AAFX TRADING

Daily Market Lookup

  • The dollar was down on Wednesday morning in Asia to near two-week lows as demand for safe-haven assets faded. Hopes for a global economic recovery from COVID-19 continue to grow alongside hopes for further, massive fiscal and monetary stimulus. Data released by China earlier in the day showed that the Consumer Price Index (CPI) grew 1% month-on-month but fell 0.3% year-on-year. The Producer Price Index (PPI) grew 0.3% year-on-year in January. The GBP/USD pair inched up 0.07% to 1.3824. The pound was around 0.1% lower after reaching an almost three-year high during the previous session. In the cryptocurrency space, Bitcoin was near the $46,500 mark after climbing up to $48,500 overnight on the back of a $1.5 billion investment from Tesla Inc. (NASDAQ:TSLA). Hopes that monetary and fiscal support, solid corporate earnings, and the rollout of COIVD-19 vaccines have all boosted hopes for the U.S. economic recovery. The increased risk sentiment has meant declines for safe-haven assets such as the dollar. Investors remain divided about the impact that a $1.9 trillion stimulus package proposed by U.S. President Joe Biden will have on the dollar. Those arguing for a positive impact point to a speedy U.S. recovery compared to other economies boosting the greenback. Those arguing the opposite say that a recovery will drive reflation globally, which will boost riskier assets and contribute to a dollar decline. Westpac analysts argued the latter in a note, despite the dollar’s strong start in 2021, with the previous week’s U.S. jobs data a key indicator.
  • The dollar traded near two-week lows as demand for safer assets ebbed on Wednesday, with traders looking ahead to an expected recovery from the COVID-19 pandemic this year, driven by massive fiscal and monetary stimulus. Traditionally viewed as a safe haven, the dollar has sunk against major peers as optimism over monetary and fiscal support from policymakers, robust corporate earnings and the prospect that coronavirus vaccines could hasten a return to normality in the United States and elsewhere have bolstered risk sentiment. The dollar index edged higher to 90.509 early in the Asian session on Wednesday, following a two-day loss that took it as low as 90.427 for the first time this month. There has been a tug-of-war among traders over the impact on the dollar of President Joe Biden's planned $1.9 trillion fiscal stimulus package. On one hand, it should speed a U.S. recovery relative to other countries, bolstering the currency; on the other, it is a major driver in a global reflation narrative that should lift riskier assets at the dollar's expense. After a strong start to the year for the greenback, the latter view appears to be regaining sway -- with last week's U.S. jobs data providing the turning point, according to Westpac analysts. The British pound was about 0.1% lower at $1.3803 after renewing an almost three-year high at $1.382 overnight.
  • Gold was up on Wednesday morning in Asia, with a weak dollar and growing expectation of further U.S. stimulus measures continuing to give the yellow metal a boost. Progress continues to be made on a $1.9 trillion stimulus package proposed by U.S. President Joe Biden. Biden said on Tuesday that he agreed with a proposal by Democrat lawmakers that would limit or phase out of planned $1,4000 stimulus payments to higher-income individuals. The House of Representatives will vote on the bill on Feb. 22, with Speaker Nancy Pelosi pledging to secure congressional passage by mid-March, when enhanced jobless benefits approved in a December 2020 aid package expire. However, Biden’s administration has largely ignored worries that massive stimulus spending and ultra-easy monetary policy will lead to inflation. On the other hand, Friday’s disappointing U.S. jobs data, including non-farm payrolls, highlighted the urgent need for the package to be passed by Congress quickly. The U.S. will release its Consumer Price Index (CPI) later in the day, after China released its own CPI figures earlier in the day. The Chinese CPI grew 1% month-on-month but fell 0.3% year-on-year, and the Producer Price Index (PPI) grew 0.3% year-on-year in January. Investors also await comments from Federal Reserve Chairman Jerome Powell, who will speak at a virtual Economic Club of New York event later in the day.
  • Oil was mixed Tuesday morning in Asia, with caution creeping into the market even as hopes for a strong rebound in fuel demand continue. There are signs of supply tightness, indicated by the nearest Brent contract sharply widening its premium to the following month. Global inventories are also shrinking and there are expectations that U.S. supplies will also continue to record draws. U.S. supply data from the American Petroleum Institute recorded a draw of 3.5 million barrels. Forecasts prepared by Investing.com had predicted a 1.340-million-barrel build, while a 4.261-million-barrel draw was recorded during the previous week. Investors await supply data from the U.S. Energy Information Administration, due later in the day. Some investors remained positive, however. The rollout of COVID-19 vaccines, as well as the Saudi Arabian production cuts, helped underpin a surge in the black liquid since the end of October. Although a slowly decreasing number of COVID-19 cases and cold weather is boosting fuel demand, there are concerns that higher prices will increase supply, thereby preventing further rallies. Concerns also remain about a supply crunch in the medium-term, which Total SE blamed on the oil industry’s continued under-investment in 2020 while also warning that “cracks in the U.S. shale model” are emerging. Oil prices rose again on Wednesday, extending their more than week-long rally after industry data showing a fall in U.S. crude oil stocks added to optimism about an expected rise in global fuel demand. Crude inventories fell by 3.5 million barrels in the week to Feb. 5 to about 474.1 million barrels, data from the American Petroleum Institute showed on Tuesday. That compared with analysts' expectations in a Reuters poll for an increase of 985,000 barrels. Official Energy Information Administration (EIA) data is due at 1530 GMT on Wednesday. Crude oil stocks at the Cushing, Oklahoma, delivery point dropped by 1.4 million barrels, API said. Still, inventories of gasoline rose, gaining by 4.8 million barrels, compared with analysts' forecasts in a Reuters poll for a build of 1.8 million barrels. Official data is due later on Wednesday. Oil prices have rallied since November as governments kicked off vaccination drives for COVID-19, while putting in place large stimulus packages to boost economic activity. The world's biggest exporter, Saudi Arabia, is unilaterally reducing supply in February and March, adding to cuts agreed by other members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies. Some analysts are now forecasting there will be a supply deficit in 2021 as more populations get vaccinated and start going away on trips and working in offices, potentially boosting fuel demand.

 

 
Intraday RESISTANCE LEVELS
10th February 2021 R1 R2 R3
GOLD-XAU 1,849 1,862 1,870-1,879
Silver-XAG 27.25-27.65 28.20 28.90-29.50
Crude Oil 57.50 58.00-58.80 59.50
EURO/USD 1.2150-1.2190 1.2250 1.2300-1.2340
GBP/USD 1.3860 1.3910-1.3990 1.4040
USD/JPY 105.60-106.10 106.90 107.50

Intraday SUPPORTS LEVELS
10th February 2021 S1 S2 S3
GOLD-XAU 1,839-1,828 1,819 1,800-1,791
Silver-XAG 26.50-26.05 25.30 24.40-24.00
Crude Oil 57.00 55.90 54.60-54.00
EURO/USD 1.2090-1.2020 1.1960 1.1925-1.1850
GBP/USD 1.3800-1.3710 1.3600 1.3540-1.3470
USD/JPY 104.50 103.50-103.15 103.50-103.15

Intra-Day Strategy (10th 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$1848.50/oz and low of US$1828.79/oz. Gold up 0.412% at US$1837.51/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 1839-1764 with risk below 1764, targeting 1849-1867 and 1870-1878. Sell below 1849-1879 keeping stop loss closing above 1879, targeting 1839-1828-1819 and 1800-1791-1783.

 
Intraday Support Levels
S1     1,839-1,828
S2     1,819
S3     1,800-1,791
Intraday Resistance Levels
R1     1,849
R2     1,862
R3     1,870-1,879

Technical Indicators

Name   Value Action
14DRSI  

49.752

Buy
20-DMA   1856.89 Sell
50-DMA  

49.752

Buy
100-DMA   1850.29 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 Monday made its intraday high of US$27.56/oz and low of US$27.05/oz settled up by 0.003% at US$27.25/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 Monday made an intra‐day high of US58.48/bbl, intraday low of US$56.32/bbl and settled up by 0.472% to close at US$58.24/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

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.

 
Intraday Support Levels
S1     57.00
S2     55.90
S3     54.60-54.00

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 Tuesday an intraday low of US$1.2044/EUR, high of US$1.2044/EUR and settled the day up by 0.0947% to close at US$1.2118/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 1.2090-1.1840 with risk below 1.1800, targeting 1.2150-1.2190 and 1.2300-1.2350-1.2400. Sell below 1.2150-1.2545 targeting 1.2090-1.2020-1.1960 and 1.1925-1.1870 with stop-loss at daily closing above 1.2545.

 
Intraday Support Levels
S1     1.2090-1.2020
S2     1.1960
S3     1.1925-1.1850

Intraday  Resistance Levels
R1     1.2150-1.2190
R2     1.2250
R3     1.2300-1.2340

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.812 Buy
20-DMA   1.2098 Buy
50-DMA   1.1967 Buy
100-DMA   1.1967 Buy
200-DMA   1.1673 Buy
STOCH(5,3)   90.758 Buy
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on made an intra‐day low of US$1.3730/GBP, high of US$1.3819/GBP and settled the day up by 0.166% to close at US$1.3815/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 1.3860-1.3990 with targets at 1.3800-1.3710-1.3600 and 1.3540-1.3470-1.3400 stop-loss should be 1.4000. Buy above 1.3800-1.3470 with targets 1.3860-1.3910 and 1.3990-1.4040 with stop loss closing below 1.3200.

 
Intraday Support Levels
S1     1.3800-1.3710
S2     1.3600
S3     1.3540-1.3470

Intraday Resistance Levels
R1     1.3860
R2     1.3910-1.3990
R3     1.4040

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 JPY104.49/USD and made an intraday high of JPY105.25/USD and settled the day down by 0.612% at JPY104.54/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     104.50
S2     103.50-103.15
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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