AAFX TRADING

Daily Market Lookup

  • The dollar hit its highest in over two weeks on Wednesday, extending a rally as chatter about the possibility of higher U.S. interest rates and a sell-off in tech stocks soured risk sentiment to the benefit of the safe-haven currency. The bounce was partly sparked by comments from U.S. Treasury Secretary Janet Yellen that rate hikes may be needed to stop the economy overheating. Yellen later downplayed their importance, but even the slightest mention of U.S. tightening has an outsized impact in markets that have become so dependent on monetary stimulus. So far, Federal Reserve Chair Jerome Powell has argued the labour market is still far short of where it needs to be to start talking of tapering asset buying. That position could be tested on Friday should the April payrolls report be as strong as some are suggesting. The median forecast is for a rise of 978,000, but estimates stretch as high as 2.1 million. Three more Fed officials are speaking later on Wednesday providing the opportunity for further market-moving comments. Westpac analysts pointed to expectations for a blockbuster payrolls number as a factor helping the dollar build a base. Europe's reopening and pick up in the pace of vaccinations could limit the dollar's gains, they wrote. Trading was limited in Asia with Japan and China on holiday, but the New Zealand dollar blipped higher to $0.7170 when local jobs data proved strong than expected. The dollar pushed higher Wednesday, boosted by talk of higher U.S. higher interest rates while a selloff in tech stocks raised its safe haven appeal. This bounce in the dollar came in the wake of comments from U.S. Treasury Secretary Janet Yellen suggesting rate hikes may be needed in the near future. Yellen later tried to row back on the significance of these remarks, but the mere mention of U.S. tightening spooked a market that has become so influenced by the Federal Reserve’s monetary stimulus. The tech-heavy Nasdaq Composite slumped on Wall Street as investors dumped the giant tech stocks on concerns their valuations would be hit in a rising interest rates environment. Investors are now looking to the ADP National Employment Report, due later in the day, and the April employment report, including non-farm payrolls, due on Friday. Additionally, the ISM Non-Manufacturing Purchasing Managers Index is also due later Wednesday. The Norges Bank is widely expected to maintain its key rate at zero, and “we are most interested in how they assess the latest vaccine news and the outlook for the reopening of the Norwegian economy. This is clearly the most important factor for when the first rate hike will occur,” said Nordea. Poland's central bank is also due to meet later, amid speculation that it will change its guidance to reflect an earlier tightening of monetary policy than previously expected.
  • Gold was down on Wednesday morning in Asia as investors digested U.S. Treasury Secretary Janet Yellen’s comments about the possibility of interest rate hikes. Yellen on Tuesday said that interest rate hikes might be needed to stop the economy overheating due to U.S. President Joe Biden’s spending plans. She clarified later in the day, however, that she saw no signs of inflation and was not predicting the U.S. Federal Reserve’s move on rates. Investors now await comments from other senior Fed officials, including Chicago Fed President Charles Evans and Cleveland Fed President Loretta Mester. Questions also remain pertaining to whether Biden will nominate Fed Chairman Jerome Powell for a second four-year term remains. On the data front, investors await other upcoming economic data from the U.S., including the Institute of Supply Management (ISM) Non-Manufacturing Purchasing Managers Index (PMI) and ADP National Employment Report, both due later in the day. April’s employment report, including non-farm payrolls, is due on Friday. Across the Atlantic, the Bank of England will hand down its policy decision on Thursday. In other precious metals, silver was steady at $26.52 per ounce and palladium inched up 0.1%, while platinum edged down 0.2%. Top producer Nornickel, a Russian nickel and palladium mining and smelting company, reported two waterlogged mines in Siberia which contributed to a supply shortfall.
  • Oil was up Wednesday morning in Asia over a record fall in U.S. crude supplies and growing expectations that re-opening drives in the U.S. and Europe will boost fuel demand. However, investors are also keeping an eye on ever-surging numbers of COVID-19 cases in parts of Asia. U.S. crude oil supply data from the American Petroleum Institute showed a draw of 7.688 million barrels for the week ended Apr. 30, in what is set to be the largest drop since late January 2021. The draw exceeded the 2.191-million-barrel draw in forecasts prepared by Investing.com and the 4.319-million-barrel build recorded during the previous week. Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day. U.S. President Joe Biden said on Tuesday that the U.S. aims to vaccinate 70% of U.S. adults with at least one COVID-19 shot by the Independence Day holiday on Jul. 4. In the U.K., Prime Minister Boris Johnson said the country is set to lift lockdown rules in seven weeks. Investors are betting that the accelerating COVID-19 vaccination rate will help oil prices return to pre-COVID-19 conditions in key markets. 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. G20, a group of the world’s top 20 major economies, plans to introduce so-called vaccine passports to boost travel and tourism. However, India, the third-largest oil importer globally, topped 20.2 million COVID-19 cases by May 5, according to Johns Hopkins University data. Elsewhere in Asia, countries including Singapore, Vietnam and Seychelles, have recently reported increasing numbers of COVID-19 cases. However, with crude oil a major part of the current strong appetite for commodities, some investors remain optimistic.

 

 
Intraday RESISTANCE LEVELS
5th May 2021 R1 R2 R3
GOLD-XAU 1,795-1,803 1,816 1,824-1,840
Silver-XAG 26.55-27.25 27.90 28.50-28.95
Crude Oil 66.40-67.00 67.85 68.50-69.20
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 109.70-110.20 110.90 111.00-111.70

Intraday SUPPORTS LEVELS
5th May 2021 S1 S2 S3
GOLD-XAU 1,772-1,763 1,754 1,741-1,718
Silver-XAG 26.00 25.60 24.70-23.90
Crude Oil 65.30-64.55 63.70 62.70-62.00
EURO/USD 1.2010 1.1960 1.1905-1.1800
GBP/USD 1.3800-1.3747 1.3700 1.3670-1.3600
USD/JPY 109.00-108.50 107.50 107.00-106.50

Intra-Day Strategy (5th 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 Tuesday made its intraday high of US$1798.92/oz and low of US$1770.81/oz. Gold down 0.783% at US$1778.58/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 1772-1718 with risk below 1718, 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     1,772-1,763
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 Tuesday made its intraday high of US$27.10/oz and low of US$26.07/oz settled down by 1.502% at US$26.48/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 26.55-29.50 with stop loss above 29.50; targeting 26.00-25.60 and 24.70-24.45-23.90. Buy silver in between 26.00-22.60, 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     26.00
S2     25.60
S3     24.70-23.90

Intraday  Resistance Levels
R1     26.55-27.25
R2     27.90
R3     28.50-28.95

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.037 Buy
20-DMA   25.93 Sell
50-DMA   25.78 Sell
100-DMA   26.01 Sell
200-DMA   25.53 Buy
STOCH(5,3)   73.468 Buy
MACD(12,26,9)   -0.151 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US66.12/bbl, intraday low of US$64.22/bbl and settled up by 2.517% to close at US$66.04/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 65.30-58.00 with risk daily closing below 58.00 and targeting 66.40-67.00-67.80 and 68.50-69.20. Sell in between 66.40-69.20 with stop loss at 69.20; targeting 65.20-64.55-63.70 and 62.90-62.00-61.45.

 
Intraday Support Levels
S1     65.30-64.55
S2     63.70
S3     62.70-62.00

Intraday Resistance Levels
R1     66.40-67.00
R2     67.85
R3     68.50-69.20

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 Tuesday an intraday low of US$1.1998/EUR, high of US$1.2064/EUR and settled the day down by 0.423% to close at US$1.2012/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   50.621 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 Tuesday made an intra‐day low of US$1.3837/GBP, high of US$1.3911/GBP and settled the day down by 0.1574% 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 1.3900-1.4180 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 Tuesday made intra‐day low of JPY109.00/USD and made an intraday high of JPY109.48/USD and settled the day up by 0.251% at JPY109.31/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 109.00-105.00 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     109.00-108.50
S2     107.50
S3     107.00-106.50

INTRADAY RESISTANCE LEVELS
R1     109.70-110.20
R2     110.90
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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