AAFX TRADING

Daily Market Lookup

  • The dollar was down on Tuesday morning in Asia but was hovering near seven-week highs. The U.S. currency was a beneficiary of an overnight euro selloff after COVID-19 lockdowns in the continent led to decreased consumer spending. The euro sank to two-and-a-half-week lows overnight in reaction to disappointing German retail sales figures. Retail sales contracted 9.6% month-on-month and grew 1.5% year-on-year in December, well below the respective forecast contraction of 2.6% and 5% growth. Europe is still feeling the impact of a second wave of COVID-19 cases in the continent and is also struggling with its COVID-19 vaccine rollout program. Meanwhile, gains in Asian shares saw the index ease slightly by 0.1% after rising 0.4% overnight, even touching 91.063 for the first time since Dec. 10. The index has also stuck to a tight range in recent weeks, bouncing back from the three-year low recorded at the beginning of 2021. The blip in the correlation came down to the euro, and market sentiment would continue to drive the dollar’s direction near-term, Commonwealth Bank of Australia (OTC:CMWAY) currency analyst Joseph Capurso told Reuters. Global sentiment remains cautious overall, with investors still digesting the previous week’s market volatility that was trigged by a retail treading frenzy in stocks such as GameStop Corp Investors are also evaluating whether the almost 7% selloff in 2020 over expectations of a global pandemic recovery amid massive fiscal spending and continued ultra-easy monetary policy, will continue in 2021. In the U.S., investor sentiment was boosted after a “very productive” two-hour meeting on Monday between U.S. President Joe Biden and a group of ten Republican senators to discuss a downsized COVID-19 stimulus package. However, Biden maintained that the $618 billion package proposed by the group does not go far enough to solve the COVID-19 crisis and insisted on keeping the $1.9 trillion price tag that he proposed in January. Democrat lawmakers also filed the $1.9 trillion budget measure on Monday, a step towards bypassing Republicans to get the measure passed in Congress, ahead of the meeting.
  • The dollar hovered near a seven-week high on Tuesday, largely benefiting from a euro selloff overnight after coronavirus lockdowns choked consumer spending in Europe's biggest economy. The euro sank the most in 2-1/2 weeks on Monday after data showed German retail sales plunged by more than forecast in December, with the continent still struggling with vaccine rollouts. The dollar gained even as stocks rallied globally, bucking a recent trend for the U.S. currency to decline when risk appetite improves. Commonwealth Bank of Australia (OTC:CMWAY) currency analyst Joseph Capurso said the blip in the correlation came down to the euro, and market sentiment would continue to drive the dollar's direction near-term On the whole, global markets remain wary with institutional investors trying to get to grips with the retail trading frenzy that boosted GameStop Corp (NYSE:GME) and other so-called meme stocks in recent sessions despite no change in their fundamentals Investors are trying to evaluate whether an almost 7% selloff in 2020 -- driven by expectations of a global pandemic recovery amid massive fiscal spending and continued ultra-easy monetary policy -- is likely to continue. Hopes for a speedy U.S. recovery got a boost as Democrats filed a $1.9 trillion budget measure in a step toward bypassing Republicans on President Joe Biden's massive COVID relief package, even as a group of Republican senators visited the White House to discuss a $618 billion alternative plan.
  • Gold was down on Tuesday morning in Asia, but the focus remained on silver as investors booked profits from Monday’s rally. Silver prices rose as much as 11.2%, near highs last recorded in February 2013, during the previous session. The precious metal’s price soared after retail investors piled into the market to drive prices up, driven by messages on Reddit. The activity has sparked “close monitoring” by the U.S. Commodity Futures Trading Commission, acting chairman Rostin Behnam said on Monday, as the previous weeks’ volatility in securities markets impacted trading in the silver market. The impact continues to leave investors in places as diverse as the U.S. and Singapore scrambling for silver bars and coins to meet demand. CME Group Inc. (NASDAQ:CME) has also raised Comex 5000 Silver Futures margins by 17.9% to $16,500 per contract from $14,000 for February. On the stimulus front, hopes for further U.S. stimulus packages were boosted after a two-hour meeting on Monday between U.S. President Joe Biden and a group of ten Republican senators to discuss a downsized COVID-19 stimulus package proposed by the group. Although the meeting was “very productive”, Biden said that the downsized package does not go far enough to solve the COVID-19 crisis and is insistent on keeping the $1.9 trillion package that he proposed in January. However, Democrat lawmakers had filed the $1.9 trillion budget measure on Monday, a step towards bypassing Republicans to get the measure passed in Congress, ahead of the meeting. Meanwhile India slashed import duties on gold and silver on Monday to boost retail demand and curtail smuggling. The China Gold Association, on the other hand, said on Monday that gold consumption in the country fell by almost a fifth in 2020.
  • Oil was up Tuesday morning in Asia, climbing to its highest level in more than two weeks as a strong market and expectations of a global economic recovery from COVID-19 spurred fuel demand recovery hopes. On the production side, Saudi Aramco estimates that demand will return to pre-COVID-19 levels later in the year, adding that it is confident the worst of the pandemic is now in the rearview mirror. Royal Dutch Shell (LON:RDSa), on the other hand, purchased five cargoes of North Sea crude and is bidding for another seven on Monday, a move seen as a raid on the North Sea physical oil market as part of a forceful trading play. Shell’s purchase was the most cargoes of benchmark grades in a single day in ten years in the S&P Global Platts pricing window. It also comes amid signs of tightening in Brent futures as the Organization of the Petroleum Exporting Countries and its partners, or OPEC+, continues its production cuts. Brent futures also showed signs of backwardation, with the second-month contract the most expensive versus a month later in more than a year. However, the outlook for Asian transport fuels has worsened, as the re-emergence of COVID-19 cases in the region sees restrictive measures such as lockdowns. This is also likely to spur more diesel and gasoline exports from China, the world’s largest fuel importer. Meanwhile, OPEC+'s Joint Technical Committee is due to present its assessment to the Joint Ministerial Monitoring Committee (JMMC) that will meet on Wednesday. The focus will be on how much supply will be added to the market after OPEC decided to keep output unchanged in February and March during its January meeting. Although crude production was increased as agreed to in January, the monthly change was barely two-thirds of the scheduled amount thanks to disruptions in Nigeria and Libya offsetting exports from the cartel’s Persian Gulf exporters. Investors also await U.S. crude oil supply data from the American Petroleum Institute, which is due later in the day.

 

 
Intraday RESISTANCE LEVELS
2nd February 2021 R1 R2 R3
GOLD-XAU 1,862-1,867 1,878 1,887-1,900
Silver-XAG 28.90-29.50 29.90 30.50-31.00
Crude Oil 54.00-54.60 55.90 56.90-57.50
EURO/USD 1.2090-1.2150 1.2190 1.2250-1.2300
GBP/USD 1.3710-1.3800 1.3860 1.3910-1.3990
USD/JPY 105.00 105.60-106.10 106.90

Intraday SUPPORTS LEVELS
2nd February 2021 S1 S2 S3
GOLD-XAU 1,849-1,835 1,828 1,817-1,800
Silver-XAG 27.00 27.00 26.50-26.05
Crude Oil 53.60-53.00 52.50 51.90-51.30
EURO/USD 1.2050-1.1960 1.1925 1.1850-1.1800
GBP/USD 1.3600 1.3540 1.3470-1.3410
USD/JPY 104.50-104.00 103.50 103.15-102.50

Intra-Day Strategy (2nd February 2021)
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 Monday made its intraday high of US$1871.70/oz and low of US$1849.08/oz. Gold up 0.052% at US$1859.91/oz.

Technicals in Focus:

In daily charts, prices are below 50DMA (1899) and breakage above will call for 1916. 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 1849-1800 with risk below 1800, targeting 1867-1878-1890-1900. Sell below 1867-1910 keeping stop loss closing above 1910, targeting 1849-1835-1828 and 1817-1810-1800.

 
Intraday Support Levels
S1     1,849-1,835
S2     1,828
S3     1,817-1,800
Intraday Resistance Levels
R1     1,862-1,867
R2     1,878
R3     1,887-1,900

Technical Indicators

Name   Value Action
14DRSI  

49.752

Buy
20-DMA   1856.89 Sell
50-DMA  

1854.60

Buy
100-DMA   1877.75 Sell
200-DMA   1850.29 Buy
STOCH(5,3)   52.503 Buy
MACD(12,26,9)   -4.276 Sell

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$30.07/oz and low of US$27.94/oz settled up by 2.195% at US$28.95/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 50DMA (24.30), breakage above will lead to 25.00. MACD is below zero line and histograms are decreasing trend and it will bring bearish stance in the upcoming sessions. RSI is approaching neutral region, indicating buy signal for now. The Stochastic Oscillator is in overbought 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, sell in between 28.90-31.00 with stop loss above 31.00; targeting 28.30-27.65-27.00 and 26.50-25.05-24.45. Buy silver in between 28.20-26.00, targeting 28.90-29.50-29.90 and 30.50-31.00 with stop loss should be place on the breakage below 24.60.

 
Intraday  Support Levels
S1     27.00
S2     27.00
S3     26.50-26.05

Intraday  Resistance Levels
R1     28.90-29.50
R2     29.90
R3     30.50-31.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.168 Buy
20-DMA   25.81 Sell
50-DMA   25.06 Sell
100-DMA   24.80 Sell
200-DMA   22.65 Buy
STOCH(5,3)   66.468 Sell
MACD(12,26,9)   0.1334 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US53.63/bbl, intraday low of US$51.57/bbl and settled up by 2.77% to close at US$53.40/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 48.34 which is a support level and breakage below will call for 45.74. MACD is above 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 upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 53.60-51.30 with risk daily closing below 51.30 and targeting 54.00-54.60-55.00 and 55.90-56.90. Sell in between 54.00-57.00 with stop loss at 57.00; targeting 53.60-53.00-52.50 and 51.90-51.20-50.25.

 
Intraday Support Levels
S1     53.60-53.00
S2     52.50
S3     51.90-51.30

Intraday Resistance Levels
R1     54.00-54.60
R2     55.90
R3     56.90-57.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.203 Sell
20-DMA   52.51 Buy
50-DMA   49.04 Buy
100-DMA   44.43 Buy
200-DMA   40.72 Buy
STOCH(5,3)   70.130 Sell
MACD(12,26,9)   1.219 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.2055/EUR, high of US$1.2135/EUR and settled the day up by 0.585% to close at US$1.2058/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2177), which become immediate resistance level, break above will target 1.1970. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently in overbought region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.2050-1.1840 with risk below 1.1800, targeting 1.2090-1.2150-1.2190 and 1.2300-1.2350-1.2400. Sell below 1.2090-1.2545 targeting 1.2050-1.1990-1.1960 and 1.1925-1.1870 with stop-loss at daily closing above 1.2545.

 
Intraday Support Levels
S1     1.2050-1.1960
S2     1.1925
S3     1.1850-1.1800

Intraday  Resistance Levels
R1     1.2090-1.2150
R2     1.2190
R3     1.2250-1.2300

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.812 Buy
20-DMA   1.2182 Buy
50-DMA   1.2115 Buy
100-DMA   1.1942 Buy
200-DMA   1.1942 Buy
STOCH(5,3)   64.758 Sell
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3655/GBP, high of US$1.3757/GBP and settled the day down by 0.319% to close at US$1.3657/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.3610) is become immediate support 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 in between 1.3710-1.3990 with targets at 1.3600-1.3540 and 1.3470-1.3400 stop-loss should be 1.3900. Buy above 1.3650-1.3240 with targets 1.3710-1.3800-1.3860 and 1.3910-1.3990 with stop loss closing below 1.3200.

 
Intraday Support Levels
S1     1.3600
S2     1.3540
S3     1.3470-1.3410

Intraday Resistance Levels
R1     1.3710-1.3800
R2     1.3860
R3     1.3910-1.3990

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

55.999

Buy
20-DMA   1.3637 Buy
50-DMA   1.3501 Buy
100-DMA   1.3239 Buy
200-DMA   1.2961 Buy
STOCH(5,3)   57.940 Buy
MACD(12,26,9)   0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY105.02/USD and made an intraday high of JPY105.02/USD and settled the day up by 0.178% at JPY104.92/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 105.00-108.00 with risk above 108.00 targeting 104.50-104.00-103.10 and 102.50-102.05-101.60. Long positions above 104.00-101.00 with targets of 103.80-104.50 and 105.00-105.40 with stop below 105.00.

 
Intraday Support Levels
S1     104.50-104.00
S2     103.50
S3     103.15-102.50

INTRADAY RESISTANCE LEVELS
R1     105.00
R2     105.60-106.10
R3     106.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.407 Buy
20-DMA   103.66 Sell
50-DMA   103.80 Sell
100-DMA   104.45 Sell
200-DMA   105.66 Sell
STOCH(9,6)   79.253 Sell
MACD(12,26,9)   0.0750 Sell

AAFX TRADING
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