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Daily Market Lookup

  • The dollar struggled to hold on to its gains on Thursday as more investors weigh up whether the Federal Reserve is edging closer to talking about tapering its asset purchases, and as traders wait for this week's closely watched U.S. inflation data. In market heavily short dollars, the mere suggestion of tapering is enough to temper further selling, and against the euro and the yen the dollar held late Wednesday gains early in the Thursday Asia session. Fed officials have this week downplayed immediate concerns about inflation prompting a knee-jerk policy response. But they - and notably influential vice chair Richard Clarida - have made a subtle shift in tone by acknowledging that the time to talk about policy changes might be approaching. Still, most analysts think the Fed actually talking about reining in its asset purchases is some way off, limiting any rebound in the dollar. Market attention now turns to U.S. inflation data due on Friday as investors gauge the extent of a jump in price growth in recent months. Economists expect core PCE (personal consumption expenditures) prices to jump 2.9% year-on-year in April, compared with a year-on-year rise of 1.8% a month earlier. The latest fretting about inflation was triggered when data in mid-May showed April U.S. CPI running at an annual clip of 4.2% - juiced by the low base of the pandemic year, but still well above forecasts for 3.6%. It has given dollar bears pause for thought, stalling a downtrend in the dollar index and hemming most majors into ranges while the world awaits more data to learn whether the lift is transitory. The dollar edged higher in early European trade Thursday, finding support from comments suggesting the Federal Reserve will soon have to discuss tapering its massive bond-buying program, thus tightening monetary policy. Numerous Fed officials have this week sought to downplay immediate concerns that rising inflationary pressures will force the central bank to tighten monetary policy sooner than its previous guidance would suggest, to the detriment of the dollar. However, the U.S. currency received some support late Wednesday when Randal Quarles, the Fed Vice Chairman for Supervision, stated that the central bank will need to start discussing shortly plans to reduce its bond purchases if the economy continues to show massive improvement as it emerges from the pandemic. Although discussing changes could still be a far way from actually implementing them, this does represent a shift in tone by a senior Fed official. There are a number of important economic data releases due later Thursday, including weekly jobless claims, first-quarter GDP and durable goods, but the focus will turn to Friday’s release of the personal consumption expenditures index, the Fed's preferred inflation gauge. Fed vice chairman for supervision Randy Quarles said on Wednesday that though "we need to remain patient" in any policy shift, "if my expectations about economic growth, employment and inflation over the coming months are borne out ... and especially if they come in strong ... it will become important for the (Federal Open Market Committee) to begin discussing our plans to adjust the pace of asset purchases at upcoming meetings.” Quarles’ comments echoed comments made by Fed Vice Chairman Richard Clarida earlier in the week and reinforced the possibility of a policy shift for some investors.
  • Gold was down on Thursday morning in Asia after hitting a four-and-a-half month high hit in the previous session as investors await key economic data in the U.S. to be released later in the day. Investors continue to monitor how the U.S. Federal Reserve is going to change its policy in light of possible runaway inflation, even if Fed officials have reiterated any inflation is transitory and the central bank will keep its current dovish monetary policy for a while. Fed vice chair for supervision Randy Quarles, however, said on Wednesday that he was ready for the Fed to begin tapering discussions. Though "we need to remain patient" in any policy shift, "if my expectations about economic growth, employment and inflation over the coming months are borne out ... and especially if they come in strong ... it will become important for the (Federal Open Market Committee) to begin discussing our plans to adjust the pace of asset purchases at upcoming meetings," Quarles added, in an echo of comments made by Fed Vice Chairman Richard Clarida earlier in the week. Elsewhere on the central bank front, the Bank of Korea handed down its policy decision earlier in the day and kept its interest rate unchanged at 0.50%. On the data front, investors now await U.S. data, including GDP for the first quarter of 2021, initial jobless claims for the previous week, as well as Core Durable Goods Orders and Pending Home Sales for April, due later in the day.
  • Oil prices fell on Thursday but stayed within the tight range set this week, with optimism about the summer driving season in the United States and Europe offsetting concerns on demand in India and a potential increase in Iranian supplies. The markets remain focused on the Iranian nuclear talks and whether sanctions on its oil exports are lifted in full, and when, Citi analysts said in a note That will be a big issue for the next meeting of the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, on June 1, where producers will have to assess whether to change their plans for easing production curbs against the prospect of Iranian supply returning to the market. Citi predicted OPEC+ would stick to plans to bring back 700,000 barrels per day (bpd) of oil supply in June, but the group's plan to step up supply by a further 840,000 bpd in July "might now be in question". Analysts said any increase of supply from Iran would only be gradual, with JPMorganestimating Iran could add 500,000 bpd by the end of this year and a further 500,000 bpd by August 2022. While the market was supported on Wednesday by a bigger-than-expected drawdown in U.S. oil inventories, there are still concerns about demand shrinking in India, the world's third-largest oil consumer.

 

 
Intraday RESISTANCE LEVELS
27th May 2021 R1 R2 R3
GOLD-XAU 1,910-1,920 1,928 1,938-1,954
Silver-XAG 27.90-28.50 28.90 29.50-30.10
Crude Oil 66.10-67.00 67.80 68.50-69.00
EURO/USD 1.2240-1.2300 1.2350 1.2400-1.2490
GBP/USD 1.4150-1.4240 1.4300 1.4360-1.4400
USD/JPY 109.70 110.20 110.90-111.70

Intraday SUPPORTS LEVELS
27th May 2021 S1 S2 S3
GOLD-XAU 1,890 1,884 1,876-1,865
Silver-XAG 27.25 26.55 26.00-25.60
Crude Oil 65.30-64.70 63.70 62.60-62.00
EURO/USD 1.2200-1.2140 1.2070 1.2010-1.1950
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 (27th 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$1902.16/oz and low of US$1893.07/oz. Gold down 0.382% at US$1901.64/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 1890-1865 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     1,890
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  

1782.15

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$27.77/oz and low of US$27.58/oz settled down by 0.573% at US$27.65/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 27.90-27.25-26.55 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     27.25
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$65.88/bbl, intraday low of US$65.39/bbl and settled down by 0.442% to close at US$65.58/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 Wednesday an intraday low of US$1.2179/EUR, high of US$1.2214/EUR and settled the day up by 0.0902% to close at US$1.2181/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     1.2200-1.2140
S2     1.2070
S3     1.2010-1.1950

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 Wednesday made an intra‐day low of US$1.4100/GBP, high of US$1.4138/GBP and settled the day up by 0.0800% to close at US$1.1.4115/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     1.4090
S2     1.4065
S3     1.4010-1.3900

Intraday Resistance Levels
R1     1.4150-1.4240
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 JPY109.03/USD and made an intraday high of JPY109.18/USD and settled the day up 0.076% at JPY109.17/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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