AAFX TRADING

Daily Market Lookup

  • The dollar hit a fresh 15-month high versus the yen and hovered near multi-month peaks against other major peers on Thursday, ahead of a key U.S. jobs report that could offer clues on when the Federal Reserve will start to pare back stimulus. The index posted its best month since November 2016 in June, driven by the Federal Open Market Committee (FOMC)'s surprise hawkish shift in the middle of that month, when policymakers signalled two interest rate hikes by the end of 2023. Traders are looking to Friday's U.S. nonfarm payrolls report for confirmation of that outlook, with economists polled by Reuters expecting a gain of 700,000 jobs last month, compared with 559,000 in May, and an unemployment rate of 5.7% versus 5.8% in the previous month. The greenback extended gains on Wednesday after data showed U.S. private payrolls increased by a greater-than-expected 692,000 jobs in June. Safe-haven assets including Treasuries, the dollar and the yen have been supported by the spread of the highly contagious Delta variant of COVID-19, which is threatening the global reopening narrative. Indonesia, Malaysia, Thailand and Australia are all battling outbreaks of COVID-19 and tightening curbs, and Spain and Portugal announced restrictions for unvaccinated British tourists. The Reserve Bank of Australia will meet next Tuesday to decide on policy, and officials have already flagged it will announce its decisions on the fate of its three-year yield target as well as its broader quantitative easing programme, which is set to end in September. RBA Governor Philip Lowe will also hold a news conference afterward, in a break from recent procedure. The dollar consolidated around multi-month highs against its major peers as traders await Friday’s key employment report for clues about future Federal Reserve policy. This index has just posted its best month since November 2016, helped by the hawkish turn by the Federal Reserve in bringing forward its expected interest rate hikes. The dollar received a boost on Wednesday as data showed U.S. companies hired more new employees than expected in June, adding to signs that the nation’s labor market is recovering strongly. Private payrolls increased by a greater-than-expected 692,000 jobs last month, according to ADP Research Institute data released Wednesday, above the 600,000 jobs expected. The ADP report is a widely-watched precursor to Friday’s official U.S. nonfarm payrolls release, although the relationship between the two hasn't been as tight as usual since the pandemic began. But it is the official labor market report that carries more weight with the Fed. Ahead of the big release on Friday, the Labor Department will release jobless claims numbers, at 8:30 AM ET with first-time filings for unemployment insurance for the week ended June 26 seen falling to 390,000 from 411,000 in the previous period. Continuing claims are seen falling to 3.382 million from 3.39 million. The greenback has also been supported of late by the spread of the virulent delta strain of the Covid-19 virus, which is threatening the wider reopening narrative. The dollar rose to a 2-1/2-month peak on Wednesday, posting its biggest monthly rise since November 2016, supported by a surprisingly hawkish shift in the U.S. Federal Reserve's rate outlook and concern over the spread of the Delta coronavirus variant Action Economics said the dollar has been mainly supported by the better-than-expected U.S. private payrolls data, "which has driven dollar short covering," ahead of the employment report. Investors were also apprehensive about the spread of the Delta variant that has prompted some countries such as Australia, the UK, and parts of Europe to undertake or plan renewed lockdowns, causing their currencies to struggle. That has put a bid on the U.S. dollar.
  • Oil bulls had their eyes warily on OPEC as U.S. crude closed out its best quarter in a year on Wednesday on optimism about fuel demand even as producers planned output hikes and new coronavirus outbreaks were reported from a variant of the virus. It was U.S. crude’s best performance in a three-month stretch since its Q2 2020 jump of 92% when it rose from $20 levels after the COV demand destruction that took it to minus $40 at one point. London-traded Brent, the global benchmark for oil, settled at $74.62 per barrel, up 34 cents, or 0.5% on the day. For the month, Brent rose almost 8% while for the quarter, it gained 17%. OPEC, comprising the 13-member Saudi-led Organization of the Petroleum Exporting Countries, is meeting its 10 oil producing allies led by Russia on Thursday to consider output hikes after months of sustained crude price hikes that some analysts fear might begin impacting demand. Some members in the enlarged oil producing alliance, known as OPEC+, want a substantial production hike to maximize revenue from current prices. Russia is one of them, reportedly seeking a hike of as much as 800,000 barrels. Much will depend on whether Saudi oil minister Abdulaziz bin Salman will allow an increase that could be large enough to derail the market’s upside momentum. The number bandied about is anywhere between 500,000 and 1 million barrels daily. OPEC Secretary-General Mohammed Barkindo said on Tuesday that oil consumption in the second half of 2021 was expected to be 5 million barrels per day higher than in the first. He said oil inventories in developed countries in the OECD, or Organization of the Economic Cooperation Development, were below the 2015-19 average now. Even so, he urged caution against a sharp production hike by OPEC+, which is still holding about 5.8 million barrels daily from the market under production cuts that began in April 2020 at the height of the demand-destroying pandemic. Aside from OPEC cuts, oil prices, especially those of WTI, have been supported by strong inventory drawdowns over the past month as traffic in U.S. cities returned to pre-pandemic levels and refiners maximized gasoline production from crude to cater to expected fuel demand. Data on Wednesday from the U.S. Energy Information Administration again showed a huge crude drawdown for last week, with stockpiles falling as much as 6.7 million barrels versus forecasts for a 4.7 million-barrel drop. The big crude draw came as U.S. refiners operated last week at 92.9 percent of capacity, a level last seen in the summer of 2019, well before the onset of the pandemic last year. Gasoline inventories rose by 1.52 million barrels last week, versus forecasts for a drawdown of 886,000 barrels — demonstrating the stepped-up refining activity. Stockpiles of distillates that include diesel and heating oil fell by 869,000 barrels versus forecasts for a build of 486,000. Aside from domestic consumption, exports of U.S. crude also rose last week to an average of 3.72 million barrels per day from the previous week’s average of 3.65 million. Production of U.S. crude, meanwhile, remained stagnant at 11.2 million barrels per day.

 

 
Intraday RESISTANCE LEVELS
1st July 2021 R1 R2 R3
GOLD-XAU 1,780-1,790 1,805 1,814-1,830
Silver-XAG 27.00 27.00 27.55-27.90
Crude Oil 74.60-75.00 76.00 77.05-78.00
EURO/USD 1.1910-1.1990 1.2040 1.2080-1.2140
GBP/USD 1.3800-1.3840 1.3905 1.3965-1.4025
USD/JPY 111.70-112.50 113.00 113.90-114.50

Intraday SUPPORTS LEVELS
1st July 2021 S1 S2 S3
GOLD-XAU 1,767-1,760 1,755 1,744-1,735
Silver-XAG 25.70-25.05 24.80 24.50-24.00
Crude Oil 74.00-73.50 73.10 72.50-71.50
EURO/USD 1.1850-1.1800 1.1750 1.1690-1.1600
GBP/USD 1.3770-1.3720 1.3650 1.3600-1.3560
USD/JPY 110.90-110.50 109.50 109.00-108.50

Intra-Day Strategy (1st July 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 Wednesday made its intraday high of US$1774.33/oz and low of US$1753.27/oz. Gold down 0.507% at US$1769.93/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 1767-1720 with risk below 1720, targeting 1778-1790-1797 and 1805-1820-1830. Sell in between 1790-1830 keeping stop loss closing above 1830, targeting 1767-1755-1744 and 1735-1722-1710.

 
Intraday Support Levels
S1     1,767-1,760
S2     1,755
S3     1,744-1,735
Intraday Resistance Levels
R1     1,780-1,790
R2     1,805
R3     1,814-1,830

Technical Indicators

Name   Value Action
14DRSI  

37.215

Buy
20-DMA   1820.03 Sell
50-DMA  

1832.84

Sell
100-DMA   1790.71 Sell
200-DMA   1830.21 Sell
STOCH(5,3)   44.5031830.21 Sell
MACD(12,26,9)   -23.653 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$26.30/oz and low of US$26.03/oz settled up by 0.310% at US$26.19/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     25.70-25.05
S2     24.80
S3     24.50-24.00

Intraday  Resistance Levels
R1     27.00
R2     27.00
R3     27.55-27.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.739 Buy
20-DMA   26.73 Sell
50-DMA   27.04 Sell
100-DMA   26.51 Sell
200-DMA   25.68 Buy
STOCH(5,3)   64.413 Buy
MACD(12,26,9)   -0.3810 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$73.78/bbl, intraday low of US$72.45/bbl and settled up by 0.0656% to close at US$73.06/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 74.10-69.30 with risk daily closing below 69.30 and targeting 73.90-74.60 and 75.00-75.60. Sell in between 74.50-76.00 with stop loss at 76.00; targeting 73.50-73.10-72.50 and 71.00-70.10.

 
Intraday Support Levels
S1     74.00-73.50
S2     73.10
S3     72.50-71.50

Intraday Resistance Levels
R1     74.60-75.00
R2     76.00
R3     77.05-78.00

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 Wednesday an intraday low of US$1.1844/EUR, high of US$1.1908/EUR and settled the day down by % to close at US$1.1856/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 1.1910-1.2140 targeting 1.1850-1.1800-1.1750 with stop-loss at daily closing above 1.2140. Buy above 1.1850-1.1600 with risk below 1.1600, targeting 1.1910-1.1990-1.2040 and 1.2100-1.2140.

 
Intraday Support Levels
S1     1.1850-1.1800
S2     1.1750
S3     1.1690-1.1600

Intraday  Resistance Levels
R1     1.1910-1.1990
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 Wednesday made an intra‐day low of US$1.3797/GBP, high of US$1.3872/GBP and settled the day down by 0.0636% to close at US$1.3827/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 1.3800-1.4220 with targets at 1.3770-1.3720-1.3660 and 1.3600-1.3560 stop-loss should be 1.4220. Buy above 1.3770-1.3560 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     1.3770-1.3720
S2     1.3650
S3     1.3600-1.3560

Intraday Resistance Levels
R1     1.3800-1.3840
R2     1.3905
R3     1.3965-1.4025

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

32.738

Buy
20-DMA   1.3987 Sell
50-DMA   1.4026 Sell
100-DMA   1.3942 Buy
200-DMA   1.3633 Buy
STOCH(5,3)   8.940 Sell
MACD(12,26,9)   0.0074 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY110.41/USD and made an intraday high of JPY111.11/USD and settled the day up 0.566% at JPY111.09/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 110.50-106.50 with targets of 110.90-111.70-112.20 with stop below 106.00. Sell below 111.70-114.50 with risk above 114.50 targeting 110.90-110.20-109.50 and 109.00-108.50-108.00.

 
Intraday Support Levels
S1     110.90-110.50
S2     109.50
S3     109.00-108.50

INTRADAY RESISTANCE LEVELS
R1     111.70-112.50
R2     113.00
R3     113.90-114.50

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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