AAFX TRADING

Daily Market Lookup

  • The dollar hit a four-month high against the euro on Monday, reversing a recent fall after strong labour market data encouraged investors to bring forward their bets on the Federal Reserve reducing its pandemic-era stimulus. The two previous months' payrolls growth were also revised higher, and Tan noted that Fed Chair Jerome Powell had signalled jobs growth as the key indicator for the central bank's evaluation of the economy's progress. Fed officials have made a jobs market recovery a condition of tighter monetary policy. Friday's non-farm payroll report showed jobs increased by 943,000 in July compared with the 870,000 forecast by economists in a Reuters poll. Numbers for May and June were also revised up. Cheung said market participants had pushed forward the Fed's tapering announcement to as early as the Jackson Hole symposium in late August. There were signs of the dollar spike fizzling and markets were generally quiet, with investors warily eyeing a rise in COVID-19 cases across Asia. The dollar steadied in early European trading Monday, remaining near recent highs following Friday’s strong nonfarm payrolls release as traders priced in an early tightening of monetary policy by the U.S. Federal Reserve. Boosting the dollar was Friday’s strong U.S. jobs report, with nonfarm payrolls rising by a healthy 943,000 in July, while numbers for May and June were also revised up. The Federal Reserve has made a recovery in the labor market a key requisite before it will start tightening monetary policy, but this strong release has increased expectations that a reduction in asset purchases could start this year and higher interest rates could follow as soon as 2022. Last week, Fed Vice Chair Richard Clarida suggested that conditions for hiking interest rates might be met as soon as late 2022, while Fed Governor Christopher Waller stated that two payrolls reports showing jobs growth of 800,000-1,000,000 region in August and September would lead him to vote for tapering in September. The coming week sees the release of the U.S. consumer price index and the producer price index, on Wednesday and Thursday respectively, while Atlanta Fed President Raphael Bostic and Richmond Fed head Thomas Barkin are set to speak later Monday.
  • The dollar jumped Friday, underpinned by move higher in U.S. Treasury yields after a better-than-expected monthly jobs report stoked expectations the Federal Reserve will begin to tighten policy sooner rather than later. The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.59% to 91.69, as U.S. bond yields gained, with the 10-yield rate trending close to 1.3%. Average hourly earnings rose to 4% to from 3.7% as employers were forced to hike wages to attract new workers amid dearth in labor supply. The trend of rising wages is expected to continue, and could keep inflation higher for longer. If the Fed fails to act quell inflation, then it runs the risk of policy misstep. The dollar has been raking up gains after bottoming in May, but there are some signs that investors are pausing their bullish bets on the greenback. Speculators' net long positions on the dollar were cut in the latest week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.
  • Oil prices fell by 4% on Monday, extending last week's steep losses on the back of a rising U.S. dollar and concerns that new coronavirus-related restrictions in Asia, especially China, could slow a global recovery in fuel demand. A United Nations panel's dire warning on climate change also added to the gloomy mood after fires in Greece have razed homes and forests and parts of Europe suffered deadly floods last month. ANZ analysts pointed to new restrictions in China, the world's second-largest oil consumer, as a major factor clouding the outlook for demand growth. The restrictions include flight cancellations, warnings by 46 cities against travel and limits on public transport and taxi services in 144 of the worst hit areas. On Monday China reported 125 new COVID-19 cases, up from 96 a day earlier. In Malaysia and Thailand, infections hit daily records. China's export growth slowed more than expected in July after outbreaks of COVID-19 cases and floods while import growth was also weaker than expected. China's crude oil imports fell in July and were down sharply from the record levels of June 2020. A rally in the U.S. dollar to a four-month high against the euro also weighed on oil prices after Friday's stronger than expected U.S. jobs report spurred bets that the Federal Reserve could move more quickly to tighten U.S. monetary policy. A stronger U.S. dollar makes oil more expensive for holders of other currencies.
  • Gold was down on Monday morning in Asia, after sliding as much as 4.4% to a more than four-month low. Strong U.S. jobs data increased fears that the U.S. Federal Reserve would hike interest rates and begin asset tapering earlier than expected. Gold broke below its bull-market defining trendline for the first time since 2019, fueling significant stop-outs and melting the yellow metal’s prices, TD Securities analysts said in a note. In Asia, China also released data earlier in the day. The country’s CPI rose 1% year-on-year and 0.3% month-on-month, while the producer price index (PPI) rose 9% year-on-year, in July. Meanwhile, prices eased in India, where the physical gold market flipped into a small premium during the previous week for the first time in a month. However, activity remained subdued in one of gold’s biggest hubs.

 

 
Intraday RESISTANCE LEVELS
9th August 2021 R1 R2 R3
GOLD-XAU 1,805-1,820 1,833 1,840-1,845
Silver-XAG 26.00-26.50 26.90 27.50-28.20
Crude Oil 69.50-70.40 70.80 71.20-71.80
EURO/USD 1.1850-1.1910 1.1990 1.2080-1.2120
GBP/USD 1.3955-1.4020 1.4050 1.4120-1.4150
USD/JPY 110.00-110.50 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
9th August 2021 S1 S2 S3
GOLD-XAU 1,791 1,780 1,767-1,760
Silver-XAG 25.05 24.75 24.50-24.00
Crude Oil 68.80-68.00 67.02 66.50-65.40
EURO/USD 1.1800-1.1770 1.1690 1.1610-1.1550
GBP/USD 1.3890-1.3810 1.3750 1.3696-1.3615
USD/JPY 109.60-109.10 108.50 107.50-106.80

Intra-Day Strategy (9th 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 Friday made its intraday high of US$1804.73/oz and low of US$1758.62/oz. Gold down 2.30% at US$1762.82/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 1794-1767 with risk below 1767, targeting 1812-1820-1833 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     1,791
S2     1,780
S3     1,767-1,760
Intraday Resistance Levels
R1     1,805-1,820
R2     1,833
R3     1,840-1,845

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 Friday made its intraday high of US$24.35/oz and low of US$22.14/oz settled down by 1.920% at US$23.84/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 23.75-21.90, targeting 24.00-24.45-25.05 and 25.50-26.00-26.65 with stop loss should be place on the breakage below 21.90. Sell in between 24.00-26.00 with stop loss above 26.00; targeting 23.75-22.90-22.50 and 22.10-21.90.

 
Intraday  Support Levels
S1     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 Monday made an intra‐day high of US$69.94/bbl, intraday low of US$67.65/bbl and settled down by 1.701% to close at US$67.70/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 65.40-68.80 with stop loss at 68.80; targeting 68.80-68.00-67.40 and 66.90-66.50-65.40. Buy above 65.45-62.80 with risk daily closing below 62.90 and targeting 65.40-66.50-67.00 and 68.05-68.80.

 
Intraday Support Levels
S1     68.80-68.00
S2     67.02
S3     66.50-65.40

Intraday Resistance Levels
R1     69.50-70.40
R2     70.80
R3     71.20-71.80

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 Friday an intraday low of US$1.1753/EUR, high of US$1.1834/EUR and settled the day down by 0.602% to close at US$1.1761/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 1.1800-1.2140 targeting 1.1850-1.1800-1.1750 with stop-loss at daily closing above 1.2140. Buy above 1.1750-1.1600 with risk below 1.1600, targeting 1.1840-1.1910-1.1990 and 1.2040-1.2100.

 
Intraday Support Levels
S1     1.1800-1.1770
S2     1.1690
S3     1.1610-1.1550

Intraday  Resistance Levels
R1     1.1850-1.1910
R2     1.1990
R3     1.2080-1.2120

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.682 Buy
20-DMA   1.1805 Sell
50-DMA   1.1903 Sell
100-DMA   1.1948 Sell
200-DMA   1.1911 Sell
STOCH(5,3)   33.758 Sell
MACD(12,26,9)   -0.0044 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.3860/GBP, high of US$1.3933/GBP and settled the day down by 0.396% to close at US$1.3872/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     1.4050
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 Friday made intra‐day low of JPY109.69/USD and made an intraday high of JPY110.35/USD and settled the day up 0.456% at JPY110.26/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 110.00-106.50 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     109.60-109.10
S2     108.50
S3     107.50-106.80

INTRADAY RESISTANCE LEVELS
R1     110.00-110.50
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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