AAFX TRADING

Daily Market Lookup

  • The dollar slightly retreated in early European trading Friday, but remained near its highest level in four months as elevated inflation levels and a recovering labor market point to the Federal Reserve reining in its hefty monetary stimulus in the near future. Thursday’s data releases added to the growing expectations of an asset tapering announcement from the Federal Reserve by the end of 2020. The producer price index grew 1% month-on-month in July, up 7.8% on the year, the largest annual increase in more than a decade. Wednesday’s consumer price data may have indicated inflation may be peaking, but this wholesale price data suggested inflationary pressures remain. Additionally, data Thursday showed that 375,000 initial jobless claims were filed throughout the week, which was lower than the 387,000 claims filed during the previous week, and indicative of a gradually improving labor market. A number of Fed officials have in recent days come out in support of tapering bond buying in coming months, and while Fed chair Jerome Powell has consistently called for more time the pressure is mounting. The “Fed may struggle to continue arguing that inflation expectations are 'well anchored',” said analysts at ING, in a note, and it’s likely “that the Fed will be having an increasingly public discussion about tapering, with an announcement possible at the 22 September meeting.” The dollar held firm on Friday, staying near its highest level in four months against a basket of currencies as investors looked for more hints from the Federal Reserve on its plans to reduce monetary stimulus. The U.S. currency was underpinned by data, released on Thursday, showing U.S. producer prices posted their largest annual increase in more than a decade in the 12 months through July. Although consumer price data published a day earlier indicated inflation may be peaking, the wholesale price data underscored the strength of inflationary pressure, helping the case for removing some of the Fed's stimulus. Several Fed officials this week came out in support of tapering bond buying in coming months, setting themselves apart from other, more dovish major central banks such as the European Central Bank and the Bank of Japan. While many market players suspect Fed Chair Jerome Powell is more dovish than some other board members, especially more hawkish regional Fed chiefs, a tapering announcement by the end of the year is seen as near certainty. Thursday's weekly data showed the number of Americans filing claims for unemployment benefits fell again last week as the economic recovery from the COVID-19 pandemic continued, despite concerns about the Delta variant of the virus. Some investors think the Fed could signal timings on tapering as early as at a meeting of central bankers in Jackson Hole, Wyoming, on Aug. 26-28, though many others expect the Fed to take a slower approach. Easing oil prices put some pressure on commodity-linked currencies as the International Energy Agency (IEA) said the spread of the Delta variant of the coronavirus would slow the recovery of global oil demand.
  • Oil prices fell for a second day on Friday after the International Energy Agency warned that demand growth for crude and its products had slowed sharply as surging COVID-19 cases worldwide forced governments to revive movement restrictions. Rising demand for crude ground to a halt in July and is set to rise at a slower pace over the rest of 2021 because of the surge in infections from the coronavirus Delta variant, the IEA said on Thursday. Banks have also lowered their near-term demand forecasts. Similarly, Goldman Sachs (NYSE:GS) has reduced its estimate for the global oil deficit to 1 million bpd from 2.3 million bpd in the short term as demand is set to decline in August and September. Looking beyond the near-term risks from Delta, the bank still expects the demand recovery to continue alongside rising vaccination rates. In sharp contrast, OPEC on Thursday stuck to its forecasts for a rebound in oil demand globally this year and further growth in 2022, notwithstanding the rising concern about the surge in COVID-19 infections. In its monthly report, the Organization of the Petroleum Exporting Countries (OPEC) also raised its expectations for supplies next year from other producers, including U.S. shale drillers, which could potentially snarl efforts by the group and allies, known as OPEC+, to achieve a balance in the market. U.S. investment bank Goldman Sachs (NYSE:GS) said a recent call by the United States to OPEC+ to boost oil output is unlikely to result in higher production over the short-term given the threat to demand from the coronavirus Delta variant. U.S. President Joe Biden's administration on Wednesday urged the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to boost output to tackle rising gasoline prices that they see as a threat to the global economic recovery. However, Goldman noted an additional hike in OPEC+ production by the year-end is required to counter recent supply disappointments globally and expects OPEC+ spare capacity to be fully normalized by spring 2022. Last month, OPEC+ agreed to boost oil supply from August to cool prices that have climbed to 2-1/2 year highs. The U.S. bank recently lowered its oil demand forecast for China, citing rising concerns over the spread of Delta variant.

 

 
Intraday RESISTANCE LEVELS
13th August 2021 R1 R2 R3
GOLD-XAU 1,760-1,767 1,784 1,790-1806
Silver-XAG 23.75-24.00 24.45 24.75-25.05
Crude Oil 68.90-69.45 70.30 70.90-71.50
EURO/USD 1.1750-1.1800 1.1850 1.1910-1.1990
GBP/USD 1.3850-1.3880 1.3955 1.4020-1.4050
USD/JPY 110.50 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
13th August 2021 S1 S2 S3
GOLD-XAU 1,751-1,742 1,731 1,716-1,705
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 (13th 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 Thursday made its intraday high of US$1758.07/oz and low of US$1741.49/oz. Gold up 0.0810% at US$1752.68/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 1751-1684 with risk below 1684, targeting 1760-1767-1780 and 1,791-1805. Sell in between 1760-1805 keeping stop loss closing above 1805, targeting 1751-1742-1731 and 1716-1705.

 
Intraday Support Levels
S1     1,751-1,742
S2     1,731
S3     1,716-1,705
Intraday Resistance Levels
R1     1,760-1,767
R2     1,784
R3     1,790-1806

Technical Indicators

Name   Value Action
14DRSI  

37.170

Buy
20-DMA   1784.03 Sell
50-DMA  

1799.86

Sell
100-DMA   1806.12 Sell
200-DMA   1804.94 Sell
STOCH(5,3)   45.254 Buy
MACD(12,26,9)   -15.653 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$23.53/oz and low of US$22.99/oz settled down by 1.55% at US$23.16/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   25.39 Buy
STOCH(5,3)   74.556 Buy
MACD(12,26,9)   -0.380 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$69.40/bbl, intraday low of US$68.24/bbl and settled down by 0.636% to close at US$68.69/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 68.90-70.90 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     68.90-69.45
R2     70.30
R3     70.90-71.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.412 Sell
20-DMA   71.84 Buy
50-DMA   69.87 Buy
100-DMA   67.12 Buy
200-DMA   61.39 Buy
STOCH(5,3)   10.130 Sell
MACD(12,26,9)   0.9685 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1722/EUR, high of US$1.1747/EUR and settled the day down by 0.0732% to close at US$1.1729/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   35.682 Buy
20-DMA   1.1809 Sell
50-DMA   1.19791.1809 Sell
100-DMA   1.1932 Sell
200-DMA   1.1904 Sell
STOCH(5,3)   8.891 Sell
MACD(12,26,9)   -0.003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3801/GBP, high of US$1.3877/GBP and settled the day down by 0.449% to close at US$1.3803/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 1.3850-1.4120 with targets at 1.3810-1.3750 and 1.3685-1.3600-1.3520 stop-loss should be 1.4120. Buy above 1.3850-1.3600 with targets 1.3880-1.3955-1.4020 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     1.3850-1.3880
R2     1.3955
R3     1.4020-1.4050

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

45.334

Buy
20-DMA   1.3978 Buy
50-DMA   1.3848 Buy
100-DMA   1.3877 Buy
200-DMA   1.3712 Buy
STOCH(5,3)   21.940 Buy
MACD(12,26,9)   -0.0074 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY110.31/USD and made an intraday high of JPY110.54/USD and settled the day down 0.130% at JPY110.35/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 110.50-114.50 with risk above 114.50 targeting 110.00-109.00-108.50 and 108.00-107.50-106.80.

 
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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