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Daily Market Lookup

  • The dollar strengthened further on Friday following its rise from more than four-month lows in recent sessions, as investors waited for U.S. inflation data to set the currency's direction. The United States and Britain have a public holiday on Monday, meaning the dollar's gains could be attributed to month-end demand. Versus the yen, the dollar was near a seven-week high. The pair changed hands at 109.875, a move which prompted analysts to note Japan's rise in unemployment, fall in consumer prices and news that the government is considering extending a state of emergency over the COVID-19 pandemic. China’s onshore yuan hit a new three-year high, on track for its best week since November. Chinese regulators said late on Thursday that they will crack down on manipulation of the forex market while reiterating no change to the country's currency policy. A Bank of England policymaker said on Thursday that the central bank could raise interest rates as soon as the first half of next year, but is more likely to wait until later in 2022. The number of Americans filing new claims for unemployment benefits dropped more than expected last week, data on Thursday showed. Core personal consumption expenditures data -- an inflation report closely watched by U.S. central bankers -- is due at 1230 GMT. U.S. President Joe Biden is set to release his first full budget since taking office in January later in the session. The New York Times reported on Thursday that Biden will seek $6 trillion in federal spending for the 2022 fiscal year.
  • The dollar edged higher in early European trade Friday, helped by rising U.S. bond yields ahead of the release of key inflation data. Helping the greenback was a report by the New York Times that President Joe Biden will announce later Friday a $6 trillion budget for 2022 to ensure investments in major infrastructure, education and healthcare projects. If this manages to get through a divided Congress, it would take federal spending to its highest levels since World War II. Yields on benchmark 10-year Treasurys climbed to around 1.62%, from around 1.58%, on debt supply risks to fund the spending, providing support for the dollar. The budget proposal came as the U.S. economic recovery appears to gain momentum. On Thursday, the number of Americans filing new claims for unemployment benefits dropped to a post-pandemic low of 406,000, ahead of next week’s widely-watched monthly June payrolls data. Later Friday comes the release of the Federal Reserve’s key gauge of inflation, core personal consumption expenditures, at 8:30 AM ET (1230 GMT), with a high reading likely to fuel further expectations of policy tightening. Economists expect core PCE to have jumped 2.9% year-on-year in April, way above the Fed’s nominal target of 2%, compared with a year-on-year rise of 1.8% a month earlier. Elsewhere, GBP/USD fell 0.1% to 1.4190, retreating slightly after earlier climbing above 1.42 and hitting a three-month high. Fuelling the pound’s gains were comments by a Bank of England policy maker, who hinted at an earlier than expected rate hike by the U.K. central bank. Gertjan Vlieghe, a member of the BOE’s Monetary Policy Committee, said late Thursday that the central bank was likely to raise rates well into next year, and an increase could come earlier if the economy rebounds more quickly than expected. The dollar was up on Friday morning in Asia ahead of the release of U.S. inflation data. The British pound was down, but a near three-month high, as expectations that the Bank of England could hike its interest rate earlier than planned grow. The yen was also hampered by investors' concerns about a delay in Japan's economic recovery as Japan seeks to extend a state of emergency covering Tokyo and other key areas by three weeks to Jun. 20. Bank of England policymaker Gertjan Vlieghe said the central bank could possibly hike interest rates well into 2022, adding that the move could come faster than expected if the economic recovery is quicker than expected. The pound also traded at 85.83 pence against the euro, near a five-week high of 85.615 pence. Meanwhile, the euro reached $1.2192, remaining below its five- and-half-a-month high on Tuesday as European Central Bank officials made dovish comments ahead of a policy meeting on Jun. 10. Investors await the Core Personal Consumption Expenditure Price Index for April, due later in the day, amid concerns that a higher-than-expected figure could force the U.S. Federal Reserve to tighten its monetary policy. Although the reading is expected to be higher than Fed’s 2% target, core inflation is expected to gradually slow later in 2021, allowing the Fed to keep its current dovish monetary policy unchanged for now.
  • Oil prices were little changed on Friday, with Brent holding near $70 a barrel as firm U.S. economic data and expectations of a strong rebound in global demand offset concerns about more supply from Iran once sanctions are lifted. Analysts expect global oil demand to rebound closer to 100 million barrels per day in the third quarter on summer travel in Europe and the United States following widespread COVID-19 vaccination programmes. Robust economic data from the United States, the world's largest economy and oil consumer, also lent support as the number of Americans filing new claims for unemployment benefits fell to the lowest since mid-March 2020, beating estimates. However, rising coronavirus infections in Asia put pressure on prices. Infections in the South Asia region surpassed 30 million on Friday, according to a Reuters tally, led by India which is struggling with a second COVID-19 wave and a vaccine shortage across the region. Exceptions on the return of Iranian oil to markets also capped the gains. 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 Iran's 2015 nuclear pact with world powers. Balancing expectations of a recovery in demand against a possible increase in Iranian supply, the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, is likely to stick to the existing pace of gradually easing oil supply curbs at a meeting on Tuesday, OPEC sources said.

 

 
Intraday RESISTANCE LEVELS
28th 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 67.00 67.80 68.50-69.00
EURO/USD 1.2240-1.2300 1.2350 1.2400-1.2490
GBP/USD 1.4200-1.4240 1.4300 1.4360-1.4400
USD/JPY 110.20-110.90 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
28th 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 66.10-65.30 64.70 63.70-62.60
EURO/USD 1.2140 1.2070 1.2240-1.2300
GBP/USD 1.4150-1.4090 1.4065 1.4010-1.3900
USD/JPY 108.50 108.50 107.50-107.00

Intra-Day Strategy (28th 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 Thursday made its intraday high of US$1903.56/oz and low of US$1888.07/oz. Gold down 0.006% at US$1896.21/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  

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 Thursday made its intraday high of US$27.87/oz and low of US$27.48/oz settled up by 0.596% at US$27.82/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 Thursday made an intra‐day high of US$66.80/bbl, intraday low of US$65.36/bbl and settled up by 1.026% to close at US$66.73/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     66.10-65.30
S2     64.70
S3     63.70-62.60

Intraday Resistance Levels
R1     67.00
R2     67.80
R3     68.50-69.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.168 Sell
20-DMA   65.09 Buy
50-DMA   62.73 Buy
100-DMA   60.48 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 Thursday an intraday low of US$1.2174/EUR, high of US$1.2214/EUR and settled the day up by 0.0204% to close at US$1.2193/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 1.2240-1.2140-1.2070 and 1.2010-1.1960-1.1905 with stop-loss at daily closing above 1.2400. Buy above 1.2190-1.1900 with risk below 1.1900, targeting 1.2300-1.2350 and 1.2400-1.2490.

 
Intraday Support Levels
S1     1.2140
S2     1.2070
S3     1.2240-1.2300

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 Thursday made an intra‐day low of US$1.4090/GBP, high of US$1.4218/GBP and settled the day up by 0.598% to close at US$1.1.4202/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 1.4150-1.4100-1.4065 and 1.4010-1.3900-1.3800 stop-loss should be 1.4360. Buy above 1.4150-1.3900 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     1.4200-1.4240
R2     1.4300
R3     1.4360-1.4400

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

65.806

Buy
20-DMA   1.3892 Buy
50-DMA   1.3785 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 JPY109.03/USD and made an intraday high of JPY109.91/USD and settled the day up 0.553% at JPY109.74/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 109.70-106.50 with targets of 109.70-110.20 and 110.90-111.70-112.20 with stop below 106.00. Sell below 110.90-112.50 with risk above 112.50 targeting 109.00-108.50-108.00 and 107.50-106.90.

 
Intraday Support Levels
S1     108.50
S2     108.50
S3     107.50-107.00

INTRADAY RESISTANCE LEVELS
R1     110.20-110.90
R2     111.70
R3     112.50-113.00

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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