AAFX TRADING

Daily Market Lookup

  • The dollar was down on Monday morning in Asia, with China due to release quarterly growth data, including GDP and industrial production readings, later in the day, despite fading hopes for the latest fiscal stimulus package to be passed by the U.S. Congress ahead of the Nov. 3 U.S. presidential elections. The risk-sensitive Antipodean currencies saw gains over expectations that the Chinese data will show strong growth for the quarter. Investors are hoping that a strong recovery in the world’s second largest economy will strengthen demand amid rising COVID-19 cases and the re-introduction of restrictive measures such as lockdowns. In the U.S., despite House of Representatives Speaker Nancy Pelosi setting a Tuesday deadline for Congress to reach consensus on a deal before the election, most investors remain doubtful that the deadline will be reached as a Joe Biden victory looks imminent. Meanwhile, Pelosi and Treasury Secretary Steven Mnuchin discussed stimulus package efforts via a phone call on Saturday and are due to speak again later in the day. Trump has also renewed his offer to up the package’s price tag. The dollar clung to gains on Monday, supported by investor worries about the looming U.S. election and the fading prospects of any fiscal stimulus beforehand, while the Chinese yuan held firm ahead of the release of quarterly growth data. The dollar index (=USD) was steady in early trade, following a 0.7% rise last week when a global surge in coronavirus cases and an impasse over the stimulus package stoked caution. The risk-sensitive Australian and New Zealand dollars edged higher on expectations that data due later on Monday shows strong growth in China, and on faint hopes that Democrats and the White House could agree on a new spending program. But enthusiasm was tempered by the opposition of Senate Republicans and as investors focused on what the election outcome means for stimulus later, with a Joe Biden victory seen weakening the dollar by boosting sentiment with big spending. He said a Biden administration with control of the Senate could pass a stimulus program as large as $3.5 trillion. Something closer to $1 trillion was probable if Biden won the presidency but the Democrats failed to win the Senate, Weston said, while a Donald Trump victory and a split Congress could limit spending to between $500 billion and $1 trillion. Fifteen days out from election day, Biden leads Trump by about ten points in national polls, and has a narrow lead in several battleground states. The pair are due to face off in a final debate on Thursday. The yuan has largely shrugged off hints last week from Chinese policymakers that its recent rise has been too fast and too large, returning to sit near an 18-month high of 6.6788 in anticipation of strong GDP growth and capital inflows. Investors globally are pinning hopes on a robust recovery in China to help restart demand as economies struggle with heavy lockdowns and a second wave of coronavirus infections. The world's second-largest economy likely grew 5.2% in July-September from a year earlier, faster than the second quarter's 3.2%, according to a Reuters poll.
  • Oil prices fell on Monday after reports that China's third-quarter economic growth did not rise as much as expected, underscoring concerns that surging coronavirus cases globally are impacting demand in the world's largest oil importer. The world's second-largest economy in the third quarter expanded by 4.9% from a year earlier, missing analyst expectations, government data showed. Refiners in China, the world's second-largest oil user, slowed their processing rates in September and industrial metal imports, underpinned by government stimulus, were lower. The Chinese data showed growth in goods and services is softening while the data on crude processing and industrial metals output, given a lifeline from fiscal stimulus, were "disappointing", said Howie Lee, an economist at Oversea-Chinese Banking Corp (OCBC). China's oil-buying frenzy earlier this year is expected to slow in the fourth quarter amid high inventories and limited import quotas for independent refiners. OCBC's Lee added that investors are focusing on the Joint Ministerial Monitoring Committee (JMMC) meeting of the OPEC+ group happening later on Monday. OPEC+ consists of the Organization of the Petroleum Exporting Countries and producer allies such as Russia. The JMMC may decide whether it will delay plans reduce its current supply cuts of 7.7 million barrels per day (bpd) by 2 million bpd starting in January. Prices are unlikely to rally on a delay since that has been priced in by the market, Lee said.
  • Last week's meeting of the OPEC+ Joint Technical Committee reported a gloomier fuel demand outlook because of fears that a prolonged second wave of the COVID-19 pandemic and that a jump in Libyan output could push the oil market into surplus next year Energy firms in the U.S., the world's biggest oil producer, last week added the most oil and natural gas rigs since January as producers return to the well pad with crude prices holding around $40 a barrel over the past several months.

 

 
Intraday RESISTANCE LEVELS
19th October 2020 R1 R2 R3
GOLD-XAU 1,916-1,934 1,944 1,955-1,968
Silver-XAG 25.30 26.05 26.80-27.50
Crude Oil 42.00 42.50 43.10-43.85
EURO/USD 1.1800-1.1860 1.1900 1.1950-1.2010
GBP/USD 1.3020-1.3100 1.3190 1.3250-1.3400
USD/JPY 105.50-105.90 106.90 107.60-108.00

Intraday SUPPORTS LEVELS
19th October 2020 S1 S2 S3
GOLD-XAU 1,890-1,882 1,875 1,865-1,848
Silver-XAG 24.50-24.00 23.30 22.90-22.20
Crude Oil 40.80-40.00 39.70 39.00-38.40
EURO/USD 1.1690 1.1635 1.1570-1.1500
GBP/USD 1.2940-1.2900 1.2820 1.2710-1.2670
USD/JPY 104.90 104.30 103.90-103.10

Intra-Day Strategy (19th 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 Friday made its intraday high of US$1913.89/oz and low of US$1897.67/oz. Gold down 0.226% at US$1900.56/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 1916-1810 with risk below 1810, targeting 1934-1944 and 1955-1964-1976. Sell below 1934-1980 keeping stop loss closing above 1955, targeting 1916-1900-1882 and 1869-1862-1850.

 
Intraday Support Levels
S1     1,890-1,882
S2     1,875
S3     1,865-1,848
Intraday Resistance Levels
R1     1,916-1,934
R2     1,944
R3     1,955-1,968

Technical Indicators

Name   Value Action
14DRSI  

54.576

Buy
20-DMA   1906.39 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 Friday made its intraday high of US$24.51/oz and low of US$24.04/oz settled up by 0.398% at US$24.14/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 24.50-25.10 and 26.00-26.50, stop breakage below 21.50. Sell below 24.50-28.00 with stop loss above 28.00; targeting 24.00-23.30-22.90 and 22.20-21.50.

 
Intraday  Support Levels
S1     24.50-24.00
S2     23.30
S3     22.90-22.20

Intraday  Resistance Levels
R1     25.30
R2     26.05
R3     26.80-27.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.681 Buy
20-DMA   23.91 Buy
50-DMA   25.67 Buy
100-DMA   22.90 Buy
200-DMA   19.59 Buy
STOCH(5,3)   42.268 Buy
MACD(12,26,9)   1.914 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US41.28/bbl, intraday low of US$40.33/bbl and settled down by 0.430% to close at US$40.93/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 40.80-37.50 with risk daily closing below 37.50 and targeting 41.20-42.00-42.50 and 43.10-43.85. Sell in between 40.80-43.85 with stop loss at 44.00; targeting 40.10-39.70-39.00 and 38.40-37.50-36.40.

 
Intraday Support Levels
S1     40.80-40.00
S2     39.70
S3     39.00-38.40

Intraday Resistance Levels
R1     42.00
R2     42.50
R3     43.10-43.85

TECHNICAL INDICATORS
Name   Value Action
14DRSI   51.194 Sell
20-DMA   39.86 Sell
50-DMA   40.76 Sell
100-DMA   39.92 Buy
200-DMA   38.96 Sell
STOCH(5,3)   80.130 Sell
MACD(12,26,9)   0.0111 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1693/EUR, high of US$1.1745/EUR and settled the day up by 0.108% 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 1.1700-1.1460 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     1.1690
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   44.804 Buy
20-DMA   1.1727 Buy
50-DMA   1.1799 Buy
100-DMA   1.1604 Buy
200-DMA   1.1282 Buy
STOCH(5,3)   17.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.2861/GBP, high of US$1.2961/GBP and settled the day up by 0.025% to close at US$1.2917/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 1.3020-1.3400 with targets at 1.2940-1.2820-1.2735 and 1.2650-1.2600 stop-loss should be 1.3270. Buy above 1.2940-1.2600 with targets 1.3020-1.3100-1.3190 and 1.3250-1.3400 with stop loss closing below 1.2650.

 
Intraday Support Levels
S1     1.2940-1.2900
S2     1.2820
S3     1.2710-1.2670

Intraday Resistance Levels
R1     1.3020-1.3100
R2     1.3190
R3     1.3250-1.3400

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

53.544

Buy
20-DMA   1.2890 Sell
50-DMA   1.3019 Buy
100-DMA   1.2830 Buy
200-DMA   1.2707 Buy
STOCH(5,3)   56.940 Buy
MACD(12,26,9)   -0.005 Sell

USD/JPY

AAFX TRADING

USD/JPY on Ftriday made intra‐day low of JPY105.18/USD and made an intraday high of JPY105.46/USD and settled the day down by 0.0265% at JPY105.38/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 105.50-108.00 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     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   105.38 Buy
20-DMA   105.38 Sell
50-DMA   105.77 Sell
100-DMA   106.42 Sell
200-DMA   107.40 Sell
STOCH(9,6)   19.253 Sell
MACD(12,26,9)   -0.099 Sell

AAFX TRADING
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