AAFX TRADING

Daily Market Lookup

  • The dollar weakened in early European trade Thursday, falling to a one-week low as fresh hopes of new U.S. fiscal stimulus prompted traders to seek out the perceived riskier currencies. This renewed optimism for a new Covid relief package has been based on comments from U.S. Treasury Secretary Steven Mnuchin, who said Wednesday that talks with House Speaker Nancy Pelosi had made progress, prompting the House of Representatives to postpone a vote on a Democratic coronavirus plan to allow more time for a bipartisan deal to come together. Mnuchin said later on Fox Business News that he would not accept the Democrats' proposed $2.2 trillion aid package, rather something closer to $1.5 trillion, adding that an agreement had been reached on direct payments to Americans. These two positions are largely unchanged from where the parties left things before the presidential conventions. But the need for economic stimuli has become very apparent, with several large U.S. companies now embarking on extensive firing rounds, and the markets have reacted to the fact they have started talking again. Helping the risk-on tone has been some healthy economic data out of the U.S., with Wednesday seeing strong U.S. labor and manufacturing data. The data slate is pretty full Thursday as well, with most eyes on the weekly unemployment measurements, particularly after Wednesday's better than expected ADP private payroll gains and before Friday’s last official government data on jobs before the general election. This follows Turkey’s decision to cut a tax on foreign currency purchases and also cut the withholding tax on new or renewed lira deposit accounts for the rest of this year. These are the country’s latest steps to ease market restrictions introduced over the past year that have hurt investor sentiment and failed to stop the lira’s depreciation.
  • The dollar was on the defensive at a one-week low on Thursday, as robust U.S. data and fresh hopes for U.S. fiscal stimulus had investors confident enough about economic recovery prospects to seek out riskier currencies. U.S. Treasury Secretary Steven Mnuchin told reporters that talks with House Speaker Nancy Pelosi "made a lot of progress" on long-awaited COVID-19 relief legislation. Along with strong U.S. labour and manufacturing data, that helped stocks to rally and the mood pulled the dollar to a one-week low of 93.664 against a basket of currencies. Mnuchin said later on Fox Business News that he would not accept the Democrats' proposed $2.2 trillion aid package, rather something closer to $1.5 trillion, adding that an agreement had been reached on direct payments to Americans At the same time, jobs figures that showed U.S. private employers stepped up hiring harder than forecast last month and that midwest manufacturing grew faster than expected also fed in to the positive sentiment. Chinese data on Wednesday had also shown the recovery on track in the world's second-biggest economy. Nevertheless, firmness in the safe-haven Japanese yen indicated that plenty of underlying caution still remains. The yen held at 105.45 in Asia on Thursday, after climbing in the wake of a chaotic first U.S. presidential debate. Gains in the euro overnight were also muted after European Central Bank President Christine Lagarde hinted that a strategy overhaul, and a more accommodative approach to inflation, could be possible. Final purchasing managers index figures are due in Europe and Britain later on Thursday, followed by the ISM manufacturing survey in the United States and jobless claims data - all providing an update on the progress of the global coronavirus recovery.
  • Oil prices rose on Thursday as renewed hopes for U.S. fiscal stimulus provided support but worries over rising infections hampering fuel demand could cap gains. The Trump administration has proposed a new stimulus package to House Democrats worth over $1.5 trillion. Earlier, U.S. Treasury Secretary Steven Mnuchin said talks with House Speaker Nancy Pelosi made progress on COVID-19 relief legislation, and the House of Representatives postponed a vote on a $2.2 trillion Democratic coronavirus plan to allow more time for a bipartisan deal to come together. WTI jumped on Wednesday after data from the U.S. Energy Information Administration showed crude and distillate inventories, which include diesel and jet fuel, fell more than expected in the latest week. Demand worries remain, though, as the pandemic has infected over 7.2 million and killed more than 206,000 people in the United States. Growing supply from the Organization of the Petroleum Exporting Countries (OPEC) also weighed on the market, with output having risen by 160,000 barrels per day (bpd) in September from August as some Libyan installations restarted and Iran's exports grew, a Reuters survey found. In a Reuters survey, 40 analysts and economists now see global demand contracting by 8 million-9.8 million bpd this year versus an 8 million-10 million bpd consensus last month. They trimmed their outlook for oil prices this year, however, with the average of forecasts for benchmark Brent crude at $42.48 a barrel for 2020 down from an average forecast of $42.75 last month.

 

 
Intraday RESISTANCE LEVELS
1st October 2020 R1 R2 R3
GOLD-XAU 1,900 1,921 1,944-1,955
Silver-XAG 24.00 24.50-25.20 26.00
Crude Oil 40.60-41.10 41.60 42.55-43.25
EURO/USD 1.1750 1.1800 1.1860-1.1900
GBP/USD 1.2900 1.2940 1.3000-1.3050
USD/JPY 105.90-106.90 107.30 107.60-108.00

Intraday SUPPORTS LEVELS
1st October 2020 S1 S2 S3
GOLD-XAU 1,890-1,882 1,869 1,862-1,850
Silver-XAG 23.30-22.90 22.20 21.65-21.00
Crude Oil 39.70-39.00 38.40 37.50-36.40
EURO/USD 1.1690-1.1635 1.1570 1.1500-1.1460
GBP/USD 1.2820-1.2725 1.2650 1.2600-1.2510
USD/JPY 105.50-104.90 104.30 103.90-103.10

Intra-Day Strategy (1st October 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$1902.18/oz and low of US$1881.41/oz. Gold down 0.653% at US$1884.99/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 1882-1810 with risk below 1810, targeting 1890-1900 and 1921-1944-1955. Sell below 1900-1955 keeping stop loss closing above 1955, targeting 1882-1869-1862 and 1850-1842-1820.

 
Intraday Support Levels
S1     1,890-1,882
S2     1,869
S3     1,862-1,850
Intraday Resistance Levels
R1     1,900
R2     1,921
R3     1,944-1,955

Technical Indicators

Name   Value Action
14DRSI  

35.576

Buy
20-DMA   1929.85 Buy
50-DMA  

1941.38

Buy
100-DMA   1844.77 Buy
200-DMA   1723.15 Buy
STOCH(5,3)   13.503 Buy
MACD(12,26,9)   14.45 Sell

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$24.30/oz and low of US$23.11/oz settled down by 0.043% at US$23.22/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 23.30-21.50 targeting 24.00-24.50-25.10 and 26.00-26.50, stop breakage below 21.50. Sell below 24.00-28.00 with stop loss above 28.00; targeting 23.30-22.90 and 22.20-21.50.

 
Intraday  Support Levels
S1     23.30-22.90
S2     22.20
S3     21.65-21.00

Intraday  Resistance Levels
R1     24.00
R2     24.50-25.20
R3     26.00

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 US40.44/bbl, intraday low of US$38.77/bbl and settled up by 1.507% to close at US$39.87/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     39.70-39.00
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$1.1683/EUR, high of US$1.1754/EUR and settled the day down by 0.1907% to close at US$1.1719/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 and 1.1900-1.1955. Sell below 1.1730-1.2000 targeting 1.1690-1.1635-1.1570 and 1.1500-1.1460 with stop-loss at daily closing above 1.2050.

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

Intraday  Resistance Levels
R1     1.1750
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$1.2804/GBP, high of US$1.2941/GBP and settled the day up by 0.416% to close at US$1.2913/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 1.2900-1.3270 with targets at 1.2820-1.2735-1.2650 and 1.2600-1.2510 stop-loss should be 1.3270. Buy above 1.2820-1.2450 with targets 1.2900-1.3000 and 1.3050-1.3100-1.3210 with stop loss closing below 1.3000.

 
Intraday Support Levels
S1     1.2820-1.2725
S2     1.2650
S3     1.2600-1.2510

Intraday Resistance Levels
R1     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 Monday made intra‐day low of JPY105.33/USD and made an intraday high of JPY105.72/USD and settled the day up by 0.155% at JPY105.61/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 105.90-108.00 with risk above 108.00 targeting 105.50-104.50-103.90 and 103.50-103.10. 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     105.50-104.90
S2     104.30
S3     103.90-103.10

INTRADAY RESISTANCE LEVELS
R1     105.90-106.90
R2     107.30
R3     107.60-108.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.716 Buy
20-DMA   105.58 Sell
50-DMA   105.80 Sell
100-DMA   106.62 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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