AAFX TRADING

Daily Market Lookup

  • The dollar was up on Tuesday morning in Asia as it edged back from near a five-month low. Investors continued to bet the U.S. Federal Reserve will change its stimulus measures sooner than expected after positive economic data was released on Tuesday. Investors continue to monitor the recent bullish yuan after the People’s Bank of China tightened banks’ forex reserve requirements to curb the yuan’s appreciation. Some U.S. Federal Reserve officials insisted that the price pressure will be temporary, while some investors remained concerned that potential runaway inflation will eventually force the central bank to change its current dovish monetary policy earlier than expected. In the U.S., data released on Tuesday said the Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rose 61.2 in May, driven by a boosted demand amid a reopening of businesses. It’s better than the 60.9 figure in forecasts prepared by investing.com and April’s 60.7 reading. However, the data also indicated supply shortages and labor constraints. Investors now await further U.S. data, including non-farm payrolls, due on Friday for clues on the economic outlook. Its much-weaker-than-expected reading in April led the dollar to slump 0.7% on May 7.
  • The dollar clung to small gains from overnight on Wednesday, edging back from near a five-month trough versus major peers, as a pickup in U.S. manufacturing kept bets alive for a quicker normalisation of Federal Reserve policy. Investors were also watching out the trajectory of China's recently bullish yuan. It was last at 6.3798 per dollar in offshore trading, after retreating from the three-year high of 6.3526 reached on Monday as policy makers took steps to cool its advance including raising banks' FX reserve requirements. Over the near term, the euro and yuan will be key in determining if the dollar remains on the back foot or stages a rebound, he said. On Tuesday, the Institute for Supply Management (ISM) said its index of U.S. manufacturing activity rose in May as pent-up demand amid a reopening economy boosted orders. The dollar initially traded lower on the report, in which ISM said manufacturing's growth potential continued to be hampered by worker absenteeism and temporary shutdowns because of shortages of parts and labor. Those employment shortcomings will be front and centre of investors' minds on Friday with the release of nonfarm payrolls numbers for May, after April's much-weaker-than-expected reading sent the dollar index slumping 0.7% on May 7.
  • Gold was down on Wednesday morning in Asia from the near five-month high hit during the previous session over the release of better-than-expected U.S. economic data and a rise in bond yields. In the U.S., data released on Tuesday said the Institute of Supply Management Manufacturing Purchasing Managers Index rose to a better-than-expected 61.2 in May. However, investors are concerned about raw materials shortages and labor constraints. Investors' risk appetite increased as the strong U.S. economic data indicated an economic rebound and higher inflation. U.S. Federal Reserve governor Lael Brainard also reiterated on Tuesday that the Fed is not ready to deviate from its current dovish monetary policy just yet. Across the Atlantic, the Eurozone Consumer Price Index jumped 2% year-on-year in May, surpassing the European Central Bank’s target for the first time in over two years. This led to concerns over whether the central bank will keep its ultra-loose monetary policy in its policy decision due to be handed down in the following week. In Asia, Australia reported a better-than-expected GDP as data released earlier in the day said that Gross Domestic Product grew 1.8% quarter-on-quarter and 1.1% year-on-year in the first quarter of 2021. On the data front, investors now await further U.S. economic data, including non-farm payrolls and unemployment rate in May, due on Friday.
  • Oil prices rose on Wednesday after OPEC and its allies stuck to their plan to cautiously bring back oil supply to the markets in June and July while expecting a robust recovery in demand in the United States and China, the world's two biggest oil consumers. The OPEC and its allies, together called OPEC+, agreed on Tuesday to keep to their plan to gradually ease supply curbs through July. Saudi Energy Minister Prince Abdulaziz bin Salman's comments after the meeting buoyed the market. He said he saw a solid demand recovery in the United States and China and added that the pace of vaccine rollouts "can only lead to further rebalancing of the global oil market". Including extra cuts by Saudi Arabia tapering off through July, the producer group will be returning 700,000 bpd in June and 840,000 bpd in July, ING said. Market gains over the past two weeks have been capped by concerns about a potential lifting of oil sanctions against Iran, as talks on reviving a nuclear accord made progress. However, negotiations hit a roadblock this week. Two Western diplomats and an Iranian official said the talks would likely pause on Thursday, but it was unclear if talks would resume before Iran's June 18 presidential election. "The return of Iranian barrels does not appear to be an imminent issue for the oil market with the fifth round of nuclear negotiations in Vienna failing to produce a major diplomatic breakthrough," analysts at RBC Capital Markets said in a note. That should provide breathing room for demand to catch up, some analysts said. OPEC Secretary General Mohammad Barkindo also played down any potential disruption to the market, saying the group expected any return of Iranian exports "will occur in an orderly and transparent fashion" if and when a nuclear deal is reached.

 

 
Intraday RESISTANCE LEVELS
2nd June 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 67.90-68.50 69.00 69.70-70.50
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
2nd June 2021 S1 S2 S3
GOLD-XAU 1,890 1,884 1,876-1,865
Silver-XAG 27.50-27.25 26.55 26.00-25.60
Crude Oil 67.00-66.10 65.30 64.70-63.70
EURO/USD 1.2200-1.2140 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 (2nd June 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$1892.30/oz and low of US$1892.30/oz. Gold down 0.360% at US$1899.99/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)   32.276 Sell
MACD(12,26,9)   32.276 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$28.54/oz and low of US$27.81/oz settled up by 0.482% at US$27.87/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     27.50-27.25
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   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 Tuesday made an intra‐day high of US$68.74/bbl, intraday low of US$66.77/bbl and settled up by 0.359% to close at US$67.85/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 67.90-70.70 with stop loss at 70.70; targeting 67.00-66.10-65.90 and 65.30-64.70-63.70. Buy above 67.10-63.70 with risk daily closing below 63.70 and targeting 67.90-68.50-69.00 and 69.70-70.50.

 
Intraday Support Levels
S1     67.00-66.10
S2     65.30
S3     64.70-63.70

Intraday Resistance Levels
R1     67.90-68.50
R2     69.00
R3     69.70-70.50

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 Tuesday an intraday low of US$1.2211/EUR, high of US$1.2253/EUR and settled the day down by 0.0965% to close at US$1.2212/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     1.2200-1.2140
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   1.2143 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 Tuesday made an intra‐day low of US$1.4145/GBP, high of US$1.4248/GBP and settled the day down by 0.420% to close at US$1.1.4147/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     1.4300
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 Tuesday made intra‐day low of JPY109.32/USD and made an intraday high of JPY109.70/USD and settled the day down 0.0721% at JPY109.46/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   106.99 Sell
200-DMA   106.00 Sell
STOCH(9,6)   51.253 Sell
MACD(12,26,9)   0.103 Sell

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