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Daily Market Lookup

  • The dollar edged marginally lower in early European trade Wednesday, remaining near multi-month lows ahead of the release of the eagerly-awaited minutes from the last U.S. Federal Reserve meeting. The minutes from the Fed's most recent meeting are due later on Wednesday, and are expected to confirm that policymakers think the U.S. economy still needs support. As such, the reining in of the central bank’s ultra-easy monetary policies will remain in the distance. This is likely to keep the dollar on the backfoot despite last week’s gains when U.S. consumer prices posted the fastest increase in more than a decade. Elsewhere, GBP/USD was largely unchanged at 1.4183, near its strongest level since late February, benefitting from the reopening of the U.K. economy as a result of a successful vaccination program. British consumer price inflation rose to 1.5% in April from 0.7% in March, official figures showed on Wednesday, ahead of the expected rise of 1.4%. There was a more notable rise in U.K. producer price inflation, with input prices rising nearly 10% on the year. USD/RUB fell 0.1% at 73.6173, helped by Axios reporting that the U.S. administration is set to waive previously imposed sanctions on the company overseeing construction of the Nord Stream 2 pipeline, easing pressure on the Russian government. The dollar steadied against major currencies on Wednesday as traders awaited U.S. Federal Reserve minutes, but bitcoin tumbled after China banned its financial institutions from offering services related to cryptocurrency assets. The minutes from the Fed's most recent meeting due later on Wednesday are expected to confirm that policymakers think a rate hike is still in the distance. Investors will also be scrutinising consumer price data in Britain and Canada later in the trading day to determine how quickly major economies may be forced to rein in their accommodative monetary policy, which holds the key to the dollar's trend in the medium term. Data last week showing U.S. consumer prices rose 4.2% in April from a year earlier was the fastest increase in more than a decade, raising fears the Fed will have to start raising interest rates sooner than expected. Fed policymakers have said the spike is temporary and reiterated that they expect rates to remain low, which has taken some steam out of the dollar, though not all are convinced by the Fed's line. The dollar index against a basket of six major currencies was quoted at 89.732, close to the lowest since late February. Expectations for policy tightening in Canada and the gradual lifting of coronavirus restrictions in Britain have lifted both countries' currencies, but any suggestion of benign inflation could help the greenback recoup some of its losses. In the cryptocurrency market, bitcoin tumbled below the closely-watched $40,000-mark to a three-month low of $39,000. Rival digital currency ether dropped by more than 13% to $2,900, which is a two-week low. Regulatory risk has emerged as a negative factor after China banned its financial institutions from offering cryptocurrency registration, trading, clearing, and settlement in a blow to investors who were betting that digital assets will gain mainstream status.
  • Oil prices fell for a second day on Wednesday on renewed demand concerns as coronavirus cases in Asia rise and on fears rising inflation might lead the U.S. Federal Reserve to raise interest rates, which could limit economic growth. Brent's rise to $70 was driven by optimism over the reopening of the U.S. and European economies, among the world's biggest oil consumers. But it later retreated on fears of slowing fuel demand in Asia as COVID-19 cases surge in India, Taiwan, Vietnam and Thailand, prompting a new wave of movement restrictionsv. Uncertainties over inflation also prompted investors to reduce exposure to riskier assets like oil. Smirk said speculation that the Federal Reserve might raise rates because of inflation fears weighed on the outlook for growth and in turn on commodities demand. The Fed has indicated that interest rates will stay at their current low levels through 2023 though futures markets show investors believe rates may start to be raised by September 2022. The lower oil prices came despite a weaker U.S. dollar which was at a 4-1/2 low against a basket of currencies. A weaker dollar makes oil cheaper for holders of other currencies and supports crude prices. Investors will also be watching out for the latest U.S. crude and products stocks data from the U.S. Energy Information Administration due on Wednesday. Data from the American Petroleum Institute on Tuesday showed crude inventories rose by 620,000 barrels in the week ended May 14, while gasoline inventories fell by 2.8 million barrels and distillate stocks fell by 2.6 million barrels, according to two market sources. The rise in crude stocks was less than the 1.6 million barrel rise analysts had estimated, on average, in a Reuters poll, while the declines in gasoline and distillate stocks were bigger than anticipated. U.S. crude stockpiles rose last week, adding to investor concerns of a jump in global oil supplies amid growing expectations an Iran nuclear deal is near. U.S. crude inventories rose by 620,000 barrels for the week ended May 13, according to an estimate released Tuesday by the American Petroleum Institute. That compared with a draw of 2.5 million barrels reported by the API for the previous week. The API also showed that gasoline inventories fell by about 2.8 million last week, compared with a 5.6 million build in the prior week, and distillate stocks slipped by about 2.6 million barrels. The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies increased by about 1.6 million barrels last week. Traders on Tuesday digested conflicting reports on how close Iran is to securing a nuclear deal that could lift restrictions on the Islamic Republic and raise the prospect of Iranian crude exports.

 

 
Intraday RESISTANCE LEVELS
19th 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 65.30-65.90 66.40 67.00-67.85
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 109.70 110.20 110.90-111.70

Intraday SUPPORTS LEVELS
19th 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 64.55-63.70 62.60 62.00-61.10
EURO/USD 1.2200-1.2140 1.2070 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 (19th 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 Tuesday made its intraday high of US$1874.91/oz and low of US$1863.15/oz. Gold up 0.149% at US$1868.99/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 Tuesday made its intraday high of US$28.73/oz and low of US$27.99/oz settled down by 0.0496% at US$28.16/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 Tuesday made an intra‐day high of US$66.39/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     64.55-63.70
S2     62.60
S3     62.00-61.10

Intraday Resistance Levels
R1     65.30-65.90
R2     66.40
R3     67.00-67.85

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.168 Sell
20-DMA   63.35 Buy
50-DMA   58.16 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$1.2148/EUR, high of US$1.2233/EUR and settled the day up by 0.584% to close at US$1.2221/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 1.2240-1.2490 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     1.2070
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   65.65.621621 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 Tuesday made an intra‐day low of US$1.4219/GBP, high of US$1.4219/GBP and settled the day up by 0.404% to close at US$1.1.4186/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 Tuesaday made intra‐day low of JPY109.27/USD and made an intraday high of JPY109.27/USD and settled the day down by 0.269% at JPY108.87/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
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

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