AAFX TRADING

Daily Market Lookup

  • The dollar pushed higher in early European trading Friday, with attention turning to next week’s Federal Reserve meeting after the European Central Bank’s dovish performance on Thursday. Additionally, EUR/USD was flat at 1.1770, having slipped during Thursday’s session after the ECB strengthened its forward guidance on interest rates, tying them more closely to inflation, suggesting an even longer period of steady or lower policy interest rates There are a slew of surveys on the manufacturing and services sectors in both Europe and the U.S. later Friday, which are expected to show a slight softening of activity, albeit from high levels, but the market's next major focus is likely to be the Federal Reserve's policy meeting next week. Coronavirus cases have started to rise again in the regions of the U.S. where there has been a low vaccination pickup since the previous meeting in mid-June, but the meeting is still expected to produce some advancement in the discussions for a tapering of stimulus. Also of interest, the Bank of Russia meets later Friday and is expected to lift its benchmark interest rate as it struggles to combat surging inflation. The central bank has already raised rates by 125 basis points this year. But with annual inflation at a five-year high of 6.5%, way above the 4% target, a further hike of as much as 100 basis points is likely. The dollar was up on Friday morning in Asia and was set to end the week not far from where it started. Investors took stock at the end of a volatile week in which currencies gyrated due to ever-changing risk appetite levels. The greenback is in for a weekly gain of 0.1% but made very small moves overnight. It was, however, down from the three-and-a-half-month high of 93.194 hit on Wednesday as investors regained some of the confidence lost as the number of COVID-19 cases involving the Delta variant rose globally. Investors also digested the European Central Bank (ECB)’s policy decision handed down on Thursday. The ECB pledged to maintain its dovish monetary policy, as widely expected, and the euro was 0.2% lower over the period at $1.1779 after the decision. Bank Indonesia also handed down its policy decision on Thursday. The uptrend in the dollar index is "showing tentative signs" of stalling around 93.0, "but its overall resilience regardless of the shifting risk mood and the ECB's shift to a more structurally dovish policy stance suggest retracements will likely be limited to the 91.5-92.0 zone," Westpac analysts said in a note. Investors now await the U.S Federal Reserve’s meeting next week. Back in the Asia-Pacific region, the riskier Australian dollar headed for a 0.2% fall, which would be a fourth consecutive weekly decline. Australia tightened its current lockdown in Sydney as the city reported its biggest daily rise in new COVID-19 cases in 2021 and prompted speculation that the Reserve Bank of Australia could increase stimulus rather than decreasing it when it next meets. Across the Tasman Sea, the record number of cases in Sydney prompted New Zealand to pause its quarantine-free travel arrangement with Australia for at least eight weeks starting later in the day, said New Zealand Prime Minister Jacinda Ardern.
  • Gold was down on Friday morning in Asia, recovering from the more than one-week low hit during the previous session. Retreating U.S. bond yields and weaker-than-expected U.S. economic data also helped to counter a strengthening dollar. The dollar, which normally moves inversely to gold, inched up on Friday towards a three-and-a-half-month peak. U.S. Treasury yields eased on Thursday after an auction of $16 billion in 10-year Treasury Inflation-Protected Securities was bid at a record low. Meanwhile, the latest U.S. economic data said that a higher-than-expected 419,000 initial jobless claims were filed throughout the past week, a two-month high. The figure served as a grim reminder that the job market recovery is far from over, as the country also recorded a surge in new COVID-19 cases involving the Delta variant. On the central bank front, the European Central Bank (ECB) pledged to keep interest rates at record lows for even longer as it handed down its policy decision on Thursday. Bank Indonesia also handed down its policy decision on Thursday, while the U.S. Federal Reserve will meet in the following week to hand down its latest policy decision.
  • Oil held the bulk of a three-day advance to trade above $71 a barrel on optimism that rising demand will tighten the global market. West Texas Intermediate was 0.3% lower in early Asian trading after rallying more than 8% in the preceding three sessions. The run of gains means prices are little changed on the week, having recouped almost all of Monday’s slump, when crude plunged amid concern the spread of the delta coronavirus variant would crimp consumption just as the OPEC+ alliance added more barrels. Crude has rallied this year as the rollout of vaccines permits economies to reopen, stoking energy demand and draining the glut that built up during the pandemic. While the emergence and spread of the highly infectious delta variant has set back that process, especially in parts of Asia, investors are betting the broader positive narrative remains intact. Data this week showed gasoline demand is essentially back to normal in many of the biggest oil-consuming countries, as well as lower crude holdings at the key Cushing hub. Still, challenges remain. The U.S. is “at another pivotal moment,” with Covid-19 cases once again climbing and beds at some hospitals filling up, according to the Centers for Disease Control and Prevention. In Europe, the number of infections in France has more than doubled in the past week. The Organization of Petroleum Exporting Countries and its allies plan to add 400,000 barrels a day to the market in August and in subsequent months until supply cuts imposed at the outset of the pandemic have been fully reversed. Additional supplies this half may come from Iran should Tehran manage to strike a nuclear deal permitting U.S. sanctions on its crude to be lifted. Brent’s prompt time spread was 62 cents a barrel in backwardation on Friday. That’s a bullish pattern -- with near-dated prices above those further out -- and unchanged from the level seen a week ago.

 

 
Intraday RESISTANCE LEVELS
23rd 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 71.65-71.90 72.50 73.40-74.05
EURO/USD 1.1840-1.1910 1.1990 1.2040-1.2080
GBP/USD 1.3750-1.3810 1.3890 1.3950-1.4010
USD/JPY 110.50-111.70 112.50 113.00-113.90

Intraday SUPPORTS LEVELS
23rd July 2021 S1 S2 S3
GOLD-XAU 1,800 1,786 1,780-1,769
Silver-XAG 25.05-24.80 24.50 24.00-23.50
Crude Oil 71.00-70.10 69.40 69.00-68.40
EURO/USD 1.1770-1.1690 1.1610 1.1550-1.1500
GBP/USD 1.3720-1.3685 1.3600 1.3520-1.3450
USD/JPY 109.60-109.10 108.50 107.50-106.80

Intra-Day Strategy (23rd 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$1807.99/oz and low of US$1792.70/oz. Gold down 0.176% at US$1806.55/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
S2     1,786
S3     1,780-1,769
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 Thursday made its intraday high of US$25.44/oz and low of US$25.00/oz settled up by 0.582% at US$25.40/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 Thurasday made an intra‐day high of US$71.83/bbl, intraday low of US$69.67/bbl and settled up by 1.669% to close at US$71.50/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 71.00-66.90 with risk daily closing below 66.90 and targeting 70.10-70.90-71.65 and 71.90-72.50. Sell in between 71.65-74.05 with stop loss at 74.05; targeting 71.00-70.10-69.40 and 68.50-67.90-66.90.

 
Intraday Support Levels
S1     71.00-70.10
S2     69.40
S3     69.00-68.40

Intraday Resistance Levels
R1     71.65-71.90
R2     72.50
R3     73.40-74.05

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)   49.130 Buy
MACD(12,26,9)   1.767 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.1756/EUR, high of US$1.1829/EUR and settled the day down by 0.157% to close at US$1.1769/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$1.3689/GBP, high of US$1.3786/GBP and settled the day up by 0.393% to close at US$1.3766/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 1.3750-1.4010 with targets at 1.3720-1.3685-1.3600 and 1.3520-1.3450 stop-loss should be 1.4000. Buy above 1.3720-1.3450 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     1.3720-1.3685
S2     1.3600
S3     1.3520-1.3450

Intraday Resistance Levels
R1     1.3750-1.3810
R2     1.3890
R3     1.3950-1.4010

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

42.207

Buy
20-DMA   1.3807 Sell
50-DMA   1.3889 Sell
100-DMA   1.3867 Sell
200-DMA   1.3685 Buy
STOCH(5,3)   37.940 Buy
MACD(12,26,9)   0.0074 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY110.00/USD and made an intraday high of JPY110.35/USD and settled the day down 0.165% at JPY110.10/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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