AAFX TRADING

Daily Market Lookup

  • The U.S. dollar hit a new 9-1/2-month high against major peers on Friday, buoyed by fears that the Delta coronavirus variant could delay the global economic recovery just as central banks begin to reverse pandemic-era stimulus. While moves in currency markets were much more contained than on Thursday as equity markets stabilized, the risk-sensitive Australian and New Zealand dollars fell sharply again. Minutes of the Fed's July meeting, released on Wednesday, showed officials largely expect to reduce their monthly bond buying later this year. Sterling slipped to one-month lows versus both the dollar and the euro. Emerging markets have also had a bruising week. A regulatory crackdown in China and the concerns over growth and COVID-19 have sent investors looking for safer assets. The dollar was largely unchanged in early European trade Friday, but the tone remains positive on worries the Covid-19 virus could stunt global growth just as the Federal Reserve starts to cut back its pandemic-era monetary stimulus. The spreading of the highly-transmissible delta variant of the Covid-19 virus is prompting concerns that the economic recovery from the first outbreak may be stalling. But, adding to this is the idea that the Federal Reserve, the central bank of the world’s largest economy and primary growth driver, is one the verge of easing its bond-buying stimulus. This means the market’s focus is now very much on the Fed’s annual Jackson Hole symposium in Wyoming, which starts at the end of next week. While this move to keep its benchmark interest rates unchanged was widely expected, there had been some looking for a cut given the slowdown in growth at the world’s second largest economy after a spate of localized Covid-19 outbreaks that have resulted in extensive lockdowns.
  • Gold was slightly higher Friday morning in Asia, with a stronger dollar taking some of the luster from a recent rally in the yellow metal. Ongoing uncertainty caused by rising COVID-19 cases globally and the relentless spread of the Delta variant should be supportive for gold, which tends to rise in periods of uncertainty, but relatively positive economic figures out of the US have given the dollar a shot in the arm at the expense of gold. The number of new unemployment benefits claims in the U.S. fell last week to a 17-month low, which suggests there will be another month of strong job growth. Counterbalancing this optimistic outlook, growth in factory activity in the mid-Atlantic region slowed for the fourth month in a row in August, according to a survey out on Thursday. The dollar has been pushed higher by expectations the U.S. Federal Reserve could begin easing stimulus this year, as minutes from its July meeting seemed to suggest. The market is now looking towards the Jackson Hole meeting of central bankers on Aug. 26-28 for further clues as to the Fed’s direction.
  • Oil prices steadied on Friday, clambering away from three-month lows, but they were still on track for a weekly loss of more than 5% as new lockdowns in countries facing surging cases of the COVID-19 Delta variant dampened the outlook for fuel demand. Broader investor risk aversion also weighed on oil with the U.S. dollar jumping to a nine-month high on signs the U.S. Federal Reserve is considering reducing stimulus this year. China has imposed new restrictions with its "zero tolerance" coronavirus policy, affecting shipping and global supply chains, and the United States and China have imposed tit-for-tat flight capacity restrictions. Meanwhile Delta variant outbreaks in Australia and New Zealand have also sparked strict lockdowns. The approaching end of the U.S. peak gasoline demand season and end of summer holidays in Europe and the United States are also set to sap oil demand. Oil was up Friday morning in Asia, climbing up from three-month lows. However, the black liquid was set for a weekly decline of around 6% as the restrictive measures in place to curb the latest COVID-19 outbreaks globally continue to dampen the fuel demand outlook. Decreasing risk appetite, with the dollar at a nine-and-a-half month high thanks to signs that the U.S. Federal Reserve could begin asset tapering later in 2021, also weighed in on oil. China, the top oil importer globally, tightened restrictive measures to zero COVID-19 cases, which has impacted shipping and global supply chains as major ports remain closed. It has also restricted the capacity for flights to the U.S. Elsewhere in Asia Pacific, Australia and New Zealand remain under lockdown to curb their latest COVID-19 outbreaks. Meanwhile, the U.S. summer driving season and European summer holidays are due to end soon, with demand expected to fall as the peak gasoline demand season in both regions draws to a close.

 

 
Intraday RESISTANCE LEVELS
20th August 2021 R1 R2 R3
GOLD-XAU 1,790-¬1,805 1,817 1,830-1,840
Silver-XAG 23.30-23.75 24.00 24.45-24.75
Crude Oil 64.05-64.90 65.45 66.50-67.00
EURO/USD 1.1705-1.1750 1.1800 1.1850-1.1910
GBP/USD 1.3650-1.3690 1.3715 1.3750-1.3810
USD/JPY 110.00¬-110.50 111.70 112.50-113.00

Intraday SUPPORTS LEVELS
20th August 2021 S1 S2 S3
GOLD-XAU 1,784-1,767 1,760 1,751-1,743
Silver-XAG 22.90-22.50 22.15 21.85-21.50
Crude Oil 63.05-62.60 61.60 61.20-60.50
EURO/USD 1.1640-1.1601 1.1550 1.1500
GBP/USD 1.3610-1.3571 1.3500 1.3500
USD/JPY 109.60-109.10 108.40 107.45-107.00

Intra-Day Strategy (20th 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$1792.38/oz and low of US$1774.38/oz. Gold down 0.429% at US$1780.05/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 1784-1743 with risk below 1743, targeting 1790-1805 and 1817-1825-1830. Sell in between 1790-1830 keeping stop loss closing above 1830, targeting 1784-1767-1760 and 1751-1742-1734.

 
Intraday Support Levels
S1     1,784-1,767
S2     1,760
S3     1,751-1,743
Intraday Resistance Levels
R1     1,790-¬1,805
R2     1,817
R3     1,830-1,840

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   45.254 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$23.52/oz and low of US$23.07/oz settled down by 1.186% at US$23.23/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 23.00-21.90, 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 23.50-26.00 with stop loss above 26.00; targeting 23.25-22.90-22.50 and 22.10-21.90.

 
Intraday  Support Levels
S1     22.90-22.50
S2     22.15
S3     21.85-21.50

Intraday  Resistance Levels
R1     23.30-23.75
R2     24.00
R3     24.45-24.75

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$64.51/bbl, intraday low of US$62.36/bbl and settled down by 1.154% to close at US$63.60/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

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.

 
Intraday Support Levels
S1     63.05-62.60
S2     61.60
S3     61.20-60.50

Intraday Resistance Levels
R1     64.05-64.90
R2     65.45
R3     66.50-67.00

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 Thursday an intraday low of US$1.1665/EUR, high of US$1.1715/EUR and settled the day down by 0.296% to close at US$1.1674/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 1.1705-1.1910 targeting 1.1640-1.1601 and 1.1550-1.1500 with stop-loss at daily closing above 1.1910. Buy above 1.1640-1.1460 with risk below 1.1460, targeting 1.1705-1.1750-1.1800 and 1.1840-1.1910-1.1990.

 
Intraday Support Levels
S1     1.1640-1.1601
S2     1.1550
S3     1.1500

Intraday  Resistance Levels
R1     1.1705-1.1750
R2     1.1800
R3     1.1850-1.1910

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 Thursday made an intra‐day low of US$1.3631/GBP, high of US$1.3757/GBP and settled the day down by 0.835% to close at US$1.3635/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 1.3650-1.3810 with targets at 1.3615-1.3571 and 1.3550-1.3510 stop-loss should be 1.3890. Buy above 1.3690-1.3550 with targets 1.3715-1.3750-1.3810 and 1.3860-1.3890-1.3955 with stop loss closing below 1.3550.

 
Intraday Support Levels
S1     1.3610-1.3571
S2     1.3500
S3     1.3500

Intraday Resistance Levels
R1     1.3650-1.3690
R2     1.3715
R3     1.3750-1.3810

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

38.544

Buy
20-DMA   1.3931 Buy
50-DMA   1.3820 Buy
100-DMA   1.3861 Buy
200-DMA   1.3714 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 JPY109.47/USD and made an intraday high of JPY110.22/USD and settled the day down 0.0665% at JPY109.68/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 109.60-106.50 with targets of 109.60-110.00-110.90 and 111.70-112.20 with stop below 106.00. Sell below 110.00-113.50 with risk above 113.50 targeting 109.60-109.00-108.50 and 108.00-107.50-106.80.

 
Intraday Support Levels
S1     109.60-109.10
S2     108.40
S3     107.45-107.00

INTRADAY RESISTANCE LEVELS
R1     110.00¬-110.50
R2     111.70
R3     112.50-113.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.047 Buy
20-DMA   109.86 Sell
50-DMA   109.86 Sell
100-DMA   109.34 Sell
200-DMA   108.39 Sell
STOCH(9,6)   7.253 Sell
MACD(12,26,9)   0.110 Sell

AAFX TRADING
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