AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trading Wednesday, but remained below recent highs amid caution ahead of the U.S. Federal Reserve's latest policy decision. The main focus Wednesday will be on the conclusion of the two-day meeting of the U.S. Federal Reserve. The central bank’s unexpected hawkish turn at its previous meeting in June led to a month-long rally for the dollar, but traders are not expecting any significant changes in today’s statement, even with discussions underway over the timing of the exit from its bond-buying program. The U.S. Centers for Disease Control and Prevention recommended Tuesday that fully vaccinated people begin wearing masks indoors again in areas where cases are surging, a reflection of the growing risks. However, if “one of two five-letter words (Delta or Taper) make their way into the FOMC statement, we will see a big reaction in the U.S. dollar,” added Lien. “If the Fed includes concerns about the Delta variant, the U.S. dollar could extend its slide quickly. If it shrugs off those worries and officially acknowledge that taper is coming, the U.S. dollar will soar.” The euro wasn't helped by consumer confidence releases in Germany and France that showed confidence failing to improve, while Sterling was supported by reports that the U.K. government will allow fully-vaccinated travelers from the U.S. and EU to enter England without quarantining, possibly as early as next week. In emerging Europe, meanwhile the Hungarian forint continued to push higher after Tuesday's surprisingly large key rate increase by the central bank. The 30 basis point hike to 1.20% was Hungary's second in as many months. The dollar was up, but remained below its recent highs, on Wednesday morning in Asia. Ripple effects from a crackdown in China and caution ahead of the U.S. Federal Reserve's latest policy decision gave the safe-haven U.S. currency a boost, however. The Japanese yen rose about 0.5% against the dollar during the previous session to hit a one-week high, with the Swiss franc and euro also recording small gains. The trio held onto those gains as the Asian session opened, with the euro last trading at $1.1819, which capped gains for the U.S. currency. The Chinese yuan fell towards a three-month low against the greenback after recording its worst day since October 2021 on Tuesday. Hong Kong’s Hang Seng Index also recorded its sharpest selloff in more than a year as concerns over a recent Chinese crackdown remained firmly in place. The crackdown on tech and other lucrative sectors also saw jitters spill over into the U.S. market on Tuesday. U.S. real yields also declined, with the 10-year tenor falling to a fresh record low during the previous session. The pound surprised the market by jumping through its 20-day moving average during the previous session, with reports that the U.K. is considering opening its border giving the currency a boost. Investors continued to focus their attention on Chinese shares’ performance on Wednesday and the Fed decision, due to be handed down later in the day. The central bank’s unexpected hawkish turn in its previous decision in June led to a month-long rally for the greenback. It now remains to be seen whether more clues on the timeline for both asset tapering and interest rate hikes will be provided in the Fed’s latest decision. Should mounting inflationary pressures prompt the Fed to introduce both faster than expected, it would give both U.S. rates and the dollar a boost. However, another hawkish surprise is unlikely, with investors more likely on the lookout for any shifts in tone or emphasis, said Westpac’s Speizer.
  • Gold was up on Wednesday morning in Asia, remaining close to the key psychological $1,800 mark as investors await the U.S. Federal Reserve’s latest policy decision. The Fed will hand down its decision later in the day, and Chairman Jerome Powell will speak at a press conference afterward. The decision and Powell’s comments will both be scrutinized for clues on the central bank’s timeline for asset tapering and interest rate hikes. On the data front, data released on Tuesday said the U.S. Conference Board (CB) consumer confidence index for July was 129.1, its highest level in 17 months. The reading indicated that households’ spending plans are rising even amid inflationary pressures, indicating that the U.S. economy maintained its strong growth as the third quarter gets underway Investors now await U.S. second-quarter GDP data, due to be released on Thursday. On the same day, the International Monetary Fund (IMF) maintained its 6% global growth forecast for 2021. While upgrading its outlook for the U.S. and other economies, IMF cut its predictions for other countries dealing with surging numbers of COVID-19 cases involving the Delta variant In Asia Pacific, Australia’s second-quarter consumer price index (CPI) grew a better-than-expected 0.8% quarter-on-quarter and 3.8% year-on-year. The country's trimmed mean CPI grew 0.5% quarter-on-quarter and 1.6% year-on-year.
  • Oil was up Wednesday morning in Asia, boosted by a draw in U.S. crude supplies that reinforced expectations that fuel demand will outstrip supply growth. However, increasing numbers of COVID-19 cases globally capped the black liquid’s gains. U.S. crude oil supply data released on Tuesday from the American Petroleum Institute showed a draw of 4.728 million barrels for the week ended Jul. 23. Forecasts prepared by Investing.com had predicted a 3.433-million-barrel draw, while a build of 806,000 barrels was reported during the previous week. Investors now await crude oil supply data from the U.S. Energy Information Administration (EIA), due later in the day. The API data also said gasoline inventory fell by 6.226 million barrels. Global inventories are expected to tighten through the remainder of 2021 as key countries in the market continue their economic recovery from COVID-19. However, surging numbers of cases involving the virus’ Delta variant has led many countries to reimpose restrictive measures and the black liquid is set to record its second monthly loss since October 2020 Refiners, making some of their best profits in years, continue to be challenged by the rising number of COVID-19 cases and its impact on the fuel demand outlook. Concerns that renewed demand weakness could lead to bloated stockpiles and squeeze margins again are getting in the way of processors’ desires to cash in. However, “U.S. and Europe demand should continue to support prices for the moment,” he added.

 

 
Intraday RESISTANCE LEVELS
28th July 2021 R1 R2 R3
GOLD-XAU 1,800-1,812 1,820 1,833-1,840
Silver-XAG 25.05-25.50 26.00 26.50-26.90
Crude Oil 71.90-72.50 73.40 74.00-74.50
EURO/USD 1.1840-1.1910 1.1990 1.2040-1.2080
GBP/USD 1.3890-1.3955 1.4020 1.4050-1.4120
USD/JPY 110.50-111.70 112.50 113.00-113.90

Intraday SUPPORTS LEVELS
28th July 2021 S1 S2 S3
GOLD-XAU 1,786¬-1,780 1,774 1,769-1,760
Silver-XAG 24.75-24.50 24.00 23.50-22.90
Crude Oil 71.65-71.00 70.10 69.40-69.00
EURO/USD 1.1770-1.1690 1.1610 1.1550-1.1500
GBP/USD 1.3810-1.3750 1.3720 1.3685-1.3600
USD/JPY 109.60-109.10 108.50 107.50-106.80

Intra-Day Strategy (28th 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 Tuesday made its intraday high of US$1805.22/oz and low of US$1793.54/oz. Gold up 0.0556% at US$1798.46/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 1790-1769 with risk below 1760, targeting 1800-1812-1820 and 1833-1840-1854. Sell in between 1812-1860 keeping stop loss closing above 1860, targeting 1800-1790 and 1771-1767-1755.

 
Intraday Support Levels
S1     1,786¬-1,780
S2     1,774
S3     1,769-1,760
Intraday Resistance Levels
R1     1,800-1,812
R2     1,820
R3     1,833-1,840

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 Tuesday made its intraday high of US$25.25/oz and low of US$25.10/oz settled down by 0.0436% at US$24.67/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     24.75-24.50
S2     24.00
S3     23.50-22.90

Intraday  Resistance Levels
R1     25.05-25.50
R2     26.00
R3     26.50-26.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.4015 Buy
20-DMA   25.66 Sell
50-DMA   26.10 Sell
100-DMA   26.18 Sell
200-DMA   25.44 Buy
STOCH(5,3)   34.413 Buy
MACD(12,26,9)   -0.4390 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$72.10/bbl, intraday low of US$70.90/bbl and settled up by 0.458% to close at US$71.65/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 71.65-69.00 with risk daily closing below 66.90 and targeting 71.90-72.50-73.40 and 74.00-74.50. Sell in between 71.90-74.05 with stop loss at 74.05; targeting 71.65-71.00-70.10 and 69.40-68.50-67.90.

 
Intraday Support Levels
S1     71.65-71.00
S2     70.10
S3     69.40-69.00

Intraday Resistance Levels
R1     71.90-72.50
R2     73.40
R3     74.00-74.50

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 Tuesday an intraday low of US$1.1840/EUR, high of US$1.1840/EUR and settled the day up by 0.1160% to close at US$1.1816/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   38.525 Buy
20-DMA   1.1820 Sell
50-DMA   1.1830 Sell
100-DMA   1.1961 Sell
200-DMA   1.1915 Sell
STOCH(5,3)   0.758 Sell
MACD(12,26,9)   0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3765/GBP, high of US$1.3893/GBP and settled the day up by 0.421% to close at US$1.3874/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 overbought 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 1.3890-1.4120 with targets at 1.3810-1.3750-1.3685 and 1.3600-1.3520-1.3450 stop-loss should be 1.4000. Buy above 1.3810-1.3600 with targets 1.3905-1.3955-1.4020 and 1.4050-1.4120 with stop loss closing below 1.3600.

 
Intraday Support Levels
S1     1.3810-1.3750
S2     1.3720
S3     1.3685-1.3600

Intraday Resistance Levels
R1     1.3890-1.3955
R2     1.4020
R3     1.4050-1.4120

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

52.207

Buy
20-DMA   1.3812 Sell
50-DMA   1.3882 Sell
100-DMA   1.3864 Sell
200-DMA   1.3689 Buy
STOCH(5,3)   91.940 Buy
MACD(12,26,9)   0.0074 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY109.57/USD and made an intraday high of JPY110.38/USD and settled the day down 0.553% at JPY109.75/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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