AAFX TRADING

Daily Market Lookup

  • The dollar hit 4-1/2 month lows against a basket of peers on Tuesday, as insistence from the U.S. Federal Reserve that policy would stay pat calmed fears about inflation forcing rates higher, while China's yuan strengthened past 6.4 to the dollar. China's major state-owned banks were seen buying U.S. dollars at around 6.4 yuan per dollar on Tuesday in Asia, sources said, in a move viewed as an effort to curb fast yuan appreciation to breach the key level. Investors are heavily short dollars in the belief that low U.S. rates will drive cash abroad as the world recovers from the pandemic. They have become leery of adding to positions after an April leap in inflation cast doubt on the policy outlook, but seemed to find reassurance in data and Fed remarks overnight. The U.S. national activity index reading of 0.24 against expectations above 1, as well as dovish comments from Fed speakers, provided some backing for the view that any policy tightening is not happening any time soon. Sterling, which has run up about 1.2% over the past three weeks while other majors have steadied or even slipped, traded flat at $1.4155. Turkey removed Oguzhan Ozbas from his post as central bank deputy governor, replacing him with Semih Tumen, an adviser to President Tayyip Erdogan. Traders have a laser-focus on inflation, the policy response to it and any data or remark that could shed light on either since huge bets on stocks, bonds and currencies are predicated on the assumption that low rates are here to stay for a while. Crucial U.S. core consumer price data for April is due on Friday. Still ahead on Tuesday is a series of U.S. housing updates and a handful of policymaker speeches in Europe, Britain and the United States, which will be parsed for a reading on inflation. The dollar weakened in early European trade Tuesday, with Federal Reserve officials keen to stick to the recent mantra that inflationary pressures were temporary in nature and the central bank’s ultra-easy monetary policies were here to stay. Minutes from the April Federal Reserve policy-setting meeting last week gave the dollar a short-lived boost as they indicated that a number of policymakers wanted to discuss tapering the central bank’s bond purchases over worries that the considerable stimulus already pouring into an economy on the mend could stoke inflation. However, a series of Fed officials--Governor Lael Brainard, Atlanta Fed President Raphael Bostic and St. Louis’s James Bullard--pushed back Monday against the threat that a spike in price pressures will prove lasting as the U.S. economy reopens, eager to make sure the message remained that the central bank was not going anywhere soon. More softish data would add weight to their views, and later Tuesday the market expects new home sales to drop nearly 5% in April from the previous month and consumer confidence to erode a little in May. This move comes just two months after Erdogan fired the bank’s third governor in less than two years, Naci Agbal, a move that shocked the market as he had been seen as trying to restore the central bank’s credibility.
  • Gold was down on Tuesday morning in Asia, but remained near its highest level in more than four months, as investors digested comments by U.S. Federal Reserve officials that sought to assuage inflation concerns. The dollar, which usually moves inversely to the safe-haven yellow metal, fell to a four-month low on Tuesday. U.S. Treasury long-dated yields also tumbled to two-week lows. Fed Governor Lael Brainard, Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard said a surge in prices, due to bottlenecks and supply shortages as the number of COVID-19 cases continue to fall, would not be surprising. However, they also reiterated that any price gains are likely to be temporary. Bullard added he expects the inflation rate to be above 2% both in 2021 and 2022. Elsewhere on the central bank front, the Bank of Indonesia will hand down its policy decision later in the day, following by the Reserve Bank of New Zealand a day later and the Bank of Korea on Thursday. Meanwhile, the U.S. will release its Personal Consumption Expenditure (PCE) Prices index, the Fed’s preferred method of measuring inflation, on Friday. Investors’ bullish sentiment on gold is on the rise, with the yellow metal close to erasing its decline for 2021 to date. However, they remain cautious about inflation and COVID-19 outbreaks in some countries. Gold’s 14-day relative strength index remained above 70 during the past week, a sign of a potential pullback to investors.
  • Oil prices slipped on Tuesday, but were near one-week highs after jumping more than 3% the previous session as investors tempered expectations of an early return of oil exporter Iran to international crude markets. Indirect negotiations between the United States and Iran are due to resume in Vienna this week. Talks were given another life after Tehran and the U.N. nuclear agency extended a monitoring agreement on the Middle Eastern country's atomic programme. U.S. Secretary of State Antony Blinken on Sunday said the United States has not seen yet whether Iran will move to comply with its nuclear commitments in order to have sanctions removed even as ongoing talks have shown progress. Still, the global recovery from the COVID-19 pandemic is patchy, indicating a mixed outlook for oil demand. Parts of Europe and the United States are recording fewer infections and deaths, prompting governments to ease restrictions, but in other areas such as India - the world's third-biggest oil importer - rates are still high. New coronavirus infections in India rose by 222,315, government data showed on Monday, the world's biggest 24-hour increase, though numbers have fallen off highs of over 400,000 earlier this month. The German economy shrank more than expected in the first quarter as coronavirus-related restrictions spurred householders to put more money than ever into savings, data showed on Tuesday.

 

 
Intraday RESISTANCE LEVELS
25th May 2021 R1 R2 R3
GOLD-XAU 1,884 1,890-1,900
Silver-XAG 27.90-28.50 28.90 29.50-30.10
Crude Oil 65.90-67.00 67.80 68.50-69.00
EURO/USD 1.2300 1.2350-1.2400 1.2490
GBP/USD 1.4240-1.4300 1.4360 1.4400-1.4500
USD/JPY 109.00-109.70 110.20 110.90-111.70

Intraday SUPPORTS LEVELS
25th May 2021 S1 S2 S3
GOLD-XAU 1,876-1,865 1,854 1,844-1,824
Silver-XAG 27.25 26.55 26.00-25.60
Crude Oil 65.30-64.70 63.70 62.60-62.00
EURO/USD 1.2240-1.2200 1.2140 1.2070-1.2010
GBP/USD 1.4150-1.4090 1.4065 1.4010-1.3900
USD/JPY 108.50 107.50 107.00-106.50

Intra-Day Strategy (25th 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$1886.92/oz and low of US$1875.05/oz. Gold down 0.0812% at US$1880.56/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     1,876-1,865
S2     1,854
S3     1,844-1,824
Intraday Resistance Levels
R1     1,884
R2     1,890-1,900
R3    

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$27.89/oz and low of US$27.44/oz settled up by 0.727% at US$27.75/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 Monday made an intra‐day high of US$66.05/bbl, intraday low of US$63.56/bbl and settled down by 2.487% to close at US$65.92/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; sell in between 65.90-69.00 with stop loss at 69.00; targeting 65.30-64.70-63.70 and 62.60-62.00-61.10. Buy above 65.30-62.00 with risk daily closing below 62.00 and targeting 65.90-67.00-67.80 and 68.50-69.00.

 
Intraday Support Levels
S1     65.30-64.70
S2     63.70
S3     62.60-62.00

Intraday Resistance Levels
R1     65.90-67.00
R2     67.80
R3     68.50-69.00

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$1.2171/EUR, high of US$1.2229/EUR and settled the day up by 0.272% to close at US$1.2213/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 1.2240-1.2140-1.2070 and 1.2010-1.1960-1.1905 with stop-loss at daily closing above 1.2400. Buy above 1.2240-1.1900 with risk below 1.1900, targeting 1.2300-1.2350 and 1.2400-1.2490.

 
Intraday Support Levels
S1     1.2240-1.2200
S2     1.2140
S3     1.2070-1.2010

Intraday  Resistance Levels
R1     1.2300
R2     1.2350-1.2400
R3     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$1.4110/GBP, high of US$1.4171/GBP and settled the day up by 0.0141% to close at US$1.1.4154/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 1.4180-1.3900 with targets 1.4240-1.4300aa and 1.4360-1.4400 with stop loss closing below 1.3700.

 
Intraday Support Levels
S1     1.4150-1.4090
S2     1.4065
S3     1.4010-1.3900

Intraday Resistance Levels
R1     1.4240-1.4300
R2     1.4360
R3     1.4400-1.4500

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 Thursday made intra‐day low of JPY108.74/USD and made an intraday high of JPY109.32/USD and settled the day up 0.289% at JPY108.75/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 108.50-106.50 with targets of 109.00-109.70-110.20 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     108.50
S2     107.50
S3     107.00-106.50

INTRADAY RESISTANCE LEVELS
R1     109.00-109.70
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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