AAFX TRADING

Daily Market Lookup

  • The dollar inched down, but traded near a two-month high against the yen, on Monday morning in Asia. Investors digested mixed economic data from China and strong inflation data from the U.S., while also expecting the U.S. Federal Reserve to start tapering its asset purchases eventually. The offshore yuan decreased after Sheng Songcheng, former director of People’s Bank of China statistics department, said on Sunday the rise of yuan will not persist. The central bank separately added that the currency may depreciate in the future on the same day Japanese data released earlier in the day said the Industrial Production for April increased by 2.5% month-on-month, surpassing March’s 1.7% but below 4.1% in forecasts prepared by investing.com. The data also said that Retail Sales also increased 12.0% year-on-year, but below 15.3% in forecasts prepared by Investing.com, in April. Both the U.S. and the U.K. markets are closed amid holidays on Monday. Data released earlier in the day said that China’s Manufacturing Purchasing Managers Index (PMI) was 51.0 and the non-manufacturing PMI was 55 in May, both remaining above the 50-mark indicating growth. However, the manufacturing PMI was slightly below 51.1 in forecasts by Investing.com and April’s reading In the U.S., data released on Friday said the Core Personal Consumption Expenditure Price Index increased 3.1% year-on-year in April, above the 2.9% in forecasts prepared by Investing.com and 1.9% during the previous session. The index was also above the Fed’s 2% target and posted its largest annual gain since 1992 due to the country’s recovery from COVID-19 and various supply disruptions. However, investors widely expect that the Fed will keep its current dovish monetary policy for a few more months, possibly until the end of 2021. Meanwhile, key Fed officials, including Fed vice chairman Richard Clarida, have recently said that the Fed may start tapering talks should inflation build up further. Investors now await further U.S. economic data, including Nonfarm Payrolls and the Unemployment Rate, due on Friday, to gauge the economic recovery.
  • 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. 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.
  • Gold was up on Monday morning in Asia against a weaker dollar and lower bond yields after the worlds’ largest gold consumer China released key economic data. The Chinese data said that the Manufacturing Purchasing Managers Index (PMI) was 51 and the non-manufacturing PMI was 55 in May, both remaining above the 50-mark indicating growth. However, the manufacturing PMI was slightly below forecasts. In India, the second-biggest bullion consumer, physical gold demand remains low as jewelry shops remain closed amid the country’s COVID-19 outbreak. Elsewhere in the region, the Reserve Bank of Australia will hand down its policy decision on Tuesday. In the U.S., data released on Friday said the Core Personal Consumption Expenditure Price Index grew by a stronger-than-expected 3.1% year-on-year in April. Investors now await key U.S. economic data for May, including the Institute of Supply Management (ISM) manufacturing PMI, to be released on Tuesday. Further data, including non-farm payrolls and the unemployment rate, is due on Friday. They also digested President Joe Biden’s proposed $6 trillion budget plan for the fiscal year 2022 to invest in infrastructure, education, and combating climate change that was unveiled on Friday. In other precious metals, palladium edged down 0.2, while silver edged up 0.2% and platinum rose 0.5%.
  • Oil prices climbed in early Asian trade on Monday, underpinned by the bright outlook for fuel demand growth in the next quarter, while investors looked ahead to the OPEC+ meeting this week to see how producers will respond. U.S. and UK markets are closed on Monday due to public holidays. Both contracts are on track for a second monthly gain as analysts expect oil demand growth to outstrip supply despite the possible return of Iranian crude and condensate exports. Iran has been in talks with world powers since April, working on steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with the 2015 nuclear pact. The Organization of the Petroleum Exporting Countries and their allies including Russia will meet on Tuesday. The group known as OPEC+ is expected to stay the course on its plans to gradually ease supply cuts until July. Separately, crude output in the United States soared 14.3% in March, the Energy Information Administration reported on Friday, while Baker Hughes data showed oil and gas rigs rising for a 10th month in a row last week. EIA's data also showed that a cargo of 1.033 million barrels of Iranian crude oil was recorded as landing on U.S. shores in March, the first shipment of Iranian oil to the United States since 1991.

 

 
Intraday RESISTANCE LEVELS
31st 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 69.00-69.70
EURO/USD 1.2240-1.2300 1.2350 1.2400-1.2490
GBP/USD 1.4200-1.4240 1.4360-1.4400 1.4360-1.4400
USD/JPY 110.20-110.90 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
31st May 2021 S1 S2 S3
GOLD-XAU 1,890 1,884 1,876-1,865
Silver-XAG 26.55 26.55 26.00-25.60
Crude Oil 66.10-65.30 64.70 63.70-62.60
EURO/USD 1.2140 1.2070 1.2010-1.1950
GBP/USD 1.4150-1.4090 1.4065 1.4010-1.3900
USD/JPY 109.70-109.00 108.50 107.50-107.00

Intra-Day Strategy (31st 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 Friday made its intraday high of US$1905.83/oz and low of US$1882.12/oz. Gold down 0.380% at US$1903.53/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1843) and breakage below will call for 1800. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving negative crossover to bearish 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  

76.420

Buy
20-DMA   1849.50 Buy
50-DMA  

1789.50

Buy
100-DMA   1793.01 Buy
200-DMA   1843.37 Buy
STOCH(5,3)   68.503 Sell
MACD(12,26,9)   32.276 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$27.96/oz and low of US$27.38/oz settled up by 2.00% at US$27.89/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     26.55
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   60.037 Buy
20-DMA   27.46 Buy
50-DMA   26.26 Buy
100-DMA   26.30 Buy
200-DMA   25.68 Buy
STOCH(5,3)   56.468 Buy
MACD(12,26,9)   0.436 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$67.39/bbl, intraday low of US$66.06/bbl and settled up by 0.359% to close at US$66.51/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 65.09 which is a support level and breakage below will call for 62.70. 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 67.00-69.70 with stop loss at 69.00; targeting 65.90-65.30-64.70 and 63.70-62.60-62.00. Buy above 66.10-62.00 with risk daily closing below 62.00 and targeting 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     67.00-67.80
R2     68.50
R3     69.00-69.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.168 Sell
20-DMA   65.09 Buy
50-DMA   62.73 Buy
100-DMA   60.48 Buy
200-DMA   51.41 Buy
STOCH(5,3)   90.130 Buy
MACD(12,26,9)   0.831 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.2131/EUR, high of US$1.2204/EUR and settled the day down by 0.002% to close at US$1.2191/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.2143), which become immediate Support 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 oversold territory and still giving negative crossovers to signal for bearish 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 1.2140-1.2070 and 1.2010-1.1960-1.1905 with stop-loss at daily closing above 1.2400. Buy above 1.2170-1.1900 with risk below 1.1900, targeting 1.2240-1.2300-1.2350 and 1.2400-1.2490.

 
Intraday Support Levels
S1     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   1.2143 Buy
50-DMA   1.2011 Buy
100-DMA   1.2037 Buy
200-DMA   1.1971 Buy
STOCH(5,3)   36.758 Sell
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.4135/GBP, high of US$1.4207/GBP and settled the day down by 0.0908% to close at US$1.1.4189/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.4079) 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 neutral territory and giving positive crossover to confirm bullish 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     1.4360-1.4400
R3     1.4360-1.4400

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

61.806

Buy
20-DMA   1.4079 Buy
50-DMA   1.3923 Buy
100-DMA   1.3869 Buy
200-DMA   1.3520 Buy
STOCH(5,3)   56.940 Buy
MACD(12,26,9)   0.0074 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY109.72/USD and made an intraday high of JPY1110.19/USD and settled the day up 0.0792% at JPY109.83/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     109.70-109.00
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   106.00 Sell
200-DMA   106.00 Sell
STOCH(9,6)   51.253 Sell
MACD(12,26,9)   0.103 Sell

AAFX TRADING
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