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Daily Market Lookup

  • The dollar pushed higher in early European trade Thursday, after the Federal Reserve failed to deliver any suggestion of more monetary stimulus in the near term. However, further currency weakness looks likely further ahead. At its first policy meeting since introducing a more tolerant stance on inflation, the Fed pledged to keep rates near zero until at least the end of 2023. This was widely expected, but the central bank also lifted its growth forecast for 2020 to show a contraction of 3.7%, compared with an estimate for a 6.5% decline previously. While growth expectations in 2021 and 2022 were revised lower to 4% and 3% from 5% and 3.5% respectively, this all still represents an upbeat assessment of the economic recovery. Particularly as the Fed also lifted its expectations for both employment and inflation. That said, “there was nothing really in the FOMC statement or the projections to un-nerve the conviction view that reflationary Fed policy is a dollar negative,” wrote analysts at ING, in a research note. Analysts at Nordea also argued that any boost to the dollar from this latest Fed statement will be a short-term phenomenon. Elsewhere, GBP/USD fell 0.2% to 1.2943, but still well above this week’s lows after Prime Minister Boris Johnson moved to cut off a rebellion in his own party, giving parliament a say over the use of post-Brexit powers. Focus is now on the Bank of England’s policy-setting meeting, due to conclude later Thursday. Market expectations are for no change, but the vote split and minutes of the meeting will be carefully studied for insight into the bank’s intentions going forward given the economic challenges the U.K. faces. The bank did upgrade its economic assessment for the first time since the virus hit, saying the economy has started to pick up with activity resuming gradually. The dollar firmed against major currencies on Thursday following the U.S. Federal Reserve's upbeat assessment of the economic recovery and as its increased tolerance for higher inflation pushed Treasury yields higher. The Fed also expects economic growth to improve from the coronavirus-induced drop they projected in June. The greenback initially fell after the Fed’s announcement and weaker-than-expected U.S. retail sales data, but swung into positive territory after Chair Jerome Powell's comment on the economic outlook. Broad dollar buying followed after the benchmark 10-year U.S. Treasury yield rose above 0.7% overnight, a reaction resembling that of the Fed's Jackson Hole symposium last month, said Mitsuo Imaizumi, chief FX strategist at Daiwa Securities. Analysts said there is a risk of a slowdown in economic activity unless more fiscal stimulus is provided. Among Asian currencies, the Australian dollar briefly surged on strong jobs data but retraced its gains as the currency was swamped by a firmer dollar, last trading 0.53% lower to $0.72665 The Bank of Japan kept its monetary policy steady on Thursday and said the country's economy "remains in a severe state but has started to pick up," suggesting no immediate stimulus was needed to support activity. The policy decision came after Yoshihide Suga, a long-time aide of Shinzo Abe who pledged to continue "Abenomics" to recover employment, was officially elected as Japan's new prime minister on Wednesday. Market participants will focus on BOJ Governor Haruhiko Kuroda's remarks about how the central bank would coordinate monetary policy with the new Suga administration. The focus for the British pound is now on Brexit tensions, following the government's deal on Wednesday to avert a rebellion in Prime Minister Boris Johnson's own party, giving parliament a say over the use of post-Brexit powers. The Bank of England is likely to signal that it is getting ready to pump more stimulus into Britain's coronavirus-hit economy at its policy decision due later in the day.
  • Oil prices fell on Thursday, after rising steeply in the two previous sessions, as concerns about weak fuel demand re-emerged and producers in the Gulf of Mexico prepared to resume output following Hurricane Sally. Prices were also dragged lower by a bigger-than-expected rise in U.S. distillate stockpiles, which include diesel and heating oil, that raised concerns about fuel demand in the world's biggest economy and fuel consumer. Distillate stockpiles rose by 3.5 million barrels last week, U.S. Energy Information Administration (EIA) data showed on Wednesday. Weekly demand for the fuel fell to 2.81 million barrels per day (bpd), down 27.2% from a year ago, the EIA reported. Distillate stocks are at their highest for this time of year since at least 1991, and U.S. refiners' margins for producing distillate are the lowest in 10 years, Dhar said. U.S. refiners processed 13.5 million barrels per day (bpd) of oil last week, the EIA data showed, down 19.3% from a year earlier. Energy companies were starting to return crews to offshore oil platforms in the Gulf of Mexico after Hurricane Sally roared onshore. Nearly 500,000 bpd of U.S. Gulf of Mexico offshore oil output was shut ahead of the storm's arrival. A panel of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, meets on Thursday to review the market but is unlikely to recommend further cuts to oil output despite the recent price drop, sources told Reuters. The meeting may have a limited impact on market sentiment as OPEC+ has consistently sent "signals that they have the matter of some members' lack of quota-compliance under control and will doggedly pursue the compensation mechanism to set it right," said Hari. OPEC+ agreed in July to cut output by 7.7 million bpd, or around 8%, of global demand from August through December. Iraq and others agreed to pump below their quotas in September to compensate for overproduction earlier this year.

 

 
Intraday RESISTANCE LEVELS
17th September 2020 R1 R2 R3
GOLD-XAU 1,954-1,971 1,989 2,010-2,023
Silver-XAG 27.00-28.10 29.00 29.80-30.50
Crude Oil 40.60-41.10 41.60 42.55-43.25
EURO/USD 1.1800 1.1850 1.1955-1.2000
GBP/USD 1.3000-1.3050 1.3100 1.3210-1.3270
USD/JPY 105.50-104.90 106.10 106.90-107.30

Intraday SUPPORTS LEVELS
17th September 2020 S1 S2 S3
GOLD-XAU 1,940 1,924 1,915-1,900
Silver-XAG 26.55 26.10 25.10-24.50
Crude Oil 39.50-39.00 38.55 37.10-36.40
EURO/USD 1.1730 1.1690-1.1635 1.1570
GBP/USD 1.2940-1.2900 1.2820 1.2735-1.2650
USD/JPY 104.30-103.90 103.50 103.10-102.50

Intra-Day Strategy (17th 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$1973.56/oz and low of US$1949.75/oz. Gold up 0.349% at US$1957.89/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 1940-1870 with risk below 1890, targeting 1954-1971-1989 and 2010-2023. Sell below 1954-2010 keeping stop loss closing above 2010, targeting 1940-1924 and 1900-1889.

 
Intraday Support Levels
S1     1,940
S2     1,924
S3     1,915-1,900
Intraday Resistance Levels
R1     1,954-1,971
R2     1,989
R3     2,010-2,023

Technical Indicators

Name   Value Action
14DRSI  

56.043

Buy
20-DMA   1943.73 Buy
50-DMA  

1925.40

Buy
100-DMA   1828.38 Buy
200-DMA   1706.50 Buy
STOCH(5,3)   77.503 Buy
MACD(12,26,9)   5.45 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$27.43/oz and low of US$26.86/oz settled down by 0.129% at US$27.09/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 27.00-24.00 targeting 28.10-29.00 and 29.80-30.50-31.00, stop breakage below 24.00. Sell below 28.00-30.50 with stop loss above 30.50; targeting 27.10-26.55-26.10 and 25.00-24.30.

 
Intraday  Support Levels
S1     26.55
S2     26.10
S3     25.10-24.50

Intraday  Resistance Levels
R1     27.00-28.10
R2     29.00
R3     29.80-30.50

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 US40.54/bbl, intraday low of US$38.57/bbl and settled up by 4.27% to close at US$40.31/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 39.50-36.50 with risk daily closing below 36.50 and targeting 40.60-41.10-42.00 and 42.55-43.25. Sell in between 40.60-43.25 with stop loss at 43.25; targeting 39.50-39.00-38.55 and 37.10-36.40.

 
Intraday Support Levels
S1     39.50-39.00
S2     38.55
S3     37.10-36.40

Intraday Resistance Levels
R1     40.60-41.10
R2     41.60
R3     42.55-43.25

TECHNICAL INDICATORS
Name   Value Action
14DRSI   23.194 Sell
20-DMA   41.76 Sell
50-DMA   41.32 Sell
100-DMA   36.63 Buy
200-DMA   41.29 Sell
STOCH(5,3)   9.130 Buy
MACD(12,26,9)   0.738 Sell

EUR/USD

AAFX TRADING

EUR/USD on Wednesday an intraday low of US$1.1787/EUR, high of US$1.1881/EUR and settled the day down by 0.263% to close at US$1.1814/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 1.1850-1.1600 with risk below 1.1600, targeting 1.1900 and 1.1955-1.2050-1.2100. Sell below 1.1900-1.2250 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     1.1730
S2     1.1690-1.1635
S3     1.1570

Intraday  Resistance Levels
R1     1.1800
R2     1.1850
R3     1.1955-1.2000

TECHNICAL INDICATORS
Name   Value Action
14DRSI   58.032 Buy
20-DMA   1.1842 Buy
50-DMA   1.1724 Buy
100-DMA   1.1409 Buy
200-DMA   1.1209 Buy
STOCH(5,3)   67.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2874/GBP, high of US$1.3006/GBP and settled the day up by 0.608% to close at US$1.2966/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 1.3000-1.3270 with targets at 1.2940-1.2900-1.2820 and 1.2735-1.2650 stop-loss should be 1.3210. Buy above 1.2940-1.2735 with targets 1.3180-1.3000-1.3050-1.3100 and 1.3210-1.3290 with stop loss closing below 1.3000.

 
Intraday Support Levels
S1     1.2940-1.2900
S2     1.2820
S3     1.2735-1.2650

Intraday Resistance Levels
R1     1.3000-1.3050
R2     1.3100
R3     1.3210-1.3270

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

43.904

Buy
20-DMA   1.3180 Sell
50-DMA   1.2911 Buy
100-DMA   1.2661 Buy
200-DMA   1.2734 Buy
STOCH(5,3)   17.940 Buy
MACD(12,26,9)   0.0124 Sell

USD/JPY

AAFX TRADING

USD/JPY on Wednesday made intra‐day low of JPY104.79/USD and made an intraday high of JPY105.43/USD and settled the day down by 0.329% at JPY104.93/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 105.50-108.00 with risk above 108.00 targeting 104.50-103.90-103.50 and 103.10-102.50. 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     104.30-103.90
S2     103.50
S3     103.10-102.50

INTRADAY RESISTANCE LEVELS
R1     105.50-104.90
R2     106.10
R3     106.90-107.30

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

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