AAFX TRADING

Daily Market Lookup

  • The dollar edged lower in early European trade Monday, continuing its weakness after falling to a two-month low on the back of Friday’s disappointing U.S. jobs report, which pointed to the ultra-low interest rate policy staying in place for some time. Friday’s U.S. employment report for April came in well below expectations, with nonfarm payrolls only rising by 266,000 during the month, after robust private payrolls data from the ADP and weekly initial claims numbers had lifted expectations to a one million-plus rise. The sharply below-consensus release “likely relieved some pressure from the Fed to shift to a less dovish rhetoric. At the same time, the data-miss was not enough to severely dent the underlying recovery story, leaving the global risk sentiment broadly supported,” said analysts at ING, in a research note. Attention will now switch this week to inflation data, although the mantra from Fed policymakers that the increase is due to temporary factors will carry extra weight following the jobs data. Wednesday sees the release of consumer price index figures for April, with the CPI number seen rising 3.6% on the year, a sharp rise from March’s 2.6%, and considerably above the 2% level the Fed usually seeks to limit price rises to Several U.S. Federal Reserve officials, including Chicago Fed President Charles Evans and U.S. Fed Governor Lael Brainard on Tuesday, will also speak in the course of the week. Elsewhere, GBP/USD rose 0.7% to 1.4066, climbing to its highest level since late February, after the Scottish National Party failed to win an overall majority after Thursday’s vote for the Scottish parliament. The SNP is pressing for another referendum on Scottish independence, but it fell one seat short of an outright majority, likely delaying any vote, even if one is granted, by years. The U.K. government has so far refused to grant Scotland permission to have a repeat of the 2014 referendum.
  • The U.S. dollar nursed losses near 2-1/2 month lows on Monday as a disappointing U.S. employment report prompted investors to unwind their growing long positions in the greenback. The United States created a little more than a quarter of the jobs that economists had forecast last month and the unemployment rate unexpectedly ticked higher, casting doubts that the Fed would consider advancing the time line of tightening policy in the coming months. However, the dollar's losses were broadly cushioned thanks to firmer U.S. Treasury yields, which were up nearly 2 bps in early London trading at 1.60% The British pound was the biggest gainer among the most-traded currencies, rallying 0.5% to $1.4067 the highest since Feb. 25, despite Scotland's leader saying another referendum on independence was inevitable after her party's resounding election victory. Such a referendum requires the backing of the UK government in London and Prime Minister Boris Johnson has ruled out holding another vote, saying the country faced more pressing challenges such as the recovery from the coronavirus pandemic. That view was shared by JP Morgan strategists who cut their net long dollar positions against a basket of G10 currencies, notably the euro and the Antipodean currencies. Broader positioning data also revealed a similar trend.
  • Gold was up on Monday morning in Asia, remaining close to a three-month high. Investors are now betting that interest rates will stay low for a while thanks to a disappointing U.S. monthly job report released on Friday. The U.S. released its April employment report on Friday, which said that non-farm payrolls rose by 266,000 during the month, well below the 978,000-rise in forecasts prepared by Investing.com. The disappointing figure was attributed to a lack of workers and raw materials, even as an improving COVID-19 situation and government stimulus measures are boosting the country’s economic recovery from COVID-19. The figure is "nowhere near" what was expected, said Richmond Federal Reserve President Thomas Barkin on Friday, adding that the Fed will retain its dovish monetary policy before any "substantial further progress." Several U.S. Federal Reserve officials, including Chicago Fed President Charles Evans and U.S. Fed Governor Lael Brainard, will give speeches throughout the week. Investors now await U.S. inflation data, including the Core Consumer Price Index, which is due later in the week. China will also release inflation data on Tuesday. In the U.K., Bank of England Governor Andrew Bailey is due to speak on Wednesday.
  • Oil was up Monday morning in Asia, as efforts continue to restore production after top U.S. fuel pipeline operator Colonial Pipeline Co. was hit by a cyber-attack during the previous week. Colonial Pipeline was forced to shut down its entire network after Friday’s ransomware attack, with the timeline for restarting its main pipeline is still not clear. U.S. President Joe Biden’s administration is also working closely with the company in recovery efforts. “It’s an all-hands-on-deck effort right now... we are working closely with the company, state and local officials, to make sure that they get back up to normal operations as quickly as possible and there aren’t disruptions in supply,” said U.S. Commerce Secretary Gina Raimondo. The pipeline supplies nearly half of all the fuel consumed on the U.S. East Coast and provides refined products to more than 50 million Americans. Crude prices are likely to increase at several fuel distribution points, including Wilmington in North Carolina, Charleston in South Carolina and Savannah in Georgia, Tank Tiger chief executive officer Ernie Barsamian told Bloomberg. The disruption comes as accelerating COVID-19 vaccination rates improve the fuel demand outlook ahead of the peak summer driving season. Elsewhere, fresh outbreaks of the virus have led to the extension of restrictive measures in places such as Australia. India also continues to deal with a virulent second wave of COVID-19 cases, with 366,161 cases and 3,754 deaths on Monday. In other commodities, iron ore futures surged as trading opened on Monday, with futures in Singapore rose more than 10% to hit a fresh record of $226 a ton. A continuous surge in demand from China and the current surge in commodity prices globally helped the steelmaking raw material continue its record run.

 

 
Intraday RESISTANCE LEVELS
10th May 2021 R1 R2 R3
GOLD-XAU 1,840-1,852 1,860 1,865-1,874
Silver-XAG 27.90-28.50 28.90 29.50-30.10
Crude Oil 66.40 67.00 67.85-68.50
EURO/USD 1.2200 1.2240-1.2300 1.2350
GBP/USD 1.4100-1.4180 1.4240 1.4300
USD/JPY 109.70-110.20 110.90 111.70-112.50

Intraday SUPPORTS LEVELS
10th May 2021 S1 S2 S3
GOLD-XAU 1,824-1,816 1,803 1,795-1,772
Silver-XAG 27.25-26.55 26.00 25.60-25.00
Crude Oil 65.30-64.55 63.70 62.70-62.00
EURO/USD 1.2140-1.2070 1.2010 1.1960-1.1905
GBP/USD 1.4065-1.4010 1.3900 1.3800-1.3747
USD/JPY 109.00-108.50 107.50 107.00-106.50

Intra-Day Strategy (10th 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 Friday made its intraday high of US$1843.21/oz and low of US$1812.77/oz. Gold up 0.906% at US$1831.00/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 1824-1767 with risk below 1767, targeting 1840-1852 and 1860-1872. Sell below 1840-1874 keeping stop loss closing above 1874, targeting 1824-1816-1803 and 1790-1772-1763.

 
Intraday Support Levels
S1     1,824-1,816
S2     1,803
S3     1,795-1,772
Intraday Resistance Levels
R1     1,840-1,852
R2     1,860
R3     1,865-1,874

Technical Indicators

Name   Value Action
14DRSI  

65.752

Buy
20-DMA   1782.15 Buy
50-DMA  

1748.10

Buy
100-DMA   1796.61 Buy
200-DMA   1851.57 Sell
STOCH(5,3)   88.503 Buy
MACD(12,26,9)   12.276 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$27.65/oz and low of US$27.12/oz settled up by 0.958% at US$27.49/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 27.90-30.10 with stop loss above 30.10; targeting 27.25-26.55-26.00 and 25.60-24.70-24.45. Buy silver in between 27.25-25.00, targeting 27.90-28.35 and 28.90-29.50 with stop loss should be place on the breakage below 25.00.

 
Intraday  Support Levels
S1     27.25-26.55
S2     26.00
S3     25.60-25.00

Intraday  Resistance Levels
R1     27.90-28.50
R2     28.90
R3     29.50-30.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.037 Buy
20-DMA   26.28 Sell
50-DMA   25.79 Sell
100-DMA   26.12 Sell
200-DMA   25.59 Buy
STOCH(5,3)   90.468 Buy
MACD(12,26,9)   0.436 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US65.18/bbl, intraday low of US$63.87/bbl and settled down by 0.134% to close at US$64.76/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 65.30-62.00 with risk daily closing below 62.00 and targeting 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     65.30-64.55
S2     63.70
S3     62.70-62.00

Intraday Resistance Levels
R1     66.40
R2     67.00
R3     67.85-68.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.168 Sell
20-DMA   63.35 Buy
50-DMA   62.30 Buy
100-DMA   58.16 Buy
200-DMA   49.79 Buy
STOCH(5,3)   51.130 Buy
MACD(12,26,9)   1.097 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.2052/EUR, high of US$1.2170/EUR and settled the day down by 0.074% to close at US$1.2166/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 1.2200-1.2350 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 1.2140-1.1800 with risk below 1.1800, targeting 1.2200-1.2240 and 1.2300-1.2350.

 
Intraday Support Levels
S1     1.2140-1.2070
S2     1.2010
S3     1.1960-1.1905

Intraday  Resistance Levels
R1     1.2200
R2     1.2240-1.2300
R3     1.2350

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.621 Buy
20-DMA   1.2050 Buy
50-DMA   1.1948 Buy
100-DMA   1.2047 Buy
200-DMA   1.1946 Buy
STOCH(5,3)   86.758 Buy
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3888/GBP, high of US$1.4005/GBP and settled the day down by 0.691% to close at US$1.3981/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 1.4100-1.4300 with targets at 1.4065-1.4010-1.3900 and 1.3800-1.3745-1.3700 stop-loss should be 1.4300. Buy above 1.4065-1.3700 with targets 1.4100-1.4180 and 1.4240-1.4300 with stop loss closing below 1.3700.

 
Intraday Support Levels
S1     1.4065-1.4010
S2     1.3900
S3     1.3800-1.3747

Intraday Resistance Levels
R1     1.4100-1.4180
R2     1.4240
R3     1.4300

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

65.806

Buy
20-DMA   1.3892 Buy
50-DMA   1.3858 Buy
100-DMA   1.3785 Buy
200-DMA   1.3447 Buy
STOCH(5,3)   82.940 Sell
MACD(12,26,9)   -0.0022 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY108.33/USD and made an intraday high of JPY109.28/USD and settled the day down by 0.404% at JPY109.63/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 109.00-106.50 with targets of 109.70-110.20 and 110.90-111.70-112.20 with stop below 106.00. Sell below 109.70-112.50 with risk above 112.50 targeting 109.00-108.50-108.00 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     111.70-112.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.407 Buy
20-DMA   109.48 Sell
50-DMA   105.79 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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING