AAFX TRADING

Daily Market Lookup

  • The dollar clung to overnight gains on Thursday, as investors trimmed bets against the greenback and sold the euro on concerns that the European Central Bank was worried about its rise. Few analysts expect it to hold for too long but it was steady in morning trade, inching about 0.1% firmer on the Australian dollar, kiwi, euro and pound as investors position themselves ahead of U.S. jobs data due on Friday. The drop in the euro extended its retreat from the $1.20 mark, which had begun on Tuesday after the ECB's chief economist Philip Lane said the euro-dollar rate "does matter" for monetary policy - suggesting the bank might do something about it. Ray Attrill, head of FX strategy at National Australia Bank (OTC:NABZY) in Sydney said that was unlikely, but that "Lane's comments were the excuse for some traders to take profits on long euro positions" that had begun to look stretched. The value of euro longs stood at a record high last week . The Japanese yen is gradually settling back towards where it was before Shinzo Abe resigned as Prime Minister as his close ally Yoshihide Suga firms as the favourite to succeed him. Suga formally declared his candidacy for the Liberal Democratic Party leadership on Wednesday and he is expected to persist with Abe's aggressive fiscal and monetary stimulus policies. Ahead on Thursday are purchasing managers index figures in Asia, Europe and the United States. Markets are also awaiting U.S. payrolls figures on Friday.
  • The dollar was on a downward trend on Thursday morning in Asia, reversing some earlier gains. The dollar saw its first back-to-back daily gains since June earlier in the session over European Central Bank (ECB) worries about the euro’s recent rise. The euro had rallied ever since the European Union in July agreed on a rescue package for its members to fight the impact of COVID-19, but a retreating euro saw investors trim bets against the dollar. ECB chief economist Philip Lane said on Tuesday the euro-dollar rate “does matter” for monetary policy, thereby suggesting that ECB action on the rate could be forthcoming. And the move downwards justified some investors’ conviction that the dollar’s upward trend would not last long. The USD/JPY pair inched up 0.06% to 1106.25. Yoshihide Suga formally declared his candidacy to lead the Liberal Democratic Party leadership on Wednesday, thereby throwing his hat into the ring to succeed incumbent Shinzo Abe as Japan’s next prime minister. Japan and China both released purchasing managers index (PMI) figures earlier in the day, with both countries seeing slight dips. Japan’s August services PMI came in at 45, slightly below July’s 45.4, and China’s Caixin services PMI for August was 54 against July’s reading of 54.1. Investors now await more PMI figures from Europe and the U.S., alongside U.S. payroll figures, later in the day.
  • Oil prices were hovering around multi-week lows on Thursday as worries about falling U.S. gasoline demand and sluggish economic recovery from the COVID-19 pandemic dented sentiment. U.S. gasoline demand last week fell to 8.78 million barrels per day (bpd) from 9.16 million bpd a week earlier. Other data, such as U.S. private employers hiring fewer workers than expected for a second straight month in August, also fed fears that economic recovery was lagging. Oil markets, however, drew some support from Iraq's denial it was seeking exemption from OPEC+ oil cuts during the first quarter of next year. Analysts warn that the upcoming refinery maintenance and the end of summer driving season would also limit crude demand. Due to shutdowns ahead of Hurricane Laura, U.S. refinery utilization rates fell by 5.3 percentage points to 76.7% of total capacity. The Organization of the Petroleum Exporting Countries and allies, a grouping known as OPEC+, is currently cutting output by 7.7 million barrels per day (bpd) until December to support prices as the coronavirus crisis hammers dem. Oil prices held steady in early trade on Thursday, sitting around multi-week lows based on concerns about fuel demand due to a patchy U.S. economic recovery. This was after a U.S. Federal Reserve survey revealed the economic recovery was mixed. Data released on Thursday demonstrated slower than expected jobs growth for August, with the ADP nonfarm employment change at 428,000, lower than the predicted 950,000. However, factory orders rose 6.4% month-on-month in July against the predicted 6%. Other signs of a limited recovery include a drop to 8.78 million barrels per day in U.S. gasoline demand in the week to Aug. 28 from 9.16 million bpd a week earlier, the U.S. Energy Information Administration (EIA) said on Thursday. But EIA data also showed a 9.362 million-barrel draw in crude oil supply for the week ended August 28, much bigger than the predicted 1.887 million-barrel draw. The data comes on the heels of the American Petroleum Institute (API) report of a 6.360 million-barrel draw for the same period on Tuesday. But with U.S. refinery run rates falling to 76.5% of total capacity during the previous week due to shutdowns ahead of Hurricane Laura, refinery maintenance and the end of the summer driving season increased investor worries of a drop in fuel demand. CBA forecasts Brent will average $46 a barrel in the fourth quarter before rising to $55 by the end of 2021.

 

 
Intraday RESISTANCE LEVELS
3rd September 2020 R1 R2 R3
GOLD-XAU 1,940-1,954 1,971 1,989-2,010
Silver-XAG 28.10-29.00 29.80 30.50-31.00
Crude Oil 42.00-43.15 44.10 45.00-46.30
EURO/USD 1.1850-1.1900 1.1955 1.2000-1.2050
GBP/USD 1.3350-1.3420 1.3490 1.3520-1.3550
USD/JPY 106.90 107.30 108.10-108.90

Intraday SUPPORTS LEVELS
3rd September 2020 S1 S2 S3
GOLD-XAU 1,924-1,915 1,900 1,889-1,880
Silver-XAG 27.00 26.10 26.55-25.10
Crude Oil 41.00 40.60-39.50 38.70
EURO/USD 1.1800-1.1730 1.1690 1.1635-1.1600
GBP/USD 1.3290 1.3250 1.3190-1.3100
USD/JPY 106.10-105.50 104.90 104.30-103.90

Intra-Day Strategy (3rd 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 Wednesday made its intraday high of US$1973.20/oz and low of US$1932.52/oz. Gold up 0.133% at US$1940.45/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 1954-1900 with risk below 1900, targeting 1971-1989-2010 and 2023-2030. Sell below 1971-2030 keeping stop loss closing above 2030, targeting 1954-1940 and 1924-1900-1889.

 
Intraday Support Levels
S1     1,924-1,915
S2     1,900
S3     1,889-1,880
Intraday Resistance Levels
R1     1,940-1,954
R2     1,971
R3     1,989-2,010

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 Wednesday made its intraday high of US$28.29/oz and low of US$27.05/oz settled down by 2.50% at US$27.41/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     27.00
S2     26.10
S3     26.55-25.10

Intraday  Resistance Levels
R1     28.10-29.00
R2     29.80
R3     30.50-31.00

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 Wednesday made an intra‐day high of US43.34/bbl, intraday low of US$41.39/bbl and settled down by 3.465% to close at US$41.67/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 41.15-38.50 with risk daily closing below 36.65 and targeting 42.00-43.15-44.10 and 45.00-46.30-47.00. Sell in between 42.10-47.30 with stop loss at 47.30; targeting 42.00-43.15-42.00-41.00 and 40.60-39.50-38.50.

 
Intraday Support Levels
S1     41.00
S2     40.60-39.50
S3     38.70

Intraday Resistance Levels
R1     42.00-43.15
R2     44.10
R3     45.00-46.30

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 Tuesday an intraday low of US$1.1900/EUR, high of US$1.2010/EUR and settled the day down by 0.206% to close at US$1.1911/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 1.1800-1.1600 with risk below 1.1600, targeting 1.1850-1.1900-1.1955 and 1.2050-1.2100-1.2170. Sell below 1.1850-1.2250 targeting 1.1800-1.1730-1.1690 and 1.1635-1.1600 with stop-loss at daily closing above 1.2250.

 
Intraday Support Levels
S1     1.1800-1.1730
S2     1.1690
S3     1.1635-1.1600

Intraday  Resistance Levels
R1     1.1850-1.1900
R2     1.1955
R3     1.2000-1.2050

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.032 Buy
20-DMA   1.1834 Buy
50-DMA   1.1631 Buy
100-DMA   1.1329 Buy
200-DMA   1.1178 Buy
STOCH(5,3)   38.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.3282/GBP, high of US$1.3401/GBP and settled the day down by 0.248% to close at US$1.3349/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     1.3290
S2     1.3250
S3     1.3190-1.3100

Intraday Resistance Levels
R1     1.3350-1.3420
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 Tuesday 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 106.50-111.00 with risk above 111.00 targeting 106.10-105.50-104.90 and 104.50-103.90-103.10. Long positions above 106.50-103.00 with targets of 106.90-107.50 and 107.90-108.40-109.40 with stop below 105.00.

 
Intraday Support Levels
S1     106.10-105.50
S2     104.90
S3     104.30-103.90

INTRADAY RESISTANCE LEVELS
R1     106.90
R2     107.30
R3     108.10-108.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.904 Buy
20-DMA   106.08 Sell
50-DMA   106.46 Sell
100-DMA   106.92 Sell
200-DMA   107.92 Sell
STOCH(9,6)   46.253 Sell
MACD(12,26,9)   -0.099 Sell

AAFX TRADING
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