AAFX TRADING

Daily Market Lookup

  • The dollar headed for its first losing week in three as new signs of weakness in the U.S. jobs market dented investor expectations about the pace of economic recovery from the pandemic. Bitcoin hit a new all-time high of $49,000 on Friday after BNY Mellon (NYSE:BK) became the latest firm to embrace cryptocurrencies, saying it will form a new unit to help clients hold, transfer and issue digital assets. The dollar remained on the back foot on Friday in Asia, pinned near two-week lows, after the release of weaker-than-expected weekly U.S. jobless claims data the previous day. That added to recent concerns that the dollar's previous rally had priced in too fast a pace of rebound for the U.S. economy. The dollar index edged up less than 0.1% to 90.49 in holiday-thinned trade due to the Lunar New Year, and was on track to fall 0.6% for the week. There has been a divergence in views among traders this year over just how U.S. President Joe Biden's planned $1.9 trillion fiscal stimulus package will affect the dollar. Some see it as bolstering the currency as it should speed a U.S. recovery relative to other countries, while others reckoned it would feed a global reflation narrative that should lift riskier assets at the dollar's expense.
  • The dollar was largely unchanged in early European trading Thursday, continuing to trade around two-week lows, after Fed chief Jerome Powell emphasised the need to keep monetary policy accommodative for some time. Federal Reserve Chairman Jerome Powell said Wednesday, while he spoke at the Economic Club of New York, a "patiently accommodative monetary policy stance" is important to boost the labor market and the overall economy following a stall in recent months There have been notable names in recent days, including Larry Summers and Oliver Blanchard, who have started to warn against the risk of overheating the U.S. economy, largely as a result of President Joe Biden’s $1.9 trillion stimulus plan. However, Powell reiterated that a strong labor market would not solely be a trigger to tighten monetary policy as full employment, part of the Fed's dual mandate, was unlikely to cause an unwanted increase in inflation. The view of a prolonged lax monetary stance was also boosted by the release Wednesday of disappointing U.S. inflation data, with core CPI flat on the month in January, growing just 1.4% on the year. The main U.S. economic release Thursday will be the weekly iinitial claims data, with traders looking for the labor market to continue to recover after the setback in December as the second surge of the pandemic caused more businesses to shut down. Elsewhere, GBP/USD climbed 0.1% to 1.3831, climbing towards a three-year high, boosted by diminishing expectations for negative interest rates in the U.K. as the country’s vaccination program continues to proceed relatively smoothly. Still, there could be trouble for sterling ahead as tensions between the EU and the U.K, start to rise again over the part of the Brexit deal covering Northern Ireland. Late Wednesday, the European Union rebuffed the U.K.’s call to reset the two sides’ relationship, after Britain had requested to delay the implementation of border checks on some goods entering the province. This follows a row in late January when the commission briefly threatened to trigger an emergency clause in the Brexit divorce deal to curb vaccine exports to Northern Ireland. Also on Wednesday, Bank of England Governor Andrew Bailey accused the EU in a keynote speech of double standards in withholding "equivalent" regulatory status for the U.K.'s financial services, something that has seen an abrupt shift of business away from London to the continent since the start of the year.
  • Oil prices fell a second day on Friday, extending losses after OPEC cut its demand forecast and the International Energy Agency said the market was still over-supplied. Both benchmarks closed on Wednesday at their highest levels since January 2020 after a nearly record-setting run of consecutive daily gains. Oil prices have risen over the last few weeks as OPEC and other producers in the group known as OPEC+ cut production, while Saudi Arabia also promised unilateral reductions in output that started this month. U.S. crude's relative strength index was at the most overbought level since the second Iraq war, Yawger noted. Oil demand around the world in 2021 will recover more slowly than earlier thought, the Organization of the Petroleum Exporting Countries (OPEC) said. Previously, the International Energy Agency (IEA) said oil supply was still outstripping demand globally, although COVID-19 vaccines are expected to help demand recover. U.S. crude inventories dropped unexpectedly last week, declining by more than 6 million barrels as refiners increased output to pre-pandemic levels, according to the Energy Information Administration. Analysts in a Reuters poll had forecast a rise of nearly 1 million barrels. Still, gasoline inventories increased more than expected, gaining by 4.3 million barrels in the last week, against forecasts of a 1.8 million rise. Gasoline demand over the last four weeks is 10% below the same time last year. Crude oil prices dipped on Thursday as two leading industry bodies issued cautiously optimistic forecasts for global demand this year. While both the International Energy Agency and the Organization of Petroleum Exporting Countries both predicted a solid rebound in demand in the latter part of the year, they both trimmed their forecasts or the year overall due to the impact of longer-than-expected lockdowns at the start o the year in much of the Northern Hemisphere, notably in Europe. Germany, the continent’s largest economy, decided to extend most of its lockdown measures until March after a meeting of state and federal governments this week, while the U.K. is set to extinguish what remains of inbound international travel with a highly restrictive quarantine for new arrivals. The IEA shaved 200,000 barrels a day from its January estimate to an average of 96.4 million barrels a day and said that “the forecasts for economic and oil demand growth are highly dependent on progress in distributing and administering vaccines, and the easing of travel restrictions in the world’s major economies.” It noted that it expects U.S. supply to remain mostly steady at 11.4 million barrels a day, noting that most U.S. companies have given few signs of increasing output to their shareholders. He added that near-term fundamentals had taken a turn for the bearish amid reports that a strike in Libya by port guards is set to end, allowing the resumption of exports from key facilities. The strike had cut the country’s output more than 200,000 barrels a day. One company that confirmed its long-term downward output trend earlier was Royal Dutch Shell (LON:RDSa), which said that its oil output peaked in 2019 as it unveiled further details of its planned transformation into a carbon neutral company.

 

 
Intraday RESISTANCE LEVELS
12th February 2021 R1 R2 R3
GOLD-XAU 1,839-1,828 1,849 1,862-1,870
Silver-XAG 27.25-27.65 28.20 28.90-29.50
Crude Oil 58.00-58.80 59.50 60.10-60.60
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
12th February 2021 S1 S2 S3
GOLD-XAU 1,819-1,800 1,787 1,776-1,764
Silver-XAG 26.50-26.05 25.30 24.40-24.00
Crude Oil 57.50-57.00 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 104.50 103.90 103.50-103.15

Intra-Day Strategy (12th 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 Thursday made its intraday high of US$1855.28/oz and low of US$1821.08/oz. Gold down 0.968% at US$1842.61/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 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     1,819-1,800
S2     1,787
S3     1,776-1,764
Intraday Resistance Levels
R1     1,839-1,828
R2     1,849
R3     1,862-1,870

Technical Indicators

Name   Value Action
14DRSI  

43.752

Buy
20-DMA   1840.29 Sell
50-DMA  

1857.01

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$27.278/oz and low of US$26.69/oz settled up by 0.0074% at US$26.95/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 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 Thursday made an intra‐day high of US58.55/bbl, intraday low of US$57.96/bbl and settled down by 0.096% to close at US$57.77/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 58.00-51.30 with risk daily closing below 51.30 and targeting 58.40-58.80 and 59.50-60.10. Sell in between 58.00-60.60 with stop loss at 60.60; targeting 57.50-57.00-55.90 and 54.60-54.00-53.60.

 
Intraday Support Levels
S1     57.50-57.00
S2     55.90
S3     54.60-54.00

Intraday Resistance Levels
R1     58.00-58.80
R2     59.50
R3     60.10-60.60

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 Thursday an intraday low of US$1.2112/EUR, high of US$1.2148/EUR and settled the day up by 0.0949% to close at US$1.2127/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   1.2151 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 Thursday made an intra‐day low of US$1.3799/GBP, high of US$1.3858/GBP and settled the day down by 0.101% to close at US$1.3813/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 Thursday made intra‐day low of JPY104.54/USD and made an intraday high of JPY104.79/USD and settled the day up by 0.150% at JPY104.73/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     103.90
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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