AAFX TRADING

Daily Market Lookup

  • The dollar edged lower in early European trade Wednesday, trading near its lowest levels since early January as Treasury yields weakened with Federal Reserve officials continuing to present a dovish view. Federal Reserve officials have been keen this week to get the message across that they see any elevated inflation pressures as temporary and thus the central bank will keep its current dovish monetary policy unchanged for now. Their continued insistence that there is no real reason to back off from the ultra-easy monetary policies in the near-term is weighing on U.S. Treasury yields. The dollar was down on Wednesday morning in Asia, near its lowest level since early January 2021, as U.S. Federal Reserve officials reiterated that any inflation will be transitory and the Fed will maintain its current dovish monetary policy. Bank of Japan board member Hitoshi Suzuki said earlier in the day that the central bank should prevent its holdings of exchange-traded funds (ETF) from increasing as much as possible during calm periods in the market. The Reserve Bank of New Zealand (RBNZ)’s policy decision, handed down earlier in the day, kept the central bank’s interest rate unchanged at 0.25%. RBNZ also said it would only scale back its stimulus measures after its inflation and employment targets are achieved. A slew of U.S. Federal Reserve officials, echoing the sentiments of Chairman Jerome Powell, reiterated that any inflation will be temporary and the central bank will keep its current dovish monetary policy unchanged. However, Fed Vice Chairman Richard Clarida said on Tuesday that policymakers could be ready to talk about the slowdown of asset purchases, echoing the recent minutes from the Fed’s latest meeting. Investors now await data, including the U.S. Core Personal Consumption Expenditure Price Index, due to be released on Friday.
  • The dollar extended its nearly two-month slide against major peers on Tuesday as U.S. interest rates fell on U.S. Federal Reserve arguments for easy monetary policy despite current inflationary forces The dollar weakness came as U.S. Treasury yields fell to fresh multi-week lows and the yield curve flattened after an auction of two-year notes attracted solid demand Interest rates in many other countries have climbed in the past month and made their currencies more competitive against the dollar, said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York The current outlook is for that difference to continue, he added. "The Federal Reserve seems to be behind several other central banks in adjusting and recalibrating monetary policy. Since the end of March the dollar has declined on the belief that low U.S. rates will drive cash abroad to capture gains now that other economies are beginning to recover more quickly from the pandemic. Early in the day, China state-owned banks were seen trying to curb a yuan rally which carried the onshore yuan to 6.4016 per dollar, the strongest since 2018 China's major state-owned banks, four sources said, were seen buying U.S. dollars at around 6.4 yuan in the Asian afternoon in a move viewed as an effort to cool a yuan rally led by its offshore counterpart. Strategists have said the dollar is likely be weak against many currencies until markets see stronger U.S. economic data and interest rates. Stronger data could come on Friday with new readings on U.S. core consumer prices in April and a survey of purchasing managers. Dovish comments from Fed speakers continued on Tuesday with a speech by Charles Evans, president of the Federal Reserve Bank of Chicago, who said recent inflation reports reflected only a "burst of post-pandemic relative price level adjustments." Two other Fed officials made similar statements on Monday. Cryptocurrencies Bitcoin and Ether were off about 3% for the day in the afternoon in New York.
  • Oil was steady on Wednesday, trading in a narrow range, supported by optimism about improving U.S. fuel demand and a weak dollar, but with the prospect of a return of Iranian oil to markets putting pressure on prices. The northern hemisphere's summer driving season and a lifting of coronavirus curbs have pushed up the demand. As a result, U.S. crude oil and fuel inventories fell last week, said two market sources, citing American Petroleum Institute figures. Crude stocks fell by 439,000 barrels in the week ended May 21. Gasoline inventories fell by 2 million barrels and distillate stocks fell by 5.1 million barrels, the data showed, according to the sources. The U.S. dollar languished near multi-month lows after Federal Reserve officials reaffirmed a dovish monetary policy stance, reassuring investors worried about the prospect of rising inflation. Market players are also closely watching developments in Iran-U.S. nuclear talks which could lead to the lifting of sanctions on the Iranian energy sector and the return of Iranian barrels to market. Iran's government spokesman Ali Rabiei said he was optimistic over Tehran reaching an agreement soon, although Iran's top negotiator cautioned that serious issues remained. Iran and global powers have negotiated in Vienna since April to work out steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with the 2015 nuclear pact with world powers. Analysts have said Iran could provide about 1 million to 2 million barrels per day (bpd) in additional oil supply if a deal is struck and sanctions lifted.

 

 
Intraday RESISTANCE LEVELS
26th May 2021 R1 R2 R3
GOLD-XAU 1,910-1,920 1,928 1,938-1,954
Silver-XAG 28.50 28.90 29.50-30.10
Crude Oil 66.10-67.00 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
26th May 2021 S1 S2 S3
GOLD-XAU 1,900-1,890 1,884 1,876-1,865
Silver-XAG 27.90-27.25 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 (26th 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$1900.17/oz and low of US$18752.61/oz. Gold down 0.0812% at US$1898.58/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 1900-1865 with risk below 1865, targeting 1910-1920-1928 and 1938-1954. Sell below 1910-1954 keeping stop loss closing above 1954, targeting 1900-1890-1884 and 1864-1852-1844.

 
Intraday Support Levels
S1     1,900-1,890
S2     1,884
S3     1,876-1,865
Intraday Resistance Levels
R1     1,910-1,920
R2     1,928
R3     1,938-1,954

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$28.022/oz and low of US$27.45/oz settled up by 0.767% at US$27.97/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 28.50-30.10 with stop loss above 30.10; targeting 27.90-27.25-26.55 and 26.00-25.60-24.70. Buy silver in between 27.90 -25.00, targeting 28.35-28.90 and 29.50-30.10 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   56.037 Buy
20-DMA   26.96 Sell
50-DMA   26.06 Sell
100-DMA   26.25 Sell
200-DMA   25.64 Sell
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$66.40/bbl, intraday low of US$65.30/bbl and settled down by 0.0652% to close at US$65.87/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     66.10-67.00
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 Tuesday an intraday low of US$1.2210/EUR, high of US$1.2265/EUR and settled the day up by 0.286% to close at US$1.2248/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 Tuesday made an intra‐day low of US$1.4114/GBP, high of US$1.4210/GBP and settled the day down by 0.0487% to close at US$1.1.4148/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 Tuesday made intra‐day low of JPY108.55/USD and made an intraday high of JPY109.06/USD and settled the day up 0.0193% at JPY108.74/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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