AAFX TRADING

Daily Market Lookup

  • The dollar traded higher in early European trading Thursday, helped by rising Treasury yields as pessimism over the U.S. economic outlook fades Sentiment for the dollar has improved of late, helped by the promise of additional fiscal stimulus by new U.S. President Joe Biden, his focus on making progress with coronavirus vaccinations, as well improving economic data. Treasury yields have started to rise, with the 10-yr Treasury note’s yield up 0.9% early Thursday, on the implication of additional borrowing to fund the stimulus. Additionally, U.S. economic data have improved of late, with Wednesday’s ADP data showing the country’s private sector added a net 174,000 jobs in the month through mid-January, bouncing back strongly from its lockdown-related blues. This brings the weekly initial claims data, due later Thursday, and more specifically Friday’s official employment report firmly into focus to see whether these confirm the rebound in the U.S. labor market This has put the U.S. Federal Reserve’s accommodative monetary stance firmly in focus, with traders beginning to wonder when the central bank will start to tighten policy. Elsewhere, GBP/USD fell 0.4% to 1.3588 ahead of a Bank of England policy meeting that will publish findings on the feasibility of negative interest rates.
  • The dollar traded near its strongest in more than two months against the euro and the yen on Thursday as pessimism about the U.S. economic outlook receded before the release of important data on the jobs market. The British pound held steady against the dollar and traded near an eight-month high versus the euro ahead of a Bank of England policy meeting that will publish findings on the feasibility of negative interest rates. Sentiment for the dollar has improved recently as progress in coronavirus vaccinations, moves by U.S. President Joe Biden to pass more fiscal stimulus, and improving economic data forced some bearish investors to give up their short positions. The dollar faces another test on Friday with the release of non-farm payrolls data, which will help confirm whether the world's largest economy has shrugged off a dip in growth toward the end of last year. Data due on Friday is forecast to show the U.S. economy added 50,000 jobs in January, which would be a mild recovery from shedding 140,000 jobs in the previous month as a spike in coronavirus infections curbed economic activity. Since the start of the year expectations for big fiscal stimulus under Biden's Democratic government have supported sentiment. The pace of vaccinations in the United States has also picked up, causing many investors to temper their pessimism. The Bank of England is not expected to change interest rates or quantitative easing at its meeting on Thursday, but sterling will be closely watched as investors try to measure the likelihood of negative interest rates.
  • Gold was down on Thursday morning in Asia, alongside silver, as investors weighed a strong dollar and progress on further U.S. stimulus measures. The dollar, which normally moves inversely to gold, was at its highest levels in over two months on Wednesday and continued the upward trend in the Asian session. The Benchmark 10-year Treasury yield also rose to its highest in over three weeks. Progress on passing a $1.9 trillion stimulus package through Congress continues. The Senate began debating a budget resolution for the 2021 fiscal year on Tuesday, the first step towards passing the package propose by President Joe Biden in January. Although disagreements with Republicans over the package’s price tag remains, Biden said that he would consider tighter limits on qualification for the $1,400 checks that are called for in the package. Although ultra-easy monetary policy could support the U.S. economy in the long term, more short-term fiscal help may be necessary to carry the U.S. economy through the COVID-19 pandemic, Cleveland Federal Reserve Bank President Loretta Mester said on Wednesday. Investors also wait the U.S. payrolls report for January, including non-farm payrolls, which will be released on Friday. The Bank of England on Thursday will hand down its policy decision later in the day and is likely to set its sights on the prospects of economic recovery later in 2021. Although widely expected to keep both interest rates and quantitative easing steady, investors will look for clues on the likelihood of the central bank introducing negative interest rates.
  • Oil prices extended gains on Thursday after the OPEC+ alliance of major producers stuck to a reduced output policy, and as crude stockpiles in the United States fell to their lowest levels since March last year. The Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, extended its current oil output policy at a meeting on Wednesday, a sign that producers are happy that their deep supply cuts are draining inventories despite an uncertain outlook for a recovery in demand as the coronavirus pandemic lingers. A document seen by Reuters on Tuesday showed OPEC expects the output cuts will keep the market in deficit throughout 2021, even though the group cut its demand forecast. Also supporting prices, U.S. crude oil stockpiles fell by 994,000 barrels last week to 475.7 million barrels, their lowest since March, the U.S. Energy Information Administration said on Wednesday. Analysts in a Reuters poll had forecast a 446,000-barrel rise. Continued progress in rolling out COVID-19 vaccines is also an important driver of oil prices, OANDA’s Moya said. The market was also bolstered by news that Democrats in the U.S. Congress took the first steps toward advancing President Joe Biden’s proposed $1.9 trillion coronavirus aid plan. In a separate development, the United States has filed a lawsuit to seize a cargo of oil it says came from Iran rather than Iraq, as stated on the bill of lading, and contravenes U.S. terrorism regulations.

 

 
Intraday RESISTANCE LEVELS
4th February 2021 R1 R2 R3
GOLD-XAU 1,817-1,828 1,835 1,849-1,862
Silver-XAG 27.00-27.65 28.20 28.90-29.50
Crude Oil 56.90 57.50 58.00-58.80
EURO/USD 1.2000-1.2090 1.2150 1.2190-1.2250
GBP/USD 1.3710-1.3800 1.3860 1.3910-1.3990
USD/JPY 105.60-106.10 106.90 107.50

Intraday SUPPORTS LEVELS
4th February 2021 S1 S2 S3
GOLD-XAU 1,800-1,791 1,783 1,775-1,764
Silver-XAG 26.50-26.05 25.30 24.40-24.00
Crude Oil 55.90-54.60 54.00 53.60-53.00
EURO/USD 1.1960 1.1925 1.1850-1.1800
GBP/USD 1.3600 1.3540 1.3470-1.3410
USD/JPY 105.00-104.50 104.00 103.50-103.15

Intra-Day Strategy (4th 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 Wednesday made its intraday high of US$1844.87/oz and low of US$1829.54/oz. Gold down 0.194% at US$1833.60/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 1800-1764 with risk below 1764, targeting 1817-1828-1835 and 1849-1867-1878. Sell below 1817-1862 keeping stop loss closing above 1862, targeting 1800-1791-1783 and 1775-1764.

 
Intraday Support Levels
S1     1,800-1,791
S2     1,783
S3     1,775-1,764
Intraday Resistance Levels
R1     1,817-1,828
R2     1,835
R3     1,849-1,862

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 Wednesday made its intraday high of US$27.17/oz and low of US$26.47/oz settled up by 0.943% at US$26.86/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 Wednesday made an intra‐day high of US56.19/bbl, intraday low of US$54.69/bbl and settled up by 1.463% to close at US$55.79/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 55.90-51.30 with risk daily closing below 51.30 and targeting 56.90-57.50 and 58.00-58.80. Sell in between 56.90-59.00 with stop loss at 57.00; targeting 54.60-54.00-53.60 and 53.00-52.50-51.90.

 
Intraday Support Levels
S1     55.90-54.60
S2     54.00
S3     53.60-53.00

Intraday Resistance Levels
R1     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   40.62 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 Wednesday an intraday low of US$1.2003/EUR, high of US$1.2049/EUR and settled the day down by 0.0631% to close at US$1.2034/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 1.1960-1.1840 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     1.1960
S2     1.1925
S3     1.1850-1.1800

Intraday  Resistance Levels
R1     1.2000-1.2090
R2     1.2150
R3     1.2190-1.2250

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 Wednesday made an intra‐day low of US$1.3618/GBP, high of US$1.3682/GBP and settled the day up by 0.174% to close at US$1.3642/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 Wednesday made intra‐day low of JPY104.91/USD and made an intraday high of JPY105.09/USD and settled the day up by 0.676% at JPY105.02/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 105.60-108.00 with risk above 108.00 targeting 105.00-104.50-104.00 and 103.10-102.50-102.05. Long positions above 105.60-101.00 with targets of 103.80-104.50 and 105.00-105.40 with stop below 105.00.

 
Intraday Support Levels
S1     105.00-104.50
S2     104.00
S3     103.50-103.15

INTRADAY RESISTANCE LEVELS
R1     105.60-106.10
R2     106.90
R3     107.50

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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