AAFX TRADING

Daily Market Lookup

  • The dollar traded higher in early European trading Tuesday, with the Federal Reserve seen as taking a more liberal stance to higher bond yields than its peers. Currency markets have recently been taking their cues from the global bond market, and while Treasury yields have stabilized the dollar has pushed higher on expectations that the Fed will show greater tolerance of higher bond yields than other central banks. Fed Chairman Jerome Powell has recently tried to tone down expectations of early tightening, saying the central bank would look through any near-term inflation spike. He will speak again at the end of the week. Additionally, Richmond Fed President Thomas Barkin played down recent Treasury market volatility, in remarks that reinforce the message that the U.S. central bank is not yet troubled by the increase in yields. However, the European Central Bank has taken a different stance, with top ECB officials expressing concern about the recent rises in bond yields. President Christine Lagarde said the central bank will prevent a premature increase in borrowing costs for firms and households, while François Villeroy de Galhau, Governor of the Bank of France, said some of the recent rises in bond yields were unwarranted. The euro also suffered Tuesday from weak German retail sales as the Covid-19 lockdown and the withdrawal of a temporary cut in sales tax hit consumer spending in Europe's largest economy. Retail sales fell 4.5% on the month in real terms after an upwardly revised decline of 9.1% in December.
  • The dollar stood firm against its low-yielding peers on Tuesday on bets of a faster economic recovery in the United States and expectations that the U.S. Federal Reserve will show greater tolerance of higher bond yields than other central banks.
  • Risk sensitive currencies stepped back from sharp gains the previous day, as China's top financial regulator discussed the need to proactively take measures to stabilise the housing market, while expressing wariness of the risk of bubbles bursting in foreign markets. The U.S. currency rose to as high as 106.93 yen, its highest since late August, and last stood at 106.78 yen while the euro dipped 0.2% to $1.2026, touching its lowest level in almost a month The euro was under pressure as top officials from the European Central Bank sounded alarm over rises in bond yields. President Christine Lagarde said the ECB will prevent a premature increase in borrowing costs for firms and households Policymaker Francois Villeroy de Galhau was even more explicit, saying some of the recent rises in bond yields were unwarranted and that the ECB must push back using the flexibility embedded in its bond purchase programme. Traders were quick to sense the marked difference in tone between the ECB and the Federal Reserve. Richmond Federal Reserve President Thomas Barkin said on Monday the uptick in long-term bond yields so far seems to suggest an adjustment to stronger growth and inflation outlook. Atlanta Fed President Raphael Bostic said last week that bond yields remain comparatively low, while Federal Reserve Chair Jerome Powell has not appeared unduly concerned by rising bond yields. The U.S. economic recovery is reckoned to be on firmer ground, bolstered by prospects of a $1.9 trillion relief package and successful rollouts of COVID-19 vaccinations. A survey by the Institute for Supply Management (ISM) released on Monday showed U.S. manufacturing activity increased to a three-year high in February amid a surge in new orders. While keeping rates at 0.1%, it emphasised that its targets for employment and inflation were not likely to be met until 2024 at the earliest.
  • Gold was down on Tuesday morning in Asia, even with a retreat in U.S. Treasury yields and progress on a massive stimulus package in the U.S. cheered investor sentiment Benchmark U.S. Treasury yields retreated further from a one-year high hit during the previous week, with the U.S. Federal Reserve continuing to downplay inflation concerns. Investors now turn to Fed Chairman Jerome Powell, who will speak at a Wall Street Journal event on Thursday where he is expected to discuss the economy. The Fed will also release its Beige Book on Wednesday. Debate on a $1.9 trillion stimulus package will begin in the Senate later in the week, the chamber’s Majority Leader Chuck Schumer said on Monday. Meanwhile, Wells Fargo (NYSE:WFC) said that it would expand its precious metals trading business, filling the gap left Bank of Nova Scotia (Scotiabank) withdrew from the market. The biggest global lender to the physical precious metals industry for years, Scotiabank made the decision to downsize in 2018 and exit the sector in 2020. Across the Atlantic, the European Central Bank reduced its net purchases of debt during the previous week, even as borrowing costs rose in the financial markets. The decision cast a shadow over the nascent recovery from COVID-19 in the euro zone economy, where the virus’ impact is still being felt.
  • Oil prices fell more than 1% on Tuesday, extending losses that began last week, as investors unwound long positions on concern that OPEC may agree to increase global supply in a meeting this week and Chinese demand may be slipping. Investors are worried the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, will boost oil output, said Hiroyuki Kikukawa, general manager of research at Nissan Securities. The group meets on Thursday and could discuss allowing as much as 1.5 million barrels per day (bpd) of crude back into the market. OPEC oil output fell in February as a voluntary cut by Saudi Arabia added to reductions agreed to under the previous OPEC+ pact, a Reuters survey found, ending a run of seven consecutive monthly increases. Market sentiment was also dampened by weak manufacturing data out of China, Nissan Securities' Kikukawa said.

 

 
Intraday RESISTANCE LEVELS
2nd March 2021 R1 R2 R3
GOLD-XAU 1,730-1,747 1,764 1,776-1,787
Silver-XAG 27.65 27.65 28.20-28.90
Crude Oil 60.10-60.60 61.40 62.00-62.90
EURO/USD 1.2015-1.2090 1.2190-1.2250 1.2190-1.2250
GBP/USD 1.3900-1.3940 1.3990 1.4040-1.4100
USD/JPY 106.90-107.50 108.00 108.50-109.00

Intraday SUPPORTS LEVELS
2nd March 2021 S1 S2 S3
GOLD-XAU 1,717 1,700 1,684-1,675
Silver-XAG 25.90-25.30 24.90 24.00-23.10
Crude Oil 59.65-59.10 57.25 56.10-55.05
EURO/USD 1.1960-1.1925 1.1890 1.1850
GBP/USD 1.3865-1.3800 1.3720 1.3650-1.3580
USD/JPY 106.10-105.60 105.00 104.50-103.90

Intra-Day Strategy (2nd 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 Monday made its intraday high of US$1759.80/oz and low of US$1719.54/oz. Gold down 0.471% at US$1724.54/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     1,717
S2     1,700
S3     1,684-1,675
Intraday Resistance Levels
R1     1,730-1,747
R2     1,764
R3     1,776-1,787

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 monday made its intraday high of US$27.06/oz and low of US$26.42/oz settled down by 0.322% at US$26.54/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 26.25-29.50 with stop loss above 30.00; targeting 25.90-25.05 and 24.90-24.45-24.00. Buy silver in between 26.50-24.60, targeting 26.50-27.25-28.20 and 28.90-29.50-29.90 with stop loss should be place on the breakage below 24.60.

 
Intraday  Support Levels
S1     25.90-25.30
S2     24.90
S3     24.00-23.10

Intraday  Resistance Levels
R1     27.65
R2     27.65
R3     28.20-28.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.085 Buy
20-DMA   27.12 Buy
50-DMA   26.45 Buy
100-DMA   25.34 Buy
200-DMA   23.91 Buy
STOCH(5,3)   15.468 Sell
MACD(12,26,9)   0.442 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US62.78/bbl, intraday low of US$59.85/bbl and settled down by 2.677% to close at US$60.07/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 59.65-55.05 with risk daily closing below 55.05 and targeting 60.10-60.60-61.40 and 62.00-62.90-63.50. Sell in between 60.10-65.40 with stop loss at 65.40; targeting 61.40-60.60 and 60.10-59.50-59.00.

 
Intraday Support Levels
S1     59.65-59.10
S2     57.25
S3     56.10-55.05

Intraday Resistance Levels
R1     60.10-60.60
R2     61.40
R3     62.00-62.90

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 Monday an intraday low of US$1.2026/EUR, high of US$1.2182/EUR and settled the day down by 0.154% 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 1.1960-1.1850 with risk below 1.1850, targeting 1.2020-1.2090-1.2150 and 1.2190-1.2300-1.2350. Sell below 1.2020-1.2340 targeting 1.1960-1.1925 and 1.1890-1.1850 with stop-loss at daily closing above 1.2340.

 
Intraday Support Levels
S1     1.1960-1.1925
S2     1.1890
S3     1.1850

Intraday  Resistance Levels
R1     1.2015-1.2090
R2     1.2190-1.2250
R3     1.2190-1.2250

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.812 Buy
20-DMA   1.2089 Sell
50-DMA   1.2140 Sell
100-DMA   1.2020 Buy
200-DMA   1.1792 Buy
STOCH(5,3)   6.758 Sell
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3903/GBP, high of US$1.3903/GBP and settled the day down by 0.548% to close at US$1.3924/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 1.3900-1.4200 with targets at 1.3860-1.3800-1.3720 and 1.3650-1.3580 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     1.3865-1.3800
S2     1.3720
S3     1.3650-1.3580

Intraday Resistance Levels
R1     1.3900-1.3940
R2     1.3990
R3     1.4040-1.4100

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

51.064

Buy
20-DMA   1.3885 Buy
50-DMA   1.3718 Buy
100-DMA   1.3460 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 Monday made intra‐day low of JPY106.88/USD and made an intraday high of JPY106.88/USD and settled the day up by 0.557% at JPY106.75/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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