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Daily Market Lookup

  • The dollar edged higher in early European trading Monday, recovering some of its losses after Friday’s disappointing jobs report raised questions about the strength of the U.S. economic recovery. Friday’s U.S. jobs report for January showed that fewer jobs were created in the economy than expected, with only 49,000 non-farm payrolls recorded. However, “we suspect that the employment data is not a game-changer,” Chandler added. “The U.S. economy is expanding, and Japan, and especially Europe, are contracting. Moreover, one way or the other, the U.S. will be delivering significantly more fiscal stimulus.” The prospect of a hefty fiscal stimulus from President Joe Biden’s administration rose Friday after the House of Representatives adopted the budget resolution that cleared the Senate, paving the way to pass a stimulus bill with only Democratic votes. Treasury Secretary Janet Yellen added to the stimulus cheerleading, saying the U.S. can return to full employment in 2022 if it enacts a robust enough stimulus package. German industrial output stagnated in December, coming in flat on the month after an upwardly revised increase of 1.5% in the previous month as lockdowns held back Europe's largest economy. This was the first stagnation following seven consecutive months of expansions. Another factor potentially helping the dollar going forward against the euro is the relative speed of the vaccine rollouts in the two regions. Elsewhere, GBP/EUR held on to most of last week's gains despite weekend reports suggesting that the end of the Brexit transition phase had crippled exports to the EU. Exports were down 68% from a year earlier, according to estimates by the Road Haulage Association, an industry group that has been hit badly by the increased bureaucracy involved.
  • The dollar steadied against most currencies on Monday as traders awaited more data on the U.S. economy after a disappointing jobs report last week slammed the breaks on a rally in the greenback. The euro held gains versus the dollar but faces a test later on Monday with data that is expected to show German industrial output growth slowed at the end of last year Speculators have been reducing short positions in the dollar, but some analysts say better U.S. economic data and continued progress in fighting the COVID-19 pandemic will be needed for further dollar gains The dollar was quoted at 105.49 yen, having pulled back from a three-month high reached on Friday. The U.S. economy created fewer jobs than expected in January while job losses the previous month were deeper than initially reported, data at the end of last week showed. The release of U.S. consumer prices and consumer sentiment later this week will help determine whether a recent rise in inflation expectations and Treasury yields was justified. Any disappointing numbers from either report could knock the dollar lower, some analysts said. Investors are also closely monitoring a U.S. debate on additional fiscal stimulus. President Joe Biden and his Democrats are pushing ahead with $1.9 trillion COVID-19 relief package. House of Representatives Speaker Nancy Pelosi has predicted the final relief legislation could pass Congress before March 15. Speculators' net bearish bets on the dollar fell to $29.95 billion for the week ended Feb. 2, compared with a net short position of $33.81 billion for the previous week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data.
  • Oil was up Monday morning in Asia, with supply cuts by key producers and hopes for further U.S. stimulus measures giving the black liquid a boost. The U.S. jobs report for January, released on Friday, showed that fewer jobs were created in the economy than expected. Non-farm payrolls were at 49,000 and the unemployment rate was at 6.3%. Further U.S. data, including the federal budget and the consumer price index, will be released later in the week. Although the data was disappointing, some investors said that it could lead to more stimulus measures, which in turn could boost fuel demand. A weaker dollar earlier in the session also boosted dollar-denominated commodities. However, the greenback clawed back losses and was up on Monday. Saudi Arabia’s pledge to implement further supply cuts in February and March, and reductions by other Organization of the Petroleum Exporting Countries and its allies (OPEC+) members, is also helping to maintain the balance in global markets Despite the cuts elsewhere, U.S. producers are increasing their output in order to take advantage of stronger crude oil prices. Energy services firm Baker Hughes Co. said that the U.S. oil rig count, an early indicator of future output, rose to its highest since May during the previous week. However, COVID-19 lockdowns that are still in place across parts of Europe and Asia continue to dampen fuel demand.
  • Gold was down on Monday morning in Asia, giving up gains made earlier in the session. The yellow metal received a boost after the U.S reported disappointing jobs data, which cast doubts on the U.S. economic recovery from COVID-19 and put pressure on the dollar. Friday’s U.S. jobs report for January showed that non-farm payrolls were at 49,000 and the unemployment rate was at 6.3%. The U.S. will release further data, including the federal budget and the consumer price index, later in the week. In Congress, debate also continues for the $1.9 trillion stimulus package proposed by U.S. President Joe Biden in January. Secretary of the Treasury Janet Yellen also said on Sunday that the U.S. could return to full employment in 2022 if the country enacts a strong-enough relief package. For physical gold, demand picked up in China during the past week ahead of the upcoming Lunar New Year holidays, while a sharp dip in domestic rates cheered Indian retail buyers. Also giving the yellow metal a boost, yields on the benchmark 10-year Treasury note jumped to levels not seen in nearly a year. Breakevens on 10-year Treasury Inflation-Protected Securities, measuring average annual inflation expectations for the coming decade, jumped to 2.19%, the highest level since mid-2018. Investors also await a webinar on Wednesday, where Federal Reserve Chairman Jerome Powell is due to speak.

 

 
Intraday RESISTANCE LEVELS
8th February 2021 R1 R2 R3
GOLD-XAU 1,819-1,828 1,835 1,849-1,862
Silver-XAG 27.25-27.65 28.20 28.90-29.50
Crude Oil 57.50 58.00-58.80 59.50
EURO/USD 1.2090 1.2150 1.2190-1.2250
GBP/USD 1.3710-1.3800 1.3860 1.3910-1.3990
USD/JPY 105.60-106.10 107.50 107.50

Intraday SUPPORTS LEVELS
8th 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 57.00-55.90 54.60 54.00-53.60
EURO/USD 1.2020-1.1960 1.1850-1.1800 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 (8th 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 Friday made its intraday high of US$1815.08/oz and low of US$1791.94/oz. Gold up 1.128% at US$1813.61/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     1,819-1,828
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 Friday made its intraday high of US$27.03/oz and low of US$26.18/oz settled up by 2.27% at US$26.89/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     27.25-27.65
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 Friday made an intra‐day high of US56.14/bbl, intraday low of US$56.32/bbl and settled up by 1.134% to close at US$56.89/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 57.00-51.30 with risk daily closing below 51.30 and targeting 57.50-58.00-58.80 and 59.50-60.10. Sell in between 57.50-59.00 with stop loss at 60.20; targeting 57.00-55.90-54.60-54.00 and 53.60-53.00.

 
Intraday Support Levels
S1     57.00-55.90
S2     54.60
S3     54.00-53.60

Intraday Resistance Levels
R1     57.50
R2     58.00-58.80
R3     59.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   76.168 Sell
20-DMA   53.57 Buy
50-DMA   50.02 Buy
100-DMA   45.13 Buy
200-DMA   41.53 Buy
STOCH(5,3)   97.130 Buy
MACD(12,26,9)   1.370 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1951/EUR, high of US$1.2049/EUR and settled the day up by 0.687% to close at US$1.2043/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     1.2020-1.1960
S2     1.1850-1.1800
S3     1.1850-1.1800

Intraday  Resistance Levels
R1     1.2090
R2     1.2150
R3     1.2190-1.2250

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.812 Buy
20-DMA   1.2104 Buy
50-DMA   1.2143 Buy
100-DMA   1.1960 Buy
200-DMA   1.1643 Buy
STOCH(5,3)   36.758 Sell
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3658/GBP, high of US$1.3739/GBP and settled the day up by 0.472% to close at US$1.3743/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 Friday 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     107.50
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 v
STOCH(9,6)   79.253 Sell
MACD(12,26,9)   0.0750 Sell

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