AAFX TRADING

Daily Market Lookup

  • The dollar was perched at multi-week highs on Friday, after notching up its biggest gains in about a month following robust jobs data that threw investors' focus on to the strength of the U.S. recovery and the possibility of policy tightening. The next test comes later in the day when U.S. non-farm payrolls data is published. The consensus forecast is for about 650,000 jobs to have been added in May, though the "whisper number" among traders is closer to 800,000. Private payrolls data delivered a big beat with an increase of 978,000, against forecasts of 650,000, which sent the dollar rallying. He thinks a million or more jobs might see the Aussie fall by another 1%, the euro drop about 0.8% and the dollar/yen exchange rate gain that amount as traders factor in a policy response to the strong economy. At issue is whether the data points to the sort of hiring that could reel in pandemic job losses, lift wages and drive broad U.S. growth that increases the trade deficit and weighs on the dollar - or whether things feel like they are overheating. Positioning data shows investors heavily short dollars, leaving the market hypersensitive to any suggestion of a change in direction for the currency or a shift in the rates outlook - hence the options market is priced for a bumpy ride. Overnight implied dollar/yen volatility shot up to a month high above 8% on Thursday and euro/dollar implied volatility hit its highest since mid-March. Brian Daingerfield, head of G10 currency strategy at Natwest, sees a payrolls print around 550,000 as the "goldilocks" number: "strong enough to keep the recovery going but not strong enough to pull tapering fears forward." That could weaken the dollar broadly, he said, offsetting Thursday's moves, while bonds could recover lost ground. Benchmark ten-year U.S. Treasury yields raised 3.6 basis points to 1.6300% overnight and traded near that level in Tokyo on Friday. The Institute for Supply Management’s services index rose to 64 last month, the highest on record, from 62.7 in April. Even with these numbers detailing the obvious improvement in the U.S. economy, New York Fed President John Williams (NYSE:WMB) still said Thursday that now is not the time for the central bank to adjust its bond-buying program, although he added that it makes sense for the policy makers to be talking through options for the future. The next focus of the market will come later in the day when U.S. nonfarm payrolls data is published at 8:30 AM ET (1230 GMT). The expectation, according to Investing.com, is for about 650,000 jobs to have been added in May, although that number may well have started climbing after Thursday’s releases. That said, traders are wary of getting too confident about a strong number after April’s figure, which came in at 266,000 versus 978,000 expected. Consumer prices increased an annual 16.6% in May, down from 17.1% the previous month, and below the expected acceleration to 17.3%.Investors also remained concerned about a slowdown in the Fed’s stimulus measures, prompted by prospective runaway inflation. However, some Fed officials reiterated that the price pressure will be temporary, and the central bank will keep its current stimulus measures unchanged for a while. New York Fed President John Williams said on Thursday that the U.S. economic recovery from COVID-19 is not strong enough for Fed to start to scale back its support for businesses, but added it makes sense to start talking about a tapering of stimulus measures. This follows Philadelphia fed President Patrick Harker’s comments of “slowly, carefully” moving back on purchases at a suitable time a day earlier.
  • Oil was down Friday morning in Asia, with the slow rollout of COVID-19 vaccines and the continuous COVID-19 outbreaks in several countries casting a shadow over the fuel demand outlook. Crude oil supply data from the U.S. Energy Information Administration showed a draw of 5.080 million barrels in the week to May 28. The draw was bigger than both the 2.443-million-barrel draw in forecasts prepared by Investing.com and the 1.662-million-barrel draw reported during the previous week. Crude oil supply data from the American Petroleum Institute released the day before showed a draw of 5.360 million barrels. On the COVID-19 front, the slow rollout of COVID-19 vaccinations and recent outbreaks of COVID-19 cases in countries such as Brazil and India clouded the fuel demand outlook. But the note added that the slow rollout of COVID-19 vaccinations in developed and emerging Asian countries alike indicates "there is no clear end in sight to social distancing restrictions in the region." Earlier this week, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) forecasted fuel demand will surpass supply in the second half of 2021. The cartel also agreed at its meeting on Tuesday to continue with supply restraint through July, giving a boost to oil prices. However, it didn’t give any clues on future supply policy. OPEC+ may need to keep increasing fuel supply in August or September to meet the demand recovery, Gazprom Neft PJSC Chief Executive Officer Alexander Dyukov told Bloomberg. Oil prices recouped early losses and steadied on Friday as concerns about the patchy roll-out of COVID-19 vaccinations around the globe tempered optimism over recovering fuel demand. More than 170 million people have contracted the virus globally, while the death toll approaches 3.8 million, as the second year of the worst global health crisis in a century shows no sign of ending soon. Prices rose earlier this week as the OPEC and its allies in the grouping known as OPEC+ predicted demand will exceed supply in the second half of 2021. OPEC+ agreed on Tuesday to continue with supply restraints through July, lifting prices. Slow progress of the Iran nuclear talks is also expected to provide breathing room for demand to catch up before Iranian oil returns to the market if a deal is reached. But the slow roll-out of vaccinations and high infections in countries like Brazil and India are hitting demand prospects in the world's high-growth markets for crude oil and refined products. Meanwhile U.S. crude inventories dropped more than forecast last week although fuel stocks rose, suggesting demand for end-products is not matching refinery output.

 

 
Intraday RESISTANCE LEVELS
4th June 2021 R1 R2 R3
GOLD-XAU 27.90-28.50 28.90 29.50-30.10
Silver-XAG 69.00 69.70-70.50 71.00
Crude Oil 1.2140-1.2170 1.2240 1.2300-1.2350
EURO/USD 1.4150-1.4200 1.4240 1.4300-1.4360
GBP/USD 1.4150-1.4200 1.4240 1.4300-1.4360
USD/JPY 110.20-110.90 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
4th June 2021 S1 S2 S3
GOLD-XAU 27.25 26.55 26.00-25.60
Silver-XAG 67.00 67.00 66.10-65.30
Crude Oil 1.2100-1.2070 1.2010 1.1950-1.1900
EURO/USD 1.4090 1.4065 1.4010-1.3900
GBP/USD 1.4090 1.4065 1.4010-1.3900
USD/JPY 109.70-109.00 108.50 107.50-107.00

Intra-Day Strategy (4th 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 Thursday made its intraday high of US$1909.52/oz and low of US$1865.22/oz. Gold down 1.992% at US$1870.64/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 1865-1825 with risk below 1825, targeting 1876-1884-1890 and 1900-1910-1920. Sell below 1876-1920 keeping stop loss closing above 1920, targeting 1864-1856-1845 and 1836-1825.

 
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  

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

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$28.22/oz and low of US$27.02/oz settled down by 2.568% at US$27.42/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 27.25-26.55 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     67.00
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

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$69.25/bbl, intraday low of US$68.04/bbl and settled up by 0.150% to close at US$68.75/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     1.2100-1.2070
S2     1.2010
S3     1.1950-1.1900

Intraday Resistance Levels
R1     1.2140-1.2170
R2     1.2240
R3     1.2300-1.2350

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

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.2117/EUR, high of US$1.2213/EUR and settled the day down by 0.690% to close at US$1.2126/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 1.2140-1.2490 targeting 1.2100-1.2070 and 1.2010-1.1960-1.1905 with stop-loss at daily closing above 1.2490. Buy above 1.2100-1.1900 with risk below 1.1900, targeting 1.2240-1.2300-1.2350 and 1.2400-1.2490.

 
Intraday Support Levels
S1     1.4090
S2     1.4065
S3     1.4010-1.3900

Intraday  Resistance Levels
R1     1.4150-1.4200
R2     1.4240
R3     1.4300-1.4360

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)   0.0044 Sell

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.4085/GBP, high of US$1.4202/GBP and settled the day down by 0.451% to close at US$1.4103/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 1.4150-1.4490 with targets at 1.4100-1.4065 and 1.4010-1.3900-1.3800 stop-loss should be 1.4360. Buy above 1.4100-1.3900 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     1.4150-1.4200
R2     1.4240
R3     1.4300-1.4360

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 Wednesday made intra‐day low of JPY109.52/USD and made an intraday high of JPY110.31/USD and settled the day up 0.649% at JPY110.25/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

AAFX TRADING
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