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Daily Market Lookup

  • The U.S. dollar held near a three-month high against its rivals on Wednesday as traders took a breather before Fed chair Jerome Powell's comments a day after data showed U.S. inflation soaring to a 13-year high in June. The greenback is likely to take its direction from Powell's two-day testimony before Congress that starts later on Wednesday. Growing short bets on the dollar in the futures markets in recent weeks also made traders wary of shorting the greenback aggressively. Markets are seeking clues on when the central bank might consider tapering its stimulus and whether it still holds the oft-reiterated view that higher inflation is transitory. The kiwi dollar was the only currency to hold its own against a broadly firm greenback after New Zealand's central bank announced an end to its pandemic-linked bond purchases, paving the way for an interest rate hike by year-end. The U.S. dollar, meanwhile, retreated marginally from three-month highs hit against the euro after data a day earlier showed inflation had scaled 13-year highs in June amid supply constraints and higher travel-related costs. Attention has turned in the meantime to central banks that are proceeding with their plans to exit pandemic-era stimulus, and to economic growth fears stemming from a global upsurge in COVID-19 caseloads.
  • The dollar edged lower in early European trade Wednesday, handing back some of the previous session’s sharp gains after a jump in U.S. inflation raised expectations of an early move by the Federal Reserve to tighten monetary policy. U.S. consumer prices rose by 0.9% in June, the most in 13 years, with the year-on-year figure soaring 5.4% as the economic recovery gathered momentum. This puts the spotlight firmly on Fed chair Jerome Powell as he testifies before Congress on Wednesday and Thursday, with the market looking for any signals on the timing of a tapering of stimulus and higher interest rates. While this will increase the pressure on the Bank of England to act, the data also showed factory gate prices rising more slowly, suggesting that the impact of the sharp commodity price rises is fading. The country’s economy has been less affected by the Covid-19 pandemic than many, growing 1.6% in the first quarter, raising concerns that the stimulative monetary policies could lead to overheating. There are more central bank meetings due Wednesday. The Bank of Canada is widely expected to announce further asset tapering, while Turkey’s central bank is likely to keep interest rates unchanged for the fourth consecutive month given a weak currency and rising prices.
  • The dollar was down on Wednesday morning in Asia, hitting a three-month high versus the euro and a one-week high versus the yen. Higher-than-expected inflation in the U.S. re-triggered bets that the U.S. Federal Reserve will tighten its monetary policy faster than expected U.S. consumer prices rose by the most in 13 years in June, with the core consumer price index (CPI) rising a higher-than-expected 0.9% month-on-month. Supply constraints and a continued rebound in the costs of travel-related services from COVID-19-depressed levels as the economic recovery progresses contributed to rising inflationary pressures. Investors now await Fed Chairman Jerome Powell's testimony before Congress on Wednesday and Thursday. Although Powell has repeatedly insisted that higher inflationary pressures would be temporary, his testimony will be scrutinized for any hints on when the central bank will begin asset tapering and hike interest rates. Other central banks will also hand down their policy decisions later in the week, with the Bank of Korea’s decision due on Thursday and the Bank of Japan’s decision due a day later. The U.S. dollar climbed to a 5-day high against a basket of currencies on Tuesday after data showed U.S. inflation data for June coming in hotter than expected, raising the prospect that inflationary concerns are set to linger. Traders are looking forward to Powell testifying before Congress on Wednesday and Thursday for any signals on the timing of potential U.S. tapering. Powell has repeatedly stated that higher inflation will be transitory, noting that he expected supply chains to normalize and adapt. Treasury Secretary Janet Yellen shares that view. The possibility of U.S. stimulus withdrawal - brought to the fore by a surprise shift in tone last month from the Fed - has boosted the dollar in recent weeks despite a renewed rise in coronavirus cases in many parts of the world. Modest strength in the price of oil, a major export for Canada, failed to stanch the Canadian currency's losses against its U.S. counterpart. The loonie was down 0.5% to a four-day low against the dollar. The Canadian central bank is due to update its economic forecasts at a policy announcement on Wednesday.
  • Oil was down Wednesday morning in Asia, after data showing that China’s crude imports dropped in the first half of 2021 triggered fuel demand concerns. However, the black liquid still remained near a one-week high as supply concerns persist alongside the economic recovery from COVID-19. Crude imports in China, the world’s top oil importer, reportedly dropped by 3% from January to June 2021 year-on-year. Import quota shortages, refinery maintenance and rising global prices led to reduced purchases that resulted in the first such contraction since 2013. The note referred to the ongoing disagreement over supply policy within the Organization of the Petroleum Exporting Countries and allies (OPEC+), which has left the output increase for August, now less than three weeks away, in limbo. The cartel is yet to meet after talks held at the beginning of the month ended without agreement. Meanwhile, the International Energy Agency said global withdrawals from storage in the third quarter of 2021 are forecast to be the most in at least a decade, thanks to early June stock draws in the U.S. Europe and Japan. U.S. crude oil supply data from the American Petroleum Institute released on Tuesday showed a draw of 4.079 million barrels for the week ended Jul. 9. The draw was smaller than both the 4.333-million-barrel draw in forecasts prepared by Investing.com and the 7.983-million-barrel draw recorded during the previous week. Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.

 

 
Intraday RESISTANCE LEVELS
14th 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 1.1840-1.1910 1.1990 1.2040-1.2080
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
14th 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 74.00-73.20 72.60 72.00-71.40
EURO/USD 1.1770-1.1690 1.1610 1.1550-1.1500
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 (14th 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$1817.13/oz and low of US$1798.60/oz. Gold up 0.0869% at US$1807.45/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 Tuesday 0made its intraday high of US$26.33/oz and low of US$25.92/oz settled down by 0.870% at US$25.97/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 Monday made an intra‐day high of US$74.93/bbl, intraday low of US$73.11/bbl and settled up by 1.426% to close at US$73.65/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 74.00-70.10 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 74.50-76.50 with stop loss at 76.50; targeting 73.10-72.60-72.00 and 71.40-70.90.

 
Intraday Support Levels
S1     74.00-73.20
S2     72.60
S3     72.00-71.40

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 Wednesday an intraday low of US$1.1771/EUR, high of US$1.1874/EUR and settled the day down by 0.706% to close at US$1.1775/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 1.1770-1.1600 with risk below 1.1600, targeting 1.1840-1.1910-1.1990 and 1.2040-1.2100.

 
Intraday Support Levels
S1     1.1770-1.1690
S2     1.1610
S3     1.1550-1.1500

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$1.3798/GBP, high of US$1.39040/GBP and settled the day down by 0.505% to close at US$1.3809/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 Tuesday made intra‐day low of JPY110.19/USD and made an intraday high of JPY110.64/USD and settled the day up 0.241% at JPY110.62/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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