AAFX TRADING

Daily Market Lookup

  • The dollar edged lower in early European trade Friday, weighed down by disappointing employment and housing data and with the tech sector continuing to suffer strong selling in the equity markets. Employment data, released on Thursday, showed that initial jobless claims fell by less than expected. At the same time, data from the housing market showed that part of the economy cooling off after three months of an extremely strong rebound. So while the U.S. economy is recovering, the rebound seems to be slowing. This prompted the Federal Reserve to pledge to keep rates near zero until at least the end of 2023, but the central bank also called for more fiscal help from Congress, which still looks unlikely. Additionally, U.S. tech stocks suffered another rout Thursday, with the tech-heavy Nasdaq Composite index falling 1.3%, which contributed to a weak dollar. However, the focus of sterling traders is elsewhere as policymakers in the Bank of England indicated Thursday that they’re considering using negative interest rates as the central bank prepares for the possibility the U.K. government fails to reach a trade deal with the European Union by the end of this year. The dollar was down on Friday morning in Asia, with disappointing U.S. employment data dampening both the economic outlook and investor sentiment. The employment data, released on Thursday, showed that initial jobless claims fell slower than expected. 860,000 claims were filed over the past week against the predicted 850,000. Investors are still digesting the U.S. Federal Reserve’s policy decision, handed down on Wednesday, which pledged low interest rates for years to come while also upgrading its 2020 GDP forecast. Another rout in U.S. tech stocks on Thursday also contributed to a weak dollar. “For the dollar to regain its upward trend, it’s necessary for the market to make sure that the U.S. stocks take a pause from a correction in stock prices,” Yamamoto added. Although the yuan has risen more than 6% from late May’s lows against the greenback as the Chinese economy continues its recovery from COVID-19, some investors are raising concerns over the rapid rise. The GBP/USD edged down 0.10% to 0.1259. The Bank of England (BOE) announced its own policy decision on Thursday, dangling the possibility of negative interest rates to counter rising numbers of COVID-19 cases, higher unemployment and the possibility of a hard Brexit. However, European Commission President Ursula Von der Leyen indicating that she was “convinced a trade deal with Britain was still possible” gave the pound a boost.
  • The safe-haven yen rose to a seven-week high against the dollar and a 1-1/2-month peak versus the euro, amid another batch of generally weak U.S. data and overall uncertainty about the economic outlook, backing the Federal Reserve's concern on Wednesday about the pace of recovery. The dollar index rose to a one-week high, but was last little changed on the day, as risk appetite diminished. Shares on Wall Street were lower and U.S. Treasuries were fairly well-supported. At Wednesday's policy meeting, the Fed pledged to keep rates near zero until the labor market reaches "maximum employment" and inflation is on track to "moderately exceed" the 2% target, with most policymakers seeing rates on hold through at least 2023. Wednesday's set of U.S. data also added to the gloom in risk sentiment. U.S. jobless claims remained elevated at 860,000, while both housing starts and the Philadelphia Fed business index fell. He added that against a soft economic backdrop, the Fed's commitment to hold rates near zero for some time appears well-justified. That said, with the new guidance from the Fed focused on keeping U.S. interest rates at current record lows until employment and inflation reach its targets, some strategists argue any dollar strength is likely to be temporary.

 

 
Intraday RESISTANCE LEVELS
18th September 2020 R1 R2 R3
GOLD-XAU 1,954-1,971 1,989 2,010-2,023
Silver-XAG 28.10 29.00 29.80-30.50
Crude Oil 41.60 42.55-43.25 44.00
EURO/USD 1.1860-1.1900 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
18th September 2020 S1 S2 S3
GOLD-XAU 1,940 1,924 1,915-1,900
Silver-XAG 27.00-26.55 26.10 25.10-24.50
Crude Oil 41.10-40.60 39.50 39.00-38.55
EURO/USD 1.1800-1.1730 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 (18th 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 Thursday made its intraday high of US$1960.84/oz and low of US$1932.68/oz. Gold down 0.778% at US$1943.31/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 Thursday made its intraday high of US$27.19/oz and low of US$26.27/oz settled down by 0.556% at US$26.97/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     27.00-26.55
S2     26.10
S3     25.10-24.50

Intraday  Resistance Levels
R1     28.10
R2     29.00
R3     29.80-30.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.514 Buy
20-DMA   27.06 Buy
50-DMA   25.41 Buy
100-DMA   21.33 Buy
200-DMA   18.92 Buy
STOCH(5,3)   55.268 Buy
MACD(12,26,9)   1.914 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US41.45/bbl, intraday low of US$39.64/bbl and settled up by 1.741% to close at US$41.11/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 41.10-36.50 with risk daily closing below 36.50 and targeting 41.60-42.00 and 42.55-43.25-44.00. Sell in between 41.60-44.00 with stop loss at 44.00; targeting 41.10-40.60-39.50 and 39.00-38.55-37.10.

 
Intraday Support Levels
S1     41.10-40.60
S2     39.50
S3     39.00-38.55

Intraday Resistance Levels
R1     41.60
R2     42.55-43.25
R3     44.00

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 Thursday an intraday low of US$1.1736/EUR, high of US$1.1851/EUR and settled the day up by 0.273% to close at US$1.1847/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 1.1900 and 1.1955-1.2050-1.2100. Sell below 1.1860-1.2250 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     1.1635-1.1570

Intraday  Resistance Levels
R1     1.1860-1.1900
R2     1.1955
R3     1.2000

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.032 Buy
20-DMA   1.1841 Buy
50-DMA   1.1755 Buy
100-DMA   1.1436 Buy
200-DMA   1.1220 Buy
STOCH(5,3)   55.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.2864/GBP, high of US$1.2998/GBP and settled the day up by 0.0563% to close at US$1.2972/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 Thursday made intra‐day low of JPY104.51/USD and made an intraday high of JPY105.16/USD and settled the day down by 0.180% at JPY104.73/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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