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Daily Market Lookup

  • The U.S. dollar rose on Thursday as traders awaited a batch of U.S. economic data that could set the tone at central bank meetings later this month. Investors have bet on the dollar falling as the world recovers from the COVID-19 pandemic, but they have lately grown nervous over whether a surprisingly strong U.S. economic rebound poses a threat to the assumption that interest rates will stay low for a long time. The mood has kept speculators from adding much to short positions in recent weeks and has put the brakes on what a month ago seemed like a relentless downtrend. Fed officials have begun to hint at tapering discussions and on Wednesday the Fed announced it will unwind corporate bond holdings it amassed through an emergency facility last year - another sign of pandemic measures coming to an end. U.S. ADP payrolls - sometimes a litmus test for the broader non-farm figures - are expected to show a gain of 650,000 jobs when the data is released at 1215 GMT, a slowdown from a rise of 742,000 in the previous month. April's big miss on payrolls, when monthly hiring of 266,000 confounded expectations for 1 million, has added to the nervousness, with a miss likely to weigh on the dollar while a beat could support it. The consensus estimate is for 664,000. Globally, the Fed is becoming a laggard as other central banks start to discuss and even lay out timetables for hikes, as has happened in New Zealand, Canada, Norway and been hinted at by Bank of England policymakers - helping their currencies. The next Fed meeting is in June, while the European Central Bank meets next week with investors focused on whether it will persist with its current pace of bond buying. Sterling was the best-performing G10 currency against the dollar in May, with a 2.9% gain, but moves have been even more dramatic against the Japanese yen, since there are no expectations of Japan's gigantic monetary support backing off. Indeed speculators in March flipped rapidly into short yen positions and Japanese currency has been the biggest major loser against the dollar during 2021, dropping almost 6%. Sterling is up 10% on the yen this year and the Canadian dollar, which has been further bolstered by rising oil prices, has gained more than 12% against the yen.
  • The dollar was up on Thursday morning in Asia as investors digested China’s Caixin services data, while awaiting key U.S. economic data for clues on the economic outlook and the U.S. Federal Reserve’s policy decision. Investors are betting on a falling dollar driven by the world’s ongoing economic recovery from COVID-19. However, they remained concerned that the Fed could change its current dovish monetary policy due to a strong economic rebound. Fed Governor Lael Brainard’s noting of risks to both sides of the central bank’s goals gave "another signal that the Fed is slowly moving away from its excessively dovish stance... (we) retain the view that Fed expectations should be gradually built in from here, barring any key data misses this week," the note said. Remarks from Brainard earlier in the week noted risks to both sides of the Fed's goals offered "another signal that the Fed is slowly moving away from its excessively dovish stance," the note added. The Fed said on Wednesday that it plans to start gradually sell a portfolio of corporate debt purchased through an emergency lending facility that it launched in 2020, indicating the beginning of policy change. Investors now await key U.S. economic data including initial jobless claims, due later in the day, for clues on the economic outlook. Further data include non-farm payrolls, released on Friday, which posted weaker-than-expected monthly hiring in April. Across the Atlantic, investors will focus on the European Central Bank meeting, scheduled for the following week, for clues on whether policymakers will pare back their bond-buying program.
  • Oil prices rose for a third day on Thursday on expectations of a surge in fuel demand later this year, particularly in the United States and Europe and China, at the same time major producers are maintaining supply discipline. The consensus among market forecasters, including the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, is that oil demand will exceed supply in the second half of 2021, which has spurred the recent run in prices. OPEC+ data shows that by the end of the year oil demand will be 99.8 million barrels per day (bpd) versus supply of 97.5 million bpd. This rebalancing will be led by resurgent demand in the United States, the world's biggest oil user, from vehicle consumption this summer, along with rising fuel needs in China, the world's second biggest oil consumer, and in the UK as it exits its COVID-19 lockdowns. U.S. crcrude oil inventories fell by more than 5 million barrels last week, according to two market sources, citing American Petroleum Institute figures on Wednesday. OPEC+ agreed on Tuesday to continue with plans to ease supply curbs through July. The OPEC+ meeting lasted 20 minutes, the quickest in the grouping's history, suggesting strong compliance among members and the conviction that demand will recover once the COVID-19 pandemic shows sign of abating. A slowdown in talks between the U.S. and Iran over the latter's nuclear programme has also reduced expectations for Iranian oil supply to come back to the market this year. The European Union envoy coordinating the discussions said he believed a deal would be struck at the next round of talks starting next week, though other diplomats cautioned that difficulties remain.

 

 
Intraday RESISTANCE LEVELS
3rd 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 69.00 69.70-70.50 71.00
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
3rd 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 68.50-67.90 67.00 66.10-65.30
EURO/USD 1.2170-1.2140 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 (3rd 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 Wednesday made its intraday high of US$1909.00/oz and low of US$1894.27/oz. Gold down 0.528% at US$1907.95/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 Wednesday made its intraday high of US$28.17/oz and low of US$27.67/oz settled up by 0.900% at US$28.12/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 Wednesday made an intra‐day high of US$68.85/bbl, intraday low of US$67.66/bbl and settled up by 1.118% to close at US$68.62/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 68.90-71.70 with stop loss at 71.70; targeting 68.50-67.90-67.00 and 66.10-65.30-64.70. Buy above 68.50-65.70 with risk daily closing below 65.70 and targeting 69.00 and 69.70-70.50-71.00.

 
Intraday Support Levels
S1     68.50-67.90
S2     67.00
S3     66.10-65.30

Intraday Resistance Levels
R1     69.00
R2     69.70-70.50
R3     71.00

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 Wednesday an intraday low of US$1.2163/EUR, high of US$1.2225/EUR and settled the day down by 0.0166% to close at US$1.2210/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     1.2170-1.2140
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 Wednesday made an intra‐day low of US$1.4110/GBP, high of US$1.4182/GBP and settled the day up by 0.148% to close at US$1.4168/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 wednsday made intra‐day low of JPY109.35/USD and made an intraday high of JPY109.87/USD and settled the day up 0.0657% at JPY109.54/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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