AAFX TRADING

Daily Market Lookup

  • The U.S. dollar fell against the Antipodean currencies and the British pound after surprising improvement in U.S. labour market data bolstered expectations for economic recovery, which reduced safe-harbour demand for the greenback. The Australian and New Zealand dollars both rose to their strongest since January after data showed a smaller-than-expected fall in Chinese exports, which supports commodity currencies. In contrast, the U.S. dollar traded near its highest in more than two months against the yen, supported by recent gains in long-term Treasury yields as investors await the outcome of a two-day U.S. Federal Reserve meeting ending on Wednesday. Sentiment has improved dramatically in the currency market as traders look for signs of a rebound from the coronavirus outbreak as economies reopen from lockdowns, which has hurt the dollar and driven money into so-called risk-on trades. Japan's economy shrank less than initially estimated in the first quarter, revised data showed earlier on Monday, but the yen took the data in its stride. New Zealand's Prime Minister Jacinda Ardern said on Monday that all coronavirus measures in the country will be lifted from Tuesday, barring border closure restrictions, as the virus had been eliminated from the country. Underpinning sentiment was a surprising recovery in U.S. employment in May after the economy suffered record job losses in April, data showed on Friday. Some investors may avoid making big trades before the Federal Reserve meeting ending on Wednesday to see how Chairman Jerome Powell views a recent rise in 10-year Treasury yields and a steepening in the yield curve. The pandemic first emerged in China late last year and has caused a sharp contraction in global economic activity, but many traders are now focused on the pace of recovery in the second half of this year. Some analysts said there are still many risks to the outlook, including any second wave of infections, diplomatic tensions between the United States and China, and the U.S. presidential election later this year. The common currency is riding a wave of optimism after the European Central Bank said last week it will increase bond purchases to help the bloc's weakest economies. Sentiment will face a test later on Monday with the release of data forecast to show that German industrial output fell the most on record in April. The dollar was down on Monday morning, with investors retreating from the safe-haven asset after the U.S. released a better-than-expected employment report on Friday. The U.S. jobless rate was 13.3% in May, down from April’s 14.7%, according to the Labor Department’s employment report released on Friday. The U.S. non-farm payroll also increased by 2.5 million, against analyst expectations of an 8-million drop.
  • Oil climbed on Monday after major producers agreed to extend a deal on record output cuts to the end of July and as China's crude imports hit an all-time high in May. Brent has nearly doubled since the OPEC, Russia and allies - collectively known as OPEC+ - agreed in April to cut supply by 9.7 million bpd during May-June to prop up prices that collapsed due to the coronavirus crisis. On Saturday, OPEC+ agreed to extend the deal to withdraw almost 10% of global supplies from the market by a third month to end-July. Following the extension, top exporter Saudi Arabia hiked its monthly crude prices for July. But Howie Lee, economist at Singapore bank OCBC, noted that the latest deal had fallen short of market hopes for a three-month extension of output cuts. He said both benchmarks would require stronger bullish factors to propel prices back to where they were before March 6, when they crashed after OPEC and Russia initially failed to reach an agreement on supply cuts. Low prices have drawn Chinese buyers to boost imports. Purchases by the world's largest crude importer rose to an all-time high of 11.3 min bpd in May. The OPEC+ move to extend cuts to July is, however, expected to lead to a supply deficit by October, aiding prices in the longer run, OCBC's Lee added. Market participants are now eyeing compliance among OPEC members such as Iraq and Nigeria, which exceeded production quotas in May and June, for trading cues, analysts said. Libya's supply could also rise soon as two major oilfields have reopened after months of a blockade that shut off most of the country's production. Even as oil prices recovered, they are still well below the costs of most U.S. shale producers, leading to shutdowns, layoffs and cost-cutting in the world's largest producer. The number of operating U.S. oil and natural gas rigs fell to a record low for a fifth week in a row in the week to June 5, according to data from Baker Hughes Co (N:BKR). Nearly 30% of U.S. offshore oil output was also shut on Friday as tropical storm Cristobal entered the Gulf of Mexico. The storm weakened to a tropical depression on Monday morning. Oil was up on Monday morning in Asia, after OPEC extended its existing production cuts into July on Saturday, with output to be cut by 9.6 million barrels next month. Investor sentiment also got a boost from Sunday’s Chinese customs data which indicated that the country’s crude imports soared to 11.34 barrels a day, 15% more than April, with the data a positive indication of China’s recovery from the COVID-19 virus. Meanwhile, OPEC still faces the challenge of getting certain member countries to meet their pledged cut targets. The reopening of two major oilfields in Libya, after a months-long blockade, could present a new headache for OPEC as the organization struggles to prevent a supply glut.

 

 
Intraday RESISTANCE LEVELS
9th June 2020 R1 R2 R3
GOLD-XAU 1,690-1,700 1,729 1,740-1,748
Silver-XAG 18.00-18.55 18.95 19.60-20.10
Crude Oil 40.10-41.00 41.60 42.50-43.40
EURO/USD 1.1300-1.1350 1.1400 1.1450-1.1495
GBP/USD 1.2720-1.2800 1.2850 1.2870-1.2930
USD/JPY 110.20-111.00 111.80 112.40-113.00

Intraday SUPPORTS LEVELS
9th June 2020 S1 S2 S3
GOLD-XAU 1,675-1,664 1,656 1,642-1,634
Silver-XAG 16.95-16.50 16.10 15.80-15.40
Crude Oil 39.50-38.90 38.00 37.10-36.60
EURO/USD 1.1260-1.1235 1.1190 1.1150-1.1100
GBP/USD 1.2650-1.2600 1.2550 1.2470-1.2410
USD/JPY 109.40-108.40 107.90 107.10-106.20

Intra-Day Strategy (9th 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 Friday made its intraday high of US$1716.12/oz and low of US$1670.59/oz. Gold down 1.63% at US$1684.99/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1642) and breakage below will call for 1600. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in oversold 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 1674-1642 with risk below 1640, targeting 1690-1700-1709- and 1729-1740-1748. Sell below 1690-1740 keeping stop loss closing above 1748, targeting 1674-1664-1656 and 1642-1634.

 
Intraday Support Levels
S1     1,675-1,664
S2     1,656
S3     1,642-1,634
Intraday Resistance Levels
R1     1,690-1,700
R2     1,729
R3     1,740-1,748

Technical Indicators

Name   Value Action
14DRSI  

43.982

Buy
20-DMA   1721.34 Sell
50-DMA  

1696.61

Sell
100-DMA   1641.90 Buy
200-DMA   1569.51 Buy
STOCH(5,3)   25.621 Sell
MACD(12,26,9)   2.894 Sell

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$17.75/oz and low of US$17.20/oz settled down by 1.604% at US$17.41/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 200DMA (16.93), breakage below will lead to 16.30. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is approaching overbought region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 17.10-15.40 targeting 18.00-18.40-18.95 and 19.60-20.10; stop breakage below 15.00. Sell below 18.00-20.10 with stop loss above 20.10; targeting 16.90-16.50-16.10 and 15.80-15.40.

 
Intraday  Support Levels
S1     16.95-16.50
S2     16.10
S3     15.80-15.40

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.514 Buy
20-DMA   17.02 Buy
50-DMA   15.78 Buy
100-DMA   16.27 Buy
200-DMA   16.93 Buy
STOCH(5,3)   31.268 Sell
MACD(12,26,9)   -0.374 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US39.77/bbl, intraday low of US$37.21/bbl and settled up by 4.25% to close at US$39.02/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 39.50-36.00 with risk daily closing below 36.00 and targeting 40.10-41.00 and 41.60-42.50-43.50. Sell in between 40.10-43.40 with stop loss at 43.40; targeting 39.50-38.90-38.00 and 36.60-36.10-35.20.

 
Intraday Support Levels
S1     39.50-38.90
S2     38.00
S3     37.10-36.60

Intraday Resistance Levels
R1     40.10-41.00
R2     41.60
R3     42.50-43.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   75.03 Sell
20-DMA   33.46 Buy
50-DMA   27.24 Sell
100-DMA   35.67 Sell
200-DMA   46.40 Sell
STOCH(5,3)   86.130 Sell
MACD(12,26,9)   -3.0720 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1277/EUR, high of US$1.1383/EUR and settled the day down by 0.394% to close at US$1.1291/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 1.1260-1.1060 with risk below 1.1030, targeting 1.1300-1.1400-1.1450 and 1.1495-1.1550. Sell below 1.1300-1.1495 targeting 1.1260-1.1235-1.1190 and 1.1150-1.1060 with stop-loss at daily closing above 1.1500.

 
Intraday Support Levels
S1     1.1260-1.1235
S2     1.1190
S3     1.1150-1.1100

Intraday  Resistance Levels
R1     1.1300-1.1350
R2     1.1400
R3     1.1450-1.1495

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.032 Buy
20-DMA   1.0851 Buy
50-DMA   1.0897 Buy
100-DMA   1.0970 Sell
200-DMA   1.1015 Sell
STOCH(5,3)   80.758 Buy
MACD(12,26,9)   -0.0047 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2582/GBP, high of US$1.2730/GBP and settled the day up by 0.585% to close at US$1.2668/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.2647) is become major resistance level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in oversold territory and giving negative crossover to confirm bearish 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 below 1.2720-1.2930 with targets at 1.2600-1.2550-1.2410 and 1.2320-1.2250-1.2165 stop-loss should be 1.2600. Buy above 1.2600-1.2060 with targets 1.2650-1.2700-1.2770 and 1.2800-1.2850-1.2910 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.2650-1.2600
S2     1.2550
S3     1.2470-1.2410

Intraday Resistance Levels
R1     1.2720-1.2800
R2     1.2850
R3     1.2870-1.2930

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 Friday made intra‐day low of JPY109.03/USD and made an intraday high of JPY109.84/USD and settled the day up by 0.414% at JPY109.58/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 110.20-113.00 with risk above 113.00 targeting 109.00-108.40-107.90 and 106.90-106.20-105.60. Long positions above 109.40-105.00 with targets of 110.20-110.90 and 111.80-112.50 with stop below 105.00.

 
Intraday Support Levels
S1     109.40-108.40
S2     107.90
S3     107.10-106.20

INTRADAY RESISTANCE LEVELS
R1     110.20-111.00
R2     111.80
R3     112.40-113.00

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
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