AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trading Monday, rebounding to a degree after earlier falling to multi-year lows against a number of currencies as vaccine progress prompted optimism on a prompt global economic recovery. Although the greenback has edged higher Monday morning, the overall tone for the safe-haven dollar remains negative as the focus remains on the global economic recovery from Covid-19 pandemic. Federal Reserve Chairman Jerome Powell testifies before Congress this week, starting on Tuesday, and investors will study his words carefully for any clues as to when the central bank’s easy monetary policy stance will start to change. The coming week should also see some progress on the US$1.9 trillion fiscal stimulus bill, where a vote could go to the House floor on Friday. This means the Senate should see the bill the following week Additionally, USD/CNY rose 0.2% to 6.4688 after the People’s Bank of China kept its loan prime rates steady for a 10th month in February. The five-year loan prime rate was set at 4.65%, while the one-year loan prime rate was set at 3.85%.
  • The dollar was down on Tuesday morning in Asia, dropping to a near six-week low as investors await U.S. Federal Reserve Chairman Jerome Powell’s potential response to rising inflation worries. The pound, which rallied nearly 3% in 2021 as the U.K. rolled out a quick and successful COVID-19 vaccine program, in turn boosting confidence in a U.K. economic recovery. Elsewhere in Europe, the euro is set to re-test resistance around the $1.2220 mark after a small gain to $1.2165. Riskier currencies such as the AUD and NZD climbed to their highest levels in almost three years as prices for materials such as oil, copper, lumber and milk powder also rose. These gains, however, have triggered worries of a global rise in inflation and a huge sell-off in longer-dated bonds. Powell, who testifies before Congress later in the day, is expected to provide assurance that the Fed will not respond to higher inflation with an immediate rate hike, which could potentially calm bond markets and could eventually potentially cause the dollar to drop further. The market made slight moves ahead of Powell’s testimony, but expectations of low U.S. interest rates in the short term could see trade-exposed currencies could climb further, which could lead to further drops in the dollar. On the cryptocurrency front, bitcoin steadied above the $50,000 mark after a volatile session overnight that saw it trade in a $10,000 range and drop to $47,400.
  • The dollar was down on Tuesday morning in Asia, dropping to a near six-week low as investors await U.S. Federal Reserve Chairman Jerome Powell’s potential response to rising inflation worries. The pound, which rallied nearly 3% in 2021 as the U.K. rolled out a quick and successful COVID-19 vaccine program, in turn boosting confidence in a U.K. economic recovery. Elsewhere in Europe, the euro is set to re-test resistance around the $1.2220 mark after a small gain to $1.2165. Riskier currencies such as the AUD and NZD climbed to their highest levels in almost three years as prices for materials such as oil, copper, lumber and milk powder also rose. These gains, however, have triggered worries of a global rise in inflation and a huge sell-off in longer-dated bonds. Powell, who testifies before Congress later in the day, is expected to provide assurance that the Fed will not respond to higher inflation with an immediate rate hike, which could potentially calm bond markets and could eventually potentially cause the dollar to drop further. The market made slight moves ahead of Powell’s testimony, but expectations of low U.S. interest rates in the short term could see trade-exposed currencies could climb further, which could lead to further drops in the dollar.
  • Oil prices jumped by more than $1 on Tuesday, underpinned by optimism over COVID-19 vaccine rollouts and lower output as U.S. supplies were slow to return after a deep freeze in Texas shut in crude production last week. Shale oil producers in the southern United States could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output that shut down because of cold weather, as frozen pipes and power supply interruptions slow their recovery, sources said. Goldman Sachs (NYSE:GS) Commodities Research raised its Brent crude oil price forecasts by $10 for the second and third quarters of 2021, citing lower expected inventories, higher marginal costs to restart upstream activity and speculative inflows. Stockpiles of U.S. crude oil and refined products likely declined last week, a preliminary Reuters poll showed on Monday, due to the disruption in Texas. Oil was up Tuesday morning in Asia, climbing to an almost 13-month high and building on the previous session’s gains. U.S output’s recovery from the previous week’s cold snap in Texas and surrounding areas that impacted crude production is taking time. Shale oil producers estimate that it could take up to two weeks to restart more than two million barrels per day of crude output thanks to frozen pipes and power supply interruptions. The black liquid was also boosted by the Organization of the Petroleum Exporting Countries (OPEC) and U.S. oil companies recording a limited rebound in shale oil supply in 2021. The decision by top U.S. producers to freeze output despite rising prices also stands to benefit OPEC and its allies, also known as OPEC+. Investors await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
23rd February 2021 R1 R2 R3
GOLD-XAU 1,819-1,828 1,840 1.849-1862
Silver-XAG 28.20-28.90 29.50 29.90-30.50
Crude Oil 62.90-63.50 64.50 65.40
EURO/USD 1.2190 1.2250 1.2300-1.2340
GBP/USD 1.4100-1.4140 1.4200 1.4240-1.4300
USD/JPY 106.10-106.90 107.50 108.00

Intraday SUPPORTS LEVELS
23rd February 2021 S1 S2 S3
GOLD-XAU 1,800-1,787 1,776 1,764-1,747
Silver-XAG 27.65-27.25 26.50 26.05-25.30
Crude Oil 62.00-61.50 60.60 60.10-59.50
EURO/USD 1.2150-1.2050 1.2020 1.1960-1.1925
GBP/USD 1.4040-1.3990 1.3940 1.3860-1.3800
USD/JPY 105.60--105.00 104.50 103.90-103.50

Intra-Day Strategy (23rd 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$1812.53/oz and low of US$1768.30.98/oz. Gold down 0.0320% at US$1808.90/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 1800-1747 with risk below 1747, targeting 1819-1828-1840 and 1849-1862. Sell below 1819-1862 keeping stop loss closing above 1862, targeting 1800-1787-1776 and 1764-1747-1730.

 
Intraday Support Levels
S1     1,800-1,787
S2     1,776
S3     1,764-1,747
Intraday Resistance Levels
R1     1,819-1,828
R2     1,840
R3     1.849-1862

Technical Indicators

Name   Value Action
14DRSI  

33.752

Buy
20-DMA   1823.70 Sell
50-DMA  

1850.89

Sell
100-DMA   1864.05 Sell
200-DMA   1857.16 Sell
STOCH(5,3)   14.503 Buy
MACD(12,26,9)   -19.276 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$28.27/oz and low of US$27.26/oz settled up by 2.676% at US$28.12/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

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.

 
Intraday  Support Levels
S1     27.65-27.25
S2     26.50
S3     26.05-25.30

Intraday  Resistance Levels
R1     28.20-28.90
R2     29.50
R3     29.90-30.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.085 Buy
20-DMA   26.84 Buy
50-DMA   26.11 Buy
100-DMA   25.11 Buy
200-DMA   23.55 Buy
STOCH(5,3)   52.468 Sell
MACD(12,26,9)   0.442 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US62.14/bbl, intraday low of US$58.78/bbl and settled up by 5.461% to close at US$62.09/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 62.00-57.50 with risk daily closing below 57.50 and targeting 62.90-63.50-64.50 and 65.40-66.00. Sell in between 62.90-65.40 with stop loss at 65.40; targeting 62.00-61.50-60.60 and 59.50-58.80.

 
Intraday Support Levels
S1     62.00-61.50
S2     60.60
S3     60.10-59.50

Intraday Resistance Levels
R1     62.90-63.50
R2     64.50
R3     65.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.168 Sell
20-DMA   56.64 Buy
50-DMA   52.52 Buy
100-DMA   45.13 Buy
200-DMA   43.10 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$1.2090/EUR, high of US$1.2168/EUR and settled the day up by 0.334% to close at US$1.2152/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 1.2150-1.1925 with risk below 1.1925, targeting 1.2190-1.2300 and 1.2350-1.2400. Sell below 1.2190-1.2340 targeting 1.2150-1.2090-1.2020-1.1960 and 1.1925-1.1870 with stop-loss at daily closing above 1.2340.

 
Intraday Support Levels
S1     1.2150-1.2050
S2     1.2020
S3     1.1960-1.1925

Intraday  Resistance Levels
R1     1.2190
R2     1.2250
R3     1.2300-1.2340

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.812 Buy
20-DMA   1.2091 Buy
50-DMA   1.2152 Buy
100-DMA   1.2005 Buy
200-DMA   1.1764 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$1.3979/GBP, high of US$1.4085/GBP and settled the day up by 0.351% to close at US$1.4059/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 1.4100-1.4300 with targets at 1.4040-1.3990-1.3940 and 1.3860-1.3800 stop-loss should be 1.4140. Buy above 1.3860-1.3470 with targets 1.3990-1.4040 and 1.4100-1.4140 with stop loss closing below 1.3200.

 
Intraday Support Levels
S1     1.4040-1.3990
S2     1.3940
S3     1.3860-1.3800

Intraday Resistance Levels
R1     1.4100-1.4140
R2     1.4200
R3     1.4240-1.4300

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

73.806

Buy
20-DMA   1.3813 Buy
50-DMA   1.3667 Buy
100-DMA   1.3407 Buy
200-DMA   1.3086 Buy
STOCH(5,3)   89.940 Buy
MACD(12,26,9)   0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY105.59/USD and made an intraday high of JPY105.91/USD and settled the day down by 0.178% at JPY105.67/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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