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Daily Market Lookup

  • The dollar traded largely unchanged in Europe early Thursday, stabilizing after Wednesday’s weakness following Fed chair Jerome Powell insistence that it was too soon to withdraw the central bank’s hefty monetary support for the economy. Soaring U.S. inflation, with consumer prices rising by 5.4% in June and producer prices by 7.3%, has prompted some FOMC members to suggest the time was coming for the U.S. central bank to rein in its massive bond-buying program. However, Powell once again shrugged off the spike in U.S. inflation as only temporary, saying in testimony before Congress on Wednesday that it would be a mistake to act prematurely and that economic conditions for tapering bond buying was "still a ways off" The Federal Reserve chairman returns to Capitol Hill later on Thursday for further testimony, and traders will be looking to see if he moderates his language over tapering at all. Ahead of his latest appearance comes the release of the weekly initial jobless claims data, the most current indication of the strength of the U.S. labor market - a key focus for the Fed given the market is still 7.5 million jobs short of its level before the pandemic erupted in early 2020. Still, dollar losses have been limited amid concerns over spiking Covid-19 cases, particularly in southwest Asia but also in the U.S. and the U.K., even with England set to fully reopen next week.
  • The dollar was up on Thursday morning in Asia but started a retreat from recent peaks. Investors digested economic data from China showing a slowdown in GDP growth and the economic recovery from COVID-19 alongside further dovish comments from U.S. Federal Reserve Chairman Jerome Powell over. Data released earlier in the day said the Chinese GDP grew 7.9% year-on-year and 1.3% quarter-on-quarter in the second quarter. Industrial production also grew 8.3% year-on-year in June while the unemployment rate was unchanged at 5%. The data follows the People’s Bank of China’s surprise cut in the reserve requirement ratio during the previous week. Powell testified before the House of Representatives Financial Services Committee on Wednesday, where he said that monetary policy would remain accommodative and that inflationary pressures will likely moderate. However, he also warned that the Fed would act if inflation was persistently and materially above its 2% target. Investors now await Powell’s second round of testimony later in the day. Investors now look to Jul. 19, when the U.K. hopes to lift almost all its remaining COVID-19 restrictions.
  • The dollar pared recent gains on Wednesday after Federal Reserve Chair Jerome Powell told Congress the U.S. economy was "still a ways off" from levels the central bank wanted to see before tapering its monetary support. His comments came as a report showed U.S. producer prices rose more than expected, posting their biggest annual increase in more than 10-1/2 years. A day earlier, data showed June U.S. inflation hit its highest in more than 13 years. The strong inflation has lifted the greenback to just shy of its three-month high, as focus sharpened on when central banks around the world will begin withdrawing pandemic-era stimulus. That focus intensified on Wednesday after the Reserve Bank of New Zealand said it was ending bond purchases, raising expectations it could raise interest rates as soon as August. The Bank of Canada said it would cut its weekly bond purchases to C$2 billion ($1.6 billion) from C$3 billion. But Powell, at the beginning of his two-day testimony to Congress, said the Fed is firm in its belief that current price increases are tied to the economic reopening and are transitory. The dollar rose almost 3% last month after the Fed's hawkish pivot forced markets to reassess when tapering and rate hikes might start. It firmed 0.6% on Tuesday after the inflation data. The kiwi soared against the greenback after New Zealand's central bank announced it would cut short a NZ$100 billion ($70 billion) bond-buying program. It added to the gains after Powell's comments, standing 1.29% higher. Analysts have brought forward calls for a rate rise to as early as August, which would put New Zealand at the forefront of countries to raise interest rates. The divergence in monetary policy outlooks pushed the Australian dollar 0.74% lower against its New Zealand counterpart to NZ$1.0636, the lowest since early June.
  • Oil was down Thursday morning in Asia, with a recent rally fizzling, as a build in U.S. gasoline inventories and a potential Organization of the Petroleum Exporting Countries and allies (OPEC+) agreement to increase supply clouded the black liquid’s outlook. Tuesday’s U.S. crude oil supply data from the U.S. Energy Information Administration (EIA), showed a draw of 7.897 million barrels for the week to Jul. 9, an eighth consecutive week of draws. The draw was bigger than both the 4.359-million-barrel draw in forecasts prepared by Investing.com and the 6.866-million-barrel draw recorded during the previous week. EIA data also showed a 1.039-million-barrel build in gasoline inventories. Crude oil supply data released by the American Petroleum Institute a day before showed a draw of 4.079 million barrels. Saudi Arabia and the United Arab Emirates (UAE) reportedly resolved a dispute that caused the breakdown of an OPEC+ meeting earlier in the month and hung August supply increases in the balance. The latest breakthrough proposal gives the UAE a higher input quota, with talks continuing. However, other OPEC+ members are also seeking better terms, with Iraq reportedly pursuing a higher production baseline. With the prospect of more supply from OPEC+ and crude nearing overbought levels, “it’s not surprising to see it down,” Tyche Capital Advisors LLC managing member of the global macro program Tariq Zahir told Bloomberg. However, investors remain concerned about the recent outbreaks of COVID-19 involving the Delta variant in several countries and its impact on fuel demand. Australia extended a lockdown in Sydney by a further two weeks while daily cases in South Korea reached a record high of 1,600 as of Jul. 15.

 

 
Intraday RESISTANCE LEVELS
15th July 2021 R1 R2 R3
GOLD-XAU 1,833-1,840 1,846 1,854-1,860
Silver-XAG 26.50-26.90 27.55 27.90-28.50
Crude Oil 72.00-72.60 73.20 74.25-75.00
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
15th July 2021 S1 S2 S3
GOLD-XAU 1,820-1,812 1,805 1,790-1,780
Silver-XAG 26.00-25.70 25.05 24.80-24.50
Crude Oil 71.40-70.90 70.00 69.40-69.10
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 (15th 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$1829.79/oz and low of US$1804.46/oz. Gold up 1.081% at US$1827.06/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 1820-1771 with risk below 1771, targeting 1833-1840 and 1854-1860. Sell in between 1833-1860 keeping stop loss closing above 1860, targeting 1820-1805-1790 and 1771-1767-1755.

 
Intraday Support Levels
S1     1,820-1,812
S2     1,805
S3     1,790-1,780
Intraday Resistance Levels
R1     1,833-1,840
R2     1,846
R3     1,854-1,860

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 Wednesday made its intraday high of US$26.76/oz and low of US$25.99/oz settled down by 0.970% 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 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 Wednesday made an intra‐day high of US$74.89/bbl, intraday low of US$71.72/bbl and settled down by 2.838% to close at US$72.42/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 71.40-69.10 with risk daily closing below 69.10 and targeting 72.00-72.60-72.20 and 74.25-75.00-75.80. Sell in between 71.40-75.00 with stop loss at 75.00; targeting 72.60-72.00 and 71.40-70.90.

 
Intraday Support Levels
S1     71.40-70.90
S2     70.00
S3     69.40-69.10

Intraday Resistance Levels
R1     72.00-72.60
R2     73.20
R3     74.25-75.00

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$1.1838/EUR and settled the day up by 0.511% to close at US$1.1835/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 Wednesday made an intra‐day low of US$1.3800/GBP, high of US$1.3891/GBP and settled the day up by 0.3606% to close at US$1.3859/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 Wednesday made intra‐day low of JPY109.93/USD and made an intraday high of JPY110.69/USD and settled the day down 0.611% at JPY109.94/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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