AAFX TRADING

Daily Market Lookup

  • The dollar moved upwards on Wednesday morning in Asia, with investors digesting U.S. President Donald Trump’s shock cancellation of talks on the latest stimulus measures. The cancellation destroyed the sense of calm regained in the market after he was discharged from Walter Reed National Military Medical Center on Monday after being treated for COVID-19, and decreased risk appetite as hopes for the stimulus measures to be passed before the Nov. 3 presidential election evaporated. Trump’s move also increases the downside risks to the U.S. economy, which was already shaky, but could increase safe harbor flows into assets such as the greenback. Trump, who is still in recovery from COVID-19 and the virus’ highest profile patient remains under medical surveillance, cancelled the talks with Democrats until after the election via a tweet. However, with the number of COVID-19 cases rising in parts of the U.S., the cancellation puts the country’s economic outlook in serious jeopardy. Federal Reserve Chairman Jerome Powell sounded the warning bell on Tuesday in his keynote speech to the National Association for Business Economics (NABE) conference a mere hour before the Trump bombshell. Powell warned that the U.S. economy could slip into a downward spiral if COVID-19 is not effectively controlled and called for more economic assistance. European Central Bank (EBC) chief economist Philip Lane also delivered a keynote speech to the conference. Both the Fed and ECB will release minutes from their respective September meetings later in the day, with investors looking to comments from several Fed speakers over the coming days for further clues to the central bank’s outlook. U.K.’s informal divorce talks with the European Union (EU) failing to shield the pound from the dollar’s gains.
  • The dollar held onto gains against most currencies on Wednesday after Republican U.S. President Donald Trump's abrupt cancelling of talks on economic stimulus with Democrats increased risk aversion. Currencies had only just regained a sense of calm after Trump returned to the White House from hospital, where he received treatment for the coronavirus. Trump's surprise decision to call off stimulus talks until after the Nov. 3 presidential election increases downside risks for an already shaky U.S. economy, which is likely to favour safe harbour flows into the dollar. The British pound was quoted at $1.2869 after skidding by 0.86% on Tuesday as optimism about Britain's trade negotiations with the European Union failed to shield sterling from the dollar's advance. Trump, still being treated for COVID-19, on Tuesday turned to Twitter to break off talks with Democrats on an aid package even though U.S. virus cases are rising, which poses a serious threat to the economic outlook. Highlighting the peril, Federal Reserve Chair Jerome Powell on Tuesday warned that the U.S. economy could slip into a downward spiral if the coronavirus is not effectively controlled and called for more economic assistance. Traders will look to minutes from the Fed's most recent meeting and comments from several Fed speakers for further signs of how central bankers view the outlook. Trump has only just returned to work on Monday after three nights in hospital following his bombshell admission last week that he had contracted the coronavirus. Medical professionals have said Trump's early discharge from hospital puts others at risk of infection, and its spread among his most senior staff is swinging public opinion against him. Support for his Democratic rival Joe Biden has grown by about four percentage points since mid-September, according to Reuters/Ipsos polling from Oct. 2 to 6, with 52% of likely voters backing Biden compared to 40% for Trump. Investors are starting to warm up to the idea of Biden winning the election, which is a positive for the dollar, Mizuho's Yamamoto said.
  • Oil prices slipped on Wednesday after U.S. President Donald Trump dashed hopes for a fourth stimulus package to boost the coronavirus-hit economy and on a larger-than-expected build-up in U.S. crude stocks. President Trump, still being treated for COVID-19, ended talks on Tuesday with Democrats on an economic aid package for his pandemic-hit country with the U.S. presidential election only weeks away. Price were also pressured by data from the American Petroleum Institute showing U.S. crude oil stocks rose by 951,000 barrels last week - more than expected. But losses were limited by restrictions on the supply side. Energy companies were busy securing offshore production platforms and evacuating workers on Tuesday, some for the sixth time this year, as Hurricane Delta took aim at U.S. oil production in the Gulf of Mexico, which accounts for 17% of total U.S. crude oil output. In Norway, meanwhile, the Lederne labour union said on Tuesday it will expand its ongoing oil strike from Oct. 10 unless a wage deal can be reached in the meantime. Six offshore oil and gas fields shut down on Monday as Lederne ramped up its strike, cutting the country's output capacity by 8%.

 

 
Intraday RESISTANCE LEVELS
7th October 2020 R1 R2 R3
GOLD-XAU 1,900-1,916 1,934 1,944-1,955
Silver-XAG 24.00-24.50 25.20 26.05-26.80
Crude Oil 40.60 41.10 42.00-42.50
EURO/USD 1.1800-1.1860 1.1900 1.1950-1.2010
GBP/USD 1.2940-1.3000 1.3050 1.3100-1.3190
USD/JPY 105.90 106.90 107.60-108.00

Intraday SUPPORTS LEVELS
7th October 2020 S1 S2 S3
GOLD-XAU 1,890 1,882 1,869-1,862
Silver-XAG 23.30 22.90 22.20-21.65
Crude Oil 39.70-39.00 38.40 37.50-36.40
EURO/USD 1.1750-1.1690 1.1635 1.1570-1.1500
GBP/USD 1.2900 1.2820 1.2725-1.2650
USD/JPY 105.50-104.90 104.30 103.90-103.10

Intra-Day Strategy (7th 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 Tuesday made its intraday high of US$1921.10/oz and low of US$1874.54/oz. Gold down 1.78% at US$1876.45/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     1,890
S2     1,882
S3     1,869-1,862
Intraday Resistance Levels
R1     1,900-1,916
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 Tuesday made its intraday high of US$24.49/oz and low of US$22.86/oz settled down by 5.184% at US$23.04/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     23.30
S2     22.90
S3     22.20-21.65

Intraday  Resistance Levels
R1     24.00-24.50
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 Tuesday made an intra‐day high of US40.99/bbl, intraday low of US$39.25/bbl and settled up by 0.966% to close at US$39.90/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 39.70-34.50 with risk daily closing below 34.50 and targeting 39.70-40.60 and 41.60-42.00. Sell in between 40.60-42.00 with stop loss at 42.00; targeting 40.60-37.50 and 36.40-35.90-34.70.

 
Intraday Support Levels
S1     39.70-39.00
S2     38.40
S3     37.50-36.40

Intraday Resistance Levels
R1     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 Tuesday an intraday low of US$1.1731/EUR, high of US$1.1807/EUR and settled the day up by 0.613% to close at US$1.1732/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 1.1750-1.1460 with risk below 1.1460, targeting 1.1800-1.1860 and 1.1900-1.1955-1.2010. Sell below 1.1800-1.2000 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     1.1750-1.1690
S2     1.1635
S3     1.1570-1.1500

Intraday  Resistance Levels
R1     1.1800-1.1860
R2     1.1900
R3     1.1950-1.2010

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.726 Buy
20-DMA   1.1758 Buy
50-DMA   1.1800 Buy
100-DMA   1.1548 Buy
200-DMA   1.1258 Buy
STOCH(5,3)   64.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2865/GBP, high of US$1.3006/GBP and settled the day down by 0.763% to close at US$1.28712/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     1.2900
S2     1.2820
S3     1.2725-1.2650

Intraday Resistance Levels
R1     1.2940-1.3000
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 Tuesday made intra‐day low of JPY105.54/USD and made an intraday high of JPY105.78/USD and settled the day up by 0.171% at JPY105.55/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 104.90-104.50-103.90 and 103.50-103.10. Long positions above 105.50-103.00 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
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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