AAFX TRADING

Daily Market Lookup

  • The dollar has sold off in early European trade Wednesday, with riskier assets in demand as investors look for more fiscal stimulus amid signs of a global economic recovery. EUR/USD traded 0.5% higher at 1.1220, trading above 1.12 for the first time since mid March, on hopes policymakers will continue to support the euro zone, despite the German government's failure to agree on a second big stimulus package Tuesday. The region’s weakest economies are still struggling to recover from the measures used to combat the corona virus outbreak, although the gradual reopening of the European economy continued Wednesday as Italy lifted its quarantine regulations for visitors. The European Central Bank is expected to increase its 750 billion euro ($840 billion) Pandemic Emergency Purchase Program, on Thursday, probably by around 500 billion Euros. Sterling has also posted gains against the U.S. dollar, up 0.5% at 1.2606, above 1.26 for the first time since mid April, in sympathy with a rally in global equity prices amidst steadily improving investor sentiment regarding the global exit from lockdown. That said, the U.K. and EU still appear far from a solution to avoid a big disruption to trade after the post-Brexit transition period ends at the end of the year. The two sides started their last scheduled talks on the issue this week, and doubts remain about the likelihood of progress. Earlier Wednesday, data showed that China’s services sector returned to growth last month for the first time since January. Additionally, the Australian dollar, often seen as a proxy bet on the strength of the Chinese economy, rose 0.6% to fetch $0.6938, hitting a five-month high against the greenback, despite the country’s GDP falling 0.3% during the first quarter of 2020, a second straight quarterly contraction. The U.S. dollar was down on Wednesday morning in Asia after increasing optimism over a global economic recovery from COVID-19 increased investor risk appetite. Investors focused on countries continuing to loosen lockdown measures and restarting their economies, despite the ever-growing number of COVID-19 cases and no cure. There are almost 6.4 million global cases of the virus as of June 3, according to Johns Hopkins University. China’s Caixin/Markit services Purchasing Managers’ Index (PMI) reading for May was 55, indicating a return to growth for the country’s services sector for the first time since January. Daiwa Securities’ Ishizuki remained optimistic about the AUD, saying that “The Australian dollar has a lot of room to run because there are still a lot of shorts that need to be covered.”
  • Oil was up on Wednesday morning in Asia, holding onto its gains from the previous session as well as hitting a three-month high, after the American Petroleum Institute (API) predicted a surprise draw in the crude oil supply on Tuesday. Although small, API's prediction of a 500,000 barrel- draw for the week ended May 29 gave the black liquid a boost after the previous week’s estimate of an 8.7-million-barrel build. Investors will also see whether OPEC+’s meeting, expected to take place on Thursday, will extend the current production cuts that will end this month. There is also optimism that the slow but certain global economic recovery from COVID-19 will continue boost demand. A Capital Economics note said, "As virus-related lockdown measures continue to be lifted, we expect that demand will gradually recover,” but also estimating that 2020’s average global oil consumption will fall to just under 92 million bpd compared to 2019’s 100.2 million bdp average. Oil is likely to end up in "a small deficit later this year, which should provide some additional support to prices," the note added. Oil rose on Wednesday to a near three-month high amid optimism that major producers will extend production cuts as the world recovers from the coronavirus pandemic. Both benchmarks have risen sharply in recent weeks from the lows of April, buoyed by a continuing recovery in China, the epicentre of the virus outbreak, while other economies are slowly opening up after lockdowns to contain its spread. The Organization of the Petroleum Exporting Countries and others including Russia may extend production cuts of 9.7 million barrels per day (bpd), or about 10% of global output, into July or August, sources told Reuters. A meeting of the grouping known as OPEC+ is expected to be held online on Thursday. The cuts are currently due to run through May and June, scaling back to a reduction of 7.7 million bpd from July to December, but Saudi Arabia has been pushing to keep the deeper cuts in place for longer. This compared with 100.2 million bpd in 2019, it said, before the pandemic swept through Europe and the United States, evaporating demand for everything from flying to trips to the dentist. Oil is likely to end up in "a small deficit later this year, which should provide some additional support to prices," it added. OPEC and its allies were edging closer to a consensus on extending production cuts, even as wrangling continued over whether the cartel’s members could be trusted to stick to their promises. Four days after a proposal to bring forward the meeting to this Thursday was first floated, there was still no agreement on the date. And while a plan to extend output cuts by one month was gaining support, delegates said Saudi Arabia and Russia were seeking assurances that all members would comply with the cuts they all sign up to. Brent oil rose above $40 for the first time in almost three months. The rally has been driven by the historic output cuts OPEC and its allies agreed to in April and also a faster-than-expected recovery in demand as the world emerges from lockdown.

 

 
Intraday RESISTANCE LEVELS
3rd June 2020 R1 R2 R3
GOLD-XAU 1,729-1,740 1,748 1,755-1,765
Silver-XAG 18.00-18.55 18.95 19.60-20.10
Crude Oil 38.00-38.90 39.50 40.10-41.00
EURO/USD 1.1235-1.1300 1.1350 1.1400-1.1450
GBP/USD 1.2600 1.2650 1.2720-1.2800
USD/JPY 109.40 110.20-111.00 111.80

Intraday SUPPORTS LEVELS
3rd June 2020 S1 S2 S3
GOLD-XAU 1,709-1,700 1,694 1,675
Silver-XAG 17.60 16.90 16.50-16.10
Crude Oil 37.10-36.60 36.10 35.20-34.00
EURO/USD 1.1190-1.1150 1.1030-1.0970 1.1030-1.0970
GBP/USD 1.2550-1.2470 1.2410 1.2350-1.2250
USD/JPY 107.10 107.10 106.20-105.60

Intra-Day Strategy (3rd June 2020)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Buy
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Tuesday made its intraday high of US$1745.26/oz and low of US$1721.40/oz. Gold down 0.711% at US$1727.96/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1596) and breakage below will call for 1550. MACD is below zero line but histograms are 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 overbought territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1720-1660 with risk below 1660, targeting 1740-1748-1754 and 1765-1772. Sell below 1740-1772 keeping stop loss closing above 1772, targeting 1720-1700-1690 and 1674-1660.

 
Intraday Support Levels
S1     1,709-1,700
S2     1,694
S3     1,675
Intraday Resistance Levels
R1     1,729-1,740
R2     1,748
R3     1,755-1,765

Technical Indicators

Name   Value Action
14DRSI  

52.982

Buy
20-DMA   1717.47 Buy
50-DMA  

1678.93

Buy
100-DMA   1632.40 Buy
200-DMA   1563.70 Buy
STOCH(5,3)   28.621 Sell
MACD(12,26,9)   -2.894 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$18.38/oz and low of US$17.73/oz settled down by 0.730% at US$18.12/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 100DMA (17.55), breakage below will lead to 17.30. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in overbought region, indicating buy signal for now. The Stochastic Oscillator is in overbought region and giving negative crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 17.60-16.10 targeting 18.00 and 18.40-18.95; stop breakage below 15.00. Sell below 18.55-20.95 with stop loss above 21.00; targeting 18.00-17.60-16.90 and 16.50-16.10-15.60.

 
Intraday  Support Levels
S1     17.60
S2     16.90
S3     16.50-16.10

Intraday  Resistance Levels
R1     18.00-18.55
R2     18.95
R3     19.60-20.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   75.370 Buy
20-DMA   15.36 Sell
50-DMA   14.88 Sell
100-DMA   16.35 Sell
200-DMA   16.91 Sell
STOCH(5,3)   96.268 Buy
MACD(12,26,9)   -0.374 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US38.17/bbl, intraday low of US$35.30/bbl and settled up by 1.77% to close at US$37.21/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 40.00 which is a resistance level and breakage above will call for 44.00. MACD is below zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving positive crossover for confirmation of bullish stance; while the RSI is in neutral region and more downside can be expected to reach the oversold region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 35.20-31.00 with risk daily closing below 31.00 and targeting 36.00-36.60 and 37.10-37.70. Sell in between 35.20-37.70 with stop loss at 37.70; targeting 35.20-34.00-33.00 and 32.25-31.00-30.50.

 
Intraday Support Levels
S1     37.10-36.60
S2     36.10
S3     35.20-34.00

Intraday Resistance Levels
R1     38.00-38.90
R2     39.50
R3     40.10-41.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.117 Sell
20-DMA   22.13 Buy
50-DMA   24.89 Sell
100-DMA   38.40 Sell
200-DMA   47.45 Sell
STOCH(5,3)   82.130 Sell
MACD(12,26,9)   -3.0720 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1114/EUR, high of US$1.1197/EUR and settled the day up by 0.305% to close at US$1.1171/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1031), which become immediate resistance level, break above will target 1.1090. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.1060-1.0800 with risk below 1.0630, targeting 1.1150-1.1200 and 1.1235-1.1300. Sell below 1.1150-1.1300 targeting 1.1060-1.1030-1.0900 and 1.0820-1.0770-1.0700 with stop-loss at daily closing above 1.1100.

 
Intraday Support Levels
S1     1.1190-1.1150
S2     1.1030-1.0970
S3     1.1030-1.0970

Intraday  Resistance Levels
R1     1.1235-1.1300
R2     1.1350
R3     1.1400-1.1450

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.032 Buy
20-DMA   1.0851 Buy
50-DMA   1.0897 Buy
100-DMA   1.0970 Sell
200-DMA   1.1015 Sell
STOCH(5,3)   78.758 Buy
MACD(12,26,9)   -0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2478/GBP, high of US$1.2612/GBP and settled the day up by 1.256% to close at US$1.2566/GBP.

Technicals in Focus:

GBP/USD on Monday made an intra‐day low of US$1.2478/GBP, high of US$1.2612/GBP and settled the day up by 1.256% to close at US$1.2566/GBP.

Trading Strategy: Neutral to Sell

GBP/USD on Monday made an intra‐day low of US$1.2478/GBP, high of US$1.2612/GBP and settled the day up by 1.256% to close at US$1.2566/GBP.

 
Intraday Support Levels
S1     1.2550-1.2470
S2     1.2410
S3     1.2350-1.2250

Intraday Resistance Levels
R1     1.2600
R2     1.2650
R3     1.2720-1.2800

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

47.554

Buy
20-DMA   1.2308 Buy
50-DMA   1.2270 Sell
100-DMA   1.2600 Sell
200-DMA   1.2650 Sell
STOCH(5,3)   44.940 Sell
MACD(12,26,9)   -0.0305 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY107.52/USD and made an intraday high of JPY107.84/USD and settled the day down by 0.204% at JPY107.78/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

Sell below 108.40-111.80 with risk above 112.00 targeting 108.40-107.90-106.90 and 106.20-105.60-105.00. Long positions above 107.90-105.00 with targets of 109.40-110.20-110.90 and 111.80-112.50 with stop below 105.00.

 
Intraday Support Levels
S1     107.10
S2     107.10
S3     106.20-105.60

INTRADAY RESISTANCE LEVELS
R1     109.40
R2     110.20-111.00
R3     111.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.904 Buy
20-DMA   107.10 Buy
50-DMA   107.55 Sell
100-DMA   108.51 Sell
200-DMA   108.22 Buy
STOCH(9,6)   70.253 Sell
MACD(12,26,9)   -0.161 Sell

AAFX TRADING
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING