AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trading Friday, but looks set to register a negative week after a dovish Federal Reserve meeting and some disappointing growth data. The U.S. central bank stated earlier this week that progress had been made towards the levels where the policymakers would agree to taper monthly bond purchases. However, Chairman Jerome Powell made it clear that rate increases were still a long way away and more economic progress was needed before the central bank starts withdrawing its extraordinary monetary stimulus The U.S. GDP release grew 6.5% annualised in the second quarter, a solid level and an improvement from the 6.3% growth recorded in the first quarter, but this was still below the 8.5% growth expected. Investors will be keeping an eye on the second-quarter employment cost index, personal income and spending for June and the July University of Michigan consumer sentiment index later in the day for more clues over the country’s economic recovery. That said, the dollar could receive support if rising Covid cases in the U.S. prompt a bout of risk aversion. The New York Times reported Friday that the U.S. Centers for Disease Control and Prevention has described the delta variant of the coronavirus to be as contagious as chickenpox and could cause severe illness, citing an internal CDC document. The dollar languished near a one-month low on Friday and was set for its worst weekly performance since May as dovish remarks by the U.S. Federal Reserve together with underwhelming economic data took the steam out of a month-long rally. The dollar's downtrend began after Fed Chairman Jerome Powell wrong-footed bulls following a policy meeting this week by saying that rate increases were "a ways away" and the job market still had "some ground to cover". The dollar found little support overnight from U.S. gross domestic product numbers. While the U.S. economy expanded at a 6.5% annualised rate in the second quarter, boosted by massive government aid, growth fell short of economists' expectations for an 8.5% acceleration. The dollar held near a two-week low against the safe haven Japanese yen at 109.52. The euro climbed to a one-month high against the dollar to be last at $1.18955 ahead of preliminary second quarter gross domestic product data for the euro area as well as preliminary July inflation prints for France, Italy and the euro area. The euro area also gets June unemployment data. The German economy returned to growth in the second quarter but bounced back less strongly than expected, as coronavirus-related restrictions were eased and households started spending again, data showed on Friday. Sentiment was helped by China's attempt to calm frayed investor nerves by telling foreign brokerages not to "overinterpret" its latest regulatory actions. Both the Australian and New Zealand dollars, reliant on world and Chinese economic growth, hovered near two-week highs. The British pound hovered near its highest in over a month helped by the U.S. dollar's weaker tone and a fall in coronavirus cases in Britain. The dollar was up on Friday morning in Asia but remained near a one-month low. The U.S. Federal Reserve maintained a dovish stance in its latest policy decision, and disappointing U.S. economic data also curbed the U.S. currency’s month-long rally. Fed Chairman Jerome Powell’s comments, made as the central bank handed down its policy decision on Wednesday, set the greenback on a downward trend. Powell insisted that interest rate hikes were “a ways away” and the job market still had “some ground to cover” before asset tapering could begin Thursday's U.S. GDP figures for the second quarter of 2021 also failed to provide the dollar with support. Although the U.S.’s GDP grew a solid 6.5% quarter-on-quarter in the second quarter of 2021, it was lower than both the 8.5% in forecasts prepared by Investing.com and the 6.3% growth recorded for the first quarter. Further data from the U.S., including the second-quarter employment cost index, personal income and spending for June and the University of Michigan consumer sentiment index for July, are due later in the day. Across the Atlantic, the euro climbed to a one-month high against the dollar, last trading at $1.1886 ahead of a slew of data. Second-quarter German, Italian and eurozone GDPs, alongside French, German, Italian and eurozone consumer price indexes for July as well as the eurozone unemployment rate, are due later in the day. In Asia Pacific, the yuan clawed back most of its losses from Tuesday, although it remained slightly on the back foot ahead of the open of onshore markets on Friday. Sentiment was aided somewhat by Chinese attempts to calm the market by telling foreign brokerages to avoid “overinterpreting” its recent crackdown on sectors including private education. Investors will keep a close eye on a bunch of U.S. macro indicators due later in the day including second-quarter employment cost index, personal income and spending for June and the University of Michigan consumer sentiment index for July.
  • Oil was down Friday morning in Asia but was set to post solid gains as the week and month wraps up. Fuel demand is growing faster than supply, while vaccination rates dampened the impact of a resurgence in COVID-19 cases globally. Both Brent and WTI futures were set for gains of around 2% for the week, over signs of tight crude supplies and strong fuel demand in the U.S., the world’s biggest oil consumer. Both the American Petroleum Institute and the U.S. Energy Information Administration reported a draw in U.S. crude oil supplies, with crude stocks at Cushing at their lowest since January 2020. Even U.S. jet fuel consumption hit its highest level since March 2020, according to ANZ analysts. Investors remain concerned about rising numbers of COVID-19 cases in the U.S., Asia and parts of Europe involving the Delta variant of the virus. However, some said rising COVID-19 vaccination rates could limit the need for harsh restrictive measures that contributed to falling demand in 2020. Indian gasoline consumption and industrial production also recorded a rapid rebound following a surge in COVID-19 cases in the country earlier in 2021. Meanwhile, the Organization of the Petroleum Exporting Countries and allies (OPEC+) will start hiking monthly supplies by 400,000 barrels a day beginning in August. The hikes will continue until all OPEC+ production halted thanks to COVID-19 is revived, and it is expected that the market will be able to absorb these additional barrels as demand grows through the second half of 2021.

 

 
Intraday RESISTANCE LEVELS
30th July 2021 R1 R2 R3
GOLD-XAU 1,833-1,840 1,845 1,852-1,860
Silver-XAG 26.00-26.50 26.90 27.50-28.20
Crude Oil 72.60-73.00 73.40 74.00-74.50
EURO/USD 1.1910 1.1990 1.2040-1.2080
GBP/USD 1.4020-1.4050 1.4120 1.4150-1.4200
USD/JPY 110.50-111.70 112.50 113.00-113.90

Intraday SUPPORTS LEVELS
30th July 2021 S1 S2 S3
GOLD-XAU 1,820-1,812 1,800 1,786¬-1,780
Silver-XAG 25.50-25.05 24.75 24.50-24.00
Crude Oil 71.90-71.65 71.00 70.10-69.40
EURO/USD 1.1840-1.1770 1.1690 1.1610-1.1550
GBP/USD 1.3955-1.3890 1.3810 1.3750-1.3720
USD/JPY 109.60-109.10 108.50 107.50-106.80

Intra-Day Strategy (30th 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$1832.62/oz and low of US$1806.72/oz. Gold up 1.174% at US$1828.13/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 1820-1769 with risk below 1769, targeting 1833-1840-1854. Sell in between 1833-1860 keeping stop loss closing above 1860, targeting 1822-1800-1790 and 1771-1767-1755.

 
Intraday Support Levels
S1     1,820-1,812
S2     1,800
S3     1,786¬-1,780
Intraday Resistance Levels
R1     1,833-1,840
R2     1,845
R3     1,852-1,860

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$25.78/oz and low of US$24.95/oz settled up by 2.12% at US$25.49/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     25.50-25.05
S2     24.75
S3     24.50-24.00

Intraday  Resistance Levels
R1     26.00-26.50
R2     26.90
R3     27.50-28.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   46.411 Buy
20-DMA   24.48 Sell
50-DMA   26.08 Sell
100-DMA   26.17 Sell
200-DMA   25.44 Buy
STOCH(5,3)   51.413 Buy
MACD(12,26,9)   -0.380 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$7/bbl, intraday low of US$71.47/bbl and settled up by 0.614% to close at US$72.08/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 72.00-69.00 with risk daily closing below 66.90 and targeting 72.50-73.40 and 74.00-74.50. Sell in between 72.60-74.05 with stop loss at 74.05; targeting 71.65-71.00-70.10 and 69.40-68.50-67.90.

 
Intraday Support Levels
S1     71.90-71.65
S2     71.00
S3     70.10-69.40

Intraday Resistance Levels
R1     72.60-73.00
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 Thursday an intraday low of US$1.1838/EUR, high of US$1.1892/EUR and settled the day up by 0.369% to close at US$1.1886/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 1.1910-1.2140 targeting 1.1850-1.1800-1.1750 with stop-loss at daily closing above 1.2140. Buy above 1.1840-1.1600 with risk below 1.1600, targeting 1.1840-1.1910-1.1990 and 1.2040-1.2100.

 
Intraday Support Levels
S1     1.1840-1.1770
S2     1.1690
S3     1.1610-1.1550

Intraday  Resistance Levels
R1     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 Thursday made an intra‐day low of US$1.3895/GBP, high of US$1.3981/GBP and settled the day up by 0.398% to close at US$1.3953/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 1.3955-1.4120 with targets at 1.3890-1.3810-1.3750 and 1.3685-1.3600-1.3520 stop-loss should be 1.4120. Buy above 1.3890-1.3600 with targets 1.3955-1.4020 and 1.4050-1.4120 with stop loss closing below 1.3600.

 
Intraday Support Levels
S1     1.3955-1.3890
S2     1.3810
S3     1.3750-1.3720

Intraday Resistance Levels
R1     1.4020-1.4050
R2     1.4120
R3     1.4150-1.4200

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

59.572

Buy
20-DMA   1.3846 Sell
50-DMA   1.3888 Sell
100-DMA   1.3869 Sell
200-DMA   1.3697 Buy
STOCH(5,3)   93.940 Buy
MACD(12,26,9)   -0.0074 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY109.41/USD and made an intraday high of JPY109.94/USD and settled the day down 0.398% at JPY109.46/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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