AAFX TRADING

Daily Market Lookup

  • The dollar fell to a three-week low on Tuesday, sterling hit an almost three-year high and commodity currencies rose as vaccination progress added to investors' recovery hopes. The buoyant mood, and a sell-off in U.S. Treasuries, also dragged on the safe-haven Japanese yen, which fell through its 200-day moving average against the dollar and struck multi-year lows against the euro, Aussie and Swiss franc. The dollar traded near milestone lows against other currencies. The risk-sensitive Australian dollar hit a one-month high of $0.7802 and the kiwi made a five-week peak of $0.7257. He said investors were weighing up whether the recovery would be U.S.-led, which could support the dollar, or much broader, and thus negative for the greenback as global trade picks up. Sterling, which has led the charge, extended gains to hit $1.3946, its highest level since April 2018 as Britain leads the world in per-capita vaccination speed. The currency has gained almost 3% from early-February lows. [GBP/] Soaring bitcoin made a fresh record high of $49,938, but seems rangebound just below $50,000, as profit-taking pauses a steep rally that has driven the cryptocurrency more than 60% higher this year. Besides the dollar, the Japanese yen has been the other casualty of the broad rally in financial markets, hitting a one-week low on Tuesday Recent equity gains - global stocks have climbed for a dozen days straight - have been matched by growing expectations for higher inflation, especially as central banks promise to keep rates low for a long time. Those expectations were further boosted by a jump in oil prices this week, as a cold snap shuts Texan wells, and have driven U.S. Treasury yields to their highest since March. That can affect the yen because Japanese investors are acutely sensitive to any rise in nominal U.S. yields, especially as they extend above anchored Japanese returns. Ahead on Tuesday, investors are looking to euro zone growth estimates, a German sentiment survey and U.S. manufacturing data to gauge the relative pace of the world's pandemic recovery.
  • The dollar was slightly down on Tuesday morning in Asia, with the pound rising to an almost three-year high over increasing vaccine optimism. Rising oil prices and the general optimism for a global economic recovery from COVID-19 boosted currencies exposed to commodities and trade. The pound has jumped as much as 2.5% against the dollar in less than two weeks, over hopes that the U.K.’s aggressive COVID-19 vaccine rollout will enable to the country to see a swifter economic recovery than its European peers. The pound remained above the $1.39 mark that it surpassed on Monday and was holding steady at its highest level against the euro since May 2020. Trade was thin due to holidays in both China and the U.S., however the optimism weighed on the yen. The safe-have asset dropped to a one-week low against the dollar during the previous session, while tumbling to more than two-year lows against the euro and the AUD. The Chinese yuan strengthened past 6.4 for the first time against the dollar since mid-2018 in offshore trade, taking advantage of greenback weakness in Asia. The dollar index was hovering near a two-week low reached last Wednesday. There are also inflationary pressures particularly coming from energy prices,” which is pushing up nominal yields. These are adding another weight on the yen as that can attract flows from Japan but keeping real returns on Treasuries steady, he added. On the cryptocurrency side, Bitcoin was just below the $50,000 mark as profit taking hit the pause button on a rally that has seen a more than 60% gain in 2021 to date. Investors also await data due later in the day, including the U.S.’ NY Empire State Manufacturing Index for February. Across the Atlantic, the data includes the German Zentrum für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment index, as well as the EU’s GDP and ZEW Economic Sentiment Index.
  • Oil was up Tuesday morning in Asia, after an unexpected cold snap impacted production in Texas, the biggest crude producing state in the biggest oil producer globally. Concerns also remain about supply in Saudi Arabia, the world’s biggest oil exporter, after Yemen’s Iran-aligned Houthi group said it struck airports in the country with drones. All this, in addition to accelerated COVID-19 vaccine rollouts leading to increased hopes for economic recovery and improved fuel demand, gave the black liquid a boost. The cold snap in the U.S. halted oil wells and refineries, with natural gas and crude pipeline operators also facing restrictions. The rare bout of cold weather also crippled Texas’ power system and saw 13 states impose rotating blackouts. Texas produces roughly 4.6 million barrels of oil daily, and houses 31 refineries, the most of any U.S. state and including some of the largest in the country, according to U.S. Energy Information Administration data. In the Middle East, Houthis said that they had struck Abha and Jeddah airports in Saudi Arabia with drones. A Saudi-led coalition fighting against the Iran-aligned group said on Monday that it intercepted and destroyed an explosive-laden drone fired by the Houthis toward Saudi Arabia. Meanwhile, the World Health Organization on Monday approved the COVID-19 vaccine developed by AstraZeneca PLC (LON:AZN) and Oxford University for emergency use. The approval is expected to widen access to the vaccine, which is already relatively inexpensive, in the developing world. Gold was up on Tuesday morning in Asia, with platinum prices rising for a third consecutive session, hitting its highest levels since September 2014. Hopes for a quick global economic recovery also increased expectations that demand for the auto-catalyst metal, used by automakers for catalytic converter manufacturing to clean car exhaust fumes, would also increase. However, platinum could also see its third consecutive annual deficit in 2021 over supply concerns in South Africa, the world’s largest platinum producer. Benchmark U.S. Treasury yields climbed to their highest levels since March 2020, and global shares continued their rally on Thursday. Optimism for a quick economic recovery from COVID-19 and expectations of continuous low interest rates saw investors turn to riskier assets. In Australia, the Reserve Bank of Australia released the minutes from its February meeting earlier in the day. The U.S. Federal Reserve is also scheduled to release the minutes from the Federal Open Market Committee’s January meeting on Wednesday. Across the Atlantic, the European Union (EU) is likely to decide when and how governments would start tapering support to their economies between March and May, with the rollout of vaccines in the region lifting COVID-19 lockdowns and the resumption of economic activity, officials said on Monday. EU finance ministers will meet later in the day to discuss the region’s current economic situation and outlook. The EU’s GDP and Zentrum für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment index figures are also due to be released later in the day. On the vaccine front, the World Health Organization on Monday approved AstraZeneca PLC (LON:AZN) and Oxford University’s COVID-19 vaccine for emergency use.

 

 
Intraday RESISTANCE LEVELS
16th February 2021 R1 R2 R3
GOLD-XAU 1,839-1,828 1,849 1,862-1,870
Silver-XAG 27.65-28.20 28.90 29.50
Crude Oil 60.60-61.50 62.00 62.90-64.50
EURO/USD 1.2150-1.2190 1.2250 1.2300-1.2340
GBP/USD 1.3940-1.3990 1.4040 1.4100-1.4140
USD/JPY 105.60-106.10 106.90 Sell

Intraday SUPPORTS LEVELS
16th February 2021 S1 S2 S3
GOLD-XAU 1,819-1,800 1,787 1,776-1,764
Silver-XAG 27.25-26.50 26.05 25.30-24.40
Crude Oil 60.10-59.50 58.80 58.00-57.50
EURO/USD 1.2090-1.2020 1.1960 1.1925-1.1850
GBP/USD 1.3860-1.3800 1.3710 1.3600-1.3540
USD/JPY 103.90 103.90 103.50-103.15

Intra-Day Strategy (16th 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 Monday made its intraday high of US$1826.95/oz and low of US$1815.98/oz. Gold down 0.367% at US$1817.72/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)   -4.276 Buy
MACD(12,26,9)   -4.276 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$27.69/oz and low of US$27.34/oz settled up by 0.93% at US$27.59/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 27.65-31.00 with stop loss above 31.00; targeting 27.25-26.50 and 25.90-25.05-24.45. Buy silver in between 27.25-24.60, targeting 27.65-28.20-28.90 and 29.50-29.90 with stop loss should be place on the breakage below 24.60.

 
Intraday  Support Levels
S1     27.25-26.50
S2     26.05
S3     25.30-24.40

Intraday  Resistance Levels
R1     27.65-28.20
R2     28.90
R3     29.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.334 Buy
20-DMA   26.52 Sell
50-DMA   25.87 Sell
100-DMA   24.96 Sell
200-DMA   23.32 Buy
STOCH(5,3)   54.468 Sell
MACD(12,26,9)   0.442 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US60.75/bbl, intraday low of US$59.80/bbl and settled up by 0.325% to close at US$60.02/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 60.10-57.50 with risk daily closing below 57.50 and targeting 60.10-59.50-58.80 and 58.00-. 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     60.10-59.50
S2     58.80
S3     58.00-57.50

Intraday Resistance Levels
R1     60.60-61.50
R2     62.00
R3     62.90-64.50

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 Monday an intraday low of US$1.2116/EUR, high of US$1.2144/EUR and settled the day down by 0.0263% to close at US$1.2126/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 Monday made an intra‐day low of US$1.3847/GBP, high of US$1.3918/GBP and settled the day up by 0.336% to close at US$1.3899/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 1.3940-1.4140 with targets at 1.3860-1.3800-1.3710 and 1.3600-1.3540-1.3470 stop-loss should be 1.4140. Buy above 1.3860-1.3470 with targets 1.3940-1.3990-1.4040 and 1.4100-1.4140 with stop loss closing below 1.3200.

 
Intraday Support Levels
S1     1.3860-1.3800
S2     1.3710
S3     1.3600-1.3540

Intraday Resistance Levels
R1     1.3940-1.3990
R2     1.4040
R3     1.4100-1.4140

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

68.806

Buy
20-DMA   1.3726 Buy
50-DMA   1.3592 Buy
100-DMA   1.3341 Buy
200-DMA   88.940 Buy
STOCH(5,3)   88.940 Buy
MACD(12,26,9)   0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY104.88/USD and made an intraday high of JPY105.41/USD and settled the day up by 0.436% at JPY105.35/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     103.90
S2     103.90
S3     103.50-103.15

INTRADAY RESISTANCE LEVELS
R1     105.60-106.10
R2     106.90
R3     Sell

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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