AAFX TRADING

Daily Market Lookup

  • The dollar surged Friday, riding on the coattails of the recent surge U.S. Treasury yields amid bets the U.S. will emerge from the crisis stronger than its peers, but the greenback's momentum is unlikely to last, experts warn. Expectations the U.S. economy is likely to emerge from the crisis "better and faster than many other economies" has pushed inflation expectations and the 10-year U.S. Treasury yield sharply higher recently, sparking a move higher in the dollar. Data on Friday, however, showed that fears of runaway inflation could be misplaced as the personal consumption expenditures (PCE) price index, the Federal Reserve preferred measure of inflation, showed price pressures were tepid last month. In the 12 months through January, the PCE price index increased 1.5% from 1.4% in December. But with another round of fiscal stimulus expected to come, and the Federal Reserve seemingly content to continue its pace of the bond purchases and near-zero interest rates, investors are pricing a further run-up in inflation that could boost prices. Others, however, don't expect inflation and the knock-on uptick in the dollar to sustain their run higher.
  • The dollar climbed higher in early European trading Friday, lifted by a sharp rise in U.S. Treasury yields, while riskier currencies were hit hard amid fears central banks will have to tighten sooner than previously expected. Government bonds, and particularly U.S. Treasuries, have started to become the focal point of markets globally, as traders now expect inflation to rise aggressively as economies recover on the back of extreme levels of fiscal stimulus and very loose monetary policies. As such, the fact that a Treasury auction on Thursday drew the weakest ratio ever of bids relative to the intended sale volume was the catalyst for a broad collapse in risk sentiment across markets. The yield on the benchmark 10-year U.S. Treasury note briefly crossed the 1.6% level to trade at its highest level in more than a year. While central bank rhetoric has remained very dovish - notably the testimony this week from Federal Reserve Chairman Jerome Powell, the rise in bond yields has indicated a growing belief that monetary policies will have to be tightened more quickly than originally envisioned. The bank says the dollar is at risk of wrong-footing the consensus once more, strengthening rather than weakening in 2021, and lowers its year-end forecast for EUR/USD to 1.16.
  • Gold was up on Monday morning in Asia, recovering from an eight-month low reached during the previous session, with a weakening dollar boosting the yellow metal’s appeal. However, bullion recorded its worst monthly fall since November 2016 in February, thanks to rising U.S. Treasury yields increasing the opportunity cost of holding gold. The ensuing bond market selloff saw government bond yields in the U.S., Germany and Australia ending February with their biggest monthly rises in years and central banks globally scrambling to calm the panic. U.S. Treasury yields soared to their highest level in a year as bets on accelerating inflation raised concerns that there could be a pullback in monetary policy support. In other central bank news, the U.S. Federal Reserve will release its Beige Book on Wednesday, and Fed Chairman Jerome Powell will discuss the economy at a Wall Street Journal event scheduled for Thursday. Investors decreased bullish positions in COMEX gold and silver contracts in the week to Feb. 23, the U.S. Commodity Futures Trading Commission said on Friday. In Asia, demand for physical gold in India grew during the past week as bullion prices remained near eight-month low prices, while there was continued steady interest for both gold and silver in Singapore. Other precious metals also gained, with silver gaining 0.3%, palladium up 1% and platinum rising 1.1%. Meanwhile, over the weekend, the U.S. also approved its third COVID-19 vaccine, the single-dose candidate developed by Johnson & Johnson (NYSE:JNJ), and the U.S. House of Representatives passed the $1.9 trillion stimulus package proposed by President Joe Biden.
  • Oil was up, rising more than $1 on Monday morning in Asia thanks to growing optimism about the global economic recovery from COVID-19. Increased prospects of a huge U.S. stimulus package and the country’s approval of a third COVID-19 vaccine also raised fuel demand recovery hopes The $1.9 trillion stimulus package proposed by U.S. President Joe Biden was passed by the House of Representatives over the weekend, with the bill now under debate in the Senate. Further positive news came out of the U.S., after the Food and Drug Administration approved the Johnson & Johnson (NYSE:JNJ) COVID-19 vaccine candidate for emergency use over the weekend. The addition of a third vaccine to the country’s vaccine rollout arsenal is sure to boost inoculation efforts, with more than 20 million doses of the vaccine expected to be shipped by the end of the month and 100 million doses by the middle of 2021. In Asia, there were also signs of a rebound in Asian growth. Data released earlier in the day showed that Japan’s manufacturing purchasing managers’ index (PMI) was 51.4 in February, above the 50.6 predicted in Investing.com forecasts and January’s 49.8 figure. Investors are now looking to a meeting of the Organization of the Petroleum Exporting Countries and allies (OPEC+) to take place during the week, for further clues on whether supply will return to the market.
  • Oil prices rose more than $1 on Monday on optimism in the global economy thanks to progress in a huge U.S. stimulus package and on hopes for improving oil demand as vaccines are rolled out. U.S. House of Representatives passed a $1.9 trillion coronavirus relief package early Saturday. Democrats who control the chamber approved the sweeping measure by a mostly party-line vote of 219 to 212 and sent it to the Senate, where Democrats planned a legislative manoeuvre to allow them to pass it without the support of Republicans. More positive news on the coronavirus vaccination front and signs of an improving Asian economy also boosted prices. A U.S. Centers for Disease Control and Prevention advisory panel voted unanimously on Sunday to recommend Johnson & Johnson (NYSE:JNJ)'s COVID-19 shot for widespread use, and U.S. officials said initial shipments would start on Sunday. J&J expects to ship more than 20 million doses by the end of March and 100 million by midyear, enough to vaccinate nearly a third of Americans. Over in Japan, a private survey showed factory activity expanding at the fastest pace in over two years in February, adding to signs of a rebound in Asian growth. On the flip side, investors are betting that this week's meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+, will result in more supply returning to the market.

 

 
Intraday RESISTANCE LEVELS
1st March 2021 R1 R2 R3
GOLD-XAU 1,747-1,764 1,776 1,787-1,800
Silver-XAG 27.25-27.65 28.90-29.50 28.90-29.50
Crude Oil 62.00-62.90 63.50 64.50-65.40
EURO/USD 1.2090-1.2150 1.2190 1.2250-1.2300
GBP/USD 1.3940-1.3990 1.4040 1.4100-1.4200
USD/JPY 106.90-107.50 108.00 108.50-109.00

Intraday SUPPORTS LEVELS
1st March 2021 S1 S2 S3
GOLD-XAU 1,730-1,717 1,700 1,684-1,675
Silver-XAG 26.50-26.05 25.30 24.90-24.00
Crude Oil 61.40 60.60-60.10 59.10
EURO/USD 1.2050-1.2015 1.1960 1.1925-1.890
GBP/USD 1.3900-1.3865 1.3800 1.3705
USD/JPY 106.10-105.60 105.00 104.50-103.90

Intra-Day Strategy (1st March 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 Friday made its intraday high of US$1775.69/oz and low of US$1717.16/oz. Gold down 1.99% at US$1734.27/oz.

Technicals in Focus:

In daily charts, prices are below 200DMA (1858) 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 1717-1664 with risk below 1664, targeting 1747-1764-1776 and 1787-1800-1819. Sell below 1747-1800 keeping stop loss closing above 1800, targeting 1730-1717-1700 and 1684-1675.

 
Intraday Support Levels
S1     1,730-1,717
S2     1,700
S3     1,684-1,675
Intraday Resistance Levels
R1     1,747-1,764
R2     1,776
R3     1,787-1,800

Technical Indicators

Name   Value Action
14DRSI  

29.752

Buy
20-DMA   1808.34 Sell
50-DMA  

1845.12

Sell
100-DMA   1858.56 Sell
200-DMA   1858.33 Sell
STOCH(5,3)   33.503 Sell
MACD(12,26,9)   -19.276 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$27.58/oz and low of US$26.12/oz settled down by 2.707% at US$26.66/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 27.25-29.50 with stop loss above 30.00; targeting 26.50-25.90-25.05 and 24.90-24.45-24.00. Buy silver in between 26.50-24.60, targeting 27.25-28.20-28.90 and 29.50-29.90 with stop loss should be place on the breakage below 24.60.

 
Intraday  Support Levels
S1     26.50-26.05
S2     25.30
S3     24.90-24.00

Intraday  Resistance Levels
R1     27.25-27.65
R2     28.90-29.50
R3     28.90-29.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.085 Buy
20-DMA   27.28 Buy
50-DMA   26.44 Buy
100-DMA   25.30 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 Friday made an intra‐day high of US63.41/bbl, intraday low of US$61.22/bbl and settled down by 2.79% to close at US$61.48/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 61.40-59.50 with risk daily closing below 59.50 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 61.40-60.60 and 60.10-59.50-59.00.

 
Intraday Support Levels
S1     61.40
S2     60.60-60.10
S3     59.10

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.168 Sell
20-DMA   59.06 Buy
50-DMA   54.04 Buy
100-DMA   48.05 Buy
200-DMA   43.88 Buy
STOCH(5,3)   82.130 Buy
MACD(12,26,9)   2.528 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.2061/EUR, high of US$1.2182/EUR and settled the day down by 0.750% to close at US$1.2074/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 1.2050-1.1925 with risk below 1.1925, targeting 1.2090-1.2150-1.2190 and 1.2300-1.2350-1.2400. Sell below 1.2090-1.2340 targeting 1.2050-1.2010-1.1960 and 1.1925-1.1870 with stop-loss at daily closing above 1.2340.

 
Intraday Support Levels
S1     1.2050-1.2015
S2     1.1960
S3     1.1925-1.890

Intraday  Resistance Levels
R1     1.2090-1.2150
R2     1.2190
R3     1.2250-1.2300

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.812 Buy
20-DMA   1.2092 Sell
50-DMA   1.2150 Sell
100-DMA   1.2016 Buy
200-DMA   1.1782 Buy
STOCH(5,3)   46.758 Sell
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3887/GBP, high of US$1.4025/GBP and settled the day down by 0.548% to close at US$1.3934/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 1.3940-1.4200 with targets at 1.3900-1.3860 and 1.3800-1.3705 stop-loss should be 1.4200. Buy above 1.3900-1.3570 with targets 1.3940-1.3990-1.4040 and 1.4100-1.4200-1.4240 with stop loss closing below 1.3470.

 
Intraday Support Levels
S1     1.3900-1.3865
S2     1.3800
S3     1.3705

Intraday Resistance Levels
R1     1.3940-1.3990
R2     1.4040
R3     1.4100-1.4200

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 Friday made intra‐day low of JPY105.84/USD and made an intraday high of JPY106.68/USD and settled the day up by 0.171% at JPY106.58/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 106.90-109.00 with risk above 109.00 targeting 106.10-105.60-105.00 and 104.50-104.00-103.10. Long positions above 106.10-103.00 with targets of 106.90-107.50-108.00 and 108.50-109.00 with stop below 103.00.

 
Intraday Support Levels
S1     106.10-105.60
S2     105.00
S3     104.50-103.90

INTRADAY RESISTANCE LEVELS
R1     106.90-107.50
R2     108.00
R3     108.50-109.00

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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