AAFX TRADING

Daily Market Lookup

  • The dollar was up on Wednesday morning in Asia, holding onto gains from the previous session on the back of positive economic data from the U.S. and concerns over the COVID-19 outbreak in Europe. COVID-19 cases also continue to rise in the U.S., with the number of deaths in the country surpassing 200,000 and the number of cases approaching 6.9 million as of September 23, according to Johns Hopkins University data. The U.S. data showed that existing home sales surged to 6 million in August, the highest level in nearly 14 years. But investors are also digesting comments from Chicago U.S. Federal Reserve President Charles Evans, who said on Tuesday that the U.S. economy risks a longer, slower recovery and “recessionary dynamics” if Congress fails to pass the latest fiscal stimulus package. He also hinted that it might be possible for the Fed to raise interest rates before inflation starts to average 2%. All eyes are on whether the Senate will pass the stopgap funding bill to keep the federal government running through December 11, which was passed by the House of Representatives on Tuesday. Although the dollar is likely to continue its upward trajectory in the short term as European COVID-19 cases continue to rise, continued uncertainty over November’s U.S. presidential elections could potentially expose the greenback to volatile swings. The GBP/USD pair inched down 0.05% to 1.2725, after touching lows not seen since late July, after U.K. Prime Minister Boris Johnson on Tuesday announced new restrictive measures. The measures are likely to be in place over the next six months, with Johnson urging Britons to work from home.
  • The U.S. dollar held onto gains against major currencies on Wednesday, supported by positive U.S. economic data and concerns about a second wave of coronavirus infections in Europe and Britain. The greenback is likely to continue to grind higher in the short term as the coronavirus rattles sentiment in Europe, but uncertainty about this year's U.S. presidential election means the dollar could be prone to more volatile swings. The pound bought $1.2744, near the lowest since late July, after British Prime Minister Boris Johnson unveiled new restrictions on business activity to tackle a second wave of the coronavirus. On Tuesday the greenback was bolstered by data showing U.S. home sales surged to their highest level in nearly 14 years in August, but comments from a prominent Federal Reserve official sent mixed signals. The U.S. economy risks a longer, slower recovery and "recessionary dynamics" if Congress fails to pass an additional fiscal stimulus package, Chicago Federal Reserve President Charles Evans said on Tuesday. It is possible for the Fed to raise interest rates before inflation starts to average 2%, Evans also said. Sentiment for the euro has slowly weakened as investors grow increasingly worried about surging coronavirus infections in countries like France and Spain, raising the risk of lockdowns. Many euro zone countries have reintroduced travel restrictions, forcing airlines to scale back passenger services after a relatively quick run up over the summer. Traders in the pound and the euro are also worried that Britain and the European Union will fail to agree a free trade deal, which would cause additional economic strain.
  • Oil prices fell more than 1% on Wednesday after an industry group reported an unexpected rise in U.S. crude inventories, renewing concerns about fuel demand that caused a steep selloff earlier in the week. Surging cases of coronavirus infections in countries including France and Spain, along with the likelihood of more restrictions in Britain have renewed worries about fuel demand, just as more supply may come onto the market from Libya. In the United States, where the death toll from COVID-19 has passed 200,000, the world's highest, crude oil inventories rose by 691,000 barrels in the week to Sept. 18, according to industry data, compared with analysts' forecasts for a drop of 2.3 mn barrels. Gasoline stocks fell by nearly 7.7 mn barrels, nearly eight times expectations, suggesting some demand for fuel in the world's biggest oil consuming nation, but the jump in COVID-19 cases in many countries is placing a question mark over the extent of the demand resumption worldwide Official data on crude inventories from the Energy Information Administration is due out later on Wednesday. In Libya, the National Oil Company expects oil output to rise to more than 250K barrels per day (bpd) by next week, it said on Tuesday. The NOC said it was restarting exports from the Zueitinia oil terminal after checking the security situation at the port and fields that pipe crude there. An escalation in the country's conflict led to a blockade of facilities, which is now easing, although analysts say they don't expect Libya to reach the 1.2 mn bpd of production it was pumping previously. Concerns over expanded COVID-19 restrictions as global cases continue to rise gave pause to oil investors today. The U.S. has passed 200K COVID-19 deaths, and multiple European countries are looking at bringing in further restrictions, causing concerns over an ever greater drop in demand. The U.K. imposed stricter containment measures on Tuesday, with suggestions that the previous lockdown may need to be reinstated. The U.S. FED Chairman Jerome Powell warned on Tuesday that the economy still had a long road ahead of a full economic recovery and required further support, with Chicago Fed President Charles Evans joining him in voicing concerns about long-term economic worries and also the need for further government support. Investors are now awaiting data from the U.S. EIA, due to be released later in the day.

 

 
Intraday RESISTANCE LEVELS
23rd September 2020 R1 R2 R3
GOLD-XAU 1,882-1889 1,900 1,915-1,924
Silver-XAG 24.00-24.50 25.10 26.10-26.55
Crude Oil 40.60-41.10 41.60 42.55-43.25
EURO/USD 1.1730-1.1800 1.1860 1.1900-1.1970
GBP/USD 1.2820-1.2900 1.2940 1.3000-1.3050
USD/JPY 105.50-104.90 106.10 106.90-107.30

Intraday SUPPORTS LEVELS
23rd September 2020 S1 S2 S3
GOLD-XAU 1,869-1,862 1,850 1,841-1,820
Silver-XAG 23.30 22.90 22.20-21.50
Crude Oil 39.40-39.00 38.40 37.50-36.40
EURO/USD 1.1690-1.1635 1.1570 1.1500-1.1460
GBP/USD 1.2725-1.2650 1.2600 1.2510-1.2450
USD/JPY 104.30-103.90 103.50 103.10-102.50

Intra-Day Strategy (23rd 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$1919.97/oz and low of US$1894.70/oz. Gold down 0.662% at US$1899.31/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 1882-1820 with risk below 1820, targeting 1869-1862-1850 and 1841-1820. Sell below 1889-1924 keeping stop loss closing above 1924, targeting 1869-1862-1850 and 1841-1820.

 
Intraday Support Levels
S1     1,869-1,862
S2     1,850
S3     1,841-1,820
Intraday Resistance Levels
R1     1,882-1889
R2     1,900
R3     1,915-1,924

Technical Indicators

Name   Value Action
14DRSI  

42.043

Buy
20-DMA   1942.85 Buy
50-DMA  

1938.38

Buy
100-DMA   1839.77 Buy
200-DMA   1718.15 Buy
STOCH(5,3)   34.503 Buy
MACD(12,26,9)   5.45 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$25.22/oz and low of US$23.81/oz settled down by 1.462% at US$24.31/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 23.30-21.00 targeting 24.00-24.50-25.10 and 26.00-26.55, stop breakage below 21.00. Sell below 24.00-28.50 with stop loss above 28.50; targeting 23.30-22.90 and 22.20-21.50.

 
Intraday  Support Levels
S1     23.30
S2     22.90
S3     22.20-21.50

Intraday  Resistance Levels
R1     24.00-24.50
R2     25.10
R3     26.10-26.55

TECHNICAL INDICATORS
Name   Value Action
14DRSI   33.681 Buy
20-DMA   26.82 Buy
50-DMA   25.61 Buy
100-DMA   21.51 Buy
200-DMA   19.00 Buy
STOCH(5,3)   19.268 Buy
MACD(12,26,9)   1.914 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US40.27/bbl, intraday low of US$39.21/bbl and settled down by 0.301% to close at US$39.69/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 39.40-36.50 with risk daily closing below 36.50 and targeting 40.60-41.60-42.00 and 42.55-43.25-44.00. Sell in between 40.60-44.00 with stop loss at 44.00; targeting 41.10-40.60-39.50 and 39.00-38.55-37.10.

 
Intraday Support Levels
S1     39.40-39.00
S2     38.40
S3     37.50-36.40

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   40.24 Sell
50-DMA   41.14 Sell
100-DMA   38.43 Buy
200-DMA   40.44 Sell
STOCH(5,3)   60.130 Sell
MACD(12,26,9)   0.738 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1691/EUR, high of US$1.1773/EUR and settled the day down by 0.580% to close at US$1.1706/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 1.1690-1.1460 with risk below 1.1460, targeting 1.1730-1.1800-1.1900 and 1.1955-1.2050. Sell below 1.1730-1.2250 targeting 1.1690-1.1635-1.1570 and 1.1500-1.1460 with stop-loss at daily closing above 1.2250.

 
Intraday Support Levels
S1     1.1690-1.1635
S2     1.1570
S3     1.1500-1.1460

Intraday  Resistance Levels
R1     1.1730-1.1800
R2     1.1860
R3     1.1900-1.1970

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.032 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 Tuesday made an intra‐day low of US$1.2709/GBP, high of US$1.2866/GBP and settled the day down by 0.677% to close at US$1.2729/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 1.2820-1.3270 with targets at 1.2735-1.2650-1.2600 and 1.2510-1.2450 stop-loss should be 1.3270. Buy above 1.2735-1.2450 with targets 1.2820-1.2900-1.3000 and 1.3050-1.3100-1.3210 with stop loss closing below 1.3000.

 
Intraday Support Levels
S1     1.2725-1.2650
S2     1.2600
S3     1.2510-1.2450

Intraday Resistance Levels
R1     1.2820-1.2900
R2     1.2940
R3     1.3000-1.3050

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 Tuesday made intra‐day low of JPY104.39/USD and made an intraday high of JPY105.07/USD and settled the day up by 0.281% at JPY104.91/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 105.00-108.00 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

AAFX TRADING
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