AAFX TRADING

Daily Market Lookup

  • The dollar stabilized in early European trade Tuesday, after handing back some of the previous week’s gains during the previous session, with traders awaiting testimony from Federal Reserve Chair Jerome Powell in the wake of the central bank’s hawkish turn. The dollar had gained sharply since Wednesday’s move by the U.S. Federal Reserve, the country’s central bank, to bring forward the median expected starting point for interest rate rises to 2023, a year earlier than previously guided, while also starting to discuss the timetable for reducing the Fed’s massive bond-buying program. The dollar index gained 1.9% last week, its biggest weekly rise since March 2000, and it was perhaps understandable that traders cashed in some of those gains during Monday's session Fed officials have already started the process of explaining their thinking, with New York Fed president John Williams taking a dovish tone Monday, saying more economic progress is needed before the central bank should begin to scale back some of its support. However, others, including Dallas Fed President Robert Kaplan and his colleague in St. Louis, James Bullard, expressed views more in line with the change of overall tone at the central bank, calling for an early discussion over tapering the central bank’s ongoing bond purchases. Now Fed Chair Jerome Powell heads to Capitol Hill to provide U.S. lawmakers in Congress with an update of the central bank’s support for the country’s economy during the pandemic. He is sure to be asked about the Fed’s new inflation concerns given his repeated insistence that the recent surge in prices would prove transitory in nature. Powell is due to start his testimony at 2 PM ET. His prepared remarks, already released late on Monday by the Fed, broadly echo what Powell said at his press conference last week. “The hawkish turn from the Fed has many wondering whether its new strategy of 'Average Inflation Targeting' adopted last September was really just some elaborate form of forward guidance that would be dropped at the first sign of genuine concern over inflation,” said analysts at ING, in a note. The dollar was up on Tuesday morning in Asia. The greenback hit pause as investors await testimony from U.S. Federal Reserve Chairman Jerome Powell after being caught off-guard by the central bank’s latest policy decision. The U.S. currency has climbed sharply ever since the previous week’s Fed decision, which hinted that interest rate hikes and asset tapering could come sooner than expected. It gave up some of those gains on Monday as it dipped, however. Investors will now focus on the U.S. labor market, whose performance will likely influence the Fed’s next moves. They also await Powell’s testimony before a House of Representatives subcommittee hearing later in the day. However, Powell noted sustained labor market improvement and the recent increase in inflation in written remarks ahead of his testimony. Other Fed officials, including St. Louis Fed President James Bullard and Dallas Fed President Robert Kaplan, also offered toned-down rhetoric. However, New York Fed President John Williams (NYSE:WMB) warned it was too soon to shift policy as he expects inflation to ease from about 3% in 2021 to around 2% in 2022 and 2023. In cryptocurrencies, bitcoin and its rivals slumped on Monday in reaction to an intensifying crackdown on trading and mining in China in addition to technical factors.
  • Oil was up Tuesday morning in Asia, with signs emerging of a rapidly tightening market. Brent futures have rallied more than 40% this year as countries such as the U.S., China and Europe continue their economic recoveries from COVID-19, thus improving the fuel demand outlook. However, ongoing COVID-19 outbreaks in several countries are a grim reminder that fuel demand recovery remains uneven. Also dampening investor sentiment is China’s crackdown on its private refiners. The second batch of 2021 crude import quotas allocated to them was about 35% less than 2020, which could impact flows in the sector, which accounts for around a quarter of processing capacity in the world’s largest oil importer. However, the overall bullish outlook for the black liquid is adding pressure on the Organization of the Petroleum Exporting Countries and allies (OPEC+) to consider reviving more of the production curbed during COVID-19 when it meets in the following week. Investors now await U.S. crude oil supply from the American Petroleum Institute, due later in the day. Should the data and crude oil supply data from the U.S. Energy Information Administration.
  • Gold was up on Tuesday morning in Asia against the dollar's fell below the $92 mark. Investors digested comments by U.S. Federal Reserve chair Jerome Powell that the inflation will be transitory while await Powell’s speech later in the day. Although inflation had increased, it will move back toward the Fed’s 2% target once supply imbalances are resolved, Powell said in written remarks prepared for his Tuesday testimony before Congress. Investors now await the hearing to get clues on the pace of U.S. economic recovery from COVID-19 and the outlook for the Fed monetary policy. Gold picked up on Monday after the biggest weekly fall in its worst week in 15 months, as the Fed hinted earlier-than-expect interest rate hikes and tightening of its asset purchase program as it handed down its latest policy decision during the previous week. The yellow metal rebounded a little as investors bet the tightening will be very gradual. However, some investors remained cautious. Investors also await a Bank of England policy decision, to be handed down on Thursday. In other precious metals, silver and palladium edged down 0.2%, while platinum climbed 0.7%.

 

 
Intraday RESISTANCE LEVELS
22nd 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 73.10-74.00 74.60 75.00-75.60
EURO/USD 1.1935-1.1990 1.2040 1.2080-1.2140
GBP/USD 1.3905-1.3965 1.4010 1.4065-1.4090
USD/JPY 110.50-110.90 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
22nd 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 72.50-71.50 71.00 70.10-69.30
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 (22nd 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 Monday made its intraday high of US$1786.46/oz and low of US$1764.41/oz. Gold up 1.042% at US$1782.81/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

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.

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 Monday made an intra‐day high of US$73.12/bbl, intraday low of US$70.66/bbl and settled down by 2.695% to close at US$72.91/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 72.50-69.30 with risk daily closing below 69.30 and targeting 73.10-73.90-74.60 and 75.00-75.60. 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     72.50-71.50
S2     71.00
S3     70.10-69.30

Intraday Resistance Levels
R1     73.10-74.00
R2     74.60
R3     75.00-75.60

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 Monday an intraday low of US$1.1846/EUR, high of US$1.1920/EUR and settled the day up by 0.519% to close at US$1.1917/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 intraday. 14D RSI is currently in overbought region and giving no directions to consider right now in oversold territory and still giving negative crossovers to signal for bearish outlook for.

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 Monday made an intra‐day low of US$1.3785/GBP, high of US$1.3936/GBP and settled the day down by 0.952% to close at US$1.3932/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 1.3905-1.4490 with targets at 1.3870-1.3840-1.3800 and 1.3720-1.3670 stop-loss should be 1.4500. Buy above 1.3870-1.3670 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     1.3870-1.3840
S2     1.3800
S3     1.3720-1.3670

Intraday Resistance Levels
R1     1.3905-1.3965
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 Monday made intra‐day low of JPY109.71/USD and made an intraday high of JPY110.34/USD and settled the day up 0.0235% at JPY110.20/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   109.07 109.07 109.07 109.07 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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