AAFX TRADING

Daily Market Lookup

  • The dollar jumped Friday, and is set for its first weekly gain in three weeks as the prospect of fresh clues on Federal Reserve monetary policy and weakness in the euro has restored some swagger to the world's reserve currency. There are just days to go until the Federal Reserve's two day meeting on Tuesday and Wednesday, and recent hot inflation report is likely to get the conversation started on tapering. This is good news for the yields and the dollar. But the lift to the dollar will only hold out as long as inflation delivers its end of the bargain. If the pace of inflation fades, then all bullish bets on the greenback are off. Still, Treasury yields were hovering at unchanged levels on Friday, suggesting the greenback had been given a helping hand from demise in the euro, which makes up about half of the weighing of the dollar index.
  • The euro and sterling dipped against the dollar on Friday as investors bet interest rates would stay lower for longer in Europe and Britain while looking ahead to next week's U.S. monetary policy meeting. A day after the European Central Bank stuck to its dovish stance, ECB policymaker Klaas Knot said that flexible fiscal rules would be needed for years as monetary policy remains constrained. Sterling was down 0.54% at $1.4098 as traders worried about slower-than-expected growth as the rapid spread of the Delta variant in Britain raised concerns that much of the country may not be able to fully reopen from a COVID-19 pandemic-related lockdown on June 21, as previously hoped. Currency markets had been sluggish all week in anticipation of Thursday's release of U.S. consumer prices, which rose 5% year-on-year in May. But even with the number above expectations, there was little market reaction. Investors seemed to back the Federal Reserve's assertion that high inflation would be temporary. Economists see the central bank announcing in August or September a strategy for reducing its massive bond-buying program, but do not expect it to start cutting monthly purchases until early next year, a Reuters poll found. Traders were still preparing for volatility around the Federal Open Market Committee meeting scheduled for the week ahead, according to Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets In cryptocurrencies, bitcoin, which recovered slightly in recent sessions, was on track for a 3% weekly gain and last up 0.3% at $36,817.94 on the day. Ether was last down 3% and set for an 11.7% weekly drop. Both are still trading significantly below their earlier peaks.
  • Inflation is here and the conventional wisdom is that we should buy gold. Conventional should actually be underlined as gold’s history as an inflation hedge is anything but certain. Gold has had spotty returns over the past few months despite creeping price pressures and fears that U.S. inflation in 2021 could be the worst in 35 years. Those surprised or frustrated by this might benefit from studying the history of the precious metal’s returns over the past 40 years. A Morningstar analysis of gold’s returns during some of the highest U.S. inflation periods since the 1980s shows a negative yield for long-only investors in the yellow metal. The Personal Consumption Expenditures Price Index, a tamer measure of inflation used by the Federal Reserve, rose 3.6% in the year to April. Until the Covid-19 outbreak and the chronic disruption of U.S. supply chains that followed, the Fed’s target of keeping annual inflation at or under 2% has barely been challenged over the past decade. Now that it has, inflation is the one risk that’s on top of investors’ minds. But gold hasn’t delivered - to expectations at least. Gold’s correlation to inflation has been relatively low - 0.16 - over the past half century, Arnott said. This metric shows how closely gold and inflation track together. A correlation of 0 means there’s no relationship, while a correlation of 1 means they move in unison. Arnott’s study shows that long-only investors in gold lost 10% on average from 1980 to 1984, when the annual inflation rate was about 6.5%. Similarly, gold yielded a negative 7.6% return from 1988 to 1991, a period when inflation was about 4.6% But as an inflation hedge, gold really outperformed between 1973 and 1979, when it gained 35% while the annual inflation rate in that period averaged 8.8%. My own analysis shows that the gold speculator, regardless bull or bear, may have found the perfect play for now: buy at near $1,850 and sell well before $1,900.
  • Oil prices rose for a third straight week on speculation of runaway summer demand for fuels, although some investors were keeping a wary eye on gasoline, which hasn’t performed to expectations since the start of the peak U.S. driving season. Oil prices have been on a tear lately amid projections for one of the biggest ever summer demand periods for fuel in the United States as the country reopens fully from Covid-19 lockdowns The International Energy Agency, which represents the interests of Western oil consumers, said in its monthly report that global producers would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022. Despite the optimism over global oil demand, US gasoline take-up has been tepid since the May 31 Memorial Day that marked the start of the peak summer driving period in the world’s largest oil consuming country. That suggests to some that more time was probably needed for U.S. fuel demand to accelerate. The problem was particularly highlighted by the U.S. Energy Information Administration’s Weekly Petroleum Status report released Wednesday, which showed gasoline inventories rising by 7.05 million barrels during the week ended June 4 - nearly six times above analysts’ estimates for a 1.2--million-barrel build. The Washington-based EIA also reported that stockpiles of distillates, which include diesel and heating oil, rose by 4.4 million barrels against expectations for a 1.8-million-barrel rise. Offsetting some of the build in gasoline and distillates, crude stockpiles fell by 5.2 million barrels in the week to June 4, the EIA said, versus a forecast decline of 3.5 million barrels.

 

 
Intraday RESISTANCE LEVELS
14th June 2021 R1 R2 R3
GOLD-XAU 1,889-1,912 1,920 1,9291,939
Silver-XAG 28.50 28.90 29.50-30.10
Crude Oil 70.60-71.00 71.60 72.00-72.50
EURO/USD 1.2140-1.2190 1.2240 1.2300-1.2350
GBP/USD 1.4140-1.4200 1.4240 1.4300-1.4390
USD/JPY 110.20-110.90 112.50-113.00 112.50-113.00

Intraday SUPPORTS LEVELS
14th June 2021 S1 S2 S3
GOLD-XAU 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 1.2100-1.2080 1.2040 1.1990-1.1950
GBP/USD 1.4090 1.4065 1.4010-1.3920
USD/JPY 109.50-109.00 108.50 107.50-107.00

Intra-Day Strategy (14th 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$1902.90/oz and low of US$1874.34/oz. Gold down 1.06% at US$1877.59/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 1876-1845 with risk below 1845, targeting 1900-1910-1920 and 1929-1940. Sell below 1890-1940 keeping stop loss closing above 1940, targeting 1876-1864 and 1856-1845-1836.

 
Intraday Support Levels
S1     1,876
S2     1,865
S3     1,856-1,845
Intraday Resistance Levels
R1     1,889-1,912
R2     1,920
R3     1,9291,939

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 Friday made its intraday high of US$28.27/oz and low of US$27.88/oz settled down by 0.185% at US$27.93/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 28.50-30.10 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     27.90-27.55
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$70.90/bbl, intraday low of US$69.48/bbl and settled up by 0.849% to close at US$70.53/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     70.60-71.00
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 Friday an intraday low of US$1.2092/EUR, high of US$1.2192/EUR and settled the day down by 0.494% to close at US$1.2107/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 1.2140-1.2240-1.2300 and 1.2350-1.2400-1.2490.

 
Intraday Support Levels
S1     1.2100-1.2080
S2     1.2040
S3     1.1990-1.1950

Intraday  Resistance Levels
R1     1.2140-1.2190
R2     1.2240
R3     1.2300-1.2350

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 Friday made an intra‐day low of US$1.4094/GBP, high of US$1.4184/GBP and settled the day down by 0.475% to close at US$1.4108/GBP.

Technicals in Focus:

GBP/USD on Friday made an intra‐day low of US$1.4094/GBP, high of US$1.4184/GBP and settled the day down by 0.475% to close at US$1.4108/GBP.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell in between 1.4140-1.4490 with targets at 1.4090-1.4065 and 1.4010-1.3920 stop-loss should be 1.4500. Buy above 1.4100-1.3800 with targets 1.4140-1.4200 and 1.4240-1.4300-1.4360 with stop loss closing below 1.3700.

 
Intraday Support Levels
S1     1.4090
S2     1.4065
S3     1.4010-1.3920

Intraday Resistance Levels
R1     1.4140-1.4200
R2     1.4240
R3     1.4300-1.4390

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 Friday made intra‐day low of JPY109.31/USD and made an intraday high of JPY109.83/USD and settled the day up 0.295% at JPY109.64/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     112.50-113.00
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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