AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trade Wednesday, but remains near recent lows ahead of a key U.S. inflation release. Investors now await the latest U.S. consumer inflation data, due at 8:30 AM ET (1230 GMT), which is expected to show a 3.6% lift in year-on-year prices, boosted by last April's low base. This would be the largest jump since September 2011. While equity markets have started to fret about what a high inflation number could mean in terms of Federal Reserve policy going forward, currency traders seem to have been calmed by repeated promises of patience from Fed speakers as the dollar remains at low levels. St. Louis Federal Reserve President James Bullard said on Tuesday he expects inflation could stay as high as 2.5% next year, while Fed Governor Lael Brainard said weak labour data last week shows the recovery has a long way to run. Adding to the idea of further dollar weakening, the latest CFTC data on speculative positioning provided clear indications that bearish sentiment towards the greenback is strengthening again. That said, sterling has shown strength over the last few days, helped by political risk being factored out, while the country starts a widespread reopening.
  • The dollar was up on Wednesday morning in Asia, but remained near its lowest levels of 2021, as investors increased bets that U.S. inflation data will not change the U.S. Federal Reserve’s current dovish monetary policy. The dollar fell to its lowest level in two months against the euro during the previous session, as Tuesday's Zentrum fur Europaische Wirtschaftsforschung Economic Sentiment Index read a better-than-expected 84. Worries that higher U.S. inflation numbers could pressure the Fed to hike interest rates sooner than expected drove a selloff in rate-sensitive tech stocks earlier in the week. However, repeated assurances from Fed officials, including Chairman Jerome Powell, have seemingly soothed market worries. Comments made by several Fed officials during the week neutralized Dallas Fed President Robert Kaplan's mention of tapering support in April. St. Louis Fed President James Bullard said on Tuesday he expects inflation could stay as high as 2.5% next year, while Fed Governor Lael Brainard said the previous week’s weak employment data, including non-farm payrolls, is an indication that the U.S. economic recovery from COVID-19 still has a long way to go. The recent surge in commodities that drove gains in commodity-linked currencies also put pressure on the dollar. However, currencies such as the Australian and New Zealand dollars cooled their gains just short of ten-week highs. The Canadian dollar was also just below Tuesday’s almost four-year high. An improving outlook for global growth that is diverting investors’ cash to emerging markets, alongside a large and growing deficit in both U.S. trade and the current account sending dollars overseas, also capped gains for the greenback.
  • Gold was down on Wednesday morning in Asia against continued gains in both the benchmark U.S. 10-year Treasury yield and dollar. Investors also await U.S. inflation data for April later in the day. The U.S. consumer price index report, including the core consumer price index (CPI), will be released later in the day. Investors are on the lookout for the further implications that the data, along with U.S. government debt sales, will have on the U.S. Federal Reserve’s dovish stance on inflation. Fed officials continued to be optimistic about the country's progress towards economic recovery from COVID-19 but warned that the road ahead remains long, which was highlighted by the disappointing employment data, including non-farm payrolls, for April released during the previous week. Across the Atlantic, Bank of England Governor Andrew Bailey is due to speak later Wednesday. However, Tuesday’s U.S. JOLTs job openings rose to a record 8.123 million in March, indicating that a shortage of workers is hindering job growth. However, nearly 10 million Americans are still looking for a job. In Asia, unemployment in South Korea dropped to 3.7%, an eight-month low, in April, according to data released earlier in the day. The number of people employed also rose at the highest pace in nearly seven years as the country continues its economic recovery from COVID-19.
  • Oil was up Wednesday morning in Asia after data showed a larger-than-expected draw in U.S. crude supplies and the Organization of the Petroleum Exporting Countries (OPEC) remained to be optimistic about the outlook for fuel demand. Tuesday’s U.S. crude oil supply data from the American Petroleum Institute showed a draw of 2.533 barrels for the week ending May 7. Forecasts prepared by Investing.com predicted a 2.250-million-barrel draw, while a 7.688-barrel draw was recorded during the previous week. Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day. The draw came before the closure of Colonial Pipeline’s networks after a cyberattack during the previous week. The operator is hoping to re-open a large part of the network by the end of the week. On the demand side, OPEC continued to expect a strong fuel demand recovery in 2021 as China and the U.S. continue their economic recoveries from COVID-19. The cartel maintained its forecast of an increase of 5.95 million barrels per day (bpd) but cut its demand expectations for the second quarter by 300,000 as the number of COVID-19 cases continues to surge in India, the third-largest oil importer globally. -Oil prices rose on Wednesday after a drop in U.S. crude inventories reinforced OPEC's robust demand outlook, while the market awaited fresh updates on the Colonial Pipeline outage. Gasoline stations from Florida to Virginia began running out of fuel on Tuesday as drivers rushed to top up their tanks and pump prices rocketed. U.S. unleaded gasoline prices hit an average $2.99 a gallon, the highest since November 2014, the American Automobile Association said. Meanwhile, oil prices were supported by the latest outlook from the Organization of the Petroleum Exporting Countries (OPEC), which stuck to a forecast for a strong recovery in world oil demand in 2021 with growth in China and the United States outweighing the impact of the coronavirus crisis in India. OPEC said it expects demand to rise by 5.95 million bpd this year, unchanged from its forecast last month. However, it cut its demand outlook for the second quarter by 300,000 bpd due to soaring COVID-19 infections in India. Data from the American Petroleum Institute industry group showed U.S. crude oil stocks fell by 2.5 million barrels in the week to May 7, according to two market sources, slightly less than expected. The drawdown came before the Colonial Pipeline was hit by a cyberattack last Friday which forced the pipeline, which transports more than 2.5 million barrels a day of fuel, to shut down.

 

 
Intraday RESISTANCE LEVELS
12th 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 65.90-66.40 67.00 67.85-68.50
EURO/USD 1.2200 1.2240-1.2300 1.2350
GBP/USD 1.4180-1.4240 1.4300 1.4360
USD/JPY 109.70-110.20 110.90 111.70-112.50

Intraday SUPPORTS LEVELS
12th 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 1.4100-1.4065 1.4010 1.3900-1.3800
USD/JPY 109.00-108.50 107.50 107.00-106.50

Intra-Day Strategy (12th 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 Tuesaday made its intraday high of US$1841.79/oz and low of US$1817.93/oz. Gold up 0.0702% at US$1837.19/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 Tuesday made its intraday high of US$27.65/oz and low of US$27.09/oz settled up by 1.125% at US$27.59/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 Tuesday made an intra‐day high of US65.45/bbl, intraday low of US$63.68/bbl and settled up by 0.790% to close at US$65.38/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     65.90-66.40
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 Tuesday an intraday low of US$1.2122/EUR, high of US$1.2180/EUR and settled the day up by 0.160% to close at US$1.2147/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 Monday made an intra‐day low of US$1.4103/GBP, high of US$1.4165/GBP and settled the day up by 0.178% to close at US$1.1.4141/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 1.4180-1.4360 with targets at 1.4100-1.4065-1.4010 and 1.3900-1.3800-1.3745 stop-loss should be 1.4360. Buy above 1.4100-1.3700 with targets 1.4180-1.4240 and 1.4300-1.4360 with stop loss closing below 1.3700.

 
Intraday Support Levels
S1     1.4100-1.4065
S2     1.4010
S3     1.3900-1.3800

Intraday Resistance Levels
R1     1.4180-1.4240
R2     1.4300
R3     1.4360

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

65.806

Buy
20-DMA   1.3858 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 Tuesday made intra‐day low of JPY108.34/USD and made an intraday high of JPY108.97/USD and settled the day down by 0.1599% at JPY108.60/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   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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