AAFX TRADING

Daily Market Lookup

  • Safe-harbour currencies like the yen and dollar traded near multi-month highs against the riskier Australian dollar and British pound on Tuesday, as fears grow that a rampant coronavirus variant could upend the global economic recovery. The fast-spreading Delta variant of the coronavirus is now the dominant strain worldwide, and has been accompanied by a surge in infections around the United States, particularly in areas where vaccinations have lagged. Meanwhile, Boris Johnson's "freedom day" - ending over a year of COVID-19 lockdown restrictions in England - was marred by surging infections and the British prime minister's own forced self-isolation after Health Minister Sajid Javid tested positive for the virus. The European Central Bank announces policy on Thursday, with market participants keen to see how the monetary authority implements changes to its strategy unveiled earlier this month. The dollar traded at multi-month highs in Europe Tuesday, continuing to benefit from its safe haven status amid concerns rising Covid-19 will hinder the global economic recovery. The highly-contagious delta variant of the Covid-19 virus is now the dominant strain worldwide, and this has resulted in a jump in coronavirus cases across Asia, where vaccination programs are in their infancy, and also in parts of Europe and the United States, largely among the unvaccinated. The average number of daily new Covid-19 cases in the United States has tripled in the past 30 days, according to an analysis of Reuters data, climbing over 30,000 on the weekend. Expectations for a cut had been growing after a surprise lowering of bank reserve requirements earlier this month, prompting questions over whether that move was merely the fine-tuning of banking system liquidity or the starting of an easing cycle to combat the economic slowdown. Thursday sees the latest policy meeting of the European Central Bank, the first at which the bank will have to discuss how to implement its new strategy. Analysts expect it to turn more dovish, despite the current surge in inflation. German producer price inflation climbed to a 40-year high, according to figures released by Destatis earlier Tuesday.
  • The dollar was up on Tuesday morning in Asia, with investors turning to safe-haven assets as concerns over the impact of COVID-19 outbreaks involving the Delta variant on economic recovery remain. The greenback remained near multi-month highs against its riskier Australian counterpart and the pound, alongside the Japanese yen The yen surged to 80.05 per Australian dollar during the previous session for the first time since early February 2020, and traded at 80.40 early in the Asian session. It also rallied to an almost three-month high of 149.35 against the pound overnight. Meanwhile, the dollar strengthened to an almost eight-month high of $0.73225 against its Australian counterpart at the beginning of the trading week, and hit its highest level since early February 2021 at $1.3655 against the pound. The yen also outpaced the dollar, rising to 109.07 against the U.S. currency on Monday for the first time since late May 2021. A slide in benchmark 10-year U.S. Treasury yields to as low as 1.1740% for the first time since mid-February 2021 also gave the Japanese currency a boost. Investor concerns over the COVID-19 outbreaks linger, with the reimposition of restrictive measures in some countries triggering worries about the global economic recovery. In the U.K., the lifting of most COVID-19 restrictions in England on Jul.19 was marred both by Prime Minister Boris Johnson’s self-isolation after Health Minister Sajid Javid tested positive for the virus and rising numbers of daily cases in the country. The rising numbers also prompted the U.S. to warn its citizens against traveling to the U.K. In other central bank news, the European Central Bank and Bank Indonesia will also hand down their respective policy decision on Thursday.
  • Gold was up on Tuesday morning in Asia as concerns over the recent COVID-19 outbreaks involving the Delta variant in several countries also gave the safe-haven yellow metal a boost. The dollar, which normally moves inversely to gold, inched down on Tuesday but remained near a three-and-a-half-month peak. Benchmark 10-year U.S. Treasury yields fell to near five-month lows. In Asia, the People's Bank of China also kept its July loan prime rate (LPR) unchanged for the fifteenth straight month, with the one-year LPR at 3.85% and the five-year LPR at 4.65%. The European Central Bank and Bank Indonesia will also hand down their respective policy decision on Thursday. Japan’s national core consumer price index (CPI) grew 0.2% year-on-year in June, the fastest annual pace in over a year, according to data released earlier in the day. The data also said national CPI growth remained unchanged at 0.3% month-on-month. On the stimulus front, U.S. Senate Democratic leader Chuck Schumer said on Monday that he would set a procedural vote on a bipartisan, $1.2 trillion infrastructure bill for Wednesday.
  • Oil was up Tuesday morning in Asia, but Brent oil futures and WTI futures both remaining below the $70 mark. A broader market rout, combined with the recent COVID-19 outbreaks involving the Delta strain, all raised concerns about the short-term fuel demand outlook. Global COVID-19 outbreaks also continue to cloud the fuel demand outlook, as some countries re-introduce lockdown measures. The number of daily COVID-19 cases in the U.K. surged, even after most COVID-19 restrictions were lifted on Monday, and prompted the U.S. to warn its citizens not to travel to the country. The number of cases in Japan’s Olympic village also continues to rise, ahead of the Tokyo Olympic Games’ opening ceremony on Jul. 23. The economic recovery from COVID-19 earlier in 2021 saw oil record gains in seven of the past eight months. However, recent outbreaks of the virus and some countries’ reimposition of restrictive measures put a dent in those gains The Organization of the Petroleum Exporting Countries and allies (OPEC+)’s resolution of its dispute over output increases earlier in the week removed some uncertainty for investors. With the supply from August 2021 onwards now secured, it is widely expected that the market will tighten and prices rise once again. However, some investors warned that the increased OPEC+ supply would not be enough to fill an imminent supply shortfall. The latest COVID-19 outbreaks also indicate that the fuel demand outlook will remain uneven for some time. Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
22nd July 2021 R1 R2 R3
GOLD-XAU 1,820 1,833 1,840-1,846
Silver-XAG 25.50-26.00 26.50 26.90-27.55
Crude Oil 67.90-68.40 69.00 69.40-70.10
EURO/USD 1.1840-1.1910 1.1990 1.2040-1.2080
GBP/USD 1.3685-1.3720 1.3750 1.3800-1.3905
USD/JPY 110.50-111.70 112.50 113.00-113.90

Intraday SUPPORTS LEVELS
22nd July 2021 S1 S2 S3
GOLD-XAU 1,812-1,800 1,786 1,780-1,769
Silver-XAG 25.05-24.80 24.50 24.00-23.50
Crude Oil 66.90-66.00 65.60 64.50-63.80
EURO/USD 1.1770-1.1690 1.1610 1.1550-1.1500
GBP/USD 1.3600-1.3520 1.3450 1.3400-1.3320
USD/JPY 109.60-109.10 108.50 107.50-106.80

Intra-Day Strategy (22nd 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$1817.31/oz and low of US$1794.94/oz. Gold up 0.0784% at US$1812.46/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 1812-1820-1833 and 1840-1854-1860. Sell in between 1820-1860 keeping stop loss closing above 1860, targeting 1800-1790 and 1771-1767-1755.

 
Intraday Support Levels
S1     1,812-1,800
S2     1,786
S3     1,780-1,769
Intraday Resistance Levels
R1     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 Monday made its intraday high of US$25.74/oz and low of US$24.98/oz settled down by 1.856% at US$25.16/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 Monday made an intra‐day high of US$71.30/bbl, intraday low of US$65.48/bbl and settled down by 6.41% to close at US$66.43/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 66.90-63.90 with risk daily closing below 63.90 and targeting 67.90-68.40-69.00 and 69.40-70.10-70.90. Sell in between 67.90-70.10 with stop loss at 75.00; targeting 66.90-66.00-65.60 and 64.50-63.80.

 
Intraday Support Levels
S1     66.90-66.00
S2     65.60
S3     64.50-63.80

Intraday Resistance Levels
R1     67.90-68.40
R2     69.00
R3     69.40-70.10

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 Monday an intraday low of US$1.1762/EUR, high of US$1.1823/EUR and settled the day down by 0.0635% to close at US$1.1799/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 Monday made an intra‐day low of US$1.3653/GBP, high of US$1.3774/GBP and settled the day down by 0.374% to close at US$1.3674/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 1.3685-1.3905 with targets at 1.3600-1.3520-1.3450 and 1.3400-1.3320 stop-loss should be 1.4000. Buy above 1.3600-1.3320 with targets 1.3685-1.3750-1.3800 and 1.3905-1.3965-1.4025 with stop loss closing below 1.3320.

 
Intraday Support Levels
S1     1.3600-1.3520
S2     1.3450
S3     1.3400-1.3320

Intraday Resistance Levels
R1     1.3685-1.3720
R2     1.3750
R3     1.3800-1.3905

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 JPY109.05/USD and made an intraday high of JPY110.09/USD and settled the day down 0.556% at JPY109.41/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 109.60-106.50 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     109.60-109.10
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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