AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trading Monday, maintaining its recent strong tone as rising Covid-19 cases threaten to derail the global economic recovery, prompting a flight to safety. The greenback has benefited of late from investors becoming more risk averse as rising numbers of Covid-19 cases threatened to halt the tepid global economic recovery. The majority of the new cases had been seen in southeast Asia, but infections are now also rising in the U.S. and Europe, even as England lifts most of its social restrictions. U.S. cases of Covid-19 were up 70% over the previous week and deaths up 26%, with outbreaks occurring in parts of the country with low vaccination rates, U.S. Centers for Disease Control and Prevention Director Rochelle Walensky said Friday. The global seven-day average of daily new Covid-19 cases is over half a million for the first time since May, according to Reuters data. Also of interest this week will be Thursday’s policy meeting of the European Central Bank, especially after last week’s release of the central bank's strategic review. The safety of dollars and yen was sought on Monday, keeping the greenback near its strongest in months, as the spread of the delta coronavirus variant shook investors' confidence in growth and left many nervous about England's reopening. The risk sensitive Aussie came under the most pressure among major currencies in the Asia session, dropping to a seven-month low of $0.7373 and sliding for a fifth day in a row on the yen to find its lowest in five months. The dollar rose to stand at its strongest this year on the Thai baht, the Singapore dollar and the Malaysian ringgit as stocks fell and bonds rallied with the jittery mood on what has been dubbed "Freedom Day" in England. Daily infections have been surging from the United States and Europe to Asia and the global seven-day average of new cases each day is over half a million for the first time since May. Traders are now holding their breath as Monday marks the end of most social curbs in England and a shift from suppression to trusting vaccination to prevent serious illness. Sterling was perched at $1.3754, its lowest in more than a week, as the sun rose in London with epidemiologists sceptical and the prime minister, finance minister and health minister themselves isolating as cases spread. Boris Johnson's government is betting fully vaccinated people are less likely to get seriously ill with COVID-19. The week ahead's data calendar is fairly bare until Friday, when global purchasing managers' index figures are published, with policy and virus response set to be in focus in the meantime as lockdowns expand in Asia. There is an outside chance China's benchmark loan prime rate is lowered on Tuesday and the European Central Bank (ECB), which meets on Thursday, has flagged a guidance tweak to reflect its more relaxed stance on inflation overshooting.
  • The dollar edged higher on Friday, logging its largest weekly gain in a month, after upbeat retail sales data boosted expectations that economic growth accelerated in the second quarter. U.S. retail sales unexpectedly increased in June as demand for goods remained strong even as spending was shifting back to services.A survey that showed U.S. consumer sentiment fell sharply and unexpectedly in early July to the lowest level in five months, as inflation worries dented confidence in the economic recovery, did little to dent the dollar's stronger tone. Solid U.S. data and a shift in interest rate expectations after the Federal Reserve flagged in June sooner-than-expected hikes in 2023 have helped lift the dollar in recent weeks and made investors nervous about shorting it. Friday's gains for the dollar came despite Fed Chair Jerome Powell reiterating on Thursday that rising inflation was likely to be transitory and that the U.S. central bank would continue to support the economy.
  • Oil was down Monday morning in Asia, with prices falling more than 1%. Investors continued to digest the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreement to boost output that was reached over the weekend. Under the agreement reached on Sunday, the cartel will add 400,000 barrels a day every month from August 2021 onwards until all the output that was halted due to COVID-19 is revived. The agreement also gives Saudi Arabia, the United Arab Emirates (UAE), Iraq, Kuwait and Russia higher baselines against which their output cuts are measured starting in May 2022. Investors breathed a sigh of relief as the dispute between Saudi Arabia and the UAE that saw the last OPEC+ meeting end without an agreement was resolved. Additionally, other longstanding grievances that threatened the cartel’s unity were also resolved. The market also avoided a price war not unlike the one between Saudi Arabia and Russia that saw the black liquid enter negative territory in April 2020. On the supply side, Iran’s first crude export from outside the Persian Gulf and beyond the Strait of Hormuz is also on investors’ radars. The shipment will leave from Jask in the Gulf of Oman, said Vahid Maleki, director of the Jask Oil Terminal. Meanwhile, COVID-19 cases involving the Delta variant continue to increase and cloud the fuel demand outlook as some countries, including Australia and South Korea, reintroduced restrictive measures to curb their latest outbreaks. The U.K. on Saturday reported the highest number of daily COVID-19 cases since January 2021 ahead of England lifting of most restrictive measures on Jul. 19.
  • Gold was down on Monday morning in Asia. However, lower U.S. Treasury yields in addition to concerns over the rising number of COVID-19 cases globally and its impact on the global economic recovery ca pped losses for the yellow metal. Global shares were also on a downward trend as concerns over rising inflation and the increasing number of COVID-19 cases continue to bite. The number of global COVID-19 cases topped 190,000 as of Jul. 19, according to Johns Hopkins University data. Some countries, such as Australia and South Korea, have re-imposed restrictive measures to curb the spread of their most recent outbreaks involving the virus’ Delta variant. Japan has also reported COVID-19 cases in the Olympic village just days before the Tokyo Olympics are due to open on Jul. 23 Elsewhere in Asia, gold was sold at a discount in India during the previous week for the first time in almost a month as rising prices deterred buyers. Higher prices also deterred buyers in other major Asian hubs.

 

 
Intraday RESISTANCE LEVELS
19th July 2021 R1 R2 R3
GOLD-XAU 1,812-1,820 1,833 1,840-1,846
Silver-XAG 25.50-26.00 26.50 26.90-27.55
Crude Oil 70.90-71.40 72.00 72.60-73.20
EURO/USD 1.1840-1.1910 1.1990 1.2040-1.2080
GBP/USD 1.3750-1.3800 1.3905 1.3965-1.4020
USD/JPY 110.50-111.70 112.50 113.00-113.90

Intraday SUPPORTS LEVELS
19th July 2021 S1 S2 S3
GOLD-XAU 1,800-1,786 1,780 1,769-1,760
Silver-XAG 25.05-24.80 24.50 24.00-23.50
Crude Oil 70.10-69.40 69.00 68.40-67.90
EURO/USD 1.1770-1.1690 1.1610 1.1550-1.1500
GBP/USD 1.3720 1.3685-1.3600 1.3520
USD/JPY 109.70-109.10 108.50 107.50-106.80

Intra-Day Strategy (19th 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 Friday made its intraday high of US$1831.94/oz and low of US$1808.96/oz. Gold down 0.941% at US$1812.06/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 1800-1771 with risk below 1771, targeting 1812-1820-1833 and 1840-1854-1860. Sell in between 1812-1860 keeping stop loss closing above 1860, targeting 1800-1790 and 1771-1767-1755.

 
Intraday Support Levels
S1     1,800-1,786
S2     1,780
S3     1,769-1,760
Intraday Resistance Levels
R1     1,812-1,820
R2     1,833
R3     1,840-1,846

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 Friday made its intraday high of US$26.43/oz and low of US$26.43/oz settled down by 0.974% at US$25.65/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 25.05-23.50, targeting 25.50-26.00-26.65 and 26.90-27.55-27.90 with stop loss should be place on the breakage below 23.50. Sell in between 25.50-28.50 with stop loss above 28.50; targeting 26.00-25.70 and 25.05-24.80-24.00.

 
Intraday  Support Levels
S1     25.05-24.80
S2     24.50
S3     24.00-23.50

Intraday  Resistance Levels
R1     25.50-26.00
R2     26.50
R3     26.90-27.55

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.626 Buy
20-DMA   26.62 Sell
50-DMA   26.15 Sell
100-DMA   26.46 Sell
200-DMA   25.47 Buy
STOCH(5,3)   27.413 Sell
MACD(12,26,9)   -0.3810 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$71.97/bbl, intraday low of US$70.11/bbl and settled up by 0.881% to close at US$71.10/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 oversold region and giving negative crossover for confirmation of bearish 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 70.10-67.90 with risk daily closing below 67.90 and targeting 70.90-71.40-72.00 and 72.60-74.25-75.00. 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     70.10-69.40
S2     69.00
S3     68.40-67.90

Intraday Resistance Levels
R1     70.90-71.40
R2     72.00
R3     72.60-73.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.266 Sell
20-DMA   74.51 Buy
50-DMA   72.21 Buy
100-DMA   70.01 Buy
200-DMA   59.74 Buy
STOCH(5,3)   9.130 Sell
MACD(12,26,9)   1.767 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1791/EUR, high of US$1.1821/EUR and settled the day down by 0.0491% to close at US$1.1806/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 Friday made an intra‐day low of US$1.3759/GBP, high of US$1.3861/GBP and settled the day down by 0.374% to close at US$1.3769/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 1.3750-1.4220 with targets at 1.3720-1.3660-1.3600 and 1.3560-1.3500 stop-loss should be 1.4220. Buy above 1.3720-1.3560 with targets 1.3750-1.3800-1.3905 and 1.3965-1.4025-1.4065 with stop loss closing below 1.3520.

 
Intraday Support Levels
S1     1.3720
S2     1.3685-1.3600
S3     1.3520

Intraday Resistance Levels
R1     1.3750-1.3800
R2     1.3905
R3     1.3965-1.4020

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 Friday made intra‐day low of JPY109.72/USD and made an intraday high of JPY110.33/USD and settled the day up 0.0701% at JPY110.03/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 109.70-106.50 with targets of 110.90-111.70-112.20 with stop below 106.00. Sell below 110.50-114.50 with risk above 114.50 targeting 109.70-109.00-108.50-108.00.

 
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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