AAFX TRADING

Daily Market Lookup

  • The dollar strengthened in early European trading Wednesday, extending recent gains ahead of U.S. inflation data which could influence Federal Reserve’s tapering thinking. The dollar has been on the rise of late, as improving U.S. labor data and a more hawkish tone from Federal Reserve policymakers have led markets to expect the central bank to begin tapering its asset purchases later this year. Friday’s official U.S. jobs report impressed, with nonfarm payrolls rising by 943,000 in July and numbers for May and June also being revised higher. Now the attention turns to the second leg of the Fed’s dual mandate, with the consumer price index for July due out from the Bureau of Labor Statistics at 8:30 AM ET (1230 GMT). Analysts are looking for a gain in the headline figure of 5.3% over last year, marginally lower than June’s 5.4%, which was the biggest monthly gain since August 2008. Core inflation, which excludes food and energy prices, is expected to have climbed 4.3% in July from a year ago against the 4.5% jump in June, which was the quickest pace of increase since September 1991. Fed Chair Jerome Powell has consistently said the elevated inflation numbers will turn out to be transitory as the economy fully reopens, but another high release could add pressure to the tapering debate. Chicago Fed President Charles Evans took a dovish slant on Tuesday, saying the current inflation spike shouldn't push the Federal Reserve to tighten monetary policy prematurely, but he’s in the minority this week with a couple of his colleagues stating on Monday that inflation is already at a level that could prompt tightening.
  • The dollar was poised just below this year's high against the euro on Wednesday and it struck a five-week peak against the yen ahead of U.S. inflation data, with the prospect a strong number could pressure the Federal Reserve to wind back policy support. The greenback has enjoyed a lift from last week's impressive U.S. jobs data and from remarks by Fed officials about tapering bond buying and, eventually, raising rates, sooner than policymakers elsewhere. The inflation data may determine whether it tests those peaks, with a hot reading likely to stoke hike expectations and provide support, while downside surprise could reel those in. Economists polled by Reuters expect the pace of inflation to have eased slightly in July, with headline consumer prices rising 0.5% for the month compared with 0.9% a month earlier and the annual pace at 5.3%. Two Federal Reserve officials said on Monday that inflation is already at a level that could satisfy one leg of a test for the beginning of interest rate hikes - though a third, Charles Evans, demurred on Tuesday. At the same time, investor sentiment is sagging in Europe, with a survey showing a third straight month of deterioration in Germany, as rising global COVID cases keep markets nervous. Besides the inflation data, which is due at 1230 GMT, a speech at 1600 GMT by Federal Reserve Bank of Kansas City President Esther George will be closely watched, as will the troubling global spread of the Delta coronavirus variant. South Korea reported a record number of COVID-19 cases on Wednesday, while outbreaks in China, through Southeast Asia and in Australia grow steadily. Hospitals in Texas and Florida are filling up with patients. The Chinese yuan touched a two-week low in offshore trade, before steadying onshore, while the South Korean won also made a two-week trough. A measure of consumer sentiment in Australia slid to a one-year low as lockdowns in major cities weighed, and the Australian dollar slipped a little.
  • Oil was up Wednesday morning in Asia thanks to a brightening fuel demand outlook, but the growing number of COVID-19 cases globally capped gains for the black liquid. U.S. and European shares rose amid growing expectations that global consumption will continue upwards and tighten the market until the end of 2021. Meanwhile, U.S. crude oil supply data from the American Petroleum Institute showed a draw of 816,000 barrels for the week ending Aug. 6. Forecasts prepared by Investing.com had predicted a 1.050-million-barrel draw, while an 879,000-barrel draw was recorded during the previous week. Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day. In Asia, however, the spread of the Delta variant of COVID-19 is compounded by a slow vaccination rate, and restrictive measures currently in place could dent fuel consumption. The rising number of cases in the U.S. also continues to be of concern.
  • Gold was up on Wednesday morning in Asia but a strengthening dollar and rising bond yields capping gains for the yellow metal. The U.S. Senate also passed a huge infrastructure plan on Tuesday, which will now be voted on by the House of Representatives. The news sent U.S. Treasury yields to their highest levels since mid-July 2021 and U.S. shares also closed at record highs. Immediately after passing the bill, the Senate kicked off debate on a $3.5 trillion spending blueprint. Investors now await U.S. data, including the core consumer price index, due to be released later in the day, to gauge inflationary pressure as well as the U.S. Federal Reserve’s next move. The current inflation spike should not push the Fed to begin asset tapering or hike interest rates prematurely, as more months of labor data is needed before any changes to monetary policy, said Chicago Fed President Charles Evans. Evans’ comments were in contrast to the Fed’s recent hawkish stance, which spurred bets on an earlier-than-expected asset tapering and sent gold tumbling to a four-month low on Monday.

 

 
Intraday RESISTANCE LEVELS
11th August 2021 R1 R2 R3
GOLD-XAU 1,742-1,751 1,760 1,767-1,780
Silver-XAG 23.75-24.00 24.45 24.75-25.05
Crude Oil 68.80 69.45 70.30-70.90
EURO/USD 1.1750-1.1800 1.1850 1.1910-1.1990
GBP/USD 1.3860-1.3955 1.4020 1.4050-1.4120
USD/JPY 110.50 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
11th August 2021 S1 S2 S3
GOLD-XAU 1,731¬-1,716 1,705 1,698-1,684
Silver-XAG 23.30-22.90 22.50 22.10-21.90
Crude Oil 68.05-67.00 66.50 65.45-64.90
EURO/USD 1.1705-1.1640 1.1550 1.1500-1.1460
GBP/USD 1.3810-1.3750 1.3696 1.3615-1.3550
USD/JPY 110.00-109.60 109.10 108.50-107.50

Intra-Day Strategy (11th 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$1738.19/oz and low of US$1717.68/oz. Gold down 0.054% at US$1728.79/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 1731-1684 with risk below 1684, targeting 1742-1751-1760 and 1767-1780-1,791. Sell in between 1742-1780 keeping stop loss closing above 1780, targeting 1731-1716 and 1705-1698.

 
Intraday Support Levels
S1     1,731¬-1,716
S2     1,705
S3     1,698-1,684
Intraday Resistance Levels
R1     1,742-1,751
R2     1,760
R3     1,767-1,780

Technical Indicators

Name   Value Action
14DRSI  

28.131

Buy
20-DMA   1791.46 Sell
50-DMA  

1803.99

Sell
100-DMA   1808.40 Sell
200-DMA   1806.05 Sell
STOCH(5,3)   27.254 Buy
MACD(12,26,9)   -13.653 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$23.66/oz and low of US$23.22/oz settled down by 0.482% at US$23.32/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 23.30-21.90, 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 23.70-26.00 with stop loss above 26.00; targeting 23.25-22.90-22.50 and 22.10-21.90.

 
Intraday  Support Levels
S1     23.30-22.90
S2     22.50
S3     22.10-21.90

Intraday  Resistance Levels
R1     23.75-24.00
R2     24.45
R3     24.75-25.05

TECHNICAL INDICATORS
Name   Value Action
14DRSI   28.388 Buy
20-DMA   25.80 Sell
50-DMA   25.03 Sell
100-DMA   25.96 Sell
200-DMA   74.556 Buy
STOCH(5,3)   74.556 Buy
MACD(12,26,9)   -0.380 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$68.68/bbl, intraday low of US$66.33/bbl and settled up by 2.474% to close at US$68.26/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 68.80-70.90 with stop loss at 70.90; targeting 67.40-66.90-66.50 and 65.40-64.90-64.00. Buy above 68.00-64.00 with risk daily closing below 64.00 and targeting 68.05-68.80-69.45 and 70.30-70.90.

 
Intraday Support Levels
S1     68.05-67.00
S2     66.50
S3     65.45-64.90

Intraday Resistance Levels
R1     68.80
R2     69.45
R3     70.30-70.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   34.213 Sell
20-DMA   70.12 Buy
50-DMA   69.91 Buy
100-DMA   66.99 Buy
200-DMA   61.15 Buy
STOCH(5,3)   10.130 Sell
MACD(12,26,9)   0.9685 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1708/EUR, high of US$1.1742/EUR and settled the day down by 0.1363% to close at US$1.1719/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 1.1750-1.1990 targeting 1.1850-1.1800-1.1750 with stop-loss at daily closing above 1.2140. Buy above 1.1705-1.1460 with risk below 1.1460, targeting 1.1750-1.1840-1.1910 and 1.1990-1.2040-1.2100.

 
Intraday Support Levels
S1     1.1705-1.1640
S2     1.1550
S3     1.1500-1.1460

Intraday  Resistance Levels
R1     1.1750-1.1800
R2     1.1850
R3     1.1910-1.1990

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 Tuesday made an intra‐day low of US$1.3826/GBP, high of US$1.3893/GBP and settled the day down by 0.0715% to close at US$1.3834/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 1.3900-1.4120 with targets at 1.3810-1.3750 and 1.3685-1.3600-1.3520 stop-loss should be 1.4120. Buy above 1.3810-1.3600 with targets 1.3860-1.3955-1.4020 and 1.4050-1.4120 with stop loss closing below 1.3600.

 
Intraday Support Levels
S1     1.3810-1.3750
S2     1.3696
S3     1.3615-1.3550

Intraday Resistance Levels
R1     1.3860-1.3955
R2     1.4020
R3     1.4050-1.4120

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 JPY110.01/USD and made an intraday high of JPY110.34/USD and settled the day down 0.0589% at JPY110.22/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     110.00-109.60
S2     109.10
S3     108.50-107.50

INTRADAY RESISTANCE LEVELS
R1     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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