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Daily Market Lookup

  • The dollar was headed for its best week in nearly nine months on Friday, with rival currencies struggling to shake the pressure exerted by the Federal Reserve's sudden hawkish shift in tone. With investors also scrambling to price in a sooner-than-expected tapering of extraordinary U.S. monetary stimulus, the euro and the yen failed to recoup losses of the last two days. With a dovish European Central Bank seemingly far behind the Fed in the monetary policy cycle, traders will be reluctant to buy euros against dollars. With investors busy closing short positions since the Fed meeting, the dollar index hit a more than two-month high of 92.010, and is on track for a 1.6% weekly gain, its largest since September. The shakeout on foreign exchanges has been triggered by Fed forecasts, or 'dot plots,' showing 13 of the 18-person policy board saw rates rising in 2023, versus only six previously, with the median board member tipping two hikes in 2023. The dollar edged higher in early European trade Friday, continuing to benefit from Wednesday’s surprise move by the Federal Reserve in bringing forward its timetable for raising interest rates. The dollar is still reaping the rewards of the U.S. Federal Reserve, the country’s central bank, taking a more hawkish stance than expected and planning for two interest rate increases of 25 basis points in 2023, a year earlier than expected. This represented an abrupt change from the previous meeting when none of these officials were looking for hikes during that year. Additionally, Fed chief Jerome Powell indicated that the members of the Federal Open Market Committee had begun the conversation on stopping the bank’s massive bond-buying program. These moves suggest to the market that the days of readily abundant liquidity are drawing to a close. Earlier Friday, the Bank of Japan kept its key interest rates unchanged, as expected, and decided to extend by six months the September deadline for its programs to help pandemic-hit firms. Japan's economy is struggling to rebound from the measures put in place to combat the virus, after gross domestic product fell an annualised 3.9% in the first quarter. Core consumer prices rose 0.1% in May from a year earlier, the first year-on-year increase since March 2020 but still far removed from the central bank's 2% goal. On Thursday, the Swiss National Bank, Turkey’s central bank and the Norges Bank all kept interest rates unchanged, with the Norwegian central bank signalling a raise in September as its economy recovers more quickly than most of its peers.
  • The dollar was up on Friday morning in Asia and is set for its best week in nearly nine months. Investors also continue to recalculate their strategies after the U.S. Federal Reserve’s hint of a sooner-than-expected asset tapering. Investors continue to digest the implications of the Fd hinting at asset tempering and interest rate hikes earlier than expected in its policy decision handed down earlier in the week. The greenback soared above its 200-day moving average to hit a more than two-month high of 92.010 since the Fed decision. It is set for a 1.5% weekly gain, the largest since September 2020. Fed forecasts, also known as ‘dot plots’, showed that 13 of the 18-member policy board predicted interest rate hikes in 2023, compared with the previous six. Despite the plots being an inaccurate rates predictor, the sudden deviation caused shock waves throughout the market. Investors also retreated from U.S. Treasuries, particularly five and 10-year tenors. However, the U.S. yield curve flattened during the previous session as some investors remained hopeful that the Fed’s more hawkish stance could avert hyperinflation.
  • Oil prices fell for a second straight session on Friday as the U.S. dollar soared on the prospect of interest rate hikes in the United States, but they were on track to finish the week little changed and only slightly off multi-year highs. On Wednesday, Brent settled at its highest price since April 2019 while WTI settled at its highest since October 2018 The dollar has rocketed in the two sessions since the U.S. Federal Reserve projected possible rate hikes in 2023, earlier than market watchers previously expected. A rising dollar makes oil more expensive in other currencies, curbing demand. The prospect of rate hikes also weighed on the longer-term growth outlook, which would eventually hurt oil demand, in contrast to the near-term outlook for growth in demand as COVID-19 related curbs on movement and business activity ease and road and air travel pick up, said Westpac senior economist Justin Smirk. Oil prices also fell after Britain on Thursday reported its biggest daily rise in new cases of COVID-19 since Feb. 19, with government figures showing 11,007 new infections versus 9,055 a day earlier. Adding to negative sentiment were remarks from Iran's top negotiator on Thursday saying talks between Tehran and Washington on reviving the 2015 Iran nuclear deal have come closer than ever to an agreement. Oil was down Friday morning in Asia but remained above $70-market after the U.S. Federal Reserve projected possible interest rate hikes earlier than expected. The dollar has soared in the two sessions after Fed expected possible interest rate hikes in 2023, curbing oil demand. In the short term, crude demand is increasing as some countries continue their economic recovery from COVID-19 and are easing COVID-19 restrictions. However, the prospective interest rate hikes will impact the growth outlook in the long term and eventually hurt oil demand, Westpac senior economist Justin Smirk told Reuters. Meanwhile, the U.K. reported 11,007 new infections on Thursday, its biggest daily rise in the number of COVID-19 cases since Feb. 19. On the supply side, Iranian Deputy Foreign Minister Abbas Araqchi said that talks between Iran and the U.S. to revive the 2015 Iran nuclear deal have come closer than ever to an agreement. "Renewed negotiations have sparked concerns that this would lead to the U.S. removing sanctions, resulting in a flood of oil hitting the market…despite this, fundamentals suggest the market remains tight " ANZ Research analysts said in a note. Investors also await the results of Iran's presidential election, due to take place later in the day.

 

 
Intraday RESISTANCE LEVELS
18th June 2021 R1 R2 R3
GOLD-XAU 1,790-1,797 1,803 1,820-1,834
Silver-XAG 26.65-27.00 27.55 27.90-28.50
Crude Oil 70.60-71.00 71.50 72.50-73.00
EURO/USD 1.1935-1.1990 1.2040 1.2080-1.2140
GBP/USD 1.3965-1.4010 1.4065 1.4090-1.4140
USD/JPY 110.50-110.90 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
18th June 2021 S1 S2 S3
GOLD-XAU 1,780-1,767 1,760 1,755-1,744
Silver-XAG 26.20-25.70 25.05 24.80-24.50
Crude Oil 70.00-69.30 68.40 67.80
EURO/USD 1.1890-1.1850 1.1800 1.1750-1.1690
GBP/USD 1.3905 1.3885 1.3840-1.3800
USD/JPY 110.20 109.50 109.00-108.50

Intra-Day Strategy (18th June 2021)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Sell
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$1825.24/oz and low of US$1767.13/oz. Gold down 2.134% at US$1772.93/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

Buy in Between 1768-1744 with risk below 1744, targeting 1790-1797-1803 and 1820-1834. Sell in between 1879-1856 keeping stop loss closing above 1856, targeting 1804-1795-1780 and 1771-1760.

 
Intraday Support Levels
S1     1,780-1,767
S2     1,760
S3     1,755-1,744
Intraday Resistance Levels
R1     1,790-1,797
R2     1,803
R3     1,820-1,834

Technical Indicators

Name   Value Action
14DRSI  

32.420

Buy
20-DMA   1875.55 Sell
50-DMA  

1831.09

Sell
100-DMA   1796.96 Sell
200-DMA   1837.83 Sell
STOCH(5,3)   9.503 Sell
MACD(12,26,9)   0.295 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$27.23/oz and low of US$25.76/oz settled down by 3.825% at US$25.89/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. 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 oversold region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 26.20-24.80, targeting 26.65-27.00-27.55 and 27.90-28.35-28.90 with stop loss should be place on the breakage below 24.00. Sell in between 26.65-28.50 with stop loss above 28.50; targeting 26.00-25.70 and 25.05-24.80-24.00.

 
Intraday  Support Levels
S1     26.20-25.70
S2     25.05
S3     24.80-24.50

Intraday  Resistance Levels
R1     26.65-27.00
R2     27.55
R3     27.90-28.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.205 Buy
20-DMA   27.60 Sell
50-DMA   27.01 Sell
100-DMA   26.62 Sell
200-DMA   25.71 Buy
STOCH(5,3)   17.468 Buy
MACD(12,26,9)   0.0436 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$72.07/bbl, intraday low of US$69.53/bbl and settled down by 1.020% to close at US$70.71/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. 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 Sell

Sell in between 70.60-73.00 with stop loss at 73.00; targeting 69.70-69.30 and 68.40-67.80. Buy above 70.60-67.80 with risk daily closing below 67.80 and targeting 70.60-71.00-71.60 and 72.50-73.00-73.90.

 
Intraday Support Levels
S1     70.00-69.30
S2     68.40
S3     67.80

Intraday Resistance Levels
R1     70.60-71.00
R2     71.50
R3     72.50-73.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.168 Sell
20-DMA   68.50 Buy
50-DMA   65.44 Buy
100-DMA   62.86 Buy
200-DMA   53.33 Buy
STOCH(5,3)   69.130 Buy
MACD(12,26,9)   1.767 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.1891/EUR, high of US$1.2005/EUR and settled the day down by 0.722% to close at US$1.1907/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 1.1935-1.2140 targeting 1.1890-1.1850 and 1.1800-1.1750 with stop-loss at daily closing above 1.2140. Buy above 1.1890-1.1750 with risk below 1.1750, targeting 1.1935-1.1990-1.2040 and 1.2100-1.2140.

 
Intraday Support Levels
S1     1.1890-1.1850
S2     1.1800
S3     1.1750-1.1690

Intraday  Resistance Levels
R1     1.1935-1.1990
R2     1.2040
R3     1.2080-1.2140

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 Thursday made an intra‐day low of US$1.3894/GBP, high of US$1.4008/GBP and settled the day down by 0.486% to close at US$1.3916/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 1.3965-1.4490 with targets at 1.3905-1.3885 and 1.3840-1.3800 stop-loss should be 1.4500. Buy above 1.3905-1.3800 with targets 1.3965-1.4010-1.4065 and 1.4090-1.4140-1.4200 with stop loss closing below 1.3800.

 
Intraday Support Levels
S1     1.3905
S2     1.3885
S3     1.3840-1.3800

Intraday Resistance Levels
R1     1.3965-1.4010
R2     1.4065
R3     1.4090-1.4140

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.806

Buy
20-DMA   1.4131 Sell
50-DMA   1.4018 Sell
100-DMA   1.3935 Buy
200-DMA   1.3583 Buy
STOCH(5,3)   10.940 Sell
MACD(12,26,9)   0.0074 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY110.16/USD and made an intraday high of JPY110.81/USD and settled the day down 0.478% at JPY110.17/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 110.20-106.50 with targets of 110.90-111.70-112.20 with stop below 106.00. Sell below 110.50-112.50 with risk above 112.50 targeting 110.20-109.50-109.00 and 108.50-108.00-107.50.

 
Intraday Support Levels
S1     110.20
S2     109.50
S3     109.00-108.50

INTRADAY RESISTANCE LEVELS
R1     110.50-110.90
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

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