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Daily Market Lookup

  • The dollar drifted lower in early European trading Wednesday, with traders betting on riskier currencies after Federal Reserve Chairman Jerome Powell kept a dovish stance in his semi-annual testimony to Congress. Fed chief Powell reiterated on Tuesday that U.S. interest rates will remain low for some time and the central bank will keep buying bonds to support the U.S. economy, even as Congress prepares to authorize President Joe Biden’s new $1.9 trillion support package. While these policies are designed to support the U.S. economy, many see them as being long-term negatives for the dollar. There is growing optimism about the global economic outlook, resulting in money flowing toward currencies that are expected to benefit from a pick-up in global trade and to countries that are bouncing back quickly from the pandemic. For example, NZD/USD rose 0.5% to 0.7373, a three-year high, after the Reserve Bank of New Zealand kept its interest rate unchanged at 0.25% earlier in the day. Despite saying that it was ready to reduce its overnight cash rate further if needed, the RBNZ said the risks to the economy from here on were "balanced". U.K. Prime Minister Boris Johnson outlined his plan to ease the current lockdown restrictions in stages earlier this week as the country continues its rapid vaccine rollout. The dollar slipped to a three-year low against the British pound and nursed losses against commodities currencies on Wednesday as investors increased bets that a global economic recovery will boost riskier assets. U.S. Federal Reserve Chair Jerome Powell reiterated on Tuesday that interest rates will remain low and the Fed will keep buying bonds to support the U.S. economy, which many traders say is a long-term negative factor for the dollar.At the same time, more money is flowing toward currencies that are expected to benefit from a pick-up in global trade and to countries that are bouncing back quickly from the coronavirus pandemic, which is also weighing on the dollar. The outlook for sterling has brightened as investors cheer Britain's rapid coronavirus vaccination programme and its plans to ease lockdown restrictions on economic activity. Powell pushed back against suggestions that loose monetary policy will lead to runaway inflation and financial bubbles, which have emerged as two important themes this year, because there is growing scepticism about the rapid pace of gains in global stocks. For economies that have limited disruptions caused by the coronavirus outbreak, their central bankers now face questions of when to start tightening policy, which makes the dollar look less attractive, some analysts say. The Reserve Bank of New Zealand is expected to keep policy on hold on Tuesday, but three economists in a Reuters poll expect a rate hike by the end of next year due to a quicker-than-expected economic recovery.
  • Gold was up on Wednesday morning in Asia, close to a one-week high reached during the previous session, due to a weaker dollar and comments by U.S. Federal Reserve Chairman Jerome Powell that the U.S. economy is still on the road towards recovery from COVID-19. Powell testified before the U.S. Senate Banking Committee on Tuesday that monetary policy still needed to be accommodative with economic recovery "uneven and far from complete". Some investors were optimistic about gold’s prospects. A weakening dollar was also supporting prices, with the dollar down on Wednesday. As benchmark ten-year U.S. Treasury yields drop, gold will continue to react to the moves in bond yields in the short term, Axi’s Innes added. Powell's remarks are an indication that "the stimulus trade is unlikely to go away anytime in the next six months," with a depreciation in the dollar and potential impact of inflation as a result of stimulus measures key drivers for gold, AirGuide director Michael Langford told Reuters. Investors are waiting to see whether the U.S. Congress will pass a $1.9 trillion COVID-19 stimulus package proposed by U.S. President Joe Biden later in the week.
  • Oil prices were lower on Wednesday after industry data showed a surprise build in U.S. crude stocks last week as a deep freeze in the southern states curbed demand from refineries that were forced to shut. Crude stockpiles rose by 1 million barrels in the week to Feb. 19, the American Petroleum Institute (API) reported on Tuesday, against estimates for a draw of 5.2 million barrels in a Reuters poll. API data showed refinery crude runs fell by 2.2 million bpd. Investors will be awaiting confirmation from the U.S. Energy Information Administration later on Wednesday that crude inventories rose last week, despite the hit to shale oil production amid the unprecedented icy spell in the U.S. south. Traffic at the Houston ship channel was slowly coming back to normal but terminals were still facing several issues due to last week's freezing weather in Texas. The price retreat is being seen as a pause following a rally of more than 26% to 13-month highs in both Brent and WTI since the start of the year. Prices have jumped due to the U.S. supply disruption and supply discipline by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, led by an extra 1 million bpd cut by Saudi Arabia. Oil was down Wednesday morning in Asia, with investors digesting an unexpected build in U.S. crude inventories. The build was attributable to the unprecedented cold snap that hit Texas and surrounding areas during the previous week curbing fuel demand from refineries that were forced to shut down. Wednesday's downward trend sees the black liquid press pause on a recent rally of more than 26% to 13-month highs for both Brent and WTI futures since the start of 2021. Also giving prices a boost was the supply disruption in the U.S. and the supply discipline maintained by the Organization of the Petroleum Exporting Countries and allies, or OPEC+. Saudi Arabia also took the lead by implementing an extra one-million-barrels-per-day cut earlier in 2021. Losses were capped, however, by global stimulus packages to bolster economic growth, increasing investor appetite for commodities and continued hopes that the COVID-19 vaccines rollout will lead to eased lockdown restrictions globally.

 

 
Intraday RESISTANCE LEVELS
24th 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 62.00-62.90 63.50 64.50-65.40
EURO/USD 1.2190 1.2250 1.2300-1.2340
GBP/USD 1.4200-1.4240 1.4300 1.4340-1.4380
USD/JPY 106.10-106.90 107.50 108.00

Intraday SUPPORTS LEVELS
24th 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 61.50 60.60 60.10-59.50
EURO/USD 1.2150-1.2050 1.2020 1.1960-1.1925
GBP/USD 1.4140-1.4100 1.4040 1.3990-1.3940
USD/JPY 105.60--105.00 104.50 103.90-103.50

Intra-Day Strategy (24th 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$1815.89/oz and low of US$1795.50/oz. Gold down 0.210% at US$1805.25/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 Tuesday made its intraday high of US$28.31/oz and low of US$27.23/oz settled up by 1.549% at US$27.63/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 28.20-31.00 with stop loss above 31.00; targeting 27.65-26.50 and 25.90-25.05-24.45. Buy silver in between 27.65-24.60, targeting 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     27.65-27.25
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 Tuesday made an intra‐day high of US62.90/bbl, intraday low of US$60.60/bbl and settled down by 1.464% to close at US$61.10/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 61.70-57.50 with risk daily closing below 57.50 and targeting 62.00-62.90-63.50 and 64.50-65.40-66.00. Sell in between 62.00-65.40 with stop loss at 65.40; targeting 61.50-60.60 and 59.50-58.80.

 
Intraday Support Levels
S1     61.50
S2     60.60
S3     60.10-59.50

Intraday Resistance Levels
R1     62.00-62.90
R2     63.50
R3     64.50-65.40

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$1.2134/EUR, high of US$1.2179/EUR and settled the day down by 0.027% to close at US$1.2090/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$1.4053/GBP, high of US$1.4116/GBP and settled the day up by 0.378% to close at US$1.4111/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 1.4200-1.4380 with targets at 1.4140-1.4100-1.4040 and 1.3990-1.3940-1.3860 stop-loss should be 1.4380. Buy above 1.4140-1.3470 with targets 1.4200-1.4240-1.4300 and 1.4340-1.4380 with stop loss closing below 1.3470.

 
Intraday Support Levels
S1     1.4140-1.4100
S2     1.4040
S3     1.3990-1.3940

Intraday Resistance Levels
R1     1.4200-1.4240
R2     1.4300
R3     1.4340-1.4380

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

76.806

Buy
20-DMA   1.3839 Buy
50-DMA   1.3685 Buy
100-DMA   1.3420 Buy
200-DMA   1.3096 Buy
STOCH(5,3)   86.940 Buy
MACD(12,26,9)   0.0061 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY104.91/USD and made an intraday high of JPY105.42/USD and settled the day up by 0.171% at JPY105.23/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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