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Daily Market Lookup

  • The dollar pushed higher in early European trade Friday with the safe haven benefiting from investors becoming more risk averse on concerns of the global economic recovery as Covid-19 cases surge again. Concerns have been growing that the fast-spreading delta variant of the Covid-19 virus could hamper a global economic revival that is already showing pockets of weakness. These worries resulted in the benchmark 10-year U.S. Treasury yield falling to its lowest in nearly five months at 1.25% late Thursday, pressuring the dollar, but has since rebounded to 1.34%. It was as high as 1.54% just two weeks ago. San Francisco Federal Reserve President Mary Daly told the Financial Times in an interview published on Friday that: “One of the biggest risks to our global growth going forward is that we prematurely declare victory on Covid." Japan has already declared a state of emergency for Tokyo as cases rise, meaning that the upcoming Olympic Games will go ahead largely without spectators. Southeast Asia is now suffering record rises in deaths and cases, while infections are also rising in the likes of the U.K. and the U.S. Evidence of the patchy nature of the economic recovery came with the weekly U.S. unemployment data on Thursday, as the number of Americans filing new claims for unemployment benefits rose unexpectedly last week.
  • The dollar was up on Friday morning in Asia, as concerns over the global economic recovery from COVID-19 continue to mount. Safe-haven currencies such as the Japanese yen and Swiss franc also gained, while riskier currencies such as the Australian and New Zealand dollars remained near multi-month lows. The USD/JPY pair edged up 0.15% to 109.95, with the yen holding onto gains from the previous session's 0.8% rally. However, Japan has declared a fresh state of emergency in Tokyo, three weeks before the Olympic Games are due to open in the city, as COVID-19 case numbers continue to rise. The current lockdown in Sydney could be extended as the city struggles to contain its latest outbreak. Chinese data, released earlier in the day, said the consumer price index (CPI) grew a smaller-than-expected 1.1% year-on-year in June, while contracting a bigger-than-expected 0.4% month-on-month. Meanwhile, the producer price index (PPI) grew 8.8% year-on-year. Bonds rallied while global stocks plunged as concerns about the outbreaks involving the Delta variant of COVID-19 derailing economic recovery mounted. The benchmark U.S. Treasury yield fell to a nearly five-month low of 1.25% during the previous session, from the 1.5440%-high hit two weeks ago. This in turn has put pressure on the greenback Data released on Thursday also said 373,000 initial jobless claims were filed in the U.S. over the past week. The higher-than-expected number was another indication that the labor market’s recovery from COVID-19 continues to be uneven.
  • 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. Gold is heading for a third weekly advance, with the haven metal gaining on anxiety about the spread of Covid-19 variants and the prospect of prolonged dovish monetary policy. Bullion is winning back investors after a bleak June, with fears that the world’s exit from the pandemic may be more fraught than anticipated. Renewed virus fears around the world are a boon for bullion because they may mean governments must extend monetary support to still-fragile economies. Those risks were underscored this week by Federal Reserve minutes that highlighted continued uncertainties, and on Thursday by a rise in U.S. jobless claims. China’s surprise hint that it could unleash more liquidity to the economy also added to the sense that headwinds to a global recovery remain strong.
  • Oil was down Friday morning in Asia even as data released on Thursday said U.S. fuel inventories fell and demand surged as economic recovery drove consumption Crude oil supply data from the U.S. Energy Information Administration (EIA) showed a draw of 6.866 million barrels. Forecasts prepared by Investing.com predicted a 4.033 million-barrel draw, while a 6.718 million-barrel draw was recorded during the previous week. The EIA also said fuel demand surged to 10 million barrels a day in the week before Jul. 4 U.S. holiday. Meanwhile, crude oil supply data from the American Petroleum Institute released a day before showed a draw of 7.983 million barrels. After an 11% gain in June, the oil market faces challenges this month amid rising uncertainties for both supply and demand. The U.S. benchmark is set to post the first weekly decline since the middle of May 2021, with an ongoing dispute between Saudi Arabia and the United Arab Emirates about supply increase and the spread of the COVID-19 Delta variant clouding the market. The Organization of the Petroleum Exporting Countries and allies (OPEC+) is yet to reach a decision on supply policy and could keep output steady in August, as members may add barrels unilaterally. Meanwhile, fuel consumption rose, driven by economic reopenings in the U.S. and Europe but overshadowed by the spread of the Delta variant.

 

 
Intraday RESISTANCE LEVELS
9th July 2021 R1 R2 R3
GOLD-XAU 1,805-1,812 1,820 1,833-1,840
Silver-XAG 26.00-26.50 26.90 27.55-27.90
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
9th July 2021 S1 S2 S3
GOLD-XAU 1,790 1,780 1,767 -1,760
Silver-XAG 25.70-25.05 24.80 24.50-24.05
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 1.3650-1.3600
USD/JPY 109.70-109.10 107.50-106.80 107.50-106.80

Intra-Day Strategy (9th 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$1818.34/oz and low of US$1794.20/oz. Gold down 0.0454% at US$1802.54/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 1790-1771 with risk below 1771, targeting 1805-1812-1820 and 1833-1840-1852. Sell in between 1805-1840 keeping stop loss closing above 1840, targeting 1805-1790-1771 and 1767-1755.

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

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$26.20/oz and low of US$25.79/oz settled down by 0.970% at US$25.90/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 25.70-24.80, 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     25.70-25.05
S2     24.80
S3     24.50-24.05

Intraday  Resistance Levels
R1     26.00-26.50
R2     26.90
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$72.67/bbl, intraday low of US$70.25/bbl and settled up by 1.256% to close at US$72.63/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 Thursday an intraday low of US$1.1782/EUR, high of US$1.1867/EUR and settled the day up by 0.452% to close at US$1.1824/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 Thursday made an intra‐day low of US$1.3741/GBP, high of US$1.3804/GBP and settled the day down by 0.0130% to close at US$1.3780/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 and 1.3660-1.3600-1.3560 stop-loss should be 1.4220. Buy above 1.3770-1.3560 with targets 1.3800-1.3905-1.3965 and 1.4025-1.4065-1.4090 with stop loss closing below 1.3660.

 
Intraday Support Levels
S1     1.3770
S2     1.3720
S3     1.3650-1.3600

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 Thursday made intra‐day low of JPY109.52/USD and made an intraday high of JPY110.67/USD and settled the day down 0.274% at JPY109.63/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     107.50-106.80
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

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