AAFX TRADING

Daily Market Lookup

  • The dollar edged lower in early European trade Wednesday ahead of the release of the keenly-awaited minutes from the last Federal Reserve meeting, with traders looking for clues on the direction of the economy and interest rates. The dollar received a boost Tuesday as volatility surrounding the price of oil, the Chinese clampdown on the tech sector and a weak ISM non-manufacturing reading prompted a bout of risk aversion. However, the greenback has since given back some of those gains ahead of the release of the minutes from the Fed’s June 2021 meeting, at 2:00 PM ET (1800 GMT), which are widely expected to offer clues to the central’s bank’s policy outlook moving forward. Additionally, the May release of job openings and labor turnover, at 10 AM ET, is expected to show 9.4 million vacancies for May, a small increase on the number of vacancies in April. The dollar edged lower in early European trade Wednesday ahead of the release of the keenly-awaited minutes from the last Federal Reserve meeting, with traders looking for clues on the direction of the economy and interest rates. The dollar received a boost Tuesday as volatility surrounding the price of oil, the Chinese clampdown on the tech sector and a weak ISM non-manufacturing reading prompted a bout of risk aversion. However, the greenback has since given back some of those gains ahead of the release of the minutes from the Fed’s June 2021 meeting, at 2:00 PM ET (1800 GMT), which are widely expected to offer clues to the central’s bank’s policy outlook moving forward. Additionally, the May release of job openings and labor turnover, at 10 AM ET, is expected to show 9.4 million vacancies for May, a small increase on the number of vacancies in April.
  • The dollar was down on Wednesday morning in Asia ahead of the U.S. Federal Reserve’s release of the minutes from its latest meeting. The euro, meanwhile, fell to an almost three-month low against the greenback as German economic data disappointed and raised concerns about the country’s economic recovery from COVID-19. Data released on Tuesday said that the German Zentrum für Europäische Wirtschaftsforschung (ZEW) economic sentiment index fell sharply to 63.3, below the 75.2 in forecasts prepared by Investing.com and June’s 79.8 figure. Separate data also said that German factory orders contracted 3.7% month-on-month in May, against the 1% growth in forecasts prepared by Investing.com and April’s 1.2% growth. Meanwhile, the ongoing production dispute among the members of the Organization of the Petroleum Exporting Countries and allies (OPEC+) that caused a plunge in prices dampened sentiment for other risk-sensitive currencies In the U.S., yields recently took a tumble after investors who had bet that the Fed would tighten its monetary policy sooner than expected thanks to rising inflation were forced to bail out of their positions. The minutes from the Fed’s June 2021 meeting, to be released later in the day, are widely expected to offer clues to the central’s bank’s policy outlook moving forward. However, some investors said that the clues are already there.
  • Gold was up on Wednesday morning in Asia after hitting a three-week high during the previous session. A weakening dollar also gave the yellow metal a boost as investors await the minutes from the U.S. Federal Reserve’s latest policy meeting. The dollar, which usually moves inversely to gold, inched down on Wednesday but remained near the three-month high hit during the previous week. Benchmark 10-year U.S. Treasury yields also fell to their lowest level in more than four months. The minutes from the Fed’s June 2021 meeting, due to be released later in the day, are expected to provide some clues to the central bank’s monetary policy moving forward. They could also shed some light on the Fed’s surprise hawkish turn in the policy decision handed down after that meeting. On the data front, the U.S. Institute of Supply Management (ISM) non-manufacturing purchasing managers index (PMI) released on Tuesday came in at 60.1 for June, as labor and raw material shortages likely contributed to the lower-than-expected figure. Across the Atlantic, data also released on Tuesday said the German Zentrum für Europäische Wirtschaftsforschung (ZEW) economic sentiment index fell sharply to 63.3, below the 75.2 in forecasts prepared by Investing.com and June’s 79.8 figure. Separately, German factory orders also missed forecasts, contracting 3.7% month-on-month in May against the 1% growth in forecasts prepared by Investing.com and April’s 1.2% growth.
  • Oil was mixed Wednesday morning in Asia, but remained above the $73 mark, as a production dispute between Saudi Arabia and the United Arab Emirates (UAE) continues. The dispute has stalled efforts by the Organization of the Petroleum Exporting Countries and allies (OPEC+) to raise production as the fuel demand outlook brightens. Prices had been climbing towards the highest intraday level since 2014 earlier in the week over concern that the dispute would prevent more crude from being restored to the market. Buyers of the black liquid are already feeling the pinch, as Saudi Aramco (SE:2222) raised the official selling price of Arab Light crude increased by 80 cents a barrel to $2.7 above the regional benchmark in its main market of Asia. The increase is the biggest month-on-month gain since January 2021, and a hint that the company will not boost supply in August. It also further indicated a tightening market as the cartel’s dispute could mean supply will not increase in August. JPMorgan Chase & Co. (NYSE:JPM) is among the banks anticipating that a deal will be struck eventually, saying in a note that OPEC+ is expected to eventually agree in the coming weeks to boost production by 400,000 barrels a day each month for the rest of 2021.
  • However, ING Group (NYSE:ING) NV pointed out that the widening gap between Saudi Arabia and the UAE’s positions could prompt other cartel members to ignore production restraints and engage in a free-for-all that could crash prices. Everyone involved will also be making efforts to avoid a price war not unlike the one between Saudi Arabia and Russia that sent prices into negative territory in April 2020. The U.S. is “encouraged” by the continuous OPEC+ talks and officials have spoken with their counterparts in Saudi Arabia and the UAE in hopes of reaching an agreement to stem the rise in oil prices, White House Press Secretary Jen Psaki said at a briefing. Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
7th July 2021 R1 R2 R3
GOLD-XAU 1,812-1,820 1,833 1,840-1,852
Silver-XAG 26.50-26.90 27.55 27.90-28.50
Crude Oil 74.00-74.60 75.00 75.80-76.50
EURO/USD 1.1840-1.1910 1.1990 1.2040-1.2080
GBP/USD 1.3840-1.3905 1.3965 1.4025-1.4100
USD/JPY 111.70-112.50 113.00 113.90-114.50

Intraday SUPPORTS LEVELS
7th July 2021 S1 S2 S3
GOLD-XAU 1,805-1,790 1,780 1,767 -1,760
Silver-XAG 26.15-25.70 25.05 24.80-24.50
Crude Oil 73.20-72.60 72.00 71.40-71.00
EURO/USD 1.1800 1.1750 1.1690-1.1600
GBP/USD 1.3800-1.3770 1.3720 1.3650-1.3600
USD/JPY 110.50 109.50 109.00-108.50

Intra-Day Strategy (7th 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 Tuesday made its intraday high of US$1814.93/oz and low of US$1790.02/oz. Gold up 0.292% at US$1796.68/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 1805-1771 with risk below 1771, targeting 1812-1820-1833 and 1840-1852. Sell in between 1805-1840 keeping stop loss closing above 1840, targeting 1805-1790-1771 and 1767-1755.

 
Intraday Support Levels
S1     1,805-1,790
S2     1,780
S3     1,767 -1,760
Intraday Resistance Levels
R1     1,812-1,820
R2     1,833
R3     1,840-1,852

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)   26.15-25.70 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$26.76/oz and low of US$25.99/oz settled down by 0.969% at US$26.14/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 26.50-28.50 with stop loss above 28.50; targeting 26.00-25.70 and 25.05-24.80-24.00.

 
Intraday  Support Levels
S1     26.15-25.70
S2     25.05
S3     24.80-24.50

Intraday  Resistance Levels
R1     26.50-26.90
R2     27.55
R3     27.90-28.50

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 Tuesday made an intra‐day high of US$76.38/bbl, intraday low of US$72.42/bbl and settled down by 3.202% to close at US$73.26/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 73.20-69.30 with risk daily closing below 69.30 and targeting 74.00-74.60-75.00 and 75.80-76.50-77.05. Sell in between 74.00-76.50 with stop loss at 76.50; targeting 73.10-72.60-72.00 and 71.40-70.90.

 
Intraday Support Levels
S1     73.20-72.60
S2     72.00
S3     71.40-71.00

Intraday Resistance Levels
R1     74.00-74.60
R2     75.00
R3     75.80-76.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.920 Sell
20-DMA   72.62 Buy
50-DMA   68.64 Buy
100-DMA   65.19 Buy
200-DMA   55.73 Buy
STOCH(5,3)   50.130 Sell
MACD(12,26,9)   1.767 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1806/EUR, high of US$1.1894/EUR and settled the day down by 0.321% to close at US$1.1822/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 1.1840-1.2140 targeting 1.1850-1.1800-1.1750 with stop-loss at daily closing above 1.2140. Buy above 1.1800-1.1600 with risk below 1.1600, targeting 1.1910-1.1990-1.2040 and 1.2100-1.2140.

 
Intraday Support Levels
S1     1.1800
S2     1.1750
S3     1.1690-1.1600

Intraday  Resistance Levels
R1     1.1840-1.1910
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 Tuesday made an intra‐day low of US$1.3772/GBP, high of US$1.3897/GBP and settled the day down by 0.303% to close at US$1.3795/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     1.3800-1.3770
S2     1.3720
S3     1.3650-1.3600

Intraday Resistance Levels
R1     1.3840-1.3905
R2     1.3965
R3     1.4025-1.4100

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 Tuesday made intra‐day low of JPY110.51/USD and made an intraday high of JPY110.97/USD and settled the day down 0.274% at JPY110.60/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     110.50
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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