AAFX TRADING

Daily Market Lookup

  • The safe-haven U.S. dollar languished near three-year lows versus riskier currencies on Thursday as continued dovish signals from the Federal Reserve stoked reflation bets. The greenback sank to fresh lows against the Australian and Canadian dollars, and held near lows set overnight against its British and New Zealand peers. Fed Chair Jerome Powell reiterated on Wednesday that the central bank wouldn't adjust policy until the economy is clearly improving, and will look through any near-term spike in inflation. The remarks to the House of Representatives Committee on Financial Services mirrored his testimony before the Senate the day before. Easy financial conditions, the promise of fiscal stimulus and an accelerating COVID-19 vaccine rollout have driven money into what's known as the reflation trade, referring to bets on an upswing in economic activity and prices. Commodity-linked currencies are placed to benefit from a pickup in global trade, while investors have also cheered Britain's progress in recovering from the coronavirus pandemic. The euro traded near the top of its recent range at $1.2178, near the almost one-month high of $1.2180 touched earlier this week. The dollar strengthened though against other traditional safe haven currencies, maintaining a two-day gain to trade at 105.875 yen and holding near the three-month high of 90.945 Swiss francs reached overnight. The dollar was up on Thursday morning in Asia, but stayed near three-year lows, as the U.S. Federal Reserve continued a dovish stance that stoked reflation fears The U.S. currency also fell to a fresh low against the Australian dollar and hovered near lows seen overnight against the pound as well as the Canadian and New Zealand dollars. The euro was also trading near the top of its recent range, after nearing a one-month high earlier in the week.Fed Chairman Jerome Powell on Wednesday reiterated that the central bank would maintain its easy policy until there are clear signs of economic improvement and would look through the short-term rise in inflation. The comments, part of Powell’s testimony before the House of Representatives Committee on Financial Services, were not dissimilar to Powell’s testimony before the Senate on Tuesday. Investors also continue to turn to the reflation trade, placing bets on increasing economic activities and prices, driven by easy financial conditions, the promise of fiscal stimulus and an accelerating COVID-19 vaccine rollout.
  • Gold was down on Thursday morning in Asia, with higher U.S. Treasury yields and U.S. Federal Reserve Chairman Jerome Powell’s commitment to current ultra-easy monetary policy all putting a dent in the yellow metal’s appeal. Powell recommitted to getting the U.S. economy back to full employment during his testimony before the House Financial Services Committee. He also tried to calm growing fears about inflation, saying that he will only start worrying about it if prices begin to rise in a persistent and troubling way. Benchmark U.S. Treasury yields remained near the highest levels in a year hit during the previous session. Although Powell is the latest central banker to reiterate that his institution has no plans to cut back on money-printing or raise interest rates in the short term, investors will take a bit of convincing. However, investors were cheered by a third COVID-19 vaccine nearing regulatory approval. The U.S. Food and Drug Administration said on Wednesday that Johnson & Johnson's (NYSE:JNJ) one-dose COVID-19 vaccine appeared safe and effective in clinical trials and could grant emergency use approval by the end of the week. In Israel, the results from a study published and peer-reviewed in the New England Journal of Medicine on Wednesday showed that two doses of the Pfizer Inc (NYSE:PFE)/BioNTech SE COVID-19 vaccine cut symptomatic COVID-19 cases by 94% across all age groups, and severe illnesses by nearly as much. Other precious metals also saw drops, with silver slipping 0.7%, platinum falling 1.1% and palladium easing 0.1%.
  • Oil prices extended gains for a fourth session on Thursday to reach the highest levels in more than 13 months, underpinned by an assurance that U.S. interest rates will stay low, and a sharp drop in U.S. crude output last week due to the storm in Texas. An assurance from the U.S. Federal Reserve that interest rates would stay low for a while weakened the U.S. dollar, while boosting investors' risk appetite and global equity markets. A severe winter storm in Texas has caused U.S. crude production to drop by more than 10%, or 1 million barrels per day (bpd) last week, the Energy Information Administration said on Wednesday. Fuel supplies in the world's largest oil consumer could also tighten as its refinery crude inputs had dropped to the lowest since September 2008, EIA's data showed. ING analysts said U.S. crude stocks could rise in weeks ahead as production has recovered fairly quickly while refinery capacity is expected to take longer to return to normal. Barclays (LON:BARC), which raised its oil price forecasts on Thursday, said it is seeing staying power in the recent oil price rally on a weaker-than-expected supply response by U.S. tight oil operators to higher prices. The Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, is due to meet on March 4. The group will discuss a modest easing of oil supply curbs from April given a recovery in prices, OPEC+ sources said, although some suggest holding steady for now given the risk of new setbacks in the battle against the pandemic. Extra voluntary cuts by Saudi Arabia in February and March have tightened global supplies and supported prices. Oil was mixed Thursday morning in Asia. A U.S. Federal Reserve commitment to continue ultra-easy monetary policy and lower levels of U.S. crude production also gave the black liquid a boost. U.S. crude oil supply data from the U.S. Energy Information Administration (EIA) showed a build of 1.285 million barrels as of Feb. 19. Forecasts prepared by Investing.com had predicted a 5.190-million-barrel draw, while a 1.026-million-barrel draw was recorded for the previous week. EIA’s data follows that released by the American Petroleum Institute on Tuesday, which showed a build of 1.026 million barrels. The unexpected cold snap in Texas during the previous week contributed to U.S. crude production dropping one million barrels per day, or more than 10%, the EIA added. With refinery crude inputs dropping to their lowest level since September 2008, fuel supplies in the world’s largest oil consumer could also tighten. Meanwhile, the Fed reiterated its commitment to low interest rates for a while, whetting investor risk appetite and giving global shares a boost. Meanwhile, investors are looking to the next meeting of the Organization of the Petroleum Exporting Countries and allies, or OPEC+, scheduled for Mar. 4. Member states will reportedly discuss a modest easing of oil supply curbs from April onwards, as prices continue their recovery. However, some investors warn of moving ahead to quickly as the battle against COVID-19, and towards fuel demand recovery, remains far from over.

 

 
Intraday RESISTANCE LEVELS
25th February 2021 R1 R2 R3
GOLD-XAU 1,800-1,819 1,828 1,840-1.849
Silver-XAG 28.20-28.90 29.50 29.90-30.50
Crude Oil 63.50 64.50-65.40 66.00
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
25th February 2021 S1 S2 S3
GOLD-XAU 1,787 1,776 1,764-1,747
Silver-XAG 27.65-27.25 26.50 26.05-25.30
Crude Oil 62.90-62.00 61.50 60.60-60.10
EURO/USD 1.2150-1.2050 1.2020 1.1960-1.1925
GBP/USD 1.4100 1.4040 1.3990-1.3940
USD/JPY 105.60--105.00 104.50 103.90-103.50

Intra-Day Strategy (25th 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 Wednesday made its intraday high of US$1813.71/oz and low of US$1783.47/oz. Gold down 0.0166% at US$1804.51/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     1,787
S2     1,776
S3     1,764-1,747
Intraday Resistance Levels
R1     1,800-1,819
R2     1,828
R3     1,840-1.849

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 Wednesday made its intraday high of US$28.19/oz and low of US$27.81/oz settled down by 0.396% at US$27.81/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 Wednesday made an intra‐day high of US63.40/bbl, intraday low of US$60.87/bbl and settled up by 3.61% to close at US$63.35/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 62.90-59.50 with risk daily closing below 59.50 and targeting 63.50-64.50 and 65.40-66.00. Sell in between 63.50-65.40 with stop loss at 65.40; targeting 62.90-62.00-61.50 and 60.60-59.50.

 
Intraday Support Levels
S1     62.90-62.00
S2     61.50
S3     60.60-60.10

Intraday Resistance Levels
R1     63.50
R2     64.50-65.40
R3     66.00

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 Wednesday an intraday low of US$1.2108/EUR, high of US$1.2173/EUR and settled the day up by 0.102% to close at US$1.2160/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 Wednesday made an intra‐day low of US$1.4081/GBP, high of US$1.4240/GBP and settled the day up by 0.094% to close at US$1.4136/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     1.4100
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 Wednesday made intra‐day low of JPY105.16/USD and made an intraday high of JPY106.09/USD and settled the day up by 0.171% at JPY105.84/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   103.66 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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