AAFX TRADING

Daily Market Lookup

  • The dollar index edged down on Friday and major currency pairs were stuck within recent ranges as markets shrugged off Thursday's high U.S. inflation number, believing the Federal Reserve's stance that it is likely to be a temporary blip. U.S. consumer prices rose 5% year-on-year in May, the biggest jump in nearly 13 years. Currency markets had been sluggish all week in anticipation of the data, but when it came in above expectations, there was little market reaction. The Federal Reserve has repeatedly said that it expects any rise in inflation to be temporary and that it is too soon to be discussing reducing its monetary stimulus. Benchmark 10-year U.S. Treasuries actually rallied to a three-month high in the wake of CPI, as short sellers quit bets on rising yields. A dovish stance from the ECB at its meeting on Thursday had little effect on the euro, which was flat on the day at $1.2181 and set for a small weekly gain of around 0.1%. The ECB said it would continue its emergency bond-buying at a "significantly higher" pace, even as it raised its growth and inflation projections. A gauge of euro-dollar implied volatility over a six-month horizon was at its lowest since early March 2020, almost back to the levels it was at before the COVID-19 pandemic caused volatility to spike. The central bank targets annual consumer inflation of 4%. It climbed above the target in late 2020 amid global inflation and as the weaker rouble filtered into prices. Elsewhere, Bitcoin recovered slightly while Ether was set for a 10% weekly drop. Both have stabilised so far this month but are still trading significantly below their mid-May peaks. Attention now turns to the Fed meeting next week. The central bank is likely to announce in August or September a strategy for reducing its massive bond buying program, but won't start cutting monthly purchases until early next year, a Reuters poll of economists found. Meanwhile, leaders of the Group of Seven wealthiest economies are meeting in the English seaside resort of Carbis Bay on Friday.
  • The dollar edged lower in early European trade Friday, as traders wagered that a hefty rise in U.S. consumer prices would not be enough to immediately jolt the Federal Reserve from its ultra easy monetary policy stance. Data released on Thursday saw the U.S. consumer price index jumping 5.0% year-on-year in May, the sharpest rise in more than a dozen years, up 0.6% on the month, while core CPI, which excludes volatile food and energy prices, increased 3.8% year-on-year and 0.7% month-on-month in May. The foreign exchange market had been wary of strong inflation numbers all week, and this exceeded expectations. However, the response has been muted as the CPI release included hefty contributions from short-term rises in airline ticket prices and used cars, all of which played into the Fed narrative of the surge in inflation being a temporary phenomena. This belief in Fed thinking can clearly be seen in the bond market, as the yield on the benchmark 10-year U.S. Treasury note fell to a three-month low of 1.44%. When investors were worried about inflation in March, the yield had spiked to almost 1.78%. Attention now turns to next week’s meeting of the FOMC, but there are no longer any great expectations of a shift in rhetoric over the need to taper stimulus. Later Friday sees the Russian central bank meet to decide on the appropriate level for interest rates in the country following an unexpectedly high inflation release earlier in the week. Annual consumer inflation accelerated to 6.0% in May, according to data released Monday way above the central bank’s target of 4%, and the highest since October 2016.
  • Gold was up on Friday morning in Asia and is set for a small weekly gain. The slightly faster-than-expected rise in U.S. inflation drove investor bets that price pressures will be temporary and central bank support will remain in place. U.S. inflation data released on Thursday said that the core CPI grew by a higher-than-expected 3.8% year-on-year. It grew 0.7% month-on-month, which was above expectations but below April’s growth. On the central bank front, investors continued to digest the ECB’s policy decision handed down on Thursday. ECB President Christine Lagarde also renewed a pledge on faster bond buying, even as officials admitted for the first time since 2018 that the euro-zone economy was no longer overshadowed by risks to its growth outlook. The U.S. Federal Reserve is also due to hand down its policy decision in the following week.
  • Oil prices rose on Friday to fresh multi-year highs and were set for their third weekly jump on expectations of a recovery in fuel demand in the United States, Europe and China as rising vaccination rates lead to an easing of pandemic curbs. The International Energy Agency said in its monthly report that OPEC+ oil producers would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022. It said that rising demand and countries' short-term policies were at odds with the IEA's call to end new oil, gas and coal funding. Data showing road traffic returning to pre-COVID-19 levels in North America and most of Europe was encouraging, ANZ Research analysts said in a note. The world will need a lot more oil from OPEC+ as global demand is on track to return to pre-pandemic levels at the end of next year, the International Energy Agency said on Friday, just a few weeks after saying long-term oil production must decline to reduce emissions. Oil prices were trading near a two-year high of nearly $73 a barrel on Friday, and were on track for a third week of gains, buoyed by optimism about demand recovery. OPEC+ agreed in April to gradually ease oil output cuts from May to July and confirmed the decision at a meeting on June 1. Meeting the restored demand is "unlikely to be a problem", the IEA said, forecasting that OPEC+ will still have 6.9 million bpd of effective spare capacity after July and that Iran's talks with world powers could free its oil supply from U.S. sanctions. The IEA shocked the energy industry with its "Net Zero by 2050" report on May 18, saying investors should not fund new fossil fuel projects if the world wants to reach goals on reining in emissions causing rising temperatures by mid-century.

 

 
Intraday RESISTANCE LEVELS
11th June 2021 R1 R2 R3
GOLD-XAU 1,912-1,920 1,929 1,939-1,950
Silver-XAG 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 1.4240-1.4300 1.4390
USD/JPY 110.20-110.90 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
11th June 2021 S1 S2 S3
GOLD-XAU 1,889-1,876 1,865 1,856-1,845
Silver-XAG 27.90-27.55 27.25 26.55-26.00
Crude Oil 70.00-69.30 68.50 67.90-67.00
EURO/USD 1.2140-1.2100 1.2070 1.2010-1.1950
GBP/USD 1.4065 1.4065 1.4010-1.3920
USD/JPY 109.50-109.00 108.50 107.50-107.00

Intra-Day Strategy (11th 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 Friday made its intraday high of US$1899.77/oz and low of US$1869.65/oz. Gold up 0.487% at US$1897.69/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     1,889-1,876
S2     1,865
S3     1,856-1,845
Intraday Resistance Levels
R1     1,912-1,920
R2     1,929
R3     1,939-1,950

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 Thursday made its intraday high of US$28.02/oz and low of US$27.37/oz settled up by 0.767% at US$27.97/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     27.90-27.55
S2     27.25
S3     26.55-26.00

Intraday  Resistance Levels
R1     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 Thursday made an intra‐day high of US$70.47/bbl, intraday low of US$68.51/bbl and settled up by 0.405% to close at US$69.88/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     70.00-69.30
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   73.168 Sell
20-DMA   67.05 Buy
50-DMA   64.48 Buy
100-DMA   62.10 Buy
200-DMA   52.72 Buy
STOCH(5,3)   73.130 Buy
MACD(12,26,9)   1.592 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.2142/EUR, high of US$1.2194/EUR and settled the day down by 0.0689% to close at US$1.2170/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     1.2140-1.2100
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 Wednesday made an intra‐day low of US$1.4072/GBP, high of US$1.4177/GBP and settled the day down by 0.420% to close at US$1.4175/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 1.4200-1.4490 with targets at 1.4140-1.4090-1.4065 and 1.4010-1.3920 stop-loss should be 1.4500. Buy above 1.4065-1.3800 with targets 1.4090-1.4140-1.4200 and 1.4240-1.4300-1.4360 with stop loss closing below 1.3700.

 
Intraday Support Levels
S1     1.4065
S2     1.4065
S3     1.4010-1.3920

Intraday Resistance Levels
R1     1.4200
R2     1.4240-1.4300
R3     1.4390

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 Thursday made intra‐day low of JPY109.30/USD and made an intraday high of JPY109.78/USD and settled the day up 0.249% at JPY109.31/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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING