AAFX TRADING

Daily Market Lookup

  • The dollar was headed for its best weekly gain in about a month on Friday, supported by investors' drift toward safety as rising COVID-19 infections loomed over the pandemic recovery, while a hot inflation reading sharply lifted the New Zealand dollar. The kiwi was the biggest mover amongst majors in the Asia session, and was last up 0.6% at $0.7020, after consumer prices rose far faster than expected, bringingforward markets' rate hike expectations to August. Solid U.S. data and a shift in interest rate expectations after the Federal Reserve flagged sooner-than-expected hikes in 2023 have put a floor under the greenback over the past month and made investors nervous about shorting it. The dollar was broadly steady elsewhere on Friday but heading for weekly gains, with a rise over the week so far of roughly 0.5% against the euro and sterling and 0.7% against the risk-sensitive Australian dollar. The U.S. dollar index, which measures the greenback against a basket of currencies, was flat at 92.562 on Friday and up 0.5% for the week, which if sustained would mark its biggest weekly percentage gain since the week ended June 20 Ahead on Friday, traders are looking to U.S. retail sales data and consumer confidence for any reading on inflation and the strength of the recovery. The mood across financial markets has been jittery for a couple of weeks as virus infections are surging. Treasuries have rallied for a third week in a row with no obvious catalyst but in tandem with worries that the new infections could dent recovery progress, that slowing Chinese growth puts the brakes on global growth and that U.S. inflation looks transitory, or at least under central bankers' control. The safe-haven yen has also been firm, with a loss of 0.1% on the dollar making it second only to the kiwi as the best-performing major against the strong dollar. The yen is headed for its best week in a month against the euro. The Thai baht, among the currencies most battered by the pandemic's resurgence, sat at a three-month low and tracked toward a fifth consecutive weekly loss as the tourism-dependent country posted record infections.
  • The dollar was down on Friday morning in Asia. However, the greenback is set for its best weekly gain in about a month as ongoing investor worries about a quicker-than-expected U.S. interest rate hike and by rising COVID-19 infections capped losses. Investors are now pricing an 86% chance that the Reserve Bank of New Zealand will hike interest rates in August, earlier than expected, becoming the first developed-market central bank to exit from emergency policy settings should it do so. However, a firm greenback meant that the New Zealand dollar remained within recent ranges. With Speizer adding that recent U.S. data fed into higher yields and rate-increase expectations, investors now await data on June core retail sales as well as the Michigan consumer sentiment and expectations indexes, due later in the day. U.S. Treasuries recorded a third consecutive week of gains, with worries over surging COVID-19 outbreaks involving the Delta variant and bets on inflation being transitory pulling long-end yields lower. The Thai baht, one of the currencies most battered by the recent COVID-19 outbreaks, was set for a fifth consecutive weekly loss as the country posted a record number of daily cases.
  • Oil was up Friday morning in Asia, but was headed towards the biggest weekly decline since mid-March 2021. Worsening outbreaks of COVID-19 involving the Delta variant in some countries and uncertainty over an Organization of the Petroleum Exporting Countries and allies (OPEC+) deal to boost supply clouded the short-term outlook for the black liquid, however. COVID-19 outbreaks involving the Delta variant have prompted some countries to tighten restrictive measures, thus crimping fuel demand. Indonesia surpassed India in new daily COVID-19 cases during the past week, becoming Asia Pacific’s new virus epicenter in the process. A second Australian city entered a lockdown as Melbourne joined Sydney, which in turn extended current restrictions through the end of July. In the U.S., Los Angeles County mandated the wearing of face masks indoors, including those who have been vaccinated, as COVID-19 case numbers surged Meanwhile, the United Arab Emirates (UAE) continues to move closer towards a deal with Saudi Arabia as talks continue and few details were revealed. The deal would resolve a dispute that has dragged on for weeks and allow OPEC+ to boost output in the following months. The need for OPEC+ supplies will continue to climb, remaining well above the group’s current production and exceeding pre-COVID-19 levels by the second half of 2022, the cartel said in a report on Thursday. A potential lull in the first quarter of 2021, however, could see the market return to surplus. Oil’s rally in seven of the past eight months ran into a snag in July as the global economy showed signs of recovery from COVID-19. The International Energy Agency warned earlier in the week that the market would significantly tighten if OPEC+ cannot reach a deal also tilted risk upwards. However, Citigroup Inc (NYSE:C). predicted Brent futures will rise above $80 a barrel even with a deal.
  • Gold was down on Friday morning in Asia but was headed for a fourth consecutive weekly gain. The yellow metal was boosted by U.S. Federal Reserve Chairman Jerome Powell’s insistence that any inflation will be transitory and that the central bank would continue to support the economy. Powell’s comments were given during his second day of testimony before the House of Representatives Financial Services Committee on Thursday, where he repeated his pledge of “powerful support” for the U.S. economic recovery from COVID-19. However, investors widely expect that the Fed will begin asset tapering by the end of 2022. Some even predicted an interest rate hike as early as 2022 but acknowledged that recent COVID-19 outbreaks involving the Delta variant remain the biggest economic risk. In Asia, the Bank of Japan (BOJ) left its yield curve control (YCC) target unchanged at -0.1% for short-term interest rates and 0% for 10-year bond yields as it concluded a two-day meeting earlier in the day. Investors also continued to digest the second-quarter GDP figure from China, a leading consumer of gold. As higher raw material costs and new COVID-19 outbreaks led to slower growth, expectations are growing that policymakers may have to do more to support the economic recovery. Meanwhile, Barrick Gold (NYSE:GOLD) Corp said on Thursday its second-quarter gold production fell 5.4% from the previous quarter. Planned maintenance shutdowns at Nevada Gold Mine in the U.S. and Pueblo Viejo in the Dominican Republic contributed to the decline.

 

 
Intraday RESISTANCE LEVELS
16th 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 71.40-72.00 72.60 73.20-74.25
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
16th 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 70.90-70.00 69.40 69.10-59.50
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 (16th 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$1834.06/oz and low of US$1820.33/oz. Gold up 0.114% at US$1829.24/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 Thursday made its intraday high of US$26.38/oz and low of US$26.14/oz settled up by 0.373% at US$26.32/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     70.90-70.00
S2     69.40
S3     69.10-59.50

Intraday Resistance Levels
R1     71.40-72.00
R2     72.60
R3     73.20-74.25

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 Thursday an intraday low of US$1.1795/EUR, high of US$1.1849/EUR and settled the day up by 0.511% to close at US$1.1811/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 Thursday made an intra‐day low of US$1.3804/GBP, high of US$1.3898/GBP and settled the day down by 0.2655% to close at US$1.3822/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 Thursday made intra‐day low of JPY109.70/USD and made an intraday high of JPY110.08/USD and settled the day down 0.133% at JPY109.80/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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