AAFX TRADING

Daily Market Lookup

  • The dollar was steady on Wednesday, with currency markets generally quiet ahead of the U.S. Federal Reserve meeting, where investors will be looking for any sign of response to the jump in U.S. inflation. The Fed concludes its policy meeting later in the day and will release new economic projections along with a policy statement at 1400 EDT (1800 GMT). The central bank is widely expected to acknowledge the first conversations among its policymakers about when and how fast to pare back the massive bond-buying programme launched in 2020, but most investors think the Fed will refrain from any hints of starting tapering its stimulus in the near future. U.S. retail sales dropped more than expected in May but sales in April were revised sharply up and are way above their pre-pandemic level. Separate data showed that wholesale price inflation accelerated to 6.6%. Consumer price data last week showed the sharpest rise in more than a dozen years. Market participants will be listening for any change in tone from Fed Chair Jerome Powell about whether the inflation is likely to be temporary or longer-lasting. In the oil market, Brent hit the highest since April 2019 due to a mix of post-pandemic demand and restricted production. Japan's exports rose at the fastest pace since 1980 in May and a key gauge of capital spending grew, helping the world's third largest economy offset sluggish domestic demand as COVID-19 vaccinations boost business activity in key markets. The Chinese yuan was little changed versus the dollar, hovering around the key 6.40 level, after China's industrial output and retail sales data both were below their forecasts. The dollar edged marginally lower in early European trade Wednesday, but remained near a one-month high as traders warily await the latest communications from the Federal Reserve following the recent jump in U.S. inflation. The U.S. Federal Reserve concludes its latest two-day policy meeting later Wednesday. Although the two-day meeting is expected to culminate in an unchanged decision on interest rates and monthly bond purchases, the backdrop of sharply rising inflation as the country’s economy makes a solid recovery appears to be keeping traders on edge. Further evidence of these inflationary pressures, and thus raised fears of a hawkish surprise, emerged Tuesday, with data showing wholesale inflation jumped to record levels, just a week after consumer prices rose to their highest level since 2008. Balancing this out, to a degree, May’s retail sales data came in weaker than expected on Tuesday, pointing to softer consumer spending, the backbone of the economy, even if April’s release was revised higher. Still, even if there are some concerns over the Fed turning hawkish, the moves in the foreign exchange market have been limited of late, suggesting many still have faith in the Fed's commitment to provide clear signaling before making a move on monetary policy. The Federal Open Market Committee has "indicated it will first offer ample notice to the market before beginning the taper conversation and furthermore give ample warning before formally announcing intentions to taper, a process which itself will take quite some time," analysts at Stifel said, in a note. Ahead of the Fed's statement, at 2 PM ET (1800 GMT), markets will keep an eye on the U.S. housing market, with housing starts and building permits data due for May. Data last week showed monthly inflation in May at a 25-year high for that month and the annual rate above 8% for the first time since 2016.
  • Oil was up Wednesday morning in Asia as a larger-than-expected draw in U.S. crude oil supplies and the ever-brightening fuel demand outlook in some countries gave the black liquid a boost. U.S. crude oil supply data from the American Petroleum Institute showed a draw of 8.537 million barrels for the week ending Jun. 11. The draw was much larger than both the 3-million-barrel draw in forecasts prepared by Investing.com and the previous week’s 2.108-million-barrel draw. Crude oil supply data from the U.S. Energy Information Administration is due later in the day. Meanwhile, executives from major oil traders including Vitol Chief Executive Russell Hardy, said on Tuesday they expected prices to remain above $70 a barrel and demand to return to pre-COVID-19 levels in the second half of 2022. Hardy predicted that oil would trade within a $70 to $80 a barrel range for the rest of 2021 as the Organization of the Petroleum Exporting Countries and allies (OPEC+) is expected to continue its current output restraints. Even if the U.S. and Iran revive a 2015 nuclear agreement to lift sanctions and Iranian exports are added back to the global supply, it is unlikely to change the bullish picture, he added. Oil extended its run of gains on Wednesday, climbing towards $75 a barrel to its highest since April 2019, supported by a recovery in demand from the pandemic and a drop in U.S. crude inventories. The American Petroleum Institute reported U.S. crude inventories fell 8.5 million barrels, two market sources said, more than analysts forecast. [API/S] Official Energy Information Administration figures are out at 1430 GMT. Despite some easing of last year's record output cuts made when the pandemic took hold, OPEC+ is still withholding millions of barrels of daily supply from the market. Executives from major oil traders said on Tuesday they expected prices to remain above $70 and demand to return to pre-pandemic levels in the second half of 2022. At the same time, the prospect of an imminent rise in Iranian oil exports looks less likely, analysts said. Indirect talks between Tehran and Washington on resuming the 2015 nuclear accord resumed in Vienna on Saturday.
  • Gold was up on Wednesday morning in Asia but remained near its lowest level in four weeks. The dollar steadied ahead of a much-awaited U.S. Federal Reserve policy decision. The Fed will hand down its decision as it wraps up a two-day meeting later in the day, with investors on the lookout for clues as to when the central bank will start tapering assets. Despite the insistence from Fed officials to date that monetary policy will continue to remain dovish for some time, concerns about rising inflation triggered the yellow metal’s retreat from an almost five-month high. Fed officials could project interest-rate liftoff in 2023 but are not expected to signal asset tapering until August or September 2021. The Fed is one of several central banks due to hand down policy decisions. The Swiss National Bank and Norges Bank will hand down their decisions on Thursday, followed by the Bank of Japan on Friday. Meanwhile, Metals Focus predicted a recovery in gold demand from jewelers and central banks in 2021 but this will remain below pre-COVID-19 levels. However, gold purchases by exchange traded funds will fall sharply, the consultant added.

 

 
Intraday RESISTANCE LEVELS
16th June 2021 R1 R2 R3
GOLD-XAU 1,865-1,876 1,889 1,900-1,912
Silver-XAG 27.90-28.50 28.90 29.50-30.10
Crude Oil 72.50-73.00 73.90 74.50-75.00
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 110.20-110.90 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
16th June 2021 S1 S2 S3
GOLD-XAU 1,856-1,845 1,839 1,831-1,820
Silver-XAG 27.55 27.25 26.55-26.00
Crude Oil 71.60-71.00 70.60 70.00-69.30
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 (16th 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 Tuesday made its intraday high of US$1869.06/oz and low of US$1851.50/oz. Gold down 0.392% at US$1858.67/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 1856-1820 with risk below 1820, targeting 1865-1876-1889 and 1900-1910-1920. Sell below 1865-1940 keeping stop loss closing above 1940, targeting 1856-1845-1836 and 1831-1820.

 
Intraday Support Levels
S1     1,856-1,845
S2     1,839
S3     1,831-1,820
Intraday Resistance Levels
R1     1,865-1,876
R2     1,889
R3     1,900-1,912

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$27.87/oz and low of US$27.38/oz settled down by 0.793% at US$27.63/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

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.

 
Intraday  Support Levels
S1     27.55
S2     27.25
S3     26.55-26.00

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$72.20/bbl, intraday low of US$70.54/bbl and settled up by 1.935% to close at US$72.15/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 72.50-75.00 with stop loss at 75.00; targeting 71.60-71.00-70.60 and 69.70-69.30-68.50. Buy above 71.60-69.30 with risk daily closing below 69.30 and targeting 72.50-73.00-73.90 and 74.50-75.00.

 
Intraday Support Levels
S1     71.60-71.00
S2     70.60
S3     70.00-69.30

Intraday Resistance Levels
R1     72.50-73.00
R2     73.90
R3     74.50-75.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.168 Sell
20-DMA   68.09 Buy
50-DMA   65.24 Buy
100-DMA   62.68 Buy
200-DMA   52.72 Buy
STOCH(5,3)   74.130 Buy
MACD(12,26,9)   1.592 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.2100/EUR, high of US$1.2146/EUR and settled the day up by 0.0676% to close at US$1.2125/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 Tuesday made an intra‐day low of US$1.4033/GBP, high of US$1.4127/GBP and settled the day down by 0.1977% to close at US$1.4078/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 1.4140-1.4490 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 Tuesday made intra‐day low of JPY109.98/USD and made an intraday high of JPY110.16/USD and settled the day down 0.005% at JPY110.05/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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