AAFX TRADING

Daily Market Lookup

  • The dollar held the upper hand against low-yielding currencies on Wednesday, hitting a five-month high against the yen as U.S. bond yields jumped on the prospects of further economic recovery and a possible acceleration in inflation. Bitcoin traded just below the $50,000 mark, a day after the cryptocurrency hit that level for the first time, bringing its total market capitalisation to more than $900 billion, as traders bet on its further acceptance among major companies. The dollar's index against six other major currencies jumped back from a three-week low of 90.117 hit on Tuesday to last stand at 90.665. Soaring U.S. bond yields boosted the dollar, with the 10-year yield rising to as high as 1.333% from around 1.20% at the end of last week. A sign of dwindling bets on the dollar's fall against the yen is apparent in the options market, where short-term dollar call options, or bets on the dollar, have become more expensive than dollar puts, bets against the currency. The one-week risk reversal spread is now in favour of dollar calls for the first time in almost five years. Biden tried to build public support for his $1.9 trillion coronavirus relief plan in a town hall. The euro slipped slightly to $1.2085 though its fall was less pronounced due to its gains earlier on Tuesday following strong German economic sentiment data. The New York Federal Reserve's Empire State manufacturing report released on Tuesday offered an upbeat economic picture, with a rise in its "prices paid index" stoking fear of faster inflation. That optimism was echoed by St. Louis Fed President James Bullard, who told CNBC that U.S. financial conditions were "generally good," and that inflation was likely to heat up this year. San Francisco Fed President Mary Daly, however, said pressures on inflation are still downward, pushing against critics warning low interest rates and government spending could overheat the U.S. economy and spark high inflation. The positive mood on the economic outlook is underpinning risk-sensitive currencies.
  • The dollar was up on Wednesday morning in Asia, reversing Tuesday’s losses as optimism over the global economic recovery from COVID-19 and a possible acceleration in inflation drove U.S. bond yields up. The euro saw a slight dip, although the fall was cushioned by gains from strong German economic sentiment data. February’s German Zentrum für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment Index was 71.2, higher than the 59.6 in forecasts prepared by Investing.com and January’s 61.8 reading. Bitcoin held firm after breaking past the $50,000 mark for the first time on Tuesday, with investors betting on a more widespread acceptance of the cryptocurrency among major companies The dollar rebounded from the three-week low it hit on Tuesday, as soaring U.S. bond yields also gave the U.S. currency a boost. The ten-year yield rose 1.331% from around 1.20% at the end of the previous week. The New York Federal Reserve’s Empire State manufacturing report released on Tuesday also painted an upbeat economic picture. The report showed a rise in the “prices paid index”, further stoking inflation fears. Federal Reserve Bank of St. Louis President James Bullard added to the optimism, telling CNBC that U.S. financial conditions were “generally good,” and that inflation was likely to heat up in 2021. However, Bullard’s colleague, Federal Reserve Bank of San Francisco President Mary Daly, said that pressures on inflation are still downward, pushing against warnings that low interest rates and government spending could overheat the U.S. economy and spark high inflation.
  • Bullish oil prices marked time on Wednesday, as support from supply disruptions in the U.S. south caused by an Arctic blast was offset by expectations that OPEC+ producers may ease their output curbs after April. Oil prices have run up strongly in recent months and supply disruptions caused by a historic winter storm in Texas, the country's largest oil producing state, continued to keep prices supported, analysts said. ANZ and Citigroup (NYSE:C) analysts estimated at least 2 million barrels per day (bpd) of U.S. shale oil production has been curtailed. Citi estimated a cumulative production loss of around 16 million barrels through early March. But the extreme cold has also hit crude demand due to disruptions to refinery operations. Chevron Corp 112,229 barrel-per-day (bpd) Houston-area refinery in Pasadena, Texas, was shut on Tuesday, the company said. Both oil futures dipped in early morning trade due to pressure from a stronger U.S. dollar and a potential output increase from the Organization of the Petroleum Exporting Countries and allies, known as OPEC+. OPEC+ oil producers are likely to ease curbs on supply after April given a recovery in prices, OPEC+ sources told Reuters, although any increase in output will be modest as producers are wary of fresh setbacks in the battle against the pandemic. Saudi Arabia's voluntary cut of 1 million barrels per day (bpd) ends next month. While Riyadh hasn't shared its plans beyond March with its OPEC+ partners, expectations in the group are growing that Saudi Arabia will bring back the supply from April, perhaps gradually. The OPEC+ group will meet to set policy on March 4. U.S. oil inventory data from the American Petroleum Institute industry group and the EIA will be released on Wednesday and Thursday respectively, delayed by a U.S. holiday on Monday. Analysts polled by Reuters estimated, on average, that crude stocks fell 2.2 million barrels in the week to Feb. 12. Oil was up Wednesday morning in Asia, continuing a two-day rally driven by a cold snap in Texas, the U.S.’s biggest oil-producing state, despite a strengthening dollar. The dollar was up on Wednesday, making oil priced in the greenback more expensive for buyers holding other currencies. Capping oil prices, however, was the news that Norway, western Europe’s largest oil and gas producer, averted a strike and shutdowns of major offshore fields after operator Equinor reached a wage bargain with its oil workers. However, investors had priced in a strike going ahead, as that has typically happened in the past few years, Rystad Energy analyst Paola Rodriguez-Masiu said in a note Oil supply also remains a concern in the U.S., where an unexpected cold snap has knocked out between 500,000 to 1.2 million barrels per day (bpd) of crude production in Texas’ Permian Basin. Shale oil production has also reportedly been curtailed by anywhere from 2 million bpd to 3.5 million bpd, and it is estimated that around one-fifth of the country’s refining capacity has been knocked out The hit to production has also impacted the power supply. “This is one of the worst Mother Nature catastrophes I can ever remember while catching the oil complex wrong-footed at the supply levels,” Axi’s Innes added. Investors await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
17th 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 106.10-106.90 107.50 108.00

Intraday SUPPORTS LEVELS
17th February 2021 S1 S2 S3
GOLD-XAU 1,819-1,800 1,787 1,776-1,764
Silver-XAG 26.05 26.05 25.30-24.40
Crude Oil 60.10-59.50 58.80 58.00-57.50
EURO/USD 1.2050-1.2020 1.1960 1.1925-1.1850
GBP/USD 1.3860-1.3800 1.3710 1.3600-1.3540
USD/JPY 105.60--105.00 104.50 103.90-103.50

Intra-Day Strategy (17th 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$1826/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)   52.503 Buy
MACD(12,26,9)   -4.276 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$27.94/oz and low of US$26.80/oz settled down by 1.255% at US$27.20/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     26.05
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 Tuesday made an intra‐day high of US60.27/bbl, intraday low of US$59.31/bbl and settled down by 0.031% to close at US$60.12/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 Tuesday an intraday low of US$1.2094/EUR, high of US$1.2168/EUR and settled the day down by 0.179% to close at US$1.2105/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 1.2050-1.1840 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     1.2050-1.2020
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 Tuesday made an intra‐day low of US$1.3868/GBP, high of US$1.3950/GBP and settled the day up by 0.0194% to close at US$1.3901/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   1.3034 Buy
STOCH(5,3)   88.940 Buy
MACD(12,26,9)   0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY105.17/USD and made an intraday high of JPY106.17/USD and settled the day up by 0.644% at JPY106.03/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 106.10-108.00 with risk above 108.00 targeting 105.60-105.00-104.50 and 104.00-103.10-102.50. Long positions above 105.60-101.00 with targets of 103.80-104.50 and 105.00-105.40 with stop below 101.00.

 
Intraday Support Levels
S1     105.60--105.00
S2     104.50
S3     103.90-103.50

INTRADAY RESISTANCE LEVELS
R1     106.10-106.90
R2     107.50
R3     108.00

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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