AAFX TRADING

Daily Market Lookup

  • The dollar hovered near a two-week high on Thursday, consolidating ahead of a key U.S. jobs report that may provide clues on when the Federal Reserve will dial back monetary stimulus. The greenback has rebounded from a one-month low over the past week, swung by U.S. economic data that has largely supported the case for a rapid recovery from the pandemic, with traders weighing whether a lift in inflation may force the Fed's hand earlier than policymakers have so far suggested. Cryptocurrency ether was close to a record high after setting new all-time peaks in each of the past nine sessions. With several forecasters predicting a one-million-plus increase in nonfarm payrolls, "the USD may continue to find a good level of support in the near-term," with the currency strengthening to $1.19 per euro over a one-month horizon, she said. So far, Fed Chair Jerome Powell has argued the labour market is far short of where it needs to be to start talking of tapering asset purchases. The central bank has said it will not raise its benchmark Fed funds rate through 2023. Three Fed officials spoke on Wednesday, with Chicago Fed President Charles Evans saying that while he was more optimistic about U.S. growth than he was a few months ago, he expects monetary policy to stay super-easy for some time. Boston Fed President Eric Rosengren said inflation will be temporarily distorted this spring as the U.S. economy works through imbalances caused by the pandemic but the pressures should be short-lived and should not lead to a pullback in monetary policy. Cleveland Fed President Loretta Mester said more progress will be needed in the job market before the Fed's conditions for reducing its extensive support will be met. The dollar bounced on Tuesday after Yellen said rate hikes may be needed to stop the economy from overheating, though she later downplayed the immediacy of tightening. Sterling was little changed at $1.3899, consolidating around that level over the past two weeks with the Bank of England expected by some forecasters to announce a tapering of its bond-buying programme at a meeting later Thursday, after vaccinations bolstered Britain's economic recovery. The dollar edged lower in early European trade Thursday, consolidating near a two-week high, ahead of a key U.S. jobs report, while traders also wait for a Bank of England policy decision. The greenback has edged higher over the past week, helped by U.S. economic data that has largely pointed to a rapid recovery from the pandemic, increasing the pressure on the Federal Reserve to move sooner than policymakers have so far suggested. Data from the ADP Research Institute on Wednesday showed U.S. private employers in April added the most jobs in seven months. This has raised expectations ahead of the weekly initial claims data later Thursday, but more importantly the widely-watched monthly U.S. jobs report on Friday, with several forecasters predicting a one-million-plus increase in nonfarm payrolls.So far, Fed Chair Jerome Powell has argued the U.S. labor market is far short of where it needs to be to start talking of tapering asset purchases. And Boston Fed President Eric Rosengren, widely seen as one of the Fed's more hawkish members, again played down the current spike in inflation in an interview on Wednesday, The Bank of England scheduled to meet later Thursday, and most economists expecting the central bank’s Monetary Policy Committee to keep rates and bond-buying targets unchanged, for now. However, the central bank is also set to significantly upgrade its growth outlook as the country’s successful vaccination drive leads to a reasonably rapid reopening of the economy. This could help the pound as expectations grow that the bank’s next move will be to tighten monetary policy rather than provide fresh stimulus to the economy as the pandemic eases.
  • Gold was up on Thursday morning in Asia as investors await the U.S. non-farm payroll data due Friday. The benchmark 10-year U.S. Treasury yield edged higher as trading started in Asia, also giving the yellow metal a boost. The U.S. ADP Nonfarm Employment Change climbed to 742,000 in April. Although lower than expected, the growth was the biggest in seven months as firms boosted their production in response to increasing demand. The economy recovered further from COVID-19 due to the government’s stimulus measures and accelerating COVID-19 vaccination rates. Investors now await April’s U.S. monthly jobs report, including the non-farm payrolls, due on Friday. Initial jobless claims data for the past week is also due later in the day. U.S. Federal Reserve Governor Michelle Bowman said on Wednesday that the country’s economy could be recording faster-than-expected growth and unemployment is falling faster than predicted. However, Chicago Federal Reserve Bank President Charles Evans remained concerned that the economy might not reach the Fed’s 2% inflation goal and expected the Fed to maintain its dovish monetary policy for a while. Across the Atlantic in the U.K., the Bank of England will hand down its policy decision later in the day. The central bank could announce a slowdown in its COVID-19 emergency support due to a stronger recovery in 2021 than predicted.
  • Oil was up Thursday morning in Asia as U.S. crude supplies fell to multimonth lows. However, volatility remained as the recovery from COVID-19 remains uneven and impacts fuel demand. Crude oil supply data from the U.S. EIA showed a draw of 7.990 million barrels for the week to Apr. 30. This beats the 2.346-million-barrel draw in forecasts prepared by Investing.com as well as the 90,000-barrel build reported during the previous week. However, there was a larger-than-expected 737,000-barrel build in gasoline inventories, according to EIA. The EIA data affirmed an API report of a 7.688-million-barrel draw the day before. Both EIA and API data suggest that crude oil levels are at their lowest level since late February 2021. Oil rebounded this year as major economies, including the U.S. and China, recovered from COVID-19 and increased demand for fuel. On the demand side, jet fuel usage is forecast to jump 30% as Americans start to travel during the upcoming peak summer season. However, investors remain concerned about fuel demand levels in India, the third-largest oil importer globally, where the number of daily COVID-19 cases remains high. The total number of COVID-19 cases topped 20.6 million as of May 6, according to Johns Hopkins University data. Meanwhile, Saudi Arabia’s state energy firm, Saudi Aramco , cut its June pricing for Asia by between 10 and 30 cents per barrel. Oil prices are at risk of a correction, considering the threat posed by India’s crisis as well as higher supply from the OPEC+, Bloomberg Intelligence analyst Henik Fung said in a note. The cartel has increased output by about 2 million barrels a day since May, with the increase set to continue through July.

 

 
Intraday RESISTANCE LEVELS
6th 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
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 1.4065 1.4065 1.4100-1.4180
USD/JPY 109.70-110.20 110.90 111.00-111.70

Intraday SUPPORTS LEVELS
6th May 2021 S1 S2 S3
GOLD-XAU 1,772-1,763 1,754 1,795-1,803
Silver-XAG 26.55-26.00 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 (6th 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 Wednesday made its intraday high of US$1787.85/oz and low of US$1770.46/oz. Gold down 0.446% at US$1786.46/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     1,795-1,803
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 Wednesday made its intraday high of US$26.61/oz and low of US$26.09/oz settled down by 0.132% at US$26.44/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     26.55-26.00
S2     25.60
S3     24.70-23.90

Intraday  Resistance Levels
R1     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 Wednesday made an intra‐day high of US66.68/bbl, intraday low of US$64.87/bbl and settled down by 1.443% to close at US$65.22/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 Wednesday an intraday low of US$1.1985/EUR, high of US$1.2025/EUR and settled the day down by 0.074% to close at US$1.2003/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 Wednesday made an intra‐day low of US$1.3875/GBP, high of US$1.3925/GBP and settled the day up by 0.101% to close at US$1.3900/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     1.4065
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   1.3732 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 Wednesday made intra‐day low of JPY109.13/USD and made an intraday high of JPY109.47/USD and settled the day down by 0.1170% at JPY109.19/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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