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Daily Market Lookup

  • The U.S. dollar edged lower on Thursday but remained well above three-month lows hit overnight after minutes from the Federal Reserve's last policy meeting revealed there was more talk of tapering its bond purchases than investors had expected. In the Fed minutes, several policymakers said that a discussion about reducing the pace of asset purchases would be appropriate "at some point" if the U.S. economic recovery continues to gain momentum. That surprised markets with some investors unwinding some of their short dollar positions as they believed the Fed would remain on hold for the foreseeable future despite strong data. However, the dollar's overnight gains looked set to run out of steam in early London trading with the greenback declining against most of its peers. Against a basket of its rivals, the dollar was down 0.25% at 90.00 but remained well above a late-February low of 89.686 hit on Wednesday. The dollar has been declining over the past few weeks as key Fed officials have repeatedly said they were not ready to discuss reducing stimulus, judging spikes in inflation would be transient. Cryptocurrencies were volatile after suffering one of their biggest losses on Wednesday in the wake of China's decision to ban financial and payment institutions from providing digital currency services. The dollar edged lower in early European trade Thursday, handing back some of the gains seen after the minutes from the Federal Reserve's latest policy meeting revealed talk of bond tapering. This caused something of a surprise, to the benefit of the dollar, as Fed Chair Jerome Powell had said right after that meeting last month that it is not time yet to begin discussing any change in policy. However, the gains were minor, as central bank members continued to point out that there is still a long way to go until the economy makes "sustained progress" toward the Fed's maximum employment and inflation goals. The minutes lifted U.S. bond yields a little, with the 10-year Treasury yield now around 1.67%, compared with 1.65% just before the release of the minutes, but this is still well below their March peaks. Data released Wednesday showed inflation accelerated to a 14-month high of 4.4% in April from 3.2% the previous month. With the central bank’s key interest rate at 3.5%, the country now has a negative real interest rate for the first time since February 2016.
  • The U.S. dollar edged lower on Thursday but remained well above three-month lows hit overnight after minutes from the Federal Reserve's last policy meeting revealed there was more talk of tapering its bond purchases than investors had expected. In the Fed minutes, several policymakers said that a discussion about reducing the pace of asset purchases would be appropriate "at some point" if the U.S. economic recovery continues to gain momentum. That surprised markets with some investors unwinding some of their short dollar positions as they believed the Fed would remain on hold for the foreseeable future despite strong data. However, the dollar's overnight gains looked set to run out of steam in early London trading with the greenback declining against most of its peers. Against a basket of its rivals, the dollar was down 0.25% at 90.00 but remained well above a late-February low of 89.686 hit on Wednesday. The dollar has been declining over the past few weeks as key Fed officials have repeatedly said they were not ready to discuss reducing stimulus, judging spikes in inflation would be transient.
  • Oil prices were poised for a third day of losses on Thursday after diplomats said progress was made towards a deal to lift sanctions on Iran, which could boost crude supply. European powers, the United States and Iran have made progress in talks over Tehran's nuclear programme that could result in sanctions on Iranian oil being lifted. The EU official leading the talks said on Wednesday he was confident a deal would be reached as the negotiations adjourned. Concerns about the demand outlook in Asia also dragged prices down. Almost two thirds of people tested in India show exposure to the coronavirus. Speculation the U.S. Federal Reserve might at some point start to tighten policy weighed on the outlook for economic growth and has prompted some investors to reduce exposure to oil and other commodities. Supporting prices in early trading, crude inventories in the United States increased by 1.3 million barrels last week, against analysts' expectations in a Reuters poll for a 1.6 million-barrel rise. Gasoline stocks were down by 2 million barrels, compared with predictions of an 886,000-barrel fall. Gasoline product supplied, a measure of demand, rose 5% to 9.2 million barrels per day, though this included follow-on demand from the Colonial Pipeline shutdown. Swiss bank UBS said it expected oil inventories to fall to pre-COVID levels by mid-year with an oil price of $75 a barrel in the second half. Oil was up Thursday morning in Asia but remained a three-week low even if the U.S. increased its fuel supplies. However, investors remain concerned about the spike of COVID-19 cases in parts of Asia. U.S. crude oil supply data from the U.S. Energy Information Administration, released on Wednesday, showed a build of 1.321 million barrels for the week ending May 14. Forecasts prepared by Investing.com had predicted a 1.623-million-barrel build, while a 427,000-barrel draw was reported during the previous week. Crude oil supply data from the American Petroleum Institute released the day before showed a better-than-expected build of 620,000 barrels. Meanwhile, the U.S. and Iran are close to reviving a 2015 nuclear deal that could lift sanctions and give a boost in Iranian crude supply. Enrique Mora, the European Union official in charge of coordinating diplomacy in Vienna for the nuclear talks, said he expects all parties to return to the agreement ahead of Iran’s presidential elections on June 18. Iran will also soon export its increasing crude output from the Jask terminal on the Gulf of Oman coast from June onwards, allowing them to bypass the Strait of Hormuz.

 

 
Intraday RESISTANCE LEVELS
20th May 2021 R1 R2 R3
GOLD-XAU 1,876 1,884 1,890-1,900
Silver-XAG 27.90-28.50 28.90 29.50-30.10
Crude Oil 62.60-63.70 64.55 65.30-65.90
EURO/USD 1.2200-1.2240 1.2300 1.2350-1.2400
GBP/USD 1.4180-1.4240 1.4300 1.4360-1.4400
USD/JPY 109.70 110.20 110.90-111.70

Intraday SUPPORTS LEVELS
20th May 2021 S1 S2 S3
GOLD-XAU 1,844 1,844 1,824-1,816
Silver-XAG 27.25 26.55 26.00-25.60
Crude Oil 62.00-61.10 59.50 58.40-57.60
EURO/USD 1.2140-1.2070 1.2010 1.1960-1.1900
GBP/USD 1.4090 1.4065 1.4010-1.3900
USD/JPY 109.00-108.50 107.50 107.00-106.50

Intra-Day Strategy (20th 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 Wednesday made its intraday high of US$1889.95/oz and low of US$1852.13/oz. Gold up 0.0090% at US$1869.30/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     1,844
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 Wednesday made its intraday high of US$28.22/oz and low of US$27.35/oz settled down by 1.661% at US$27.70/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
S2     26.55
S3     26.00-25.60

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.037 Buy
20-DMA   26.96 Sell
50-DMA   26.06 Sell
100-DMA   26.25 Sell
200-DMA   25.64 Buy
STOCH(5,3)   90.468 Buy
MACD(12,26,9)   0.436 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$65.30/bbl, intraday low of US$61.92/bbl and settled down by 3.056% to close at US$63.28/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 62.00-57.60 with risk daily closing below 57.60 and targeting 62.60-63.70-64.55 and 65.30-65.90. Sell in between 62.60-65.90 with stop loss at 65.90; targeting 62.00-61.10-59.50 and 58.40-57.60.

 
Intraday Support Levels
S1     62.00-61.10
S2     59.50
S3     58.40-57.60

Intraday Resistance Levels
R1     62.60-63.70
R2     64.55
R3     65.30-65.90

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 Wednesday an intraday low of US$1.2159/EUR, high of US$1.2244/EUR and settled the day down by 0.392% to close at US$1.2174/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 1.2200-1.2490 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 1.2140-1.1800 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     1.1960-1.1900

Intraday  Resistance Levels
R1     1.2200-1.2240
R2     1.2300
R3     1.2350-1.2400

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 Wednesday made an intra‐day low of US$1.4098/GBP, high of US$1.4200/GBP and settled the day down by 0.4998% to close at US$1.1.4113/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 1.4180-1.4490 with targets at 1.4100-1.4065 and 1.4010-1.3900-1.3800 stop-loss should be 1.4360. Buy above 1.4090-1.3900 with targets 1.4180-1.4240 and 1.4300-1.4360-1.4400 with stop loss closing below 1.3700.

 
Intraday Support Levels
S1     1.4090
S2     1.4065
S3     1.4010-1.3900

Intraday Resistance Levels
R1     1.4180-1.4240
R2     1.4300
R3     1.4360-1.4400

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 Wednesday made intra‐day low of JPY108.56/USD and made an intraday high of JPY109.32/USD and settled the day up 0.289% at JPY109.20/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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