AAFX TRADING

Daily Market Lookup

  • The dollar was down on Tuesday morning in Asia as investors await U.S. inflation data for clues about the likely timeline for asset tapering and interest rate hikes. They also digested better-than-expected Chinese trade data. Chinese trade data released earlier in the day said that exports rose 32.2% year-on-year, imports grew 36.7% year-on-year and the trade balance stood at $51.53 billion in June. The GBP/USD pair inched up 0.06% to 1.3888, with almost all the remaining COVID-19 restrictions in England due to be released on Jul. 19 despite a climbing number of cases. Investors now await the U.S. consumer price index (CPI) and the producer price index (PPI) for June, with the greenback holding modest gains against sterling, the Australian and New Zealand dollars and the Japanese yen ahead of the CPI’s release later in the day. The PPI is due later in the week. Meanwhile, Societe Generale strategist Kit Juckes said the reaction would be bigger if inflation falls short, leading investors to bet the U.S. Federal Reserve can maintain an easy monetary policy for longer, with the yen a clear beneficiary. With U.S. interest rate expectations driving the U.S. currency, it has gained nearly 2% since June, after the Fed sprung a surprise hawkish tone as it handed down its latest policy decision. The Fed’s projection of sooner-than-expected interest rate hikes in 2023 also cleared out huge bets on a falling dollar. Investors are increasingly turning to longer data bonds as the global economic recovery from COVID-19 also slows down. Fed Chairman Jerome Powell will also testify before Congress on Wednesday and Thursday, which will be monitored for both his response to the inflation figures as well as hints on when the central bank will begin asset tapering. Other officials including Fed Minneapolis President Neel Kashkari, Fed Atlanta President Raphael Bostic and Fed Boston President Eric Rosengren will make appearances later in the day ahead of Powell. The dollar is largely unchanged in early European trade Tuesday, with traders adopting a cautious stance ahead of the release of the latest U.S. inflation data which could influence the Federal Reserve’s monetary policy. The surprise shift in tone by the Federal Reserve last month, in bringing forward expectations of the first interest rate hike to 2023, has helped the dollar in recent weeks. This change was based on the U.S. economic recovery proceeding more quickly than previously expected, including a sharp rise in consumer inflation. These expectations have been toned down in recent days, especially as Covid-19 cases started to rise again. Fed Chair Jerome Powell is set to give his semi-annual testimony to Congress on Wednesday and Thursday this week. He has consistently taken a dovish stance that the surge in prices would prove temporary, and he could use this platform to again rein in expectations that the central bank will move quickly to normalize monetary policy. The central bank is widely expected to leave its official cash rate at 0.25%, but traders will be looking for signals that it may begin tightening monetary policy later this year on the back of a run of strong economic data.
  • Gold was up on Tuesday morning in Asia, steadying from the one-week low hit during the previous session. The dollar weakened ahead of U.S. inflation data that could indicate when asset tapering by the U.S. Federal Reserve is likely to begin. The New York Federal Reserve’s monthly survey said investors widely expect the economy to continue its rapid recovery from COVID-19 over the next year. Forecasts for inflation, earnings, income growth and spending all also increased in June, according to the report. Investors also await the consumer price index for June, due later in the day, as well as the producer price index due later in the day. Fed Chairman Jerome Powell will also testify before Congress on Wednesday and Thursday, with his comments to be scrutinized for hints on when the central bank could start asset tapering. Across the Atlantic, the European Central Bank (EBC) will meet in the following week to discuss its shift to a 2% inflation target as well as its monetary policy moving forward. Other central banks handing down policy decisions include the Reserve Bank of New Zealand on Wednesday, the Bank of Korea on Thursday and the Bank of Japan on Friday. With the U.K. due to remove almost all its remaining COVID-19 restrictions in England on Jul. 19, Prime Minister Boris Johnson on Monday urged caution as the number of cases increased.
  • Oil was up Tuesday morning in Asia. The black liquid clawed back some gains from Monday’s losses ahead of U.S. crude oil supply data from the American Petroleum Institute (API) with investors expecting a further decline in inventories. Investors continue to monitor OPEC+’s progress in resolving a price dispute between Saudi Arabia and the United Arab Emirates. The dispute prevented the cartel from reaching a deal to raise oil output from August 2020 onwards, with another policy meeting within the week reportedly unlikely. Investors now await the API crude oil supply data, due later in the day. U.S. crude inventories have fallen to their lowest levels since February 2020 in the week to Jul. 2 thanks to several consecutive weeks of draws. A rally in global stocks, with U.S. equities closing at record levels during the previous session, also boosted investor sentiment. Fresh restrictive measures to contain COVID-19 outbreaks involving the Delta variant of the virus in countries such as Australia and South Korea could also dim the fuel demand outlook as economic recovery slows down. COVID-19 vaccination rates are also slowing in some countries, while others face vaccine shortages as the Delta variant becomes dominant, according to the World Health Organization. U.S. crude inventories were expected to fall for an eighth consecutive week, while gasoline stocks also declined, a preliminary Reuters poll showed on Monday. Crude stockpiles have declined steadily for several weeks, with U.S. inventories falling to the lowest since February 2020 in the week to July 2. China's crude imports in June edged up slightly from May, though they were down sharply from a year earlier when refiners snapped up cheap oil to supply a market recovering from the coronavirus. Investors shrugged off the Energy Information Administration's (EIA) monthly drilling productivity report which said crude output from seven major shale formations is expected to rise by 42,000 bpd in August, to 7.907 million bpd, compared with a 28,000 bpd rise in July. Still, reports from around the globe of surging infections kept some investors cautious. The World Health Organization warned the Delta variant was becoming dominant and many countries had yet to receive enough doses of vaccine to secure their health workers. Meanwhile, OPEC+ is yet to make progress closing divisions between Saudi Arabia and the United Arab Emirates that last week prevented a deal to raise oil output, making another policy meeting this week less likely, OPEC+ sources said. Russian President Vladimir Putin and his U.S. counterpart Joe Biden did not discuss OPEC+ or global oil prices during an hour-long phone call on Friday, the Kremlin said on Monday.

 

 
Intraday RESISTANCE LEVELS
13th July 2021 R1 R2 R3
GOLD-XAU 1,812 1,820 1,833-1,840
Silver-XAG 26.50-26.90 27.55 27.90-28.50
Crude Oil 74.25-75.00 75.80 76.50-77.20
EURO/USD 1.1910-1.1990 1.2040 1.2080-1.2140
GBP/USD 1.3905-1.3965 1.4020 1.4070-1.4140
USD/JPY 110.50-111.70 112.50 113.00-113.90

Intraday SUPPORTS LEVELS
13th 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 73.20-72.60 72.00 71.40-71.00
EURO/USD 1.1840-1.1800 1.1750 1.1690-1.1600
GBP/USD 1.3800-1.3770 1.3720 1.3650-1.3600
USD/JPY 109.70-109.10 108.50 107.50-106.80

Intra-Day Strategy (13th 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 Monday made its intraday high of US$1810.74/oz and low of US$1791.50/oz. Gold up 0.103% at US$1805.80/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 and 1833-1840-1852. Sell in between 1812-1840 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
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 Monday made its intraday high of US$26.26/oz and low of US$25.85/oz settled up by 0.341% at US$26.15/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 26.05-24.80, 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 Friday made an intra‐day high of US$74.24/bbl, intraday low of US$72.53/bbl and settled down by 0.620% to close at US$73.57/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 neutral 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 73.20-70.10 with risk daily closing below 70.00 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     74.25-75.00
R2     75.80
R3     76.50-77.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.920 Sell
20-DMA   72.96 Buy
50-DMA   69.15 Buy
100-DMA   65.57 Buy
200-DMA   56.23 Buy
STOCH(5,3)   50.130 Buy
MACD(12,26,9)   1.767 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.1835/EUR, high of US$1.1879/EUR and settled the day down by 0.127% to close at US$1.1858/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 1.1840-1.1600 with risk below 1.1600, targeting 1.1910-1.1990-1.2040 and 1.2100-1.2140.

 
Intraday Support Levels
S1     1.1840-1.1800
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 Monday made an intra‐day low of US$1.3838/GBP, high of US$1.3909/GBP and settled the day down by 0.0482% to close at US$1.3881/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 1.3905-1.4220 with targets at 1.3850-1.3770-1.3720 and 1.3660-1.3600-1.3560 stop-loss should be 1.4220. Buy above 1.3825-1.3560 with targets 1.3905-1.3965 and 1.4025-1.4065-1.4090 with stop loss closing below 1.3660.

 
Intraday Support Levels
S1     1.3800-1.3770
S2     1.3720
S3     1.3650-1.3600

Intraday Resistance Levels
R1     1.3905-1.3965
R2     1.4020
R3     1.4070-1.4140

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 Monday made intra‐day low of JPY109.97/USD and made an intraday high of JPY110.39/USD and settled the day up 0.249% at JPY110.34/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   106.00 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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