AAFX TRADING

Daily Market Lookup

  • The dollar drifted lower in Europe on Friday as an agreement on U.S. infrastructure spending underpinned appetite for riskier currencies, but caution ahead of key U.S. inflation data kept losses to a minimum. Such small moves left most of the dollar's recent gains intact, after it was vaulted higher in the wake of a surprise shift in policy outlook from the Federal Reserve - which last week flagged sooner-than-expected interest rate rises. Inflation data due later on Friday will offer the latest indication of how much pressure the Fed is under to move, as will labour market figures due in a week's time - leaving traders unwilling to sell the dollar too hard just in case it bounces again soon. Economists polled by Reuters expect the core personal consumption expenditures index to post its fastest rise in nearly three decades, with year-on-year gains of 3.4%. The data is due at 1230 GMT. A combination of soothing comments on Thursday from New York Federal Reserve Bank President John Williams and hopes for a huge U.S. infrastructure spending plan supported the mood in financial markets, helping riskier currencies. Moves were larger in smaller markets and the South Korean won hit its strongest in over a week, while the Thai baht extended its bounce from a one-year low. On that front, the absence of any rate hike hints from the Bank of England knocked sterling on Thursday, while a surprise lift to rates in Mexico sent the peso zooming. Bank of England policymakers even warned against "premature tightening" and the pound was the worst performing G10 currency on Thursday. It was pinned at $1.3916 in both the Asian and early deals in Europe.
  • The dollar edged marginally lower in early European trade Friday, as traders warily awaited the release of key inflation data for clues over future Federal Reserve policy. The dollar received a jolt higher last week after the Federal Reserve brought forward its median forecasts for interest rates hikes, but subsequent comments from Chairman Jerome Powell over inflation pressures still being temporary in nature have soothed market nerves over the potential for early moves by the central bank to rein in its very accommodative monetary policies. There appear to be two camps within the Fed, although most of the coalition seem to be sticking to Powell’s script that the surge in consumer prices will fade. For example, New York Fed President John Williams said on Thursday that he sees inflation heading back toward the 2% target next year. Cleveland President Loretta Mester and Boston's Eric Rosengren are slated to round off a full week of public appearances by Fed officials later Friday. Of more interest may be the release of the core personal consumption expenditures index, at 8:30 AM ET (1230 GMT), into focus. This is seen as the Fed’s favorite gauge of inflation, and is expected to show year-on-year gains of 3.4% in May, climbing from the 3.1% recorded the previous month. Elsewhere, GBP/USD was marginally higher at 1.3928 after weakening during the previous session as the Bank of England kept its own easy monetary policy unchanged, warning against “premature tightening” despite a marked improvement to its forecasts for the U.K. economy.
  • The dollar was down on Friday morning in Asia but remained near multi-month highs as weary investors await further inflation data to close the week. The pound, meanwhile, nursed a modest loss after the Bank of England (BOE) shied away from hiking interest rates in its latest policy decision. The USD/JPY pair inched down 0.01% to 110.84, with the yen just below a 15-month low against the dollar. Data released earlier in the day said that the Tokyo core consumer price index (CPI) grew 0% year-on-year in June, while the CPI Tokyo Ex Food and Energy index contracted 0.1% month-on-month in June, which was smaller than May’s 0.4% contraction. Investors are still digesting the U.S. Federal Reserve’s surprise hawkish turn as it handed down its policy decision during the previous week, although comments from Fed Chairman and other officials throughout the past week calmed market nerves about an imminent interest rate hike. The Bank of England’s decision hinted that the central bank was in no hurry to hike interest rates, with officials warning against “premature tightening” as the decision was handed down on Thursday. Meanwhile, the Banco de México hiked its interest rates for the first time since late 2018, with the Mexican peso climbing to a two-week high after the surprise move. Investors also digested U.S. economic data released on Thursday, which said that the GDP rose 6.4% quarter-on-quarter in the first quarter of 2021. However, core durable goods orders rose a smaller-than-expected 0.3% month-on-month in May. On the employment side, 411,000 initial jobless claims were filed over the past week, higher than the 380,000 claims in forecasts prepared by Investing.com but lower than the 418,000 claims submitted during the previous week. Further U.S. data on personal spending and the University of Michigan consumer sentiment is due later in the day.
  • Oil was up Friday morning in Asia, ending the week with small gains in an otherwise volatile session as investors await an upcoming Organization of the Petroleum Exporting Countries and allies (OPEC+) meeting. The black oil’s recent gains pushed it into overbought territory earlier in the week, a sign that its recent rally could fade. All eyes are now on OPEC+’s meeting, due to take place in the following week, on whether the cartel will implement a widely expected supply hike. However, with no visible change on the demand side, OPEC+ could increase output gradually, CFRA Research energy equity analyst Stewart Glickman told Bloomberg. Crude futures are up more than 50% in 2021 to date, pushing WTI futures past the $75 mark earlier in the week, as the U.S., China and parts of Europe continue their economic recovery from COVID-19. The progress in COVID-19 vaccinations globally has also contributed to a brighter fuel demand outlook as economies slow reopen and fuel consumption increases India, the third-biggest oil importer globally, again urged OPEC+ to revive oil production as it remains “deeply concerned” over spiraling energy prices. U.S. crude supply data from the American Petroleum Institute and the U.S. Energy Information Administration showed a rapid depletion in crude inventories with the U.S. summer driving season well underway. U.S. refiners are even looking to Asian for crude supplies to meet the increasing demand. The U.S. is “proving to be a rare bright spot” for imports of jet kerosene, with shipments into key ports rising to pre-COVID-19 levels, a Vortexa report released earlier in the week said. However, the uncertainty over increases in OPEC+ production could become a risk for portfolio managers at the end of the quarter, according to Tyche Capital Advisors LL's managing member of the global macro program Tariq Zahir. Some may scale back positions to lock in returns in case prices dip after the meeting, he said.

 

 
Intraday RESISTANCE LEVELS
25th 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 73.50-74.00 74.60 75.00-75.60
EURO/USD 1.1990 1.2040 1.2080-1.2140
GBP/USD 1.3905-1.3965 1.4025 1.4065-1.4100
USD/JPY 110.90-111.70 112.50 113.00-113.90

Intraday SUPPORTS LEVELS
25th June 2021 S1 S2 S3
GOLD-XAU 1,775-1,767 1,760 1,755-1,744
Silver-XAG 26.00-25.70 25.05 24.80-24.50
Crude Oil 73.10-72.50 71.50 71.00-70.10
EURO/USD 1.1910-1.1850 1.1800 1.1750-1.1690
GBP/USD 1.3870-1.3840 1.3800 1.3720-1.3660
USD/JPY 110.50-109.50 109.00 108.50-108.00

Intra-Day Strategy (25th June 2021)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Buy
EUR/USD Neutral to SellGBP/USD on Thursday made an intra‐day low of US$1.3888/GBP, high of US$1.3985/GBP and settled the day down by 0.320% to close at US$1.3916/GBP.
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Thursday made its intraday high of US$1787.91/oz and low of US$1772.75/oz. Gold down 0.202% at US$1774.88/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 1775-1744 with risk below 1744, targeting 1790-1797-1803 and 1820-1834.

 
Intraday Support Levels
S1     1,775-1,767
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$26.15/oz and low of US$25.80/oz settled up by 0.146% at US$25.91/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 25.90-24.80, 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     26.00-25.70
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 Thursday made an intra‐day high of US$73.38/bbl, intraday low of US$72.12/bbl and settled up by 0.112% to close at US$73.11/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 73.10-69.30 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     73.10-72.50
S2     71.50
S3     71.00-70.10

Intraday Resistance Levels
R1     73.50-74.00
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 Thursday an intraday low of US$1.1916/EUR, high of US$1.1955/EUR and settled the day up by 0.0494% to close at US$1.1931/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 SellGBP/USD on Thursday made an intra‐day low of US$1.3888/GBP, high of US$1.3985/GBP and settled the day down by 0.320% to close at US$1.3916/GBP.

Sell below 1.1990-1.2140 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     1.1910-1.1850
S2     1.1800
S3     1.1750-1.1690

Intraday  Resistance Levels
R1     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$1.3888/GBP, high of US$1.3985/GBP and settled the day down by 0.320% 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 1.3905-1.4220 with targets at 1.3870-1.3840-1.3800 and 1.3720-1.3660 stop-loss should be 1.4500. Buy above 1.3870-1.3670 with targets 1.3905-1.3965-1.4025 and 1.4065-1.4090-1.4140 with stop loss closing below 1.3660.

 
Intraday Support Levels
S1     1.3870-1.3840
S2     1.3800
S3     1.3720-1.3660

Intraday Resistance Levels
R1     1.3905-1.3965
R2     1.4025
R3     1.4065-1.4100

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 JPY110.68/USD and made an intraday high of JPY111.11/USD and settled the day down 0.0856% at JPY110.84/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     110.50-109.50
S2     109.00
S3     108.50-108.00

INTRADAY RESISTANCE LEVELS
R1     110.90-111.70
R2     112.50
R3     113.00-113.90

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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