AAFX TRADING

Daily Market Lookup

  • The dollar sank to a six-year trough against the Canadian dollar and teetered near multi-month lows versus European currencies on Tuesday, as Treasury yields stalled amid renewed expectations the United States will not hike interest rates anytime soon. Dallas Federal Reserve President Robert Kaplan on Monday reiterated that he does not expect interest rates to rise until next year, fuelling a further decline in bets that inflationary pressure could force the Fed to act sooner. This week a host of Fed policymakers are scheduled to speak, and the U.S. central bank will also release minutes from its most recent meeting, which may give indications about where monetary policy is headed. The growing market consensus is that the Fed will tolerate what it sees as a temporary acceleration in inflation, which will keep the dollar lower against most major currencies. Under Marinov's central scenario, that could nudge the Fed towards tapering bond purchases this summer, thus boosting the outlook for U.S. Treasury yields and the dollar. The British pound rose to $1.4198, its strongest since late February. Sterling has been buoyed as investors cheer the gradual lifting of strict coronavirus restrictions. Some investors were already scaling back expectations for a Fed rate hike this year, and Kaplan's comments gave traders even more incentive to sell the dollar.
  • The dollar was down on Tuesday morning in Asia, hitting a six-year low against its Canadian counterpart and hovering close to multi-month lows against European currencies, as investors ramped up bets that the U.S. Federal Reserve would not hike interest rates anytime soon. The yen also fell against the pound and the riskier Antipodean currencies as data released earlier in the day said that the Japanese economy contracted more than expected during the first quarter of 2021, as its GDP contracted 5.1% year-on-year and 1.3% quarter-on-quarter. Dallas Fed President Robert Kaplan on Monday reiterated his view that he does not expect interest rates to rise until 2022, thus sparking a further decline in bets that inflationary pressure could force the central bank to act sooner than expected. Other Fed officials are due to speak throughout the week and investors also await the release of the minutes from the Fed’s latest meeting, due on Wednesday. Investors will analyze the minutes once they are released for clues as to the Fed’s monetary policy direction for the rest of 2021. However, a consensus is growing that the Fed will continue with its current dovish policy over the assumption that any acceleration in inflation is temporary, in turn keeping the dollar on a downward trend. With investors already scaling back bets for a Fed interest rate hike in 2021, Kaplan’s comments further incentivized them to sell the dollar. The dollar sank to a six-year trough against the Canadian dollar and teetered near multi-month lows versus European currencies on Tuesday, as Treasury yields stalled amid renewed expectations the United States will not hike interest rates anytime soon. Dallas Federal Reserve President Robert Kaplan on Monday reiterated that he does not expect interest rates to rise until next year, fuelling a further decline in bets that inflationary pressure could force the Fed to act sooner. This week a host of Fed policymakers are scheduled to speak, and the U.S. central bank will also release minutes from its most recent meeting, which may give indications about where monetary policy is headed. The growing market consensus is that the Fed will tolerate what it sees as a temporary acceleration in inflation, which will keep the dollar lower against most major currencies. Under Marinov's central scenario, that could nudge the Fed towards tapering bond purchases this summer, thus boosting the outlook for U.S. Treasury yields and the dollar. Some investors were already scaling back expectations for a Fed rate hike this year, and Kaplan's comments gave traders even more incentive to sell the dollar.
  • Oil rose on Tuesday to hit $70 a barrel for the first time since March, as expectations of demand recovery following reopenings of the European and U.S. economies offset concern over spreading coronavirus cases in Asia. The British economy reopened on Monday, and Europe is starting to reopen cities and beaches. New cases in the United States continued to fall and New York lifted the mask requirement for vaccinated people. The latest gain to $70 brings Brent's rally this year to 35%, supported by supply cuts by the Organization of the Petroleum Exporting Countries and allies. This could lead to a further advance, some analysts said. European and U.S. progress in the battle against the pandemic contrasts with the situation in Asia, which is limiting oil's rally. Singapore and Taiwan have reinstated lockdown measures, and India has seen a plunge in fuel demand following restrictions to curb infections. Also limiting oil's upside is the prospect of a revival of Iran's nuclear deal that would allow the OPEC producer to fully restart exports. In focus later will be this week's U.S. supply reports, expected to show a 1.7 million-barrel rise in crude inventories. The American Petroleum Institute's report is out at 2030 GMT. Oil was up Tuesday morning in Asia, near a two-year high as key economies such as the U.S. and Europe continue their economic recovery from COVID-19 and drive fuel demand, which offset the dimming demand in parts of Asia due to the recent COVID-19 outbreaks in the continent. The black liquid has jumped more than 35% in 2021 due to an improving fuel demand outlook as the rollout of COVID-19 vaccines drives the economic recovery in key economies and boosts mobility. U.S. airports recorded 1.85 million passengers on Sunday, the highest number since the beginning of COVID-19 in early March 2020, according to Transportation Security Administration data. It indicated a domestic travel revival that will boost fuel demand. In Europe, the U.K. reopened businesses and further eased a four-month COVID-19 lockdown. France and Spain have relaxed restrictions while Portugal and the Netherlands have opened up travel. However, investors remained concerned about new outbreaks of COVID-19 in parts of Asia, including Taiwan and Singapore. The number of COVID-19 cases in India, the world’s third-largest oil importer, closed in on 25 million as of May 18, according to Johns Hopkins University data. Preliminary data showed that India’s domestic sales of gasoline and diesel by state refiners slid 20% in the first half of May from the previous month. Talks between the U.S. and Iran to reinstate the pair’s 2015 nuclear deal are also ongoing. Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
18th May 2021 R1 R2 R3
GOLD-XAU 1,876 1,884 1,890-1,900
Silver-XAG 28.50 28.90 29.50-30.10
Crude Oil 67.00-67.85 68.50 69.00-69.90
EURO/USD 1.2240-1.2300 1.2350 1.2400-1.2490
GBP/USD 1.4240-1.4300 1.4360 1.4400-1.4490
USD/JPY 110.20 110.20 110.90-111.70

Intraday SUPPORTS LEVELS
18th May 2021 S1 S2 S3
GOLD-XAU 1,865-1,854 1,844 1,824-1,816
Silver-XAG 27.90-27.25 26.55 26.00-25.60
Crude Oil 66.40-65.90 65.30 64.55-63.70
EURO/USD 1.2200-1.2140 1.2240-1.2300 1.2010-1.1960
GBP/USD 1.4180-1.4090 1.4065 1.4010-1.3900
USD/JPY 109.00-108.50 107.50 107.00-106.50

Intra-Day Strategy (18th 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 Monday made its intraday high of US$1868.38/oz and low of US$1840.83/oz. Gold up 1.36% at US$1866.23/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 1865-1800 with risk below 1795, targeting 1874-1880 and 1890-1900. Sell below 1874-1900 keeping stop loss closing above 1900, targeting 1864-1852-1844 and 1824-1816-1803.

 
Intraday Support Levels
S1     1,865-1,854
S2     1,844
S3     1,824-1,816
Intraday Resistance Levels
R1     1,876
R2     1,884
R3     1,890-1,900

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 Monday made its intraday high of US$28.27/oz and low of US$26.80/oz settled up by 2.834% at US$28.15/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     27.90-27.25
S2     26.55
S3     26.00-25.60

Intraday  Resistance Levels
R1     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 Monday made an intra‐day high of US66.39/bbl, intraday low of US$64.81/bbl and settled up by 1.2811% to close at US$66.32/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 66.40-63.70 with risk daily closing below 63.00 and targeting 67.00-67.80-68.50- and 69.20-69.80. Sell in between 67.00-69.20 with stop loss at 69.20; targeting 64.55-63.70 and 62.90-62.00-61.45.

 
Intraday Support Levels
S1     66.40-65.90
S2     65.30
S3     64.55-63.70

Intraday Resistance Levels
R1     67.00-67.85
R2     68.50
R3     69.00-69.90

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$1.2125/EUR, high of US$1.2168/EUR and settled the day up by 0.0469% to close at US$1.2150/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 1.2300-1.2490 targeting 1.2140-1.2070-1.2010 and 1.1960-1.1905-1.1800 with stop-loss at daily closing above 1.2400. Buy above 1.2200-1.1800 with risk below 1.1800, targeting 1.2200-1.2240 and 1.2300-1.2350.

 
Intraday Support Levels
S1     1.2200-1.2140
S2     1.2240-1.2300
S3     1.2010-1.1960

Intraday  Resistance Levels
R1     1.2240-1.2300
R2     1.2350
R3     1.2400-1.2490

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$1.4076/GBP, high of US$1.4146/GBP and settled the day up by 0.240% to close at US$1.1.4129/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 1.4240-1.4490 with targets at 1.4180-1.4100-1.4065 and 1.4010-1.3900-1.3800 stop-loss should be 1.4360. Buy above 1.4180-1.3700 with targets 1.4240 and 1.4300-1.4360 with stop loss closing below 1.3700.

 
Intraday Support Levels
S1     1.4180-1.4090
S2     1.4065
S3     1.4010-1.3900

Intraday Resistance Levels
R1     1.4240-1.4300
R2     1.4360
R3     1.4400-1.4490

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 Monday made intra‐day low of JPY109.17/USD and made an intraday high of JPY109.65/USD and settled the day down by 0.173% at JPY109.27/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     110.20
R2     110.20
R3     110.90-111.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.407 Buy
20-DMA   108.83 Sell
50-DMA   109.07 Sell
100-DMA   106.99 Sell
200-DMA   106.00 Sell
STOCH(9,6)   51.253 Sell
MACD(12,26,9)   0.103 Sell

AAFX TRADING
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