AAFX TRADING

Daily Market Lookup

  • The U.S. dollar extended gains on Tuesday, partially unwinding a month long decline as investors weighed chances that interest rates will be forced higher by a roaring U.S. economic recovery and awaited upcoming data and policy speeches for clues. Tuesday's bounce nearly reversed losses sustained on Monday after a disappointing U.S. manufacturing survey report, leaving it 1% above a one-month low struck last week. Though April's headline survey numbers were lower than March, but the U.S. recovery remained firmly on track with price pressures rising, while the Federal Reserve appeared to be in no hurry to tighten. Financial conditions are nowhere near the level where the Fed would consider pulling back its support, New York Fed Bank President John Williams (NYSE:WMB) said on Monday, despite the economy being set to grow at the fastest rate in decades this year as it rebounds from the crisis caused by the coronavirus pandemic. Commerzbank (DE:CBKG) strategists said U.S. data due for durable goods orders and non-farm payrolls will provide further evidence of the economic recovery. Elsewhere central bank meetings are in focus. The Australian dollar weakened as the country's central bank sharply upgraded forecasts for the local economy yet still predicted no tightening in its super-loose policy until at least 2024.
  • The dollar was up on Tuesday morning in Asia as a surprise slowdown in U.S. manufacturing growth trimmed Investor bets on a booming U.S. economy giving the U.S. currency a boost. Japanese and Chinese markets remained closed for a holiday. The U.S.’ Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI), released on Monday, was a lower-than-expected 60.7 for April. Shortages of basic materials and transport snarls contributed to the drop, which toppled the dollar from a three-week high against the yen and a two-week high on the euro. The euro rose 0.3%, as investors digested economic data from the region. The German manufacturing PMI was 66.2 for April, while the Eurozone’s manufacturing PMI was 62.9. Investors are now looking to further data to be released later in the week including the U.S. trade balance and the April U.S. employment report which includes non-farm payrolls. Some investors suggested that strong figures might boost the dollar by bringing forward expectations for higher interest rates, while others argued that a strong U.S. economy would weigh on the greenback as imports gain and the trade deficit grows. Benchmark ten-year U.S. Treasury yields fell 2.5 basis points overnight as the data disappointed, and as New York Fed President John Williams insisted that the economic recovery so far is "not nearly enough" to tighten monetary policy. Investors also await policy decisions from Norges Bank and the Bank of England on Thursday, while the Reserve Bank of Australia (RBA) kept its interest rate steady at 0.10% when it handed down its decision earlier in the day. Investors are also looking for clues on whether RBA will upgrade economic forecasts that are due on Friday. Meanwhile, the Bank of England could announce a slowdown of its bond purchases when it hands down its policy decision on Thursday. The dollar levelled out after its recent bounce on Monday as investors made a cautious start to a week crammed with central bank meetings and big-ticket U.S. economic data, waiting for clues on the global inflation outlook and policymakers' responses. Trade was thinned by holidays in Japan, China and Britain, which kept a lid on volatility, leaving the greenback to trade where it settled after a Friday leap. It held at $1.2040 per euro and crept to a three-week high of 109.66 yen. The South Korean won hit a one-week low after North Korea vowed it would respond to what it regards as hostile U.S. policy, while pressure for a national lockdown in India pushed the rupee a little lower. Purchasing Managers Index figures for manufacturers were positive in Asia and Europe on Monday and those due later are expected to show growth picking up speed in the United States. However the week's major focus will be on U.S. manufacturing surveys due Wednesday and April labour market numbers on Friday. Forecasts are that 978,000 jobs were created in the month. However analysts say the market response to a surprise either way may be hard to guess, as investors have begun to fret that strong data may prompt central bankers to taper their support. Dallas Fed President Robert Kaplan caused a stir on Friday by calling for beginning the conversation about tapering, although Federal Reserve Chair Jerome Powell has been clear that he is likely to be patient. Powell is due to speak later on Monday and will be followed by a raft of Fed officials this week. Central bank policy meetings are also scheduled this week in Australia, Britain and Norway.
  • Oil inched up Tuesday morning in Asia as investors remained optimistic the continued economic recovery in regions such as Europe and the U.S. will boost fuel demand. However, ever-increasing numbers of COVID-19 cases in other regions put a cap on the black liquid’s gains. The European Union plans to ease curbs for the upcoming peak summer travel season, while states around the New York region in the U.S. will lift most of the COVID-19 capacity restrictions on businesses. Oil has jumped in 2021 as investors bet that the COVID-19 vaccinations would help it return to pre-COVID-19 levels. U.S. Federal Reserve Chair Jerome Powell also said on Monday that the U.S. economic recovery is “making real progress," but warned that the road towards economic recovery remains long. On the supply front, the Organization of Petroleum Exporting Countries and allies (OPEC+) will be cheered by the market’s strength so far in May as it eases production cuts. Iraq, the cartel’s second-biggest producer, forecasts the fuel price to remain around $65 a barrel in the coming months. Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day. In Asia, however, the ever-surging number of COVID-19 cases continues to cast a shadow over the market. The number of cases in India, the third-largest oil importer globally, topped 19.9 million as of May 4, according to Johns Hopkins University data. Elsewhere in Asia, countries including Japan, Thailand, Laos, Nepal and Bhutan have reported significantly rising numbers of COVID-19 cases over the past few weeks. However, investors continue to remain optimistic overall.

 

 
Intraday RESISTANCE LEVELS
4th May 2021 R1 R2 R3
GOLD-XAU 1,795-1,803 1,816 1,824-1,840
Silver-XAG 27.25-27.90 28.50 28.95-29.50
Crude Oil 65.30-66.40 67.00 67.80-68.
EURO/USD 1.2070-1.2140 1.2200 1.2240-1.2300
GBP/USD 1.3900-1.4010 1.4065 1.4100-1.4180
USD/JPY 109.00 110.00 111.00-111.70

Intraday SUPPORTS LEVELS
4th May 2021 S1 S2 S3
GOLD-XAU 1,780-1,763 1,754 1,741-1,718
Silver-XAG 26.55-26.00 25.60 24.70-23.90
Crude Oil 64.55-63.70¬ 62.70 62.00-61.45
EURO/USD 1.2010 1.1960 1.1905-1.1800
GBP/USD 1.3800-1.3747 1.3700 1.3670-1.3600
USD/JPY 108.50-107.50 107.00 106.50-105. 90

Intra-Day Strategy (4th May 2021)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Buy
EUR/USD Neutral to Sell
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Monday made its intraday high of US$1797.83/oz and low of US$1765.98/oz. Gold up 1.403% at US$1792.64/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 1780-1741 with risk below 1741, targeting 1790-1803-1816 and 1824-1830. Sell below 1795-1830 keeping stop loss closing above 1830, targeting 1763-1754-1743 and 1718-1705.

 
Intraday Support Levels
S1     1,780-1,763
S2     1,754
S3     1,741-1,718
Intraday Resistance Levels
R1     1,795-1,803
R2     1,816
R3     1,824-1,840

Technical Indicators

Name   Value Action
14DRSI  

49.752

Buy
20-DMA   1726.62 Sell
50-DMA  

1766.69

Sell
100-DMA   1812.42 Sell
200-DMA   1857.00 Sell
STOCH(5,3)   91.503 Sell
MACD(12,26,9)   -11.276 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$26.98/oz and low of US$26.85/oz settled up by 3.727% at US$26.85/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 27.25-29.50 with stop loss above 29.50; targeting 26.55-26.00-25.60 and 24.70-24.45- 23.90. Buy silver in between 26.55-22.60, targeting 27.25-27.90-28.35 and 28.90-29.50 with stop loss should be place on the breakage below 22.60.

 
Intraday  Support Levels
S1     26.55-26.00
S2     25.60
S3     24.70-23.90

Intraday  Resistance Levels
R1     27.25-27.90
R2     28.50
R3     28.95-29.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.883 Buy
20-DMA   25.88 Sell
50-DMA   25.82 Sell
100-DMA   26.01 Sell
200-DMA   25.53 Buy
STOCH(5,3)   -0.151 Buy
MACD(12,26,9)   -0.151 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US64.60/bbl, intraday low of US$62.84/bbl and settled up by 1.477% to close at US$64.40/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 62.70-58.00 with risk daily closing below 58.00 and targeting 63.70-64.45-65.30-66.00 and 66.40-67.00-67.80. Sell in between 64.55-67.80 with stop loss at 68.00; targeting 63.70-62.90-62.00 and 61.45-60.50-59.00.

 
Intraday Support Levels
S1     64.55-63.70¬
S2     62.70
S3     62.00-61.45

Intraday Resistance Levels
R1     65.30-66.40
R2     67.00
R3     67.80-68.

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.168 Sell
20-DMA   61.49 Buy
50-DMA   61.80 Buy
100-DMA   56.90 Buy
200-DMA   48.96 Buy
STOCH(5,3)   85.130 Buy
MACD(12,26,9)   1.188 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.2012/EUR, high of US$1.2075/EUR and settled the day down by 0.410% to close at US$1.2063/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 Sell

Sell below 1.2070-1.2350 targeting 1.2070-1.2010-1.1960 and 1.1905-1.1800-1.1760 with stop-loss at daily closing above 1.2400. Buy above 1.2010-1.1800 with risk below 1.1800, targeting 1.2070-1.2140-1.2200 and 1.2240-1.2300-1.2350.

 
Intraday Support Levels
S1     1.2010
S2     1.1960
S3     1.1905-1.1800

Intraday  Resistance Levels
R1     1.2070-1.2140
R2     1.2200
R3     1.2240-1.2300

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.812 Buy
20-DMA   1.1842 Sell
50-DMA   1.1962 Sell
100-DMA   1.2047 Sell
200-DMA   1.1892 Buy
STOCH(5,3)   79.758 Sell
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3800/GBP, high of US$1.3931/GBP and settled the day up by 0.731% to close at US$1.3907/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 1.3900-1.4180 with targets at 1.3800-1.3745-1.3700 and 1.3650-1.3600 stop-loss should be 1.4180. Buy above 1.3800-1.3600 with targets 1.3900-1.4010-1.4065 and 1.4100-1.4180 with stop loss closing below 1.3700.

 
Intraday Support Levels
S1     1.3800-1.3747
S2     1.3700
S3     1.3670-1.3600

Intraday Resistance Levels
R1     1.3900-1.4010
R2     1.4065
R3     1.4100-1.4180

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

56.806

Buy
20-DMA   1.3820 Buy
50-DMA   1.3852 Buy
100-DMA   1.3391 Buy
200-DMA   1.3391 Buy
STOCH(5,3)   41.940 Sell
MACD(12,26,9)   -0.0022 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY108.88/USD and made an intraday high of JPY109.69/USD and settled the day down by 0.192% at JPY109.06/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

Long positions above 108.50-105.00 with targets of 109.00-110.00 and 111.00-111.70-112.20 with stop below 106.00. Sell below 109.00-113.50 with risk above 113.50 targeting 108.50-108.00 and 107.50-106.90.

 
Intraday Support Levels
S1     108.50-107.50
S2     107.00
S3     106.50-105. 90

INTRADAY RESISTANCE LEVELS
R1     109.00
R2     110.00
R3     111.00-111.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.407 Buy
20-DMA   109.48 Sell
50-DMA   107.72 Sell
100-DMA   105.79 Sell
200-DMA   105.70 Sell
STOCH(9,6)   31.253 Sell
MACD(12,26,9)   0.508 Sell

AAFX TRADING
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