AAFX TRADING

Daily Market Lookup

  • The dollar inched up on Thursday morning in Asia after hitting a seven-month high against the yen during the previous session. With U.S. Treasuries recording orderly gains and boosting the dollar, U.S. Federal Reserve Chairman Jerome Powell is also due to give a speech later in the day. The benchmark ten-year Treasury yield gained to 1.4894% during the Asian session, with the dollar trading up against most currencies as calm continued to return to the market and boosted investor sentiment. The dollar could continue to gain against the yen should Treasury yields continue to rise in an orderly fashion but could fall against currencies of major commodities exporters as the global economy continues to recover from COVID-19. Powell will give a virtual speech to the Wall Street Journal Jobs Summit later in the day, and investors will be closely watching for any signs of concern over the recent Treasuries selloff and for any changes in his assessment of the economy ahead of the Fed’s next meeting ending Mar. 17. Concerns that the unprecedented government spending to support the global economy through COVID-19 could drive inflation up resulted in a massive selloff in Treasuries since the beginning of 2021. The selloff culminated in 10-year yields hitting their highest levels in a year during the previous week. The rise caused global shares to hit pause on their rally and the dollar to drop against most currencies. However, as calm continues to return to the market, it seems that the dollar is back on an upwards trend. However, other investors were more cautious, saying that the declines in the Australian and New Zealand dollars are likely to be temporary as both economies continue to progress in their economic recovery from COVID-19 and that an acceleration in global trade will give both currencies a boost.
  • The dollar traded higher in early European trading Thursday, helped by rising U.S. Treasury yields, while traders look to a speech by Federal Reserve Chairman Jerome Powell later for guidance. EUR/USD fell 0.1% to 1.2058, USD/JPY was up 0.1% at 107.13, after hitting a seven month high the previous session. However, commodity currencies were still well-bid: the risk-sensitive AUD/USD rose 0.5% to 0.7812, continuing to show strength after Wednesday’s strong GDP data. The kiwi and Canadian dollar also rose. The yield on benchmark 10-year U.S. Treasuries traded around 1.49% overnight, heading back towards a one-year high of 1.61% set last week on bets that a strong economic recovery aided by government stimulus will result in revived inflation, prodding the Federal Reserve into early tightening action. This brings Fed chief Jerome Powell firmly into focus, as he is due to speak at a conference at 12:05 PM EST (1705 GMT), in what will be his last outing before the Fed's policy-making committee convenes mid-March. Many Fed officials have downplayed the rise in Treasury yields in recent days, although Fed Governor Lael Brainard on Tuesday acknowledged that the rapid rise in yields had “caught her eye. The over rise in Treasury yields came despite Wednesday’s data showing the U.S. labor market struggled in February, when private payrolls rose less than expected. However, the weekly initial claims numbers will also be studied carefully, ahead of Friday’s official payrolls release.
  • OPEC, Russia and other oil producers meet on Thursday to decide whether to keep April output steady or increase it as they weigh a recent price rally against uncertainty about the economic recovery. With oil above $60 a barrel, some analysts have predicted the OPEC+ group of producers will increase output by about 500,000 barrels per day (bpd) and also expect Saudi Arabia to partially or fully end its voluntary reduction of 1 million bpd. But three OPEC+ sources said on Wednesday that some members of the Organization of the Petroleum Exporting Countries believe OPEC and its allies, a group known as OPEC+, should keep output unchanged. They said it was not immediately clear whether Saudi Arabia would end its voluntary cuts or extend them. OPEC+, whose ministers starts a meeting at 1300 GMT, have to determine whether an oil price surge from about $52 at the start of the year to more than $67 in late February warrants a production hike or whether the coronavirus crisis could deliver yet another blow to the global economy and demand for fuel. Russia has been insisting on raising output to avoid prices spiking any further and lending support to shale oil output from the United States, which is not part of OPEC+. But in February Moscow failed to raise output, despite being allowed to do so by OPEC+, because harsh winter weather hit its production at mature fields. JP Morgan cited Denis Deryushkin, Russia's representative on the OPEC+ technical committee, as saying Moscow saw some rationale in raising output because the oil market was in a 500,000 bpd deficit. A source familiar with Russian thinking said Moscow wanted to raise its output by 0.125 million bpd from April. OPEC+ cut output by a record 9.7 million bpd last year as demand collapsed due to the pandemic. As of March, it is still withholding 7.125 million bpd, about 7% of world demand. The voluntary Saudi cut brings the total withheld to 8.125 million bpd. Analysts from ING, MUFG and SEB all said on Thursday the market could easily absorb an increase of 1.0 million-1.5 million bpd from April and would need even more barrels in the second half of 2021 when economy recovers further from pandemic. The Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, are considering rolling over production cuts into April instead of raising output, as a recovery in oil demand remains fragile due to the coronavirus crisis, three OPEC+ sources told Reuters. The market had been expecting OPEC+ to ease production cuts by around 500,000 barrels per day (bpd) from April and for OPEC leader Saudi Arabia to end its voluntary production cut of an additional 1 million bpd.

 

 
Intraday RESISTANCE LEVELS
4th March 2021 R1 R2 R3
GOLD-XAU 1,730-1,747 1,764 1,776-1,787
Silver-XAG 26.50-27.25 27.65 28.20-28.90
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 1.3950-1.3990 1.4040 1.4100-1.4200
USD/JPY 108.00 108.50-109.00 109.90

Intraday SUPPORTS LEVELS
4th March 2021 S1 S2 S3
GOLD-XAU 1,715-1,700 1,684 1,675-1,650
Silver-XAG 26.05 24.90-24.00 24.90-24.00
Crude Oil 61.25-60.90 60.20 59.10-58.50
EURO/USD 1.2015 1.1960 1.1925-1.890
GBP/USD 1.3900-1.3865 1.3800 1.3705
USD/JPY 106.90-107.50 106.10 105.60-105.00

Intra-Day Strategy (4th 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 Wednesday made its intraday high of US$1740.40/oz and low of US$1717.16/oz. Gold down 1.518% at US$1710.83/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 1715-1664 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     1,715-1,700
S2     1,684
S3     1,675-1,650
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 Wednesday made its intraday high of US$26.81/oz and low of US$25.82/oz settled down by 2.32% at US$26.07/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 26.50-29.50 with stop loss above 30.00; targeting 25.90-25.05 and 24.90-24.45-24.00. Buy silver in between 26.00-24.60, 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     26.05
S2     24.90-24.00
S3     24.90-24.00

Intraday  Resistance Levels
R1     26.50-27.25
R2     27.65
R3     28.20-28.90

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 Wednesday made an intra‐day high of US61.84/bbl, intraday low of US$59.14/bbl and settled up by 2.59% to close at US$60.91/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 61.20-59.50 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     61.25-60.90
S2     60.20
S3     59.10-58.50

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 Wednesday an intraday low of US$1.2041/EUR, high of US$1.2112/EUR and settled the day down by 0.219% to close at US$1.2062/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 1.2020-1.1925 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     1.2015
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 Monday made an intra‐day low of US$1.3920/GBP, high of US$1.4005/GBP and settled the day down by 0.007% to close at US$1.3950/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     1.3950-1.3990
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 Wednesday made intra‐day low of JPY106.66/USD and made an intraday high of JPY107.14/USD and settled the day down by 0.307% at JPY107.00/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 108.00-109.90 with risk above 109.90 targeting 106.90-106.10-105.60 and 105.00-104.50-104.00. Long positions above 106.90-105.00 with targets of 106.90-107.50-108.00 and 108.50-109.00 with stop below 103.00.

 
Intraday Support Levels
S1     106.90-107.50
S2     106.10
S3     105.60-105.00

INTRADAY RESISTANCE LEVELS
R1     108.00
R2     108.50-109.00
R3     109.90

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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