AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trading Wednesday, particularly against the euro as traders fret about the state of Europe’s pandemic recovery, particularly weighed against its U.S. equivalent. Official GDP data out of the euro zone on Tuesday showed the gross domestic product in the 19 countries sharing the euro fell by 0.7% quarter-on-quarter in the final quarter of 2020, for a 5.1% year-on-year decline. On top of this initial estimates showed the region was heading for another, probably steeper decline in the first quarter of this year given the extended lockdowns to combat the virus. The U.S. recorded 4.0% annualized growth in the final quarter of last year, and on Tuesday Congress made the first moves towards passing President Joe Biden’s $1.9 trillion stimulus package. President Biden’s administration has made it a policy to lift the rate of vaccination for the population, with over 33 million shots already delivered. In Europe, only the U.K. can compete with that rate, with more of continental Europe struggling to organise a steady vaccine rollout. Elsewhere, USD/CNY rose 0.1% to 6.4594 after economic data showed China’s services sector grew at the slowest pace in nine months in January, as an outbreak of Covid-19 cases in the country impacted consumer sentiment. January’s Caixin services Purchasing Managers Index came in at 52, above the 50-mark indicating expansion, but still a fall from December’s 56.3.
  • The dollar was slightly up on Wednesday morning in Asia, trading near a two-month high against the euro as the disparity between the strength of the U.S. and Europe’s pandemic recoveries widened. The USD/CNY pair inched up 0.07% to 6.4594, after disappointing data was released in China earlier in the day. January’s Caixin services Purchasing Managers Index was 52, against December’s 56.3. The disparity was highlighted as the U.S. moves towards passing President Joe Biden’s $1.9 trillion stimulus package, while across the Atlantic lockdowns are extended and expectations of a decline in euro zone growth this quarter grow. The U.S. currency’s gains also come amid a rally in global shares and improved risk sentiment, in defiance of the usual inverse relationship between the dollar and stocks. Some investors predict declines for the dollar as the year progresses, however, as the global economy recovers from COVID-19 amid continued fiscal stimulus and ultra-easy monetary policy. A massive round of short-covering, particularly against the yen where hedge funds racked up their biggest short bets against the greenback since October 2016, also gave the dollar a boost. Although the dollar’s rebound starting form early January is widely seen as a correction to its decline in 2020, other investors said that the new-found firmness could indicate a retreat of the bearish sentiment on the U.S. currency. The dollar index has rebounded 1.2% in 2021 after declining almost 7% in 2020.
  • Gold was up on Wednesday morning in Asia, amid growing hopes of further U.S. stimulus measures. Democrat makers in the U.S. Senate began debate on a fiscal 2021 budget resolution with COVID-19 aid spending instructions. This is a first step towards passing the $1.9 trillion stimulus package proposed by President Joe Biden, and an indication that the Democrat-majority chamber will advance the bill without Republican support. Meanwhile, silver prices were rebounding from its over 8% fall during the previous session. Although the drop prompted an investor buy-in, a social media-driven rally that started during the previous week seems to have fizzled. Prices climbed to $30.03 on Monday, their highest point since February 2013, after investors responding to calls on Reddit’s WallStreetBets forum flooded the market in a move not unlike the GameStop (NYSE:GME) squeeze in shares. The white metal’s drop during the previous session came after CME Group Inc. (NASDAQ:CME) raised maintenance margins on silver futures by 17.9% on Monday, in order to reduce market volatility. The silver frenzy that started during the previous week led to a supplier scramble for bars and coins and the amount of silver traded in the London market surged to 1.006 billion ounces on Monday. Although the frenzy has cooled down, with posts on Reddit encouraging traders to steer clear of silver, some investors expect a bit of volatility to remain.
  • Oil extended gains in Asia after closing at the highest level in more than a year as declines in U.S. and Chinese crude stockpiles gave fresh impetus to a rally driven by tightening global supplies. Futures in New York traded near $55 a barrel after jumping almost 5% over the previous two sessions in tandem with a broader rally in financial markets. The American Petroleum Institute reported crude inventories fell by 4.3 million barrels last week, people familiar with the data said. Chinese stockpiles have dropped to the lowest in almost a year, according to data provider Kayrros. OPEC+ said it expects that it will drain an oil surplus by the middle of the year. There were also more signs of strength in the physical market, with Royal Dutch Shell Plc bidding for more cargoes of benchmark-grade North Sea crude on an S&P Global Platts pricing window. That comes a day after the oil major staged the heaviest buying by a single company since at least 2008. Saudi Arabia’s pledge last month to unilaterally cut output in February and March has buttressed global oil markets, allowing prices to keep rising even as a resurgent coronavirus hurts the short-term demand outlook. It’s also helped reshape the futures curve, pushing Brent into a bullish market structure that suggests investors are comfortable with the supply and demand dynamics. Brent’s prompt timespread is 27 cents a barrel in backwardation, where near-dated prices are more expensive than later-dated ones. It was in a 7-cent contango at the beginning of the year. The API reported distillates and gasoline stockpiles fell by 1.62 million barrels and 240,000 barrels, respectively, last week. The official Energy Information Administration crude inventories data is due Wednesday in the U.S. Analysts surveyed by Bloomberg are forecasting a 2.3-million barrel decline. Oil inventories in developed nations will subside back below their five-year average in June, according to a report compiled by OPEC+. The Joint Ministerial Monitoring Committee, which oversees the alliance’s strategy, will convene online on Wednesday to assess the outlook. The JMMC is unlikely to recommend new policies, which will instead be tackled at the next full OPEC+ meeting in early March, according to delegates who asked not to be identified.

 

 
Intraday RESISTANCE LEVELS
3rd February 2021 R1 R2 R3
GOLD-XAU 1,849-1,862 1,867 1,878-1,887
Silver-XAG 27.00-27.65 28.20 28.90-29.50
Crude Oil 55.90-56.90 57.50 58.00-58.80
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
3rd February 2021 S1 S2 S3
GOLD-XAU 1,835 1,828 1,817-1,800
Silver-XAG 26.50-26.05 25.30 24.40-24.00
Crude Oil 54.60-54.00 53.60 53.00-52.50
EURO/USD 1.2000-1.1960 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 (3rd 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 Tuesday made its intraday high of US$1863.98/oz and low of US$1837.08/oz. Gold up 1.213% at US$1837.26/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     1,835
S2     1,828
S3     1,817-1,800
Intraday Resistance Levels
R1     1,849-1,862
R2     1,867
R3     1,878-1,887

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 Tuesday made its intraday high of US$28.90/oz and low of US$26.26/oz settled up by 7.62% at US$26.64/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 27.00-31.00 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     26.50-26.05
S2     25.30
S3     24.40-24.00

Intraday  Resistance Levels
R1     27.00-27.65
R2     28.20
R3     28.90-29.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.168 Buy
20-DMA   25.86 Sell
50-DMA   25.29 Sell
100-DMA   24.82 Sell
200-DMA   22.83 Buy
STOCH(5,3)   50.468 Sell
MACD(12,26,9)   0.1334 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US55.13/bbl, intraday low of US$53.36/bbl and settled up by 2.95% to close at US$54.91/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 54.60-51.30 with risk daily closing below 51.30 and targeting 55.90-56.90-57.50 and 58.00-58.80. Sell in between 55.90-59.00 with stop loss at 57.00; targeting 54.60-54.00-53.60 and 53.00-52.50-51.90.

 
Intraday Support Levels
S1     54.60-54.00
S2     53.60
S3     53.00-52.50

Intraday Resistance Levels
R1     55.90-56.90
R2     57.50
R3     58.00-58.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.168 Sell
20-DMA   52.56 Buy
50-DMA   49.30 Buy
100-DMA   44.62 Buy
200-DMA   40.62 Buy
STOCH(5,3)   92.130 Buy
MACD(12,26,9)   1.370 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.2010/EUR, high of US$1.2087/EUR and settled the day down by 0.0135% to close at US$1.2042/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     1.2000-1.1960
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 Tuesday made an intra‐day low of US$1.3610/GBP, high of US$1.3709/GBP and settled the day up by 0.071% to close at US$1.3667/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 Tuesday made intra‐day low of JPY104.82/USD and made an intraday high of JPY105.16/USD and settled the day up by 0.044% at JPY104.94/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   79.53 Sell
STOCH(9,6)   79.253 Sell
MACD(12,26,9)   0.0750 Sell

AAFX TRADING
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