AAFX TRADING

Daily Market Lookup

  • The dollar pushed higher in early European trading Monday, with the Turkish lira particularly hard hit after President Recep Tayyip Erdogan abruptly removed his hawkish central bank governor from office. That said, a lot of the market’s focus will be on the Turkish lira, with USD/TRY up 8.4% at 7.8226 following Erdogan's shock weekend decision to dismiss central bank governor Naci Agbal after just four months in the role. The decision came only days after he announced a sharp rise in interest rates to combat rising inflation. Erdogan subsequently appointed Sahap Kavcioglu, a ruling party lawmaker who has argued for lower interest rates, raising fears he will reverse the orthodox moves taken to battle inflation, which could lead to prolonged market volatility. In his short time on the job, Agbal had raised rates by 875 basis points to 19% and regained some policy credibility prompting the lira to rally from the depths Worries that this turmoil would spread to other emerging markets has helped the dollar, with USD/RUB, for example, rising 0.8% to 74.732 despite the Russian central bank raising its key rate on Friday for the first time since 2018. Later this week, investors will turn their attention to a heavy slate of U.S. bond auctions focused in maturities that have seen heavy selling of late amid a brightening outlook for growth and inflation. Additionally, Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen are expected to make their first joint appearance before the U.S. House Financial Services committee to testify on Fed and Treasury pandemic policies on Tuesday.
  • The dollar was up on Monday morning in Asia, but the Turkish lira tumbled towards a record low against the greenback after President Recep Tayyip Erdoğan replaced hawkish central bank governor Naci Agbal over the weekend. Erdogan fired Agbal in a surprise move that came two days after a sharp rate hike aimed at heading off nearly 16% inflation and support the lira. With Sahap Kavcioglu now at the helm, the central bank will likely reverse the hawkish steps taken to battle inflation so far, which could lead to prolonged market volatility. The Turkish lira stood at 8.10 per dollar in early Asia trade, down 11% from its close on Friday. The lira fell by as much as 14.9% to 8.4850 at one point, close to a record low of 8.5800. Liquidity was thin during early trading in Asia, but some investors were bracing for bigger moves as European and U.S. markets open later in the day. Other inventors worried that the events in Turkey could cause disruptions in other financial markets giving the safe-haven dollar a boost. The yen climbed against the euro, the AUD, and the NZD, with the safe-haven asset boosted by expectations that Japanese investors will cut their losses on the lira, which they had bought due to its high rates, and unwind other popular cross yen trades. Further declines in the AUD and the NZD are likely to be limited because both currencies will still benefit from rising commodity prices and an acceleration in global trade, Mizuho’s Yamamoto said.
  • Gold was down on Monday morning in Asia as the dollar remained buoyant and ten-year Treasury yields remained near their highest level in more than a year. U.S. Treasury auctions of two-, five- and seven-year debt later in the week are also on investors' radars. Big U.S. banks will also have to resume holding an extra layer of loss-absorbing capital against U.S. Treasuries and central bank deposits from April onwards after the U.S. Federal Reserve said on Friday it would not extend a temporary COVID-19 regulatory break due to expire in March 2021. Fed Chairman Jerome Powell reiterated in a Wall Street Journal editorial that the Fed will continue to provide aid to the economy “for as long as it takes” with the recovery currently far from complete. He added the U.S. would pull out of the COVID-19 crisis “stronger and better, as we have done so often before.” Investors also look to the BIS Innovation Summit later in the day, where Powell is on the speaker list alongside other central bank heads including European Central Bank’s Christine Lagarde and the Bank of England’s Andrew Bailey. Powell and Treasury Secretary Janet Yellen will also make their first joint appearance before the U.S. House Financial Services Committee on Tuesday to testify on Fed and Treasury COVID-19 policies. Across the Atlantic, Turkey’s surprise replacement of central bank governor Naci Agbal over the weekend also drove investors to the safe-haven dollar. President Recep Tayyip Erdoğan’s replacement of Agbal with Sahap Kavcioglu also sparked fears of turmoil in other financial markets.
  • Oil prices resumed their decline on Monday, falling more than 1% on renewed concerns that European lockdowns may slow an anticipated recovery in demand for fuel products. Germany plans to extend a lockdown to contain COVID-19 infections into a fifth month, according to a draft proposal, after new cases exceeded levels authorities say will cause hospitals to be overstretched. Confidence in the safety of AstraZeneca's COVID-19 vaccine has taken a big hit in Spain, Germany, France and Italy as reports of rare blood clots have been linked to it and many countries briefly stopped using it, poll data showed on Monday. The Organization of the Petroleum Exporting Countries (OPEC)and its allies have put in place unprecedented production cuts in a pact to balance global markets after demand plunged during the COVID-19 pandemic U.S. drillers, meanwhile, are starting to take advantage of an earlier spike in prices on optimism about returning demand, adding the most rigs for extracting oil since January in the week through Friday. The oil and gas drilling rig tally, an early indicator of future production, rose by nine to 411 last week, the highest since April, energy services firm Baker Hughes Co said in its closely followed report on Friday. The rig count has been rising over the past seven months and is up nearly 70% from a record low of 244 in August. Germany is the latest country to consider extending restrictive measures, with a draft proposal calling for the current lockdown to be extended into a fifth month as the number of new COVID-19 cases surge. On the supply side, the OPEC+ has implemented exceptional production cuts to prop markets up as COVID-19 caused fuel demand to plunge. In the U.S., drillers are starting to cash in on an earlier spike in prices, adding the most rigs for extracting oil since January in the week through Friday. Energy services firm Baker Hughes Co said in its report that the oil and gas drilling rig tally, an early indicator of future production, rose nine to 411 during the previous week, the highest since April 2020. The rig count has been rising over the past seven months and is up nearly 70% from August 2020’s record low of 244.

 

 
Intraday RESISTANCE LEVELS
22nd March 2021 R1 R2 R3
GOLD-XAU 1,742 1,751 1,764-1,776
Silver-XAG 26.05-26.50 27.25 27.65-28.20
Crude Oil 61.40-62.00 62.55 63.50-64.70
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
22nd March 2021 S1 S2 S3
GOLD-XAU 1,730-1,715 1,705 1,684-1,675
Silver-XAG 25.40 24.90 24.10-23.60
Crude Oil 59.25-58.25 57.10 56.40-56.00
EURO/USD 1.1905-1.1850 1.1810 1.1760-1.1705
GBP/USD 1.3865-1.3800 1.3747 1.3700-1.3650
USD/JPY 108.50-108.00 107.50 106.90-106.10

Intra-Day Strategy (22nd 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$1746.58/oz and low of US$1728.40/oz. Gold up 0.538% at US$1745.27/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 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 Friday made its intraday high of US$26.30/oz and low of US$25.86/oz settled down by 0.787% at US$26.22/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     25.40
S2     24.90
S3     24.10-23.60

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.994 Buy
20-DMA   26.25 Sell
50-DMA   26.37 Sell
100-DMA   25.56 Sell
200-DMA   24.49 Buy
STOCH(5,3)   38.468 Buy
MACD(12,26,9)   -0.151 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US61.74/bbl, intraday low of US$58.98/bbl and settled up by 3.09% to close at US$61.42/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 59.25-56.00 with risk daily closing below 59.00 and targeting 61.40-62.00-62.55 and 63.50-64.70. Sell in between 61.40-64.70 with stop loss at 65.00; targeting 59.25-58.25-57.10 and 56.40-56.00.

 
Intraday Support Levels
S1     59.25-58.25
S2     57.10
S3     56.40-56.00

Intraday Resistance Levels
R1     61.40-62.00
R2     62.55
R3     63.50-64.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.168 Sell
20-DMA   62.99 Buy
50-DMA   58.37 Buy
100-DMA   51.51 Buy
200-DMA   45.93 Buy
STOCH(5,3)   18.130 Sell
MACD(12,26,9)   1.188 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1905/EUR, high of US$1.1988/EUR and settled the day down by 0.083% to close at US$1.1911/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 1.1900-1.1705 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     1.1905-1.1850
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 Friday made an intra‐day low of US$1.3829/GBP, high of US$1.3958/GBP and settled the day down by 0.354% to close at US$1.3873/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 Friday made intra‐day low of JPY108.60/USD and made an intraday high of JPY109.12/USD and settled the day down by 2.12% at JPY108.88/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     109.40
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

AAFX TRADING
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