02 Buy
100-DMA   34.96 Buy
200-DMA   42.11 Sell
STOCH(5,3)   78.130 Buy
MACD(12,26,9)   0.738 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1783/EUR, high of US$1.1843/EUR and settled the day up by 0.398% to close at US$1.1833/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 Monday made an intra‐day low of US$1.3055/GBP, high of US$1.3169/GBP and settled the day up by 0.682% to close at US$1.3150/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
R2     1.3250
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 Tuesaday made intra‐day low of JPY105.86/USD and made an intraday high of JPY106.57/USD and settled the day up by 0.394% at JPY106.38/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 106.50-111.00 with risk above 111.00 targeting 106.10-105.50-104.90 and 104.50-103.90-103.10. Long positions above 106.10-103.00 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
R2     107.30
R3     108.10-108.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.904 Buy
20-DMA   105.98 Sell
50-DMA   106.55 Sell
100-DMA   107.02 Sell
200-DMA   107.99 Sell
STOCH(9,6)   80.253 Sell
MACD(12,26,9)   -0.1448 Sell

AAFX TRADING
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