AAFX TRADING

Daily Market Lookup

  • The dollar was down, remaining near recent lows on Wednesday morning in Asia. Better-than-expected employment data in New Zealand raised expectations for interest rate hikes, while U.S. jobs data due throughout the week could indicate the U.S. Federal Reserve’s timetable for the same. In the U.S., ADP non-farm employment change for July, the Markit composite manufacturing PMI, the services PMI and the ISM non-manufacturing PMI are due later in the day. The latest U.S. jobs report, including non-farm payrolls, is also due on Friday. The data could help investors gauge the Fed’s timeline for both interest rate hikes and asset tapering. However, the dollar has now slipped more than 1% from a 15-week peak it hit a fortnight ago as investors question the strength and speed of the global economic recovery. Safe-haven currencies have benefited from the weaker dollar as concerns about the number of COVID-19 cases globally remain. The Japanese yen has gained about 2.5% against the dollar in a month and touching its highest since late May during the previous session after falling since the start of 2021. Another focal point for investors is the Bank of England’s policy decision, due to be handed down on Thursday. Swaps markets are already pricing an interest rate liftoff around June 2022. The U.S. dollar steadied on Tuesday, after having lost value against the Japanese yen and Swiss franc, as questions about slowing U.S. economic growth and the COVID-19 Delta variant challenged risk appetite.
  • The U.S. dollar dipped below 109 yen, and for a second day gave up as much as 0.4% before recovering half of the day's loss to 109.1 yen. It traded against the Swiss franc as much as 0.3% lower and leveled off with a 0.1% decline for the day. The franc also gained against the euro to its greatest value in nine months. But the moves to the safe haven franc and yen also came alongside reminders that currencies are sensitive to talk from central bankers about pulling back on bond purchases and eventually raising rates as their economies come out of the worst of the coronavirus pandemic. Relatively hawkish comments by central bank officials in Australia and New Zealand on Tuesday led the Australian dollar and the Kiwi dollar to big gains among major currencies. Last week the dollar lost nearly 1% as U.S. Federal Reserve policy makers said they expected it would still be while before job growth allowed them to pull back on support for the economy. Strategists have said they do not expect major moves in the dollar before Friday's U.S. jobs report and maybe not until Fed officials speak at the end of August at a symposium of central bankers in Jackson Hole, Wyoming. On Thursday the Bank of England will meet and could send hawkish signals on its policies amid optimism about the British economy. The 10-year U.S. Treasury yield slipped again early on Tuesday before coming back in the afternoon in New York to near Monday's level of 1.179%. The 10-year yield has been trending generally downward since the end of March. Market watchers have pointed to the decline in the 10-year yield as a sign of coming disappointment in economic growth, especially with the rise of the Delta variant of COVID-19. In the United States, COVID-19 hospital admissions in Louisiana and Florida have hit a new peak though top U.S. health expert Anthony Fauci has ruled out another lockdown in the country.
  • Gold was up on Wednesday morning in Asia. While receiving a boost from a weakening dollar, the yellow metal was stuck in a narrow range as investors await the latest U.S. jobs data. On the data front, investors await the ADP non-farm employment change for July, alongside the Markit composite manufacturing purchasing managers' index (PMI), the services PMI and the ISM non-manufacturing PMI, due later in the day. The data comes ahead of the latest U.S. jobs report, due on Friday. With Fed Chairman Jerome Powell reiterating that interest rate hikes are “ways away” as the Fed handed down its policy decision during the past week, other Fed officials also chimed in. The labor market would take time to heal from the effects of COVID-19 and more is needed to be done for the economy to get fully back on track, U.S. Federal Reserve Governor Michelle Bowman said on Tuesday. Bowman’s views were also echoed by San Francisco Fed President Mary Daly The Bank of England and Reserve Bank of India will hand down their policy decisions on Thursday and Friday respectively. In Asia, China’s Caixin services purchasing managers’ index (PMI), released earlier in the day, was 54.9 in July. The reading was higher than the 50.3 figure from the previous month.
  • Oil was down Wednesday morning in Asia, falling for a third consecutive day as concerns about the increasing numbers of COVID-19 cases globally dampen the fuel demand outlook. Rising numbers of COVID-19 cases in the U.S. and China, the top two oil importers globally, are also clouding the fuel demand outlook. The spread of COVID-19 cases from China’s coast to inland cities re-implementation of restrictive measures and dampened. In China, the spread of the variant from the coast to inland cities prompted authorities to impose strict measures to bring the outbreak under control. Investors are looking to rising geopolitical tensions in the Middle East, which could offset the demand concerns. Iran refuted reports that it was involved in a second attack on an oil tanker on Tuesday, this time off the coast of the United Arab Emirates. The U.K. and U.S. also continue to hold the country responsible for an earlier attack on a tanker in the region that took place last week. Oil also got some support from U.S. data indicating declines in crude oil, distillate and gasoline inventories over the past week. U.S. crude oil supply data from the American Petroleum Institute released on Tuesday showed a draw of 879,000 barrels for the week ending Jul. 30. The draw was smaller than both the 2.9-million-barrel draw in forecasts prepared by Investing.com and the 4.728-million-barrel draw recorded during the previous week. Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.

 

 
Intraday RESISTANCE LEVELS
4th August 2021 R1 R2 R3
GOLD-XAU 1,820-1,833 1,840 1,845-1,851
Silver-XAG 26.00-26.50 26.90 27.50-28.20
Crude Oil 70.40-71.00 71.65 71.90-72.60
EURO/USD 1.1910-1.1990 1.2040 1.2080-1.2120
GBP/USD 1.3955-1.4020 1.40501.3955-1.4020 1.4120-1.4150
USD/JPY 111.70 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
4th August 2021 S1 S2 S3
GOLD-XAU 1,805-1,791 1,780 1,767-1,760
Silver-XAG 25.20-25.05 24.75 24.50-24.00
Crude Oil 69.50-68.80 68.00 67.40-67.02
EURO/USD 1.1840-1.1770 1.1690 1.1610-1.1550
GBP/USD 1.3890-1.3810 1.3750 1.3696-1.3615
USD/JPY 109.10 108.50 107.50-106.80

Intra-Day Strategy (4th August 2021)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Sell
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$1814.94/oz and low of US$1807.01/oz. Gold down 0.161% at US$1810.32/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. 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 neutral territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Buy in between 1805-1767 with risk below 1767, targeting 1820-1833 and 1840-1854. Sell in between 1820-1860 keeping stop loss closing above 1860, targeting 1812-1800-1790 and 1780-1767.

 
Intraday Support Levels
S1     1,805-1,791
S2     1,780
S3     1,767-1,760
Intraday Resistance Levels
R1     1,820-1,833
R2     1,840
R3     1,845-1,851

Technical Indicators

Name   Value Action
14DRSI  

51.798

Buy
20-DMA   1809.64 Buy
50-DMA  

1812.27

Sell
100-DMA   1812.69 Sell
200-DMA   1808.04 Buy
STOCH(5,3)   43.503 Sell
MACD(12,26,9)   -23.653 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$25.59/oz and low of US$25.23/oz settled up by 0.476% at US$25.50/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     25.20-25.05
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   24.58 Sell
50-DMA   25.55 Sell
100-DMA   26.00 Sell
200-DMA   26.12 Buy
STOCH(5,3)   74.556 Buy
MACD(12,26,9)   -0.380 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$71.55/bbl, intraday low of US$68.86/bbl and settled down by 1.926% to close at US$69.93/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 Sell

Sell in between 70.40-73.40 with stop loss at 73.40; targeting 69.50-68.80-68.00 and 67.40-66.90. Buy above 70.00-68.00 with risk daily closing below 68.00 and targeting 70.40-71.00-71.90 and 72.60-73.40-74.00.

 
Intraday Support Levels
S1     69.50-68.80
S2     68.00
S3     67.40-67.02

Intraday Resistance Levels
R1     70.40-71.00
R2     71.65
R3     71.90-72.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.198 Sell
20-DMA   71.40 Buy
50-DMA   70.35 Buy
100-DMA   67.02 Buy
200-DMA   60.99 Buy
STOCH(5,3)   22.130 Sell
MACD(12,26,9)   0.085 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1852/EUR, high of US$1.1892/EUR and settled the day down by 0.137% to close at US$1.1862/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     1.1910-1.1990
R2     1.2040
R3     1.2080-1.2120

TECHNICAL INDICATORS
Name   Value Action
14DRSI   1.1842 Buy
20-DMA   1.1842 Sell
50-DMA   1.1913 Sell
100-DMA   1.1956 Sell
200-DMA   1.1914 Sell
STOCH(5,3)   87.758 Sell
MACD(12,26,9)   -0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3876/GBP, high of US$1.3937/GBP and settled the day up by 0.267% to close at US$1.3913/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3867) 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     1.3890-1.3810
S2     1.3750
S3     1.3696-1.3615

Intraday Resistance Levels
R1     1.3955-1.4020
R2     1.40501.3955-1.4020
R3     1.4120-1.4150

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

53.930

Buy
20-DMA   1.3839 Buy
50-DMA   1.3886 Buy
100-DMA   1.3867 Buy
200-DMA   1.3696 Buy
STOCH(5,3)   83.940 Sell
MACD(12,26,9)   -0.0074 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY108.87/USD and made an intraday high of JPY109.33/USD and settled the day down 0.247% at JPY109.02/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 109.10-106.50 with targets of 110.90-111.70-112.20 with stop below 106.00. Sell below 110.00-114.50 with risk above 114.50 targeting 109.00-108.50-108.0 and 107.50-106.80.

 
Intraday Support Levels
S1     109.10
S2     108.50
S3     107.50-106.80

INTRADAY RESISTANCE LEVELS
R1     111.70
R2     111.70
R3     112.50-113.00

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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