AAFX TRADING

Daily Market Lookup

  • The dollar was down on Tuesday morning in Asia, with the U.S. Federal Reserve’s new policy framework announced on August 28 fueling bets that rates in the U.S. will continue to remain low compared to those in other countries, and driving the greenback down to lows not seen in several years. Fed Vice Chair Richard Clarida on Monday expanded on Fed Chairman Jerome Powell's comments indicating a shift in focus to average inflation and higher employment. The framework has triggered a retreat from the dollar, with the Fed now given more scope to keep benchmark rates lower for longer. Monday's decline in long-term U.S. Treasury yields also hampered gains for the greenback. Investors are now looking to August’s U.S. manufacturing activity data, due to be released later in the day, with data on durable goods and employment also due later in the week. But even data exceeding forecasts might not be able to counter the dollar's decline against expectations of low rates. The yen was trading within a narrow range as the jockeying in Japan’s prime minister contest continues after incumbent Shinzo Abe tendered a surprise resignation last week. The ruling Liberal Democratic Party’s largest faction is supporting Yoshihide Suga, the current chief cabinet secretaryThe Reserve Bank of Australia is due to meet later in the day and is widely expected to make few changes to policy. Investors will be looking for the central bank’s economic outlook amid the recent uptick in COVID-19 cases in the country. China’s Caixin manufacturing Purchasing Managers’ Index (PMI) for August increased to 53.1, beating the forecasted 52.6 prepared by Investing.com as well as July’s reading of 52.8. Meanwhile, tensions between the U.S. and Taiwan simmered after the U.S. said on Monday that it would establish a new bilateral economic dialogue with Taiwan. Tensions between China and Australia are also heating up over Chinese authorities’ detention of Australian news anchor Cheng Lei, who worked for Chinese government-run station CTGN, in late August. The U.K.'s manufacturing PMI is due to be released later in the day.
  • The dollar slumped in early European trade Tuesday, falling to multi-year lows against many currencies, with traders viewing the Federal Reserve’s new stance on inflation as a valid reason to sell the greenback. The Fed's historic switch last week to focusing more on average inflation and higher employment means it has leeway to keep benchmark rates lower for longer, encouraging those with a negative view on the dollar to sell the currency. While EUR/USD has posted strong gains so far Tuesday, the pair is struggling to break through the 1.20 level, seen as a key resistance point. Ahead lies important Eurozone data, including manufacturing PMI releases, German unemployment figures and inflation numbers, with the potential for a rebalancing should they disappoint.
  • Oil prices gained on Tuesday, reversing overnight losses, as investors moved into risk assets and stayed away from the safe-haven U.S. dollar which hit multi-year lows The weakening U.S. dollar makes oil and other commodities priced in dollars more attractive to global buyers. But investors were also assessing the stalled recovery in fuel demand as countries continue to battle the coronavirus pandemic with rolling COVID-19 lockdowns, analysts said Ahead of the release of U.S. stockpile data from the American Petroleum Institute industry group, a Reuters poll found analysts expect U.S. crude stocks fell by about 2 million barrels in the week to Aug. 28. Gasoline inventories are seen falling by 3.6 million barrels, while distillate inventories, which include diesel and heating oil, are expected to drop by 1.5 million barrels, six analysts polled by Reuters estimated. Oil was up on Tuesday morning, with investors retreating from a weakened dollar and into risk assets. Producers are paying attention to the pace of the recovery, with countries continuing to battle fresh COVID-19 outbursts and impose rolling lockdown measures. Meanwhile, investors are now looking to the American Petroleum Institute (API)’s figures on crude oil supply, due later in the day.
  • Gold was up on Tuesday morning in Asia building on its gains as the dollar weakened to its lowest levels in years. The dollar slumped to its lowest level since May 2018, in the aftermath of U.S. Federal Reserve Vice Chairman Richard Clarida expanding on the Fed’s policy shift on inflation announced last week by Fed Chair Jerome Powell. The wider scope for the Fed to keep benchmark rates lower for longer saw investors retreating from the greenback. Meanwhile, data released in China and Japan pointed to steady economic recoveries in both countries. China’s Caixin manufacturing Purchasing Managers’ Index (PMI) for August rose to 53.1 and Japan’s manufacturing Purchasing Managers’ Index (PMI) saw an increase to 47.2 in August. Although Japan’s figure was below the 50-mark indicating economic expansion, it was the index’s slowest contraction since February. Investors are also keeping an eye on increasing tensions between China and the U.S., as well as Australia. Tensions with the U.S. mounted after the U.S. said on Monday that it was establishing a new bilateral economic dialogue with the country, whilst tensions with Australia mounted in the aftermath of the Chinese authorities’ detention of Australian news anchor Cheng Lei in late August.

 

 
Intraday RESISTANCE LEVELS
1st September 2020 R1 R2 R3
GOLD-XAU 1,989 2,010 2,023-2,030
Silver-XAG 29.00 29.80-30.50 31.00
Crude Oil 44.10 45.00-46.30 47.00
EURO/USD 1.2000-1.2050 1.2100 1.2170-1.2250
GBP/USD 1.3420 1.3490 1.3520-1.3550
USD/JPY 106.10-106.90 107.30 108.10-108.90

Intraday SUPPORTS LEVELS
1st September 2020 S1 S2 S3
GOLD-XAU 1,971-1,954 1,940 1,924-1,915
Silver-XAG 28.10-27.00 26.10 26.55-25.10
Crude Oil 43.15-42.00 41.00 40.60-39.50
EURO/USD 1.1955-1.1900 1.1850 1.1800-1.1730
GBP/USD 1.3350-1.3290 1.3250 1.3190-1.3100
USD/JPY 105.50 104.90 104.30-103.90

Intra-Day Strategy (1st September 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 Monday made its intraday high of US$1976.53/oz and low of US$1954.22/oz. Gold up 0.064% at US$1966.99/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1882) and breakage below will call for 1805. 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 overbought territory and giving positive crossover to bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1971-1900 with risk below 1900, targeting 1989-2010 and 2023-2030. Sell below 1989-2030 keeping stop loss closing above 2030, targeting 1971-1954-1940 and 1924-1900-1889.

 
Intraday Support Levels
S1     1,971-1,954
S2     1,940
S3     1,924-1,915
Intraday Resistance Levels
R1     1,989
R2     2,010
R3     2,023-2,030

Technical Indicators

Name   Value Action
14DRSI  

58.043

Buy
20-DMA   1966.45 Buy
50-DMA  

1882.25

Buy
100-DMA   1805.63 Buy
200-DMA   1682.51 Buy
STOCH(5,3)   88.503 Buy
MACD(12,26,9)   15.45 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$28.53/oz and low of US$27.41/oz settled up by 2.305% at US$28.09/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 20DMA (21.60), breakage below will lead to 19.40. 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 neutral region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 28.10-24.50 targeting 29.00-29.80 and 30.50-31.00, stop breakage below 22.50. Sell below 29.00-30.00 with stop loss above 30.00; targeting 28.10-27.20-26.10 and 25.00-24.30.

 
Intraday  Support Levels
S1     28.10-27.00
S2     26.10
S3     26.55-25.10

Intraday  Resistance Levels
R1     29.00
R2     29.80-30.50
R3     31.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.514 Buy
20-DMA   24.90 Buy
50-DMA   20.81 Buy
100-DMA   18.30 Buy
200-DMA   17.66 Buy
STOCH(5,3)   49.268 Buy
MACD(12,26,9)   1.914 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US43.49/bbl, intraday low of US$42.80/bbl and settled down by 0.0534% to close at US$43.04/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 43.15-38.50 with risk daily closing below 36.65 and targeting 44.10-45.00 and 46.30-47.00. Sell in between 44.10-47.30 with stop loss at 47.30; targeting 43.15-42.00-41.00 and 40.60-39.50-38.50.

 
Intraday Support Levels
S1     43.15-42.00
S2     41.00
S3     40.60-39.50

Intraday Resistance Levels
R1     44.10
R2     45.00-46.30
R3     47.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.099 Sell
20-DMA   42.14 Buy
50-DMA   41.02 Buy
100-DMA   34.96 Buy
200-DMA   42.11 Sell
STOCH(5,3)   78.130 Buy
MACD(12,26,9)   0.738 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.1883/EUR, high of US$1.1965/EUR and settled the day up by 0.384% to close at US$1.1935/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 oversold territory and giving negative crossovers to signal for bearish 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 1.1955-1.1740 with risk below 1.1740, targeting 1.2000-1.2050-1.2100 and 1.2170-1.2250. Sell below 1.2000-1.2250 targeting 1.1955-1.1900-1.1850 and 1.1800-1.1730-1.1650 with stop-loss at daily closing above 1.1950.

 
Intraday Support Levels
S1     1.1955-1.1900
S2     1.1850
S3     1.1800-1.1730

Intraday  Resistance Levels
R1     1.2000-1.2050
R2     1.2100
R3     1.2170-1.2250

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.032 Buy
20-DMA   1.1811 Buy
50-DMA   1.1531 Buy
100-DMA   1.1253 Buy
200-DMA   1.1145 Buy
STOCH(5,3)   28.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3300/GBP, high of US$1.3395/GBP and settled the day up by 0.277% to close at US$1.3368/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.3134) 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 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 1.3420-1.3550 with targets at 1.3350-1.3290-1.3250 and 1.3190-1.3100-1.3050 stop-loss should be 1.3550. Buy above 1.3350-1.3050 with targets 1.3420-1.3490 and 1.3520-1.3550 with stop loss closing below 1.3000.

 
Intraday Support Levels
S1     1.3350-1.3290
S2     1.3250
S3     1.3190-1.3100

Intraday Resistance Levels
R1     1.3420
R2     1.3490
R3     1.3520-1.3550

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

70.904

Buy
20-DMA   1.3154 Buy
50-DMA   1.2857 Buy
100-DMA   1.2637 Sell
200-DMA   1.2729 Sell
STOCH(5,3)   95.940 Buy
MACD(12,26,9)   0.0124 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY105.28/USD and made an intraday high of JPY106.09/USD and settled the day up by 0.454% at JPY105.90/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 106.00-111.00 with risk above 111.00 targeting 105.50-104.90 and 104.50-103.90-103.10. Long positions above 106.10-103.00 with targets of 106.00-106.50-106.90 and 107.90-108.40-109.40 with stop below 105.00.

 
Intraday Support Levels
S1     105.50
S2     104.90
S3     104.30-103.90

INTRADAY RESISTANCE LEVELS
R1     106.10-106.90
R2     107.30
R3     108.10-108.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.904 Buy
20-DMA   106.03 Sell
50-DMA   106.49 Sell
100-DMA   106.49 Sell
200-DMA   107.99 Sell
STOCH(9,6)   80.253 Sell
MACD(12,26,9)   -0.1448 Sell

AAFX TRADING
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