AAFX TRADING

Daily Market Lookup

  • The dollar clung on to its recent small gains on Wednesday as traders looked to upcoming U.S. inflation data and a European Central Bank (ECB) meeting to gauge the pace of global recovery and policymakers' thinking about paring back stimulus. Investors have piled up bets against the dollar, but are growing nervous about whether the beginning of the end of enormous monetary stimulus is nigh - and worry that interest rate rises could end a 15-month dollar downtrend. Some think tapering could be hastened, and the dollar boosted, if U.S. inflation runs hotter than the 0.4% monthly clip that economists expect. For the ECB, the focus is on any signs of an imminent slowdown to its bond buying programme.Both are due on Thursday and the anticipation has all but killed volatility in major currencies, as traders assume a wait-and-see stance. The euro was steady at $1.2179 in the Asia session, while the dollar held at 109.47 yen. Deutsche Bank (DE:DBKGn)'s Currency Volatility Index hit its lowest level since February 2020 on Tuesday, and sank even further on Wednesday. The U.S. dollar index was parked at 90.077. Sterling edged slightly higher, but remained stuck within recent ranges as doubt has crept in over whether rising cases of the coronavirus' Delta variant in Britain could delay business reopening plans scheduled for June 21. It last bought $1.4168. Leading in to the U.S. inflation figures, Chinese producer price data for May showed the biggest jump in a dozen years - signalling that factories are not absorbing higher raw material costs and that price pressure is flowing down supply chains. Canadian dollar traders were also on edge ahead of a central bank meeting on Wednesday. The bank is expected to leave rates on hold but flag further tapering of asset purchases, with any surprises on the size or speed liable to boost the loonie. However, the week's major focus is on inflation, and the ECB and traders see both events bringing risks on all sides. The ECB is expected to keep policy settings steady, but the euro is likely to be sensitive to changes in the bank's economic forecasts or any signal that the pace of bond buying could be reduced in months ahead. Elsewhere, China's yuan was steady around the 6.4 per dollar level on Wednesday, as a bill aimed at competing with China cleared the U.S. Senate, damping yuan bulls' recent enthusiasm.
  • The dollar was down on Wednesday morning in Asia with investors awaiting upcoming U.S. inflation data while digesting inflation data released by China earlier in the day. They also await a European Central Bank (ECB) policy decision to further gauge the economic recovery from COVID-19 and central banks’ potential next steps. The USD/CNY pair inched down 0.07% to 6.3953. China’s consumer price index (CPI) for May, released earlier in the day, contracted 0.2% month-on-month and grew 1.3% year-on-year, both below forecasts. Meanwhile, the producer price index (PPI) grew by a better-than-expected 9% year-on-year. Yuan bulls’ recent enthusiasm was also damped by the passage of a bill in the U.S. Senate aimed at countering the economic as well as strategic challenge from China. Investors continued to bet against the greenback but remained concerned about whether central banks would begin to withdraw their unprecedented stimulus measures. Also of interest is whether rising interest rates will end a 15-month dollar downtrend. Some investors predicted that higher-than-forecast inflation in the U.S. could prompt central banks to begin tapering their asset purchases and give the dollar a boost. However, moves were small ahead of the U.S. data, including the CPI, and the ECB policy decision, both of which are due on Thursday.
  • Oil was slightly higher on Wednesday morning in Asia, supported by expectations for growing fuel demand as the global economy reopens. Tuesday’s U.S. crude oil supply data from the American Petroleum Institute showed a draw of 2.108 million barrels for the week ending June 4. Energy analysts has expected a build of 3.576-million barrels after a 5.360-million-barrel build during the previous week. Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day. On the demand front, investors remain optimistic about the outlook for fuel demand as accelerating vaccinations allow people to travel more. The U.S., the world’s largest oil consumer, lowered travel warnings for several countries, including France, Canada and Germany, making it possible to loosen airline restrictions for trips overseas Meanwhile, U.S. shale oil output is reportedly set to rise only moderately through 2022, despite a pickup in drilling driven by gains in crude prices. It comes as the Energy Information Administration expected a decrease in its shale production for 2022, according to a monthly report.

 

 
Intraday RESISTANCE LEVELS
9th June 2021 R1 R2 R3
GOLD-XAU 1,900-1,910 1,920 1,929-1,940
Silver-XAG 27.90-28.50 28.90 29.50-30.10
Crude Oil 70.50-71.00 71.60 72.00-72.50
EURO/USD 1.2190-1.2240 1.2300 1.2350-1.2400
GBP/USD 1.4200 1.4300-1.4360 1.4300-1.4360
USD/JPY 110.20-110.90 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
9th June 2021 S1 S2 S3
GOLD-XAU 1,884-1,876 1,865 1,856-1,845
Silver-XAG 27.55-27.25 26.55 26.00-25.60
Crude Oil 69.70- 69.30 68.50 67.90-67.00
EURO/USD 1.2010-1.1950 1.2070 1.2010-1.1950
GBP/USD 1.4140-1.4090 1.4065 1.4200
USD/JPY 109.50-109.00 108.50 107.50-107.00

Intra-Day Strategy (9th 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$1903.70/oz and low of US$1883.70/oz. Gold up 0.330% at US$1892.64/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 1890-1845 with risk below 1845, targeting 1900-1910-1920 and 1929-1940. Sell below 1900-1940 keeping stop loss closing above 1940, targeting 1884-1876-1864 and 1856-1845-1836.

 
Intraday Support Levels
S1     1,884-1,876
S2     1,865
S3     1,856-1,845
Intraday Resistance Levels
R1     1,900-1,910
R2     1,920
R3     1,929-1,940

Technical Indicators

Name   Value Action
14DRSI  

61.420

Buy
20-DMA   1873.61 Buy
50-DMA  

1805.67

Buy
100-DMA   1795.01 Buy
200-DMA   1842.37 Buy
STOCH(5,3)   45.503 Sell
MACD(12,26,9)   26.276 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$27.96/oz and low of US$27.49/oz settled down by 1.025% at US$27.59/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 27.55-25.00, 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     27.55-27.25
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$70.11/bbl, intraday low of US$68.32/bbl and settled up by 1.051% to close at US$69.85/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 70.50-72.70 with stop loss at 72.70; targeting 69.70-69.30-68.50 and 67.90-67.00-66.10. 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     69.70- 69.30
S2     68.50
S3     67.90-67.00

Intraday Resistance Levels
R1     70.50-71.00
R2     71.60
R3     72.00-72.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.168 Sell
20-DMA   65.88 Buy
50-DMA   63.57 Buy
100-DMA   61.24 Buy
200-DMA   52.05 Buy
STOCH(5,3)   88.130 Buy
MACD(12,26,9)   1.831 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.2163/EUR, high of US$1.2193/EUR and settled the day down by 0.133% to close at US$1.2172/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 1.2170-1.2490 targeting 1.2100-1.2070 and 1.2010-1.1960-1.1905 with stop-loss at daily closing above 1.2490. Buy above 1.2140-1.1900 with risk below 1.1900, targeting 1.2240-1.2300-1.2350 and 1.2400-1.2490.

 
Intraday Support Levels
S1     1.2010-1.1950
S2     1.2070
S3     1.2010-1.1950

Intraday  Resistance Levels
R1     1.2190-1.2240
R2     1.2300
R3     1.2350-1.2400

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.621 Buy
20-DMA   1.2175 Buy
50-DMA   1.2047 Buy
100-DMA   1.2039 Buy
200-DMA   1.1980 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$1.4183/GBP, high of US$1.4183/GBP and settled the day down by 0.200% to close at US$1.4151/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 1.4150-1.3900 with targets 1.4200-1.4240-1.4300 and 1.4360-1.4400 with stop loss closing below 1.3700.

 
Intraday Support Levels
S1     1.4140-1.4090
S2     1.4065
S3     1.4200

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

1.4079

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 JPY109.19/USD and made an intraday high of JPY109.55/USD and settled the day up 0.242% at JPY109.49/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 109.50-106.50 with targets of 109.70-110.20 and 110.90-111.70-112.20 with stop below 106.00. Sell below 110.20-112.50 with risk above 112.50 targeting 109.00-108.50-108.00 and 107.50-106.90.

 
Intraday Support Levels
S1     109.50-109.00
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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