AAFX TRADING

Daily Market Lookup

  • The dollar maintained a strong tone in early European trade Thursday after the minutes from the last Federal Reserve meeting indicated that the world’s most influential central bank is moving towards tightening monetary policy. Traders had been waiting for the release of the minutes from the Fed’s June meeting as this was the gettogether at which the central bank hinted at two rate hikes in 2023, and signaled a greater likelihood of a first raise coming as early as 2022. While the minutes showed the policymakers generally agreed that the conditions to begin scaling back its monthly bond purchases had not yet been reached, some of the group indicated that they could be "met somewhat earlier than they had anticipated at previous meetings in light of incoming data." U.S. economic data has generally pointed to a strong economic recovery, and Thursday’s focus will be on the weekly unemployment data., due at 8:30 AM ET (1230 GMT). The number of Americans filing new claims for unemployment benefits last week is seen dropping by 14,000 to 350,000, to a new pandemic-era low. Additionally, continuing jobless claims by individuals qualifying for unemployment insurance are seen falling by 134,000 to 3.335 million. Elsewhere, the European Central Bank is set to announce the outcome of a 18-month strategy review at 1100 GMT, with the central bank expected to raise its inflation goal to 2%, from “below, but close to, 2%”, as well as describing the target as symmetric.
  • The dollar was slightly higher on Wednesday after the release of the minutes of the U.S. Federal Reserve's latest policy meeting, which showed Fed officials wrestling with the onset of inflation and financial stability concerns but included no big surprises. Fed officials last month felt substantial further progress on the economic recovery "was generally seen as not having yet been met," but agreed they must be ready to act if inflation or other risks materialize, according to the minutes of the central bank's June policy meeting. The greenback eased a bit following the release of the minutes, then reversed course and edged higher. The dollar index, which measures the greenback against a basket of peer currencies, was up 0.135% at 92.664, consolidating near its recent 3-month high, even as U.S. bond yields fell to their lowest levels since February Pressure from the lower bond yields, along with some recent soft economic reports, likely contributed to the greenback's lackluster reaction to the Fed minutes, Lien said But the U.S. economy is emerging from the COVID-19 pandemic in better shape than Europe and Japan, which bodes well for the greenback, she added. One of the main drivers of foreign exchange in the second half of the year will be the divergence of central banks that begin winding down monetary stimulus, based on solid economic fundamentals, and those that do not, said Win Thin, global head of currency strategy at Brown Brothers Harriman. The U.S. dollar index is currently trading more than 3% above where it was in February when U.S. yields were last this low, he said. The euro touched a three-month low against the dollar on Wednesday after German data raised doubts about the strength of the economic recovery. Investor sentiment in Germany, the euro zone's biggest economy, fell sharply in July, though it remained at a very high level, the ZEW economic research institute reported. Other risk-sensitive currencies took a hit after oil prices plunged as OPEC producers cancelled a meeting when major players were unable to come to an agreement to increase supply.
  • Oil was down Thursday morning in Asia, falling for a third consecutive session. Investors continue to keep an eye on the ongoing production dispute between Saudi Arabia and the United Arab Emirates (UAE) impacting global fuel supply. The Organization of the Petroleum Exporting Countries and allies (OPEC+) is yet to reach a decision on August supply, the source of the dispute between the two countries. The jury is still out about what the disarray within OPEC+ will amount to,” John Kilduff, a partner at Again Capital LLC, told Bloomberg. Oil prices have surged nearly 50% so far in 2021 as consumption rebounded and the OPEC+ curbed fuel output previously. However, investors are concerned that if OPEC+ will agree on a supply deal and that the outbreak of COVID-19 delta variant in nations will impact fuel demand recovery. JPMorgan Chase & Co. (NYSE:JPM) said in a note that it expects that OPEC+ will eventually agree on a deal in the following weeks to increase output by 400,000 barrels a day each month for the rest of 2021. Meanwhile, crude oil supply data from the American Petroleum Institute showed a draw of 7.983 million barrels for the week ending Jul. 2. Forecasts prepared by Investing.com predicted a 3.925 million-barrel draw, while an 8.153 million-barrel draw was recorded during the previous week. U.S. crude oil supply data from the U.S. Energy Information Administration will be released later in the day. 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.
  • Gold was down on Thursday morning in Asia as investors continued to digest the U.S. Federal Reserve’s minutes from its latest policy meeting. A strengthening dollar and lower U.S. Treasury yield also limited gains for the yellow metal The minutes from the Fed’s June meeting indicated the central bank is taking steps towards tapering its asset purchases as soon as 2021. Although Fed officials felt substantial further progress on the U.S. economic recovery “was generally seen as not having yet been met,” they agreed preparation was needed should asset tapering be required sooner than expected. A new surge in COVID-19 cases driven by the more virulent Delta variant could cause consumers to “pull back” and slow the U.S. recovery, Atlanta Fed President Raphael Bostic warned. The number of COVID-19 deaths also surpassed the four million mark as of Jul. 8, according to Johns Hopkins University data. The European Central Bank on its part will reportedly raise its inflation goal to 2% and allow room for any required overshoot in the outcome of an 18-month strategy review, due later in the day.

 

 
Intraday RESISTANCE LEVELS
8th July 2021 R1 R2 R3
GOLD-XAU 1,833 1,833 1,840-1,852
Silver-XAG 26.50-26.90 27.55 27.90-28.50
Crude Oil 71.00-71.40 72.00 72.60-73.20
EURO/USD 1.1840-1.1910 1.1990 1.2040-1.2080
GBP/USD 1.3800-1.3905 1.3965 1.4025-1.4100
USD/JPY 110.50-111.70 112.50 113.00-113.90

Intraday SUPPORTS LEVELS
8th July 2021 S1 S2 S3
GOLD-XAU 1,805-1,790 1,780 1,767 -1,760
Silver-XAG 26.00-25.70 25.05 24.80-24.50
Crude Oil 70.10-69.50 68.70 67.80-67.00
EURO/USD 1.1800 1.1750 1.1690-1.1600
GBP/USD 1.3770 1.3720 1.3800-1.3905
USD/JPY 109.70-109.10 108.50 107.50-106.80

Intra-Day Strategy (8th 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$1809.72/oz and low of US$1793.81/oz. Gold up 0.379% at US$1803.38/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     1,833
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   1830.21 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 Wednesday made its intraday high of US$26.46/oz and low of US$25.96/oz settled down by 0.764% at US$26.13/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     26.00-25.70
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 Wednesday made an intra‐day high of US$74.29/bbl, intraday low of US$70.60/bbl and settled down by 2.20% to close at US$70.60/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 70.1069.30 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     70.10-69.50
S2     68.70
S3     67.80-67.00

Intraday Resistance Levels
R1     71.00-71.40
R2     72.00
R3     72.60-73.20

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 Wednesday an intraday low of US$1.1780/EUR, high of US$1.1835/EUR and settled the day down by 0.279% to close at US$1.1789/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 Wednesday made an intra‐day low of US$1.3752/GBP, high of US$1.3841/GBP and settled the day down by 0.0130% to close at US$1.3797/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 1.3840-1.4220 with targets at 1.3800-1.3770-1.3720 and 1.3660-1.3600-1.3560 stop-loss should be 1.4220. Buy above 1.3800-1.3560 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
S2     1.3720
S3     1.3800-1.3905

Intraday Resistance Levels
R1     1.3800-1.3905
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 Wednesday made intra‐day low of JPY110.39/USD and made an intraday high of JPY110.80/USD and settled the day down 0.274% at JPY110.58/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     109.70-109.10
S2     108.50
S3     107.50-106.80

INTRADAY RESISTANCE LEVELS
R1     110.50-111.70
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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