AAFX TRADING

Daily Market Lookup

  • The dollar slipped against a basket of currencies on Thursday as investor focus turned to this week's Federal Reserve meeting, while cryptocurrencies jumped to their highest levels in weeks It has gained nearly 4% from a recent low on May 25 as an improving U.S. economy bolstered the outlook for the Fed to start paring asset purchases as early as this year. They added that there were risks for a slightly later announcement of a taper decision from the Fed - for example, out to the fourth quarter - given the added uncertainty associated with the Delta variant of the coronavirus The Fed at its last meeting on June 16 dropped a reference to the coronavirus as a drag on the economy The risks from the Delta variant continue to rise globally, with U.S. top infectious disease official Anthony Fauci saying some Americans may need booster shots amid new mask mandates and a surge in new cases. China reported its highest number of cases since the end of January, while new infections have also spiked in Japan, where Tokyo is currently hosting the Olympics. Australia's most populous state of New South Wales, home to Sydney, reported a rise in new COVID-19 cases on Monday despite a weeks-long stay-at-home order. Meanwhile, the MSCI index of Asia-Pacific stocks excluding Japan fell 2% on Monday, as Chinese blue chips slumped 3.8%.This week’s key event is the two-day meeting of the Federal Reserve, concluding on Wednesday. There isn’t expected to be a change in policy at this meeting, but the central bank could provide more clarity over when it will start to taper its massive bond-buying program, in the light of above-trend economic growth and inflation. There are also a number of important U.S. data releases due this week that should illustrate the economy's strong performance. In particular, the second-quarter gross domestic product is forecast on Thursday to show annualized growth of 8.6%, a sharp jump from 6.4% in the previous quarter. The risk to this optimism comes from the surge in U.S. Covid-19 cases. This largely occurred after the Fed’s last meeting in the middle of June, although the vaccination program appears to have broken the link between cases and hospitalizations for the vaccinated population. The number of infections from the Delta variant continue to rise globally, with China reporting its highest number of cases since the end of January, while new infections have also spiked in Japan, where Tokyo is currently hosting the Olympics. Numbers are also rising in Europe, but the Eurozone should still see an improvement in its second-quarter GDP data this week, with Friday’s numbers expected to show a 1.5% quarter-on-quarter expansion, as the region exits its technical recession. However, the single currency may remain under pressure after falling against the dollar last week to the lowest since early April. The European Central Bank edged closer to taking a more dovish stance toward inflation, shifting its forward guidance such that a hike in interest rates looks unlikely until as far out as 2024.
  • The dollar was down on Monday morning in Asia but remained near its strongest level since early April 2021 against the euro. Investors also await the U.S. Federal Reserve’s latest policy decision, due to be handed down on Wednesday. The greenback would continue to strengthen throughout the week as the Fed is widely expected to move closer to the start of asset tapering, said the Commonwealth Bank of Australia. However, the risk to this outlook is the surge in COVID-19 cases in the U.S., which came after the Fed’s last meeting on Jun. 16 which did not mention COVID-19 among the threats to the economy. The dollar posted a 0.2% gain during the previous week, with fears that the surge in COVID-19 cases globally would delay the economic recovery reducing investors’ risk appetite. However, that appetite was regained as strong U.S. earnings gave global stocks a boost.
  • Oil was down Monday morning in Asia but remained little changed even as increasing numbers of COVID-19 cases globally continue to cloud the fuel demand outlook. However, rising numbers of COVID-19 cases involving the Delta variant have prompted countries such as Thailand and Vietnam to impose curfews, while the possibility of tougher restrictions for those unvaccinated has been floated in Germany. China, a major crude importer, is dealing with increasing number of COVID-19 cases alongside recent severe flooding in parts of the country. Beijing is also cracking down on the misuse of import quotas, which, combined with higher crude prices, could see China’s growth in oil imports sink to the lowest in two decades in 2021. However, refining rates are expected to rise in the second half of 2021. The latest surge in COVID-19 cases coincide with and expected surge in supply from the Organization of the Petroleum Exporting Countries and their allies (OPEC+) starting in August. This could mean a tightening market and choppy waters ahead for the black liquid. However, talks to revive a 2015 nuclear deal that could add Iranian supplies back to the market have been postponed to August. The U.S. is also considering cracking down on Iranian oil sales to China in preparation for the possibility that the talks will not materialize, or that Iran will take a hard stance if they do. Meanwhile, U.S. oil rigs rose by seven to 387 during the previous week, their highest since April 2020, Baker Hughes Co. said on Friday.

 

 
Intraday RESISTANCE LEVELS
26th 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 71.00-71.65 71.90 72.50-73.40
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
26th 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 70.10-69.40 69.00 68.60-68.00
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 (26th 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$1810.28/oz and low of US$1789.58/oz. Gold down 0.262% at US$1802.05/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 Friday made its intraday high of US$25.46/oz and low of US$24.98/oz settled down by 0.967% at US$25.17/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$69.67/bbl and settled up by 0.515% to close at US$71.94/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 70.10-66.90 with risk daily closing below 66.90 and targeting 70.90-71.65 and 71.90-72.50. Sell in between 70.90-74.05 with stop loss at 74.05; targeting 70.10-69.40 and 68.50-67.90-66.90.

 
Intraday Support Levels
S1     70.10-69.40
S2     69.00
S3     68.60-68.00

Intraday Resistance Levels
R1     71.00-71.65
R2     71.90
R3     72.50-73.40

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 Friday an intraday low of US$1.1753/EUR, high of US$1.1785/EUR and settled the day up by 0.0076% to close at US$1.1770/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$1.3719/GBP, high of US$1.3779/GBP and settled the day down by 0.118% to close at US$1.3750/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 Friday made intra‐day low of JPY110.07/USD and made an intraday high of JPY110.58/USD and settled the day up 0.398% at JPY110.53/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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