AAFX TRADING

Daily Market Lookup

  • The dollar held its ground against major peers on Monday as disappointing monthly activity data from China helped the greenback claw back some losses after a shocking slump in consumer sentiment on Friday weakened the U.S. unit. July retail sales, industrial production and fixed asset investment were all weaker than expected as the latest COVID-19 outbreak weighed on the world's second-biggest economy. But long positions on the greenback swelled to their biggest levels since March 2020 suggesting the move lower was more a temporary setback than the beginning of a structural downtrend. The release of the Fed minutes this week will be key to the short-term outlook for the greenback especially if it confirms more policymakers are leaning towards tapering its bond purchase plan by the end of the year. MUFG strategists noted there has been a clear pattern for the U.S. dollar to strengthen modestly after the release of Fed minutes but there is the risk of a bigger market reaction when the Fed’s policy is moving closer to a pivot point. Currency market volatility, even by its already low levels, is nearing 2021 lows thanks to the summer lull. The dollar edged higher in early European trading Monday, but remained near a one-week low as rising Covid-19 cases and slumping U.S. consumer confidence could pressure the Federal Reserve to delay tapering its bond-buying program. A University of Michigan confidence survey released late last week showed U.S. consumer sentiment sliding to the lowest level since 2011 amid an acceleration in Covid-19 cases caused by the fast-spreading delta variant. The number of children hospitalized with the coronavirus in the United States hit a record high of just over 1,900 on Saturday, an alarming development given that the virus has so far taken more of a toll on the older and unhealthier parts of the population. . This is causing traders to pause for thought after inflation and employment numbers, also released last week, added to the growing expectations of an asset-tapering announcement from the Federal Reserve by the end of this year. The Fed's central banking conference in Jackson Hole, Wyoming, later this month is now firmly in the spotlight, but ahead of that Chairman Jerome Powell speaks on Tuesday and the central bank releases minutes of its last policy meeting a day later. Still, the dollar is trading in narrow ranges with the collapse of the Afghan government pointing risk-averse traders towards safe havens. The U.S. currency slumped the most in almost seven weeks on Friday, after a sharp fall in U.S. consumer confidence lessened the likelihood of a tighter U.S. Federal Reserve monetary policy. Investors digested U.S. economic data from the previous week that said consumer sentiment dropped to its lowest levels since 2011. The Michigan consumer expectations for August was 65.2, while the Michigan consumer sentiment was 70.2. Further U.S. data, including core retail sales and retail sales, will be released on Tuesday. Investors also await the Fed’s next move on asset tapering and interest rate hikes. Fed Chairman Jerome Powell will speak at a virtual town hall meeting with educators and students on Tuesday, with the minutes of its last policy meeting to be released a day later. Later in the month, the central bank will also hold its annual conference in Jackson Hole, Wyoming.
  • Oil prices fell more than 1% on Monday, dropping for a third session, after official data showed that refining throughput and economic activity slowed in China in an indicator that fresh COVID-19 outbreaks are crimping the world's no.2 economy. Factory output and retail sales growth slowed sharply in July in China, data showed, missing expectations as fresh outbreaks of COVID-19 and flooding disrupted business activity. China's crude oil processing last month also fell to the lowest on a daily basis since May 2020, as independent refiners cut production amid tighter quotas, elevated inventories and falling profits. China is the world's biggest oil importer. In Japan, the world's fourth-biggest importer of crude oil, many analysts expect modest economic growth in the current quarter as state of renewed emergency restrictions to deal with record cases of infections weigh on household spending. The International Energy Agency on Thursday said rising demand for crude oil reversed course in July and was expected to increase at a slower rate over the rest of 2021 because of surging COVID-19 infections from the highly transmissible Delta strain. Money managers reduced their net-long U.S. crude futures and options holdings in the week to Aug. 10, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. Speculators also cut their futures and options positions in New York and London by 21,777 contracts to 283,601 over the period, the CFTC said. Oil fell on Monday morning in Asia, falling more than 1% and dropping below the $70 mark. Concerns remained that the restrictive measures currently in place to curb the latest COVID-19 outbreaks would continue to dampen the fuel demand outlook. Data released in China earlier in the day said industrial production rose 6.4% year-on-year in July, and retail sales grew 8.5% year-on-year in the same month, both lower than expected. A recent tightening of restrictive measures due to the latest COVID-19 outbreak was a likely contributor to the disappointing data from the world’s top oil importer. In neighboring Japan, the GDP grew 0.3% quarter-on-quarter and 1.3% year-on-year in the second quarter. The figures come despite parts of the country remaining under a state of emergency to curb the latest outbreak in the country. The darkening fuel demand outlook fits the International Energy Agency’s grim prediction during the previous week that demand would rise at a slower rate for the remainder of 2021, after reversing its trend upwards in July due to COVID-19 outbreaks involving the Delta variant globally.

 

 
Intraday RESISTANCE LEVELS
16th August 2021 R1 R2 R3
GOLD-XAU 1,784-1,790 1,805 1,817-1,825
Silver-XAG 23.75-24.00 24.45 24.75-25.05
Crude Oil 67.00-68.05 68.90 69.45-70.30
EURO/USD 1.1800-1.1850 1.1910 1.1950-1.1990
GBP/USD 1.3860-1.3890 1.3955 1.4020-1.4050
USD/JPY 110.50 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
16th August 2021 S1 S2 S3
GOLD-XAU 1,767-1,760 1,751 1,742-1,731
Silver-XAG 23.30-22.90 22.50 22.10-21.90
Crude Oil 66.50-65.45 64.90 64.05-63.05
EURO/USD 1.1750-1.1705 1.1640 1.1550-1.1500
GBP/USD 1.3810-1.3750 1.3696 1.3615-1.3550
USD/JPY 110.00-109.60110.00-109.60 109.10 108.50-107.50

Intra-Day Strategy (16th 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$1779.93/oz and low of US$1751.61/oz. Gold up 1.543% at US$1779.67/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 1767-1731 with risk below 1731, targeting 1780-1,791-1805. Sell in between 1760-1805 keeping stop loss closing above 1805, targeting 1751-1742-1731 and 1716-1705.

 
Intraday Support Levels
S1     1,767-1,760
S2     1,751
S3     1,742-1,731
Intraday Resistance Levels
R1     1,784-1,790
R2     1,805
R3     1,817-1,825

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 Friday made its intraday high of US$23.82/oz and low of US$23.15/oz settled down by 2.429% at US$23.73/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 Friday made an intra‐day high of US$68.01/bbl, intraday low of US$66.61/bbl and settled down by 1.392% to close at US$66.92/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 67.00-70.90 with stop loss at 70.90; targeting 66.50-65.40 and 64.90-64.05-63.20. Buy above 67.00-63.10 with risk daily closing below 64.00 and targeting 68.05-68.80-69.45 and 70.30-70.90.

 
Intraday Support Levels
S1     66.50-65.45
S2     64.90
S3     64.05-63.05

Intraday Resistance Levels
R1     67.00-68.05
R2     68.90
R3     69.45-70.30

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$1.1728/EUR, high of US$1.1747/EUR and settled the day up by 0.571% to close at US$1.1795/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 1.1800-1.1990 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     1.1750-1.1705
S2     1.1640
S3     1.1550-1.1500

Intraday  Resistance Levels
R1     1.1800-1.1850
R2     1.1910
R3     1.1950-1.1990

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.682 Buy
20-DMA   1.1809 Sell
50-DMA   1.1979 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 Friday made an intra‐day low of US$1.3790/GBP, high of US$1.3874/GBP and settled the day up by 0.463% to close at US$1.3867/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 1.3880-1.4120 with targets at 1.3850-1.3810-1.3750 and 1.3685-1.3600-1.3520 stop-loss should be 1.4120. Buy above 1.3810-1.3600 with targets 1.3880-1.3955-1.4020 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     1.3860-1.3890
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 Friday made intra‐day low of JPY109.53/USD and made an intraday high of JPY110.45/USD and settled the day down 0.670% at JPY109.60/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     110.00-109.60110.00-109.60
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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