AAFX TRADING

Daily Market Lookup

  • The dollar pushed higher in early European trading Thursday, helped by rising U.S. Treasury yields even after the Federal Reserve reiterated that it was in no hurry to raise interest rates while predicting strong growth in the world’s largest economy. USD/JPY was up 0.3% at 109.18, near the nine-month high hit earlier this week, as the Bank of Japan starts its two-day policy meeting, ending on Friday. A Nikkei report earlier Thursday said the BOJ is expected to slightly widen an implicit band at which it allows long-term interest rates to move around its 0% target. Chairman Jerome Powell made it pretty clear, as he handed down the central bank's latest policy decision on Wednesday, that the Fed would be sticking to its easy money policies for some time, even while predicting a strong economic recovery and a jump in inflation above target The Fed predicted that the economy would grow 6.5% in 2021, the largest annual jump in GDP since 1984 and a hefty increase from the 4.2% growth projected just three months ago. It saw core personal consumer expenditures - its favored measure of inflation - at 2.2% by the end of the year, and remaining marginally above 2% for the next two years. The yield on the benchmark 10-Year U.S. Treasury note climbed above 1.73%, its highest level in more than a year, providing support for the greenback in the wake of Powell’s dovish comments. Elsewhere, GBP/USD fell 0.1% to 1.3948, having gained around 0.5% overnight. The Bank of England is not expected to change its monetary policy stance when it meets later Thursday, but it probably will emphasize its high bar for tightening monetary policy even as the economic outlook brightens. Looking at the emerging markets, which is expected to result in a rise in borrowing costs. The Indonesian rupiah was stable after Bank Indonesia left its key rate unchanged, while the Brazilian real was holding on to a 0.8% gain after the Brazilian central bank delivered the biggest interest-rate increase in more than a decade in order to tame inflation, hiking by 75 basis points to 2.75%, and becoming the first Group of 20 country to lift rates this year. Most economists see the central bank lifting its benchmark interest rate by 100 basis points to 18%, in order to combat soaring inflationary risks given the recent rises in oil prices and lira volatility.
  • The U.S. dollar was on the defensive on Thursday after the Federal Reserve signalled it was in no hurry to raise interest rates through all of 2023 even as it saw a swift recovery in the world's largest economy. The dollar's index against six major currencies stood at 91.488. It had hit a two-week low of 91.340 after remarks from Fed Chair Jerome Powell dampened speculation the stronger economic outlook could propel the central bank to wind back its stimulus. The U.S. central bank now sees the economy growing 6.5% this year, which would be the largest annual jump in gross domestic product since 1984. Inflation is now expected to exceed the Fed's 2% target to 2.4% this year, although officials think it will move back to around 2% in subsequent years. Against the yen, the dollar slipped 0.2% to as low as 108.620 yen after a Nikkei report said the Bank of Japan (BOJ) is expected to slightly widen an implicit band at which it allows long-term interest rates to move around its 0% target. A recent Reuters poll showed two thirds of Japanese firms had expected the BOJ to curb rises in long-term interest rates and keep them steady ahead of the central bank's review this week on how it will make its stimulus policy more sustainable. The Bank of England is expected to keep its benchmark Bank Rate at a historic low of 0.1% and its bond-buying programme unchanged at 895 billion pounds later in the day. "Similar to what we've seen from the Fed, the Bank of England will talk up their prospects of the economy relative to where we've been, but at the same time emphasize that we're still a long way from full recovery," said Rodrigo Catril, senior currency strategist at National Australia Bank in Sydney. The dollar was up on Thursday morning in Asia, with the U.S. Federal Reserve saying it was in no rush to raise interest rates through all of 2023 even after predicting a V-shaped recovery in the U.S. economy. Fed Chairman Jerome Powell stuck to his dovish tone as he handed down the Fed's latest policy decision on Wednesday, putting paid to speculation that the central bank would pull back its stimulus as hopes rise for a strong economic recovery. The Fed also predicted that the economy would grow 6.5% in 2021, the largest annual jump in GDP since 1984 and a 2.3 percentage points difference from its projection three months ago. Inflation is predicted at 2.4%, above the Fed’s 2% target. However, seven of 18 Fed officials now expect higher rates in 2023, compared to five in December 2020. The Fed’s comments also sent the ten-year U.S. Treasuries yield on a roller-coaster ride, with yields at around 1.648% during the Asian session. Some investors remain concerned about potential further market volatility, however. In other central bank news, the Bank of England is widely expected to leave its benchmark bank rate at a historic low of 0.1% and its bond-buying program unchanged when it hands down its policy decision later in the day. The Bank of Japan will hand down its own policy decision on Friday.
  • Oil was down Thursday morning in Asia for the fifth consecutive day in reaction to a sustained build in U.S. crude and fuel inventories. COVID-19 also continues to cloud the fuel demand recovery outlook Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration showed a build of 2.396 million barrels for the week to Mar. 5, a fourth straight week of builds. Forecasts prepared by Investing.com had predicted a 2.964-million-barrel build, while a 13.798-million-barrel build was reported during the previous week. Supply data from the American Petroleum Institute released a day earlier, showed a surprise draw of 1 million barrels, and had raised hopes for a break in the recent string of stockpile builds. U.S. refineries continue their recovery from February’s unexpected cold snap in Texas and the surrounding areas. On the COVID-19 front, Germany reported a spike in cases while France and Italy plan to tighten restrictions. Several European countries have also halted the use of the COVID-19 vaccine developed by AstraZeneca PLC (LON:AZN)/University of Oxford due to concerns about potential side effects.

 

 
Intraday RESISTANCE LEVELS
18th March 2021 R1 R2 R3
GOLD-XAU 1,742 1,751 1,764-1,776
Silver-XAG 26.50 27.25 27.65-28.20
Crude Oil 64.70-65.20 66.00 66.70-67.50
EURO/USD 1.1960 1.2015 1.2090-1.2150
GBP/USD 1.3950 1.3990 1.4040-1.4090
USD/JPY 109.40 109.90 110.50-111.00

Intraday SUPPORTS LEVELS
18th March 2021 S1 S2 S3
GOLD-XAU 1,730-1,715 1,705 1,684-1,675
Silver-XAG 26.05-25.40 24.90 24.10-23.60
Crude Oil 63.50-62.55 62.00 61.40-59.24
EURO/USD 1.1925-1.1850 1.1810 1.1760-1.1705
GBP/USD 1.3865-1.3800 1.3747 1.3700-1.3650
USD/JPY 108.50-108 107.50 106.90-106.10

Intra-Day Strategy (18th 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$1751.54/oz and low of US$1744.86/oz. Gold up 0.798% at US$1744.86/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 overbought territory and giving positive crossover to bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1715-1643 with risk below 1643, targeting 1730-1743-1751 and 1764-1776-1787. Sell below 1730-1776 keeping stop loss closing above 1776, targeting 1700-1684-1675 and 1675-1650.

 
Intraday Support Levels
S1     1,730-1,715
S2     1,705
S3     1,684-1,675
Intraday Resistance Levels
R1     1,742
R2     1,751
R3     1,764-1,776

Technical Indicators

Name   Value Action
14DRSI  

41.752

Buy
20-DMA   1743.11 Sell
50-DMA  

1803.70

Sell
100-DMA   1835.31 Sell
200-DMA   1858.86 Sell
STOCH(5,3)   79.503 Buy
MACD(12,26,9)   -34.276 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$26.50/oz and low of US$25.74/oz settled up by 1.486% at US$26.28/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 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 26.05-29.50 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     26.05-25.40
S2     24.90
S3     24.10-23.60

Intraday  Resistance Levels
R1     26.50
R2     27.25
R3     27.65-28.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.364 Buy
20-DMA   26.66 Sell
50-DMA   26.43 Sell
100-DMA   25.44 Sell
200-DMA   24.24 Buy
STOCH(5,3)   79.468 Buy
MACD(12,26,9)   -0.151 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US66.15/bbl, intraday low of US$63.61/bbl and settled down by 0.787% to close at US$65.82/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 63.50-59.25 with risk daily closing below 59.00 and targeting 64.70-65.20-66.00 and 66.70-67.50-68.00. Sell in between 64.90-69.00 with stop loss at 69.00; targeting 63.50-62.90-62.00 and 61.40-60.50-59.25.

 
Intraday Support Levels
S1     63.50-62.55
S2     62.00
S3     61.40-59.24

Intraday Resistance Levels
R1     64.70-65.20
R2     66.00
R3     66.70-67.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.168 Sell
20-DMA   61.74 Buy
50-DMA   58.32 Buy
100-DMA   51.33 Buy
200-DMA   45.85 Buy
STOCH(5,3)   34.130 Sell
MACD(12,26,9)   2.196 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1885/EUR, high of US$1.1984/EUR and settled the day up by 0.658% to close at US$1.1979/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 neutral territory and still giving positive crossovers to signal for bullish 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 1.1925-1.1705 with risk below 1.1700, targeting 1.1960-1.2015-1.2090 and 1.2150-1.2190-1.2300. Sell below 1.1960-1.2190 targeting 1.1925-1.1850-1.1800 and 1.1760-1.1705 with stop-loss at daily closing above 1.2340.

 
Intraday Support Levels
S1     1.1925-1.1850
S2     1.1810
S3     1.1760-1.1705

Intraday  Resistance Levels
R1     1.1960
R2     1.2015
R3     1.2090-1.2150

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.812 Buy
20-DMA   1.2043 Sell
50-DMA   1.2098 Sell
100-DMA   1.2035 Sell
200-DMA   1.1828 Buy
STOCH(5,3)   66.758 Buy
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3850/GBP, high of US$1.3970/GBP and settled the day up by 0.448% to close at US$1.3956/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 1.3865-1.4200 with targets at 1.3800-1.3745 and 1.3700-1.3650-1.3565 stop-loss should be 1.4200. Buy above 1.3800-1.3570 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     1.3865-1.3800
S2     1.3747
S3     1.3700-1.3650

Intraday Resistance Levels
R1     1.3950
R2     1.3990
R3     1.4040-1.4090

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

56.806

Buy
20-DMA   1.3943 Buy
50-DMA   1.3775 Buy
100-DMA   1.3521 Buy
200-DMA   1.3184 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 JPY108.73/USD and made an intraday high of JPY109.31/USD and settled the day down by 0.133% at JPY108.83/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 109.40-111.00 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
S2     107.50
S3     106.90-106.10

INTRADAY RESISTANCE LEVELS
R1     109.40
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

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