AAFX TRADING

Daily Market Lookup

  • The U.S. dollar hit a fresh three-month high versus other major currencies on Friday, as traders wagered strong U.S. labour data could lift it even further. The greenback has strengthened broadly since the U.S. Federal Reserve surprised markets last month by signalling it could tighten policy earlier than expected to curb inflation. The U.S. jobs report is due at 1230 GMT and is forecast to show a solid rise of 700,000, with traders braced for any surprises. A higher number in the employment report could fuel concerns of tighter Fed policy, analysts said. The dollar has given back some of its recent gains in early European trade Friday, but remains near multi-month peaks against its major peers ahead of the release of the widely-watched monthly payrolls report. At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 92.558, having climbed to a three-month high during the previous session. The dollar has been supported over the last couple of days by strong U.S. employment data, bringing into question the assumption that U.S. interest rates can stay at ultra-low levels for years. Applications for U.S. state unemployment insurance fell last week by more than expected, according to data released Thursday, with initial jobless claims falling by 51,000 to 364,000, reaching a fresh pandemic low as the economy reopens. This followed Wednesday’s private payrolls release, which showed U.S. companies hired 692,000 new employees in June, more than the 600,000 generally expected. This brings into focus the official U.S. nonfarm payrolls release, due at 8:30 AM ET (1230 GMT), which is expected to show another weighty rise of 700,000 jobs in June, an improvement from the 559,000 jobs added the previous month. However, with both the ADP and the weekly jobless claims coming in better than expected, market chat has been suggesting a higher payrolls figure. This would likely benefit the dollar given Federal Reserve policymakers have made the labor market the cardinal factor in determining monetary policy. The greenback continued to rise against currencies in Asia on Friday morning after the U.S. reported fewer than expected initial jobless claims and investors hold on to the possibility that rates could go up sooner than expected. The index has been climbing since late May as investors adapt to the possibility that the US Federal Reserve will raise interest rates sooner than expected. The dollar was also helped by relatively positive economic data, with US initial jobless claims falling to 364,000, below market expectations of 390,000 and the lowest number in 15 months. A key jobs report for June, including non-farm payrolls, is due later in the day and could provide more visibility into the recovery of the U.S. labor market, possibly giving the dollar some momentum. The positive sentiment around the dollar was also impacting the Japanese yen. The USD/JPY pair was up 0.11% to 111.62. The dollar is now around its highest point against the yen since March 2020. The GBP/USD pair continued falling for a seventh day and was down 0.02% to 1.3765, with the pound coming under pressure from continued interest in the greenback. The pair is trading around multi-month lows.
  • Gold was up on Friday morning in Asia, but investors avoided big bets ahead of the release of critical U.S. employment data that could sway the U.S. Federal Reserve’s recent hawkish stance on monetary policy. Philadelphia Fed President Patrick Harker suggested that cutting asset purchases by $10 billion a month might be reasonable and added that he favored starting the process in 2021, according to a report. The U.S. jobs report for June, including non-farm payrolls, will be released later in the day. Investors also continued to digest data released on Thursday that said the Institute of Supply Management (ISM) manufacturing PMI was a slightly lower-than-expected 60.6 in June and a lower-than-forecast 364,000 initial jobless claims were filed throughout the past week. U.S. layoffs also fell to a 21-year low in June. On the stimulus front, the Democrat-controlled U.S. House of Representatives approved a $715 billion surface transportation and water infrastructure bill on Thursday. The approval is a first step towards approving the bill, which Congress targets completing by September 2021. Some investors are now placing bets that U.S. government bond yields will stay subdued or continue weakening in the second half of 2021. Meanwhile, Bolivia’s government is looking to stabilize a 2020 fall in its economy not seen in over half a century through spending, COVID-19 vaccines and the yellow metal.
  • Oil was up Friday morning in Asia, retaining its gains from the previous session after a disagreement within the Organization of the Petroleum Exporting Countries and allies (OPEC+) delayed a decision on output levels, which might cause an inflationary spike in prices if not resolved. The United Arab Emirates blocked a deal at the last minute, causing the alliance to put off its decision on monthly production. The standstill could end with OPEC+ not increasing output at all, which means the alliance would fall back on previous terms that asked for production to remain unchanged until April 2022. Before the disagreement, OPEC+ appeared to agree in principle to boost output by 400,000 barrels a day each month from August through December. The OPEC+ ministers will regroup on Friday as the current outcome leaves the market in limbo and tarnishes the alliance's reputation, following last year’s Saudi Arabian-Russian price war. If OPEC+ can’t resolve the conflict, the possibility of crude surging higher will add to growing inflationary pressures in the global economy. Oil just finished its best half since 2009 as the rebound in energy demand in major economies outpaced the supply response. In a note, Citigroup Inc. (NYSE:C) analysts stated that before the standoff, it expects the market to remain in a deep deficit this quarter even after accounting for rising output from OPEC+. Along the oil futures curve, the market structure grew stronger and timespreads slid deeper into backwardation. On Thursday, the three nearest timespreads on the WTI curve hit $1 a barrel. This means that the market is growing increasingly worried about supply tightness, particularly at the key storage hub of Cushing, Oklahoma, where U.S. crude futures are priced. Brent’s September contract was 90 cents a barrel more expensive than the October one, compared with 80 cents a week ago. The UAE stated it would only give its support to a deal if the baseline for its own cuts was raised considerably, according to delegates. The country’s reductions are measured from a starting point in 2018, which set its maximum capacity at 3.168 million barrels a day. However, expansion projects have since raised that number to about 4 million barrels a day. Reflecting that new capacity in its baseline could allow it to pump hundreds of thousands of barrels a day of extra crude. Observers believe OPEC+ is likely to agree on Friday to restore more production.

 

 
Intraday RESISTANCE LEVELS
2nd July 2021 R1 R2 R3
GOLD-XAU 1,790-1,805 1,814 1,830-1,840
Silver-XAG 26.60-26.65 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
GBP/USD 1.3800-1.3840 1.3905 1.3965-1.4025
USD/JPY 113.00 113.00 113.90-114.50

Intraday SUPPORTS LEVELS
2nd July 2021 S1 S2 S3
GOLD-XAU 1,780-1,767 1,760 1,755-1,744
Silver-XAG 24.80 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 (2nd 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 Thursday made its intraday high of US$1782.75/oz and low of US$1765.56/oz. Gold down 0.384% at US$1776.72/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 1780-1720 with risk below 1720, targeting 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     1,780-1,767
S2     1,760
S3     1,755-1,744
Intraday Resistance Levels
R1     1,790-1,805
R2     1,814
R3     1,830-1,840

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)   44.503 Sell
MACD(12,26,9)   -23.653 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$26.39/oz and low of US$25.93/oz settled up by 0.421% at US$26.00/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     24.80
S2     24.80
S3     24.50-24.00

Intraday  Resistance Levels
R1     26.60-26.65
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 Thursday made an intra‐day high of US$75.67/bbl, intraday low of US$72.67/bbl and settled up by 1.88% to close at US$74.43/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   62.86 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$1.1836/EUR, high of US$1.1883/EUR and settled the day down by 0.055% to close at US$1.1849/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
R2     1.1990
R3     1.2040-1.2080

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$1.3752/GBP, high of US$1.3834/GBP and settled the day down by 0.4722% to close at US$1.3761/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 Thursday made intra‐day low of JPY111.02/USD and made an intraday high of JPY111.63/USD and settled the day up 0.376% at JPY111.51/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     113.00
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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