AAFX TRADING

Daily Market Lookup

  • The U.S. dollar rose on Wednesday, clawing back some of the losses sustained overnight, as U.S. yields found a floor following their drop from one-year highs. Riskier currencies including the Australian and New Zealand dollars retreated after logging big gains on Tuesday. Bitcoin turned lower after earlier topping $55,000 for the first time since Feb. 22. The dollar index has closely tracked a surge in Treasury yields in recent weeks, both because higher yields increase the currency's appeal and as the bond rout shook investor confidence, spurring demand for the safest assets. Bond investors have been selling on bets that a faster-than-expected economic rebound would spark a surge in inflation, with President Joe Biden expected to sign a $1.9 trillion coronavirus aid package as soon as this week. Many analysts still expect the dollar to weaken over the course of this year, but the speed of recent gains has forced some to adjust their views. Westpac, which last week was talking about selling the dollar index into 91, now sees it reaching as high as 94.50 before resuming last year's downtrend as the rest of the world closes the gap with the U.S. economic recovery. The dollar was up on Wednesday morning in Asia, reversing some losses from the previous session, as U.S. yields found a floor following their drop from one-year highs. The index fell back sharply from the three-and-a-half-month high reached during the previous session. Data released earlier in the day showed that February’s Consumer Price Index grew 0.6% month-on-month while contracting 0.2% year-on-year. February’s Producer Price Index grew 1.7% year-on-year. The dollar has closely tracked the recent climb in Treasury yields, with higher yields increasing the safe-haven currency’s appeal as investor confidence was shaken by the bond rout. The benchmark ten-year Treasury yield stabilized around 1.54% as the Asian session opened, after its three-day drop from a one-year high of 1.6250%. Investors continued to sell bonds on expectations of a quicker-than-expected global economic rebound from COVID-19 will lead to inflation. Driving these expectations is the U.S. House of Representatives voting to take up a $1.9 trillion stimulus package bill on Tuesday. With the Senate already passing the bill earlier in the week, the vote clears the way for the House of Representatives to consider the bill on Wednesday and President Joe Biden is expected to sign it into law as soon as this week. Although some investors expect the dollar to continue its downward trend as 2021 progresses, the speed of recent gains forced some to tweak their forecasts. Westpac, which as recently as the previous week was talking about selling the dollar index into 91, now sees it reaching as high as 94.50 before resuming last year’s downtrend as the rest of the world closes the gap with the U.S.’s pandemic recovery, Westpac analysts said in a note.
  • Oil fell for a third straight session on Wednesday as investors took profits while looking ahead to U.S. inventories data due later in the day for pointers on where prices will head next. Prices gained support last week from the OPEC+ decision to largely maintain production cuts in April. They then initially jumped on Monday, with Brent rising above $70 a barrel, after attacks by Yemeni Houthis on Saudi's oil heartland, before settling back as the alarm subsided. A combination of factors including top importers China and India drawing crude from storage at current high prices and expectations of a return in Iranian supplies have also cooled prices, he added. In the United States, crude inventories rose by 12.8 million barrels in the week to March 5, according to trading sources, citing data from industry group the American Petroleum Institute. Analysts had expected a build of about 800,000 barrels in a Reuters' poll. Official figures from the EIA are expected Wednesday at 10:30 a.m. ET. Meanwhile, higher prices are expected to bring more U.S. crude supplies back online. U.S. crude production is still expected to fall by 160,000 bpd in 2021 to 11.15 million bpd, the EIA said on Tuesday, but that's a smaller decline than its previous monthly forecast for a 290,000-bpd drop. The OPEC+ grouping - the OPEC and allied producers - may become the victim of its own success, analysts at EFG bank said, as higher prices resulting from supply restraint could incentivise U.S. oil production. Oil was up Wednesday morning in Asia but was lower than its recent multi-year highs, as technical indicators signaled that the black liquid’s rally went too far and was too fast Crude’s rally “just kept pushing and pushing and pushing ... then we had the OPEC surprise and the Saudi attack, triggering the last key surge where now a lot of the recovery and demand expectations due to the vaccines’ success has already been priced in,” Oando Corp. senior market analyst Edward Moya told Bloomberg. The output cuts from OPEC and allies (OPEC+), in force until the end of April, are widely viewed to hold the market over until fuel demand recovers, despite the widely expected short-term technical dip. Some investors were skeptical that output cuts could lead to further price gains, however. Further price gains from output cuts “have pretty much run their course … you can tighten as much as you want, but if you destroy the refining margins and product demand isn’t there, then effectively you don’t really get much further up the chain,” RCMA Group Chairman Doug King told Bloomberg. Supply-wise, Tuesday’s U.S. crude oil supply data from the American Petroleum Institute showed a build of 12.792 million barrels for the week ending Mar. 5. Forecasts prepared by Investing.com had predicted an 833,000-barrel draw, while a 7.356-million-barrel build was recorded during the previous week. Investors now await supply data from the U.S. Energy Information Administration, due later in the day. Meanwhile, routine maintenance work on North Sea oil fields is restricting supply to Asia from some Atlantic basin supplies. North Sea supplies will continue to be significantly constrained throughout the second quarter due to maintenance.
  • Gold was down on Wednesday morning in Asia. U.S. yields stabilized and a stronger dollar turned investors away from the yellow metal. U.S. Treasury yields stabilized on Wednesday after their drop overnight. On the central bank front, the European Central Bank will hand down its monetary policy on Thursday. Meanwhile, the U.S. House of Representatives voted to take up a $1.9 trillion stimulus package bill on Tuesday. With the Senate already passing the bill earlier in the week, the vote enables the House of Representatives to consider the bill on Wednesday, with President Joe Biden expected to sign it into law as soon as this week. Adding to optimism about the global economic recovery from COVID-19, the Organization for Economic Cooperation and Development’s interim economic outlook predicted that the world economy is set to rebound in 2021 with 5.6% growth and expand 4.0% in 2022. In other precious metals, the global platinum market will be roughly balanced in 2021 after a record undersupply of almost a million ounces in 2020, but more deficits could be ahead as demand picks up, according to the World Platinum Investment Council. Platinum steadied at $1,169.19.

 

 
Intraday RESISTANCE LEVELS
10th March 2021 R1 R2 R3
GOLD-XAU 1,715-1,730 1,747 1,764-1,776
Silver-XAG 26.05-26.50 27.25 27.65-28.20
Crude Oil 63.50-64.50 65.40 66.00-66.70
EURO/USD 1.1925-1.1960 1.2015 1.2090-1.2150
GBP/USD 1.3900 1.3950 1.3990-1.4040
USD/JPY 109.00 109.90 110.50-111.00

Intraday SUPPORTS LEVELS
10th March 2021 S1 S2 S3
GOLD-XAU 1,705-1,684 1,675 1,655-1,643
Silver-XAG 25.40-24.90 24.10 23.60-23.00
Crude Oil 62.90-62.00 61.30 60.90-60.00
EURO/USD 1.1760 1.1760 1.1705-1.1650
GBP/USD 1.3865-1.3747 1.3700 1.3650-1.3565
USD/JPY 108.50-108.00 107.50 106.90-106.10

Intra-Day Strategy (10th 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 Tuesday made its intraday high of US$1720.55/oz and low of US$1680.06/oz. Gold up 1.915% at US$1715.39/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 1690-1643 with risk below 1643, targeting 1715-1730-1747 and 1764-1776-1787. Sell below 1715-1776 keeping stop loss closing above 1776, targeting 1700-1684-1675 and 1675-1650.

 
Intraday Support Levels
S1     1,705-1,684
S2     1,675
S3     1,655-1,643
Intraday Resistance Levels
R1     1,715-1,730
R2     1,747
R3     1,764-1,776

Technical Indicators

Name   Value Action
14DRSI  

27.752

Buy
20-DMA   1779.87 Sell
50-DMA  

1829.00

Sell
100-DMA   1848.88 Sell
200-DMA   1858.18 Sell
STOCH(5,3)   10.503 Sell
MACD(12,26,9)   -34.276 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$26.12/oz and low of US$25.02/oz settled up by 3.26% at US$25.91/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (25.40), 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 oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, sell in between 26.05-29.50 with stop loss above 30.00; targeting 25.05-24.45 and 24.00-23.50-23.00. Buy silver in between 25.05-23.60, targeting 26.05-26.50-27.25 and 28.20-28.90-29.50 with stop loss should be place on the breakage below 24.60.

 
Intraday  Support Levels
S1     25.40-24.90
S2     24.10
S3     23.60-23.00

Intraday  Resistance Levels
R1     26.05-26.50
R2     27.25
R3     27.65-28.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.922 Buy
20-DMA   26.99 Sell
50-DMA   26.47 Sell
100-DMA   25.38 Sell
200-DMA   24.04 Buy
STOCH(5,3)   13.468 Sell
MACD(12,26,9)   -0.151 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US65.87/bbl, intraday low of US$63.60/bbl and settled down by 1.421% to close at US$63.74/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 62.90-60.00 with risk daily closing below 60.00 and targeting 63.50-64.50-65.40 and 66.00-66.70-67.50. Sell in between 63.50-67.40 with stop loss at 67.40; targeting 62.90-62.00-61.40 and 60.90-60.00.

 
Intraday Support Levels
S1     62.90-62.00
S2     61.30
S3     60.90-60.00

Intraday Resistance Levels
R1     63.50-64.50
R2     65.40
R3     66.00-66.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.168 Sell
20-DMA   61.49 Buy
50-DMA   56.39 Buy
100-DMA   49.81 Buy
200-DMA   45.02 Buy
STOCH(5,3)   52.130 Sell
MACD(12,26,9)   2.196 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1834/EUR, high of US$1.1914/EUR and settled the day up by 0.453% to close at US$1.1899/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.2028), which become immediate resistance level, break above will target 1.2090. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and still 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 1.850-1.1705 with risk below 1.1700, targeting 1.1900-1.2015-1.2090 and 1.2150-1.2190-1.2300. Sell below 1.1900-1.2190 targeting 1.1850-1.1800 and 1.1760-1.1705 with stop-loss at daily closing above 1.2340.

 
Intraday Support Levels
S1     1.1760
S2     1.1760
S3     1.1705-1.1650

Intraday  Resistance Levels
R1     1.1925-1.1960
R2     1.2015
R3     1.2090-1.2150

TECHNICAL INDICATORS
Name   Value Action
14DRSI   33.812 Buy
20-DMA   1.2089 Sell
50-DMA   1.2130 Sell
100-DMA   1.2028 Sell
200-DMA   1.1809 Buy
STOCH(5,3)   14.758 Sell
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3800/GBP, high of US$1.3924/GBP and settled the day up by 0.478% to close at US$1.3886/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 1.3865-1.3800-1.3745 and 1.3700-1.3650-1.3565 stop-loss should be 1.4200. Buy above 1.3865-1.3570 with targets 1.3900-1.3940-1.3990 and 1.4040-1.4100-1.4200 with stop loss closing below 1.3570.

 
Intraday Support Levels
S1     1.3865-1.3747
S2     1.3700
S3     1.3650-1.3565

Intraday Resistance Levels
R1     1.3900
R2     1.3950
R3     1.3990-1.4040

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 JPY108.40/USD and made an intraday high of JPY109.22/USD and settled the day up by 0.315% at JPY108.46/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 109.00-111.00 with risk above 111.00 targeting 108.50-107.50-106.90 and 106.10-105.60-105.00. Long positions above 108.50-106.00 with targets of 109.00-109.90 and 110.50-111.00 with stop below 106.00.

 
Intraday Support Levels
S1     108.50-108.00
S2     107.50
S3     106.90-106.10

INTRADAY RESISTANCE LEVELS
R1     109.00
R2     109.90
R3     110.50-111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   77.407 Buy
20-DMA   106.48 Sell
50-DMA   105.01 Sell
100-DMA   104.61 Sell
200-DMA   105.48 Sell
STOCH(9,6)   83.253 Sell
MACD(12,26,9)   1.025 Sell

AAFX TRADING
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