AAFX TRADING

Daily Market Lookup

  • The dollar was stuck around a one-week low on Friday, under pressure ahead of U.S. jobs data that is expected to underpin hopes for a strong post-pandemic economic recovery and to increase investor risk appetite. U.S. payrolls data is due at 1230 GMT and is expected to show that employers hired nearly a million workers in April, as they rushed to meet a surge in demand unleashed by the reopening of the economy and massive financial help from the government. In the previous session, a larger-than-expected fall in jobless claims saw stocks rise and the dollar fall, suggesting that the dollar is acting as a safe-haven currency, hurt by improving risk appetite. But if improving economic data stokes inflation worries and leads to expectations that the Federal Reserve will reduce monetary stimulus, that could boost U.S. yields and the dollar. Commerzbank (DE:CBKG) strategist You-Na Park-Heger said that the dollar could benefit in the short-term from the data The Bank of England said on Thursday that Britain's economy would grow by the most since World War Two this year and slowed the pace of its trillion dollar bond-purchasing programme, but stressed it was not reversing its stimulus. Just over a third of the results of the Scottish parliamentary election will be announced on Friday and the remainder will be announced on Saturday. China's exports unexpectedly accelerated in April and import growth hit a decade high, helping to push the yuan and Asian stocks higher. China’s yuan was at a more than two-month high versus the dollar, set for its longest weekly winning streak since September, helped by the strong trade data and softer dollar.
  • The dollar edged lower in early European trade Friday, under modest pressure ahead of the monthly U.S. employment report which is expected to firm up expectations of a strong economic recovery. The greenback has traded in narrow ranges Friday, with traders focusing on the release of U.S. payrolls data, at 1230 GMT, which are expected to confirm the U.S. labor market is on a solid path towards recovery from the pandemic. Economists polled by Investing.com earlier in the week expected, on average, 978,000 new U.S. jobs in April, after gains of 916,000 in March. That said, expectations are likely even more elevated now after data on Thursday showed the number of Americans filing new claims for unemployment benefits fell below 500,000 last week for the first time since the Covid-19 pandemic began. While strong economic data could lead to more risk taking as traders’ confidence grows, it could also lead to higher Treasury yields, helping the dollar, as the market anticipates the Federal Reserve tightening its monetary policies sooner than previously expected. However, for now, most traders seem to be prepared to take the Federal Reserve at its word that stimulus tapering will not be on the agenda any time soon. Elsewhere, GBP/USD rose 0.1% to 1.3902, with sterling struggling to post any serious gains despite the Bank of England slowing the pace of its bond-purchasing program at its meeting Thursday. Political uncertainty is capping any sterling gains as the Scots go to the polls, potentially triggering a battle between the Scottish National Party and British Prime Minister Boris Johnson over another independence vote. The GBP/USD pair edged up 0.17% to 1.3908. The U.K.’s Bank of England (BOE) kept its interest rate unchanged at 0.10% as it handed down its policy decision on Thursday. Although the central bank also slowed the pace of its trillion-dollar bond-purchasing program, the slowdown was widely expected and is not an indication that BOE will reverse stimulus measures. However, uncertainties over the results of a Scottish election that could trigger a fresh independence capped gains for the pound. In the U.S., the number of initial jobless claims fell to 498,000, the lowest since mid-March 2020 when COVID-19 was declared a pandemic. Investors now await April’s employment report, including non-farm payrolls, later in the day. With the forecast likely to affirm the U.S.’ solid path towards recovery, runaway inflation concerns are also mounting. However, most U.S. Federal Reserve officials, Chairman Jerome Powell included, have maintained a dovish monetary policy so far and are expected to keep doing so.
  • Oil was up Friday morning in Asia, set for its second consecutive weekly advance thanks to a broad rally in commodities as well as positive economic data from the U.S. and China brightening the fuel demand outlook. In the U.S., Thursday’s initial jobless claims data said that 498,000 claims were submitted during the past week, the lowest since mid-March 2020 when COVID-19 was declared a pandemic. Investors now await April’s employment report, including non-farm payrolls, due later in the day More positive data came from China, the world’s biggest oil importer, earlier in the day. The Caixin Services Purchasing Managers Index (PMI) for April was 56.3, exports grew 32.3% year-on-year, imports grew 43.1% year-on-year and the trade balance stood at $42.86 billion. The better-than-expected data reflected strong domestic and international demand, with Chinese energy consumption also rebounding from 2020’s COVID-19-induced slump and crude imports jumping by more than 7% in the first four months of 2021 The black liquid has roared back to life in 2021, with Brent futures coming close to passing the $70 mark on Wednesday. The positive American and Chinese data offset concerns about rising numbers of COVID-19 cases in other countries. The number of daily cases in India, the third-largest oil importer, hit a fresh record of 414,188. Investors are also monitoring U.S.-Iran efforts to revive a nuclear agreement that could lead to the lifting of sanctions on Iranian crude supplies. A fourth round of indirect talks in Vienna beginning later in the day, a pact could come within the month if Iran agrees to rein in its atomic work. Crude has rallied in 2021 as investors target assets that will prosper on the recovery from the pandemic. The gains were buttressed by supply cuts from the Organization of Petroleum Exporting Countries and its allies, although these are now being relaxed, and record monetary support from the Federal Reserve. U.S. payrolls data later Friday will yield fresh insights into the rebound. Figures from China on Friday showed total exports rose more than expected in April and imports climbed, reflecting strong domestic and international demand as well as surging commodity prices. Energy consumption in Asia’s largest economy has rebounded from last year’s pandemic-driven slump, with crude imports swelling by more than 7% in the first four months of 2021. Oil’s powerful climb forms part of a wide advance in raw materials that has propelled the Bloomberg Commodity Spot Index to the highest level since 2011. With copper hitting a record on Friday, that gauge is on course for its fifth consecutive weekly rise, the best run of gains since August. Investors are also tracking efforts by Washington and Tehran to revive a nuclear agreement that could see U.S. sanctions on Iranian crude flows lifted, boosting supplies. With diplomats set to enter a fourth round of indirect talks in Vienna later Friday a U.S. official said the two sides could revive the pact as early as this month if Tehran proves its willingness to rein in its atomic work.

 

 
Intraday RESISTANCE LEVELS
7th May 2021 R1 R2 R3
GOLD-XAU 1,824-1,840 1,852 1,860-1,867
Silver-XAG 27.25 27.90 28.50-28.95
Crude Oil 65.30-66.40 67.00 67.85-68.50
EURO/USD 1.2140 1.2200 1.2240-1.2300
GBP/USD 1.4010 1.4065 1.4100-1.4180
USD/JPY 109.70-110.20 110.90 111.00-111.70

Intraday SUPPORTS LEVELS
7th May 2021 S1 S2 S3
GOLD-XAU 1,816-1,803 1,795 1,772-1,763
Silver-XAG 26.55-26.00 25.60 24.70-23.90
Crude Oil 64.55 63.70 65.30-66.40
EURO/USD 1.2070-1.2010 1.1960 1.2070-1.2010
GBP/USD 1.3900-1.3800 1.3747 1.3700-1.3670
USD/JPY 109.00-108.50 107.50 107.00-106.50

Intra-Day Strategy (7th 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 Thursday made its intraday high of US$1817.99/oz and low of US$1781.90/oz. Gold up 1.582% at US$1814.87/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 1816-1767 with risk below 1767, targeting 1824-1830-1840 and 1852-1860-1872. Sell below 1795-1830 keeping stop loss closing above 1830, targeting 1763-1754-1743 and 1718-1705.

 
Intraday Support Levels
S1     1,816-1,803
S2     1,795
S3     1,772-1,763
Intraday Resistance Levels
R1     1,824-1,840
R2     1,852
R3     1,860-1,867

Technical Indicators

Name   Value Action
14DRSI  

65.752

Buy
20-DMA   1776.44 Buy
50-DMA  

1745.85

Buy
100-DMA   1796.78 Buy
200-DMA   1852.19 Sell
STOCH(5,3)   74.503 Buy
MACD(12,26,9)   12.276 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$27.44/oz and low of US$27.21/oz settled up by 2.94% at US$27.27/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 Thursday made an intra‐day high of US65.92/bbl, intraday low of US$64.46/bbl and settled down by 0.691% to close at US$64.79/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 64.40-58.00 with risk daily closing below 58.00 and targeting 65.30-66.40-67.00 and 67.80-68.50-69.20. Sell in between 65.40-69.20 with stop loss at 69.20; targeting 64.55-63.70 and 62.90-62.00-61.45.

 
Intraday Support Levels
S1     64.55
S2     63.70
S3     65.30-66.40

Intraday Resistance Levels
R1     65.30-66.40
R2     67.00
R3     67.85-68.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.168 Sell
20-DMA   63.06 Buy
50-DMA   62.20 Buy
100-DMA   57.99 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 Thursday an intraday low of US$1.1992/EUR, high of US$1.2070/EUR and settled the day down by 0.074% to close at US$1.2064/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 1.2100-1.2350 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 1.2070-1.1800 with risk below 1.1800, targeting 1.2070-1.2140-1.2200 and 1.2240-1.2300-1.2350.

 
Intraday Support Levels
S1     1.2070-1.2010
S2     1.1960
S3     1.2070-1.2010

Intraday  Resistance Levels
R1     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 Thursday made an intra‐day low of US$1.3855/GBP, high of US$1.3939/GBP and settled the day down by 0.0611% to close at US$1.3887/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 1.4010-1.4180 with targets at 1.3900-1.3800-1.3745 and 1.3700-1.3650-1.3600 stop-loss should be 1.4180. Buy above 1.3900-1.3600 with targets 1.4010-1.4065 and 1.4100-1.4180 with stop loss closing below 1.3700.

 
Intraday Support Levels
S1     1.3900-1.3800
S2     1.3747
S3     1.3700-1.3670

Intraday Resistance Levels
R1     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   1.3732 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 Thursday made intra‐day low of JPY108.96/USD and made an intraday high of JPY109.42/USD and settled the day down by 0.096% at JPY109.08/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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