AAFX TRADING

Daily Market Lookup

  • Oil may surge to $100 a barrel next year as travel demand rebounds, Bank of America said, the strongest call yet among major forecasters for a return to triple digits. Global oil consumption will continue to outstrip supply in 2022 as the economic recovery from the pandemic boosts fuel consumption, while investment in new production is crimped by environmental concerns, the bank said in a report. While other market-watchers, from trading house Trafigura Group to Goldman Sachs Group, have already said that oil could reach $100 again in the right conditions, the prediction from Bank of America (NYSE:BAC) is the firmest to date. If crude does return to triple digits, it will be the first time since 2014, before a flood of North American shale oil sent the market into a slump from which it has never fully recovered. The increasingly bullish outlook for oil is adding to pressure on the OPEC+ coalition led by Saudi Arabia and Russia, which meets next week to consider reviving some more of the production it cut during the pandemic. While Riyadh has signaled it prefers to move cautiously, an ever-tighter world market could compel the alliance to open the taps a little. Prices have been stoked this month as fellow OPEC member Iran fails to clinch an agreement to relieve U.S. sanctions on its petroleum exports According to Bank of America, the immediate prospects for the OPEC+ alliance are bright. Oil consumption will be bolstered next year as mass transit struggles to keep pace with extra travel demand, prompting passengers to make greater use of private cars. Even the ongoing popularity of remote working won’t dent fuel consumption as much as expected, as home-workers use cars during the day to run personal errands, the bank said. At the same time, the bank expects that new oil supplies will remain constrained. Shareholders will pressure major companies to invest in renewable energy, or push shale drillers to return cash rather than spend on new drilling. Still, expectations for a tight market in 2022 are far from unanimous. A report from the International Energy Agency earlier this month showed that half of the projected increase in demand can be met by recovering output outside OPEC, predominantly from the U.S.
  • The dollar edged higher in early European trade Monday, keeping the positive tone generated last week by the Federal Reserve's hawkish turn, which saw it accelerate its timetable for raising interest rates. The catalyst for this move higher in the dollar was the policy members in the U.S. Federal Reserve, the country’s central bank, reacting last week to the strong economic data, and especially the surge in inflation. The majority of FOMC members expected two interest rate increases of 25 basis points in 2023, a year earlier than expected but, perhaps more importantly, seven of the 18 members felt that the first increase could come as early as next 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. This news pushed short-end yields higher, but the longer-end rates have fallen as traders played down the long-term U.S. inflation risk with a more active Federal Reserve. Attention will now turn to comments from several Fed speakers this week, and an appearance by Fed Chair Jerome Powell before Congress on Tuesday in particular. That said, there was some good news late Friday, as Fitch Ratings upgraded its outlook for the U.K. sovereign debt to stable from negative, saying the country’s economy has proved more resilient than it expected Eyes turn to Thursday’s meeting of the Bank of England, the last for Chief Economist Andy Haldane. While the central bank is widely expected to keep its monetary policies on hold, inflation in the U.K. rose above its 2% target in May for the first time in two years, something that Haldane could seize on given his more hawkish stance on reducing stimulus measures. The dollar index lost momentum after a leap of 1.9% last week - the most since March 2020 - as the U.S. Federal Reserve signalled a sooner-than-expected end to its ultra-easy monetary policy. The Fed's hawkish shift has weighed on markets since, although risk sentiment improved somewhat on Monday, reflected in European stock markets turning positive. The Fed's policy stance has become a tailwind for the dollar and will be a challenging backdrop for risk assets, Westpac analysts said. While the dollar index has the scope to test highs reached in March after its recent gains, "there's not enough juice for a sustained medium-term breakout beyond that", they added. In cryptocurrencies, bitcoin's poor recent run continued with an 8% drop below $33,000, as China expanded restrictions on mining to the province of Sichuan Cryptomining is big business in China, accounting for more than half of global bitcoin production.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.
  • Oil prices edged higher on Monday, underpinned by strong demand during the northern hemisphere summer driving season and a pause in talks to revive the Iran nuclear deal that could lead to a resumption of crude supplies from the OPEC producer. Both benchmarks have risen for the past four weeks on optimism over the pace of global COVID-19 vaccinations and expected pick-up in summer travel. The rebound has pushed up spot premiums for crude in Asia and Europe to multi-month highs. Bank of America (NYSE:BAC) said on Monday that Brent oil was likely to average $68 this year but could hit $100 next year on unleashed pent-up demand and more private car usage as public transport use lags and remote workers run more errands near their homes. Negotiations to revive the Iran nuclear deal took a pause on Sunday after hardline judge Ebrahim Raisi won the country's presidential election. Two diplomats said they expected a break of about 10 days. Iranian and Western officials say Raisi's rise is unlikely to alter Iran's negotiating position. A deal could lead to Iran exporting an extra 1 million barrels per day, or 1% of global supply, for more than six months from its storage facilities. Oil prices are also drawing support from forecasts of limited growth in U.S. oil output, giving the OPEC more power to manage the market in the short term before a potentially strong rise in shale oil output in 2022. However, the U.S. rig count, an early indicator of future oil output, rose by eight last week to 373, its highest since April 2020, data from energy services firm Baker Hughes Co showed.

 

 
Intraday RESISTANCE LEVELS
21st June 2021 R1 R2 R3
GOLD-XAU 1,790-1,797 1,803 1,820-1,834
Silver-XAG 26.20-26.65 27.00 27.55-27.90
Crude Oil 71.50 72.50-73.20 74.00
EURO/USD 1.1935-1.1990 1.2080-1.2140 1.2080-1.2140
GBP/USD 1.4010 1.4010 1.4065-1.4090
USD/JPY 110.50-110.90 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
21st June 2021 S1 S2 S3
GOLD-XAU 1,780-1,767 1,760 1,755-1,744
Silver-XAG 25.70 25.05 24.80-24.50
Crude Oil 71.00-70.10 69.30 68.40-67.80
EURO/USD 1.1890-1.1850 1.1800 1.1750-1.1690
GBP/USD 1.3870-1.3840 1.3800 1.3720-1.3670
USD/JPY 110.00-109.50 109.00 108.50-108.00

Intra-Day Strategy (21st 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$1797.11/oz and low of US$1767.13/oz. Gold down 0.330% at US$1764.19/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 1780-1744 with risk below 1744, targeting 1790-1797-1803 and 1820-1834. Sell in between 1790-1856 keeping stop loss closing above 1856, targeting 1780-1771-1760 and 1755-1744.

 
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 Friday made its intraday high of US$26.48/oz and low of US$25.74/oz settled down by 0.390% at US$25.78/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 25.70-24.80, 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 26.20-28.50 with stop loss above 28.50; targeting 26.00-25.70 and 25.05-24.80-24.00.

 
Intraday  Support Levels
S1     25.70
S2     25.05
S3     24.80-24.50

Intraday  Resistance Levels
R1     26.20-26.65
R2     27.00
R3     27.55-27.90

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 Friday made an intra‐day high of US$71.75/bbl, intraday low of US$69.81/bbl and settled down by 0.959% to close at US$71.01/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 Buy

Buy above 71.00-67.80 with risk daily closing below 67.80 and targeting 70.60-71.00-71.60 and 72.50-73.00-73.90. Sell in between 71.60-74.00 with stop loss at 74.00; targeting 71.00-70.10-69.70 and 69.30-68.40-67.80.

 
Intraday Support Levels
S1     71.00-70.10
S2     69.30
S3     68.40-67.80

Intraday Resistance Levels
R1     71.50
R2     72.50-73.20
R3     74.00

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 Friday an intraday low of US$1.1846/EUR, high of US$1.1924/EUR and settled the day down by 0.366% to close at US$1.1863/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     1.2080-1.2140
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 Friday made an intra‐day low of US$1.3791/GBP, high of US$1.3943/GBP and settled the day down by 0.7818% to close at US$1.3807/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

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.

 
Intraday Support Levels
S1     1.3870-1.3840
S2     1.3800
S3     1.3720-1.3670

Intraday Resistance Levels
R1     1.4010
R2     1.4010
R3     1.4065-1.4090

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 Friday made intra‐day low of JPY109.93/USD and made an intraday high of JPY110.47/USD and settled the day up 0.412% at JPY110.18/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     110.00-109.50
S2     109.00
S3     108.50-108.00

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

AAFX TRADING
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