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Daily Market Lookup

  • The dollar edged higher in early European trade Thursday, as concerns about the global economic recovery given a second-wave of Covid-19 infections prompted traders to desert riskier assets in favor of safe havens. France became the latest country to tighten restrictions on social gatherings on Thursday, announcing a 10 PM curfew on bars and restaurants as well as other measures. Also helping the flow away from riskier assets, a number of Federal Reserve policymakers wared that further government aid is needed to bolster the economy, with that stimulus looking very unlikely in the near term. The drop in IHS Markit's U.S. PMI, while less closely tracked than the Institute for Supply Management's survey, didn't help. Focus is set to turn to the German Ifo survey, due later Thursday, which is forecast to show an improvement in business morale in Europe's largest economy. The central bank is widely expected to keep its key deposit rate at -0.75%, as the franc has declined around 1% since the SNB’s last policy meeting in June, relieving pressure on the central bank to counter the disinflationary effects of a rallying currency. Central bank meetings in Egypt and Turkey later Thursday will also be studied carefully by foreign exchange traders, given the risk of large currency moves: the Turkish lira hit another new all-time low in early trading before bouncing. All but one of 11 economists surveyed by Bloomberg predict Egypt’s central bank will hold its benchmark deposit rate at 9.25%, with the bank’s last move being a cut of 300 basis points in March. The central bank’s focus remains on keeping capital inflows high, with Egypt’s real interest rate among the world’s highest. France became the latest country to tighten restrictions on social gatherings on Thursday, announcing a 10 PM curfew on bars and restaurants as well as other measures. Also helping the flow away from riskier assets, a number of Federal Reserve policymakers wared that further government aid is needed to bolster the economy, with that stimulus looking very unlikely in the near term. The drop in IHS Markit's U.S. PMI, while less closely tracked than the Institute for Supply Management's survey, didn't help. Focus is set to turn to the German Ifo survey, due later Thursday, which is forecast to show an improvement in business morale in Europe's largest economy. The central bank is widely expected to keep its key deposit rate at -0.75%, as the franc has declined around 1% since the SNB’s last policy meeting in June, relieving pressure on the central bank to counter the disinflationary effects of a rallying currency. Central bank meetings in Egypt and Turkey later Thursday will also be studied carefully by foreign exchange traders, given the risk of large currency moves: the Turkish lira hit another new all-time low in early trading before bouncing. A slew of Fed officials stressed the need for more fiscal stimulus to sustain the recovery on Wednesday, as investors continue to lose hope that the U.S. Congress would pass the latest support measures. Fed Chairman Jerome Powell led the charge during a congressional hearing, where he stated that more support was likely to be necessary. Other officials adding their voices were Cleveland Fed President Loretta Mester, Chicago Fed President Charles Evans and Boston Fed President Eric Rosengren. Rosengren said that it would take another wave of infections to prompt action, and this not likely until next year. Alongside the Fed’s warning, data released on Wednesday showed that U.S. business activity slowed in September and several Fed policymakers warned that further government aid is needed to bolster the economy. In Europe, the Markit Composite Purchasing Managers Index (PMI) and the services PMI saw falls in September, with the services PMI slipping below the 50-mark separating contraction from expansion to 47.6. With the continent currently battling a fresh outbreak of COVID-19, investors are looking to the Ifo survey, due later in the day, to gauge German business sentiment. However, some investors said that the greenback could continue to be bolstered as the number of COVID-19 cases continues to rise and the Fed’s comments prompt investors to repatriate funds from riskier assets.
  • Oil prices dropped on Thursday, weighed down by concerns that U.S. economic recovery is slowing as the coronavirus outbreak lingers, while a renewed wave of COVID-19 cases in Europe have led to reimposed travel restrictions in several countries. The jitters over demand and economic outlook due to the coronavirus resurgence have prompted a rally in the dollar as investors turned to safer assets, adding pressure to oil prices. A stronger dollar makes oil, priced in U.S. dollars, less attractive to global buyers. Both benchmarks climbed slightly on Wednesday after government data showed U.S. crude and fuel stockpiles dropped last week. Gasoline inventories fell more than expected, sliding by 4 million barrels, and distillate stockpiles posted a surprise drawdown of 3.4 million barrels. Still, fuel demand in the U.S. remains subdued as the pandemic limits travel. The four-week average of gasoline demand was 8.5 million barrels per day (bpd) last week, the government data showed, down 9% from a year earlier. Prices turned down after data showed U.S. business activity slowed in September, U.S. Federal Reserve officials flagged concerns about a stalling recovery, and Britain and Germany imposed restrictions to stem new coronavirus infections -- all factors affecting the fuel demand outlook. On the supply side, the market remains wary of a resumption of exports from Libya, although it is unclear how quickly it can ramp up volumes Meanwhile, Iraq's oil minister Ihsan Abdul Jabbar expects an agreement with the OPEC+ group to increase Iraq's crude oil exports, state news agency INA cited him as saying on Thursday.

 

 
Intraday RESISTANCE LEVELS
24th September 2020 R1 R2 R3
GOLD-XAU 1,862-1,869 1,882 1889-1,900
Silver-XAG 22.20-22.90 23.30 24.00-24.50
Crude Oil 40.60-41.10 41.60 42.55-43.25
EURO/USD 1.1690-1.1730 1.1800 1.1860-1.1900
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
24th September 2020 S1 S2 S3
GOLD-XAU 1,850-1,842 1,820 1,809-1,790
Silver-XAG 21.65-21.00 19.50 19.05-18.55
Crude Oil 39.40-39.00 38.40 37.50-36.40
EURO/USD 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 (24th 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$1905.35/oz and low of US$1855.66/oz. Gold down 1.95% at US$1862.59/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 1850-1790 with risk below 1790, targeting 1862-1869-1882 and 1889-1900. Sell below 1862-1924 keeping stop loss closing above 1924, targeting 1850-1842-1820 and 1809-1791.

 
Intraday Support Levels
S1     1,850-1,842
S2     1,820
S3     1,809-1,790
Intraday Resistance Levels
R1     1,862-1,869
R2     1,882
R3     1889-1,900

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 Wednesday made its intraday high of US$24.46/oz and low of US$23.58/oz settled down by 6.671% at US$22.74/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 21.65-18.50 targeting 22.20-22.90-24.00 and 24.50-25.10, stop breakage below 18.50. 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     21.65-21.00
S2     19.50
S3     19.05-18.55

Intraday  Resistance Levels
R1     22.20-22.90
R2     23.30
R3     24.00-24.50

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 Wednesday made an intra‐day high of US40.77/bbl, intraday low of US$39.29/bbl and settled down by 0.578% to close at US$39.54/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 Wednesday an intraday low of US$1.1650/EUR, high of US$1.1718/EUR and settled the day down by 0.407% to close at US$1.1659/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 1.1635-1.1460 with risk below 1.1460, targeting 1.1690-1.1730-1.1800 and 1.1900-1.1955. Sell below 1.1690-1.2000 targeting 1.1635-1.1570 and 1.1500-1.1460 with stop-loss at daily closing above 1.2050.

 
Intraday Support Levels
S1     1.1635
S2     1.1570
S3     1.1500-1.1460

Intraday  Resistance Levels
R1     1.1690-1.1730
R2     1.1800
R3     1.1860-1.1900

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 Wednesday made an intra‐day low of US$1.2674/GBP, high of US$1.2776/GBP and settled the day down by 0.0463% to close at US$1.2721/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 Wednesday made intra‐day low of JPY104.83/USD and made an intraday high of JPY105.48/USD and settled the day up by 0.281% at JPY105.34/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

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