AAFX TRADING

Daily Market Lookup

  • The dollar edged lower in early European trade Tuesday, as an improving appetite for risk after U.S. President Donald Trump’s discharge from hospital led traders to turn away from safe haven currencies. President Trump returned to the White House on Monday after a three-night hospital stay. While this doesn’t mean he is completely cured, the market is taking this development as a sign that political risks associated with the election are ebbing Also helping the ‘risk-on’ mood was renewed confidence that U.S. lawmakers may be close to a compromise over a new coronavirus relief package after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke by phone for about an hour Monday. They are set to continue their discussions later Tuesday. As well as Trump's health, "there is also some market attention on whether the U.S. Congress will pass the extra stimulus bill," said Tai Hui, Chief Asia Market Strategist, J.P. Morgan Asset Management, in a Reuters report. That said, moves have been small :the market is awaiting comments from Federal Reserve Chairman Jay Powell, as well as other central bankers, at a meeting of the National Association for Business Economics later Tuesday. Still, the dollar is likely to see volatile trading in the run-up to the U.S. presidential election, according to foreign exchange strategists polled by Reuters. The greenback rose more than 2% in September, its best monthly performance this year, but is still down more than 3% in 2020. This has prompted Goldman Sachs (NYSE:GS) to urge its clients to buy sterling.
  • The dollar was down on Tuesday morning in Asia over rising hopes that the U.S. Congress will reach an agreement over the latest stimulus measures to ease the economic impact of COVID-19. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke for about an hour on Monday via a phone call, with topics discussed including the measures. The pair are scheduled to speak again later in the day. White House Chief of Staff Mark Meadows added to the optimism, saying that potential for an agreement in Congress on more economic relief measures is still there, with President Donald Trump also committed to seeing a deal struck and passed. The optimism is tinged with caution, however, as COVID-19 spreads among key policy making figures. The list includes Trump, who tested positive for the virus during the previous week alongside wife Melania Trump. Trump returned to the White House on Monday after his three-night stay at the Walter Reed National Military Medical Center, which also contributed to investors’ increased risk appetite. However, he will remain under medical surveillance, after White House physician Sean Conley’s warning that the president may “not be out of the woods yet”. Some investors placed more importance on the progress of stimulus measures than Trump’s return home. Australia is awaiting the Reserve Bank of Australia's policy decision, due later in the day. Although expected to keep its benchmark interest rates unchanged at 0.25%, some investors are now expecting a cut to 0.10%. The government will also hand down the annual budget later in the day.
  • Oil prices lost more than 3% on Friday after U.S. President Donald Trump tested positive for COVID-19 and negotiators failed to agree a U.S. stimulus package just as rising global oil output threatens to overwhelm a weak price recovery. U.S. and Brent crude are heading for drops of around 7% and 6% respectively this week for a second consecutive week of declines. In a tweet, Trump said that he and First Lady Melania Trump tested positive for COVID-19, prompting sell-offs on U.S. and European stock markets. Oil was already in negative territory after a bipartisan deal on U.S. stimulus continued to elude House Speaker Nancy Pelosi and the White House, adding to fears about worsening demand without more support for the economy. Crude supplies from the Organization of the Petroleum Exporting Countries (OPEC) rose in September by 160,000 barrels per day (bpd) from a month earlier, a Reuters survey showed. The increase was mainly the result of increased supplies from Libya and Iran, OPEC members that are exempt from a supply pact between OPEC and allies led by Russia - a group known as OPEC+. Libya's production has risen faster than analysts expected after the relaxation of a blockade by the Libyan National Army. Its crude output has risen to 270,000 bpd as the country ramps up export activity, a Libyan oil source told Reuters on Thursday. New COVID-19 cases worldwide have rise to more than 34 million, nearly 2 million more than at the end of last week, based on Reuters tallies. This week marked the grim milestone of 1 million deaths and several countries are tightening restrictions and contemplating lockdowns as infections accelerate, prompting concerns about the impact on fuel demand.

 

 
Intraday RESISTANCE LEVELS
6th October 2020 R1 R2 R3
GOLD-XAU 1,916 1,934 1,944-1,955
Silver-XAG 24.50 25.20 26.05-26.80
Crude Oil 39.70-40.60 41.10 42.00-42.50
EURO/USD 1.1750 1.1800 1.1860-1.1900
GBP/USD 1.3000 1.3050 1.3100-1.3190
USD/JPY 105.50-105.90 106.90 107.60-108.00

Intraday SUPPORTS LEVELS
6th October 2020 S1 S2 S3
GOLD-XAU 1,900-1,890 1,882 1,869-1,862
Silver-XAG 24.00-23.30 22.90 22.20-21.65
Crude Oil 39.00-38.40 37.50 36.40-35.90
EURO/USD 1.1690-1.1635 1.1570 1.1500-1.1460
GBP/USD 1.2940-1.2900 1.2820 1.2725-1.2650
USD/JPY 104.90 104.30 103.90-103.10

Intra-Day Strategy (6th 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 Monday made its intraday high of US$1918.69/oz and low of US$1886.96/oz. Gold up 0.456% at US$1912.63/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 1890-1810 with risk below 1810, targeting 1916-1934-1944 and 1955-1964-1976. Sell below 1900-1955 keeping stop loss closing above 1955, targeting 1882-1869-1862 and 1850-1842-1820.

 
Intraday Support Levels
S1     1,900-1,890
S2     1,882
S3     1,869-1,862
Intraday Resistance Levels
R1     1,916
R2     1,934
R3     1,944-1,955

Technical Indicators

Name   Value Action
14DRSI  

49.576

Buy
20-DMA   1915.12 Buy
50-DMA  

1944.06

Buy
100-DMA   1855.12 Buy
200-DMA   1736.17 Buy
STOCH(5,3)   81.503 Buy
MACD(12,26,9)   -11.45 Sell

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$24.50/oz and low of US$23.67/oz settled up by 1.904% at US$24.34/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 24.00-21.05 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 24.00-23.30-22.90 and 22.20-21.50.

 
Intraday  Support Levels
S1     24.00-23.30
S2     22.90
S3     22.20-21.65

Intraday  Resistance Levels
R1     24.50
R2     25.20
R3     26.05-26.80

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 Monday made an intra‐day high of US39.83/bbl, intraday low of US$37.16/bbl and settled up by 5.872% to close at US$39.41/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 39.00-34.50 with risk daily closing below 34.50 and targeting 39.70-40.60 and 41.60-42.00. Sell in between 39.70-42.00 with stop loss at 42.00; targeting 39.00-40.60-37.50 and 36.40-35.90-34.70.

 
Intraday Support Levels
S1     39.00-38.40
S2     37.50
S3     36.40-35.90

Intraday Resistance Levels
R1     39.70-40.60
R2     41.10
R3     42.00-42.50

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 Monday an intraday low of US$1.1705/EUR, high of US$1.1796/EUR and settled the day up by 0.613% to close at US$1.1782/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 Monday made an intra‐day low of US$1.2898/GBP, high of US$1.2990/GBP and settled the day up by 0.452% to close at US$1.2973/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 1.2900-1.2820-1.2735 and 1.2650-1.2600-1.2510 stop-loss should be 1.3270. Buy above 1.2940-1.2450 with targets 1.2900-1.3000 and 1.3050-1.3100-1.3210 with stop loss closing below 1.3000.

 
Intraday Support Levels
S1     1.2940-1.2900
S2     1.2820
S3     1.2725-1.2650

Intraday Resistance Levels
R1     1.3000
R2     1.3050
R3     1.3100-1.3190

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 JPY105.25/USD and made an intraday high of JPY105.78/USD and settled the day up by 0.446% at JPY105.74/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 104.90-104.50-103.90 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     104.90
S2     104.30
S3     103.90-103.10

INTRADAY RESISTANCE LEVELS
R1     105.50-105.90
R2     106.90
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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