AAFX TRADING

Daily Market Lookup

  • The dollar was up on Tuesday morning in Asia, with doubts over the status of the latest U.S. stimulus measures continuing to linger. The Chinese yuan continued near a two-year high against the dollar over signs of continued economic recovery in the country. U.S. shares took a hit on Monday over doubts that Congress will pass the stimulus measures ahead of the Nov. 3 presidential election, now two weeks away. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin “continued to narrow their differences” in a telephone conversation on Monday, her spokesman said. Pelosi hopes that there will be “clarity” on whether the measures will be passed by the end of her self-imposed Tuesday deadline to reach a deal with Republicans. However, investors remain unconvinced that a deal will be reached before the deadline. Investors are still digesting the Chinese quarterly growth data released on Monday, which showed that the GDP grew 4.9% year-on-year in the third quarter, less than expected. However, the data showed a continuous recovery for the world’s second-largest economy overall, helping offshore yuan to reach its strongest level since July 2018 and surpass its 2019 peak. The GBP/USD pair inched down 0.05% to 1.2940, as Brexit negotiations between the U.K. and the European Union (EU) floundered. Although U.K. chief Brexit negotiator David Frost warned there was no basis to resume talks with the EU unless there is a fundamental change in the body’s approach to negotiations, some investors still held onto hope that the two sides could salvage the post-Brexit trade talks to prevent a no-deal ending to Brexit, with the drama dragging on into a fifth year.
  • The yuan held near a two-year high against the dollar in offshore trade on Tuesday on signs of a robust economic recovery in China however, doubts about a U.S. stimulus deal capped gains for other risk currencies. Data on Monday showing a recovery in China's consumer sector helped boost not only the yuan but other currencies, including the euro. However, broader confidence was later dented by a fall in U.S. share prices as investors grew cautious about prospects of a stimulus deal in Washington. U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin "continued to narrow their differences" in a telephone conversation on Monday, her spokesman said. Pelosi hopes that by the end of Tuesday there will be "clarity" on whether a coronavirus stimulus bill can be passed before the Nov. 3 presidential election, he said. Britain's chief Brexit negotiator David Frost said there was no basis to resume trade talks with the European Union unless there is a fundamental change in Brussels' approach to negotiations. However, investors still think British and European negotiators might be able to salvage post-Brexit trade talks to prevent disruptions that a no-deal finale to the five-year Brexit drama would cause.
  • Oil prices slipped for a fourth straight day on Tuesday on worries a resurgence of coronavirus cases globally is stifling a promising recovery in fuel demand, while growing output from Libya adds to plentiful supply. COVID-19 cases topped 40 mn on Monday, according to a Reuters tally, with a growing second wave in Europe and North America sparking new clampdowns. A meeting on Monday of a ministerial panel of the OPEC and its allies, together called OPEC+, pledged to support the oil market as concerns grow over soaring infections. For now OPEC+ is sticking with a deal to curb output by 7.7 mn bpd through December, and then shaving the cuts back to 5.8 million bpd in January. However, three sources from producing countries said the planned output increase from January could be reversed if necessary. He said rising output from Libya, which is operating outside the OPEC+ pact, was adding to oversupply concerns. Libya is rapidly ramping up production after armed conflict shut almost all of the country's output in January. Output from its biggest field, Sharara, which reopened on Oct. 11, is now at around 150K bpd, or about half its capacity, two industry sources told Reuters. Meanwhile traders will be watching for crude and product inventory data from the American Petroleum Institute on Tuesday. Analysts expect U.S. crude oil and distillate stockpiles likely fell in the latest week, according to a Reuters poll. There are over 40 mn COVID-19 cases globally as of Oct. 20, according to Johns Hopkins University data. A second wave of cases in Europe and the U.S. has seen governments re-introduce restrictive measures. Fuel demand concerns saw OPEC+ pledge to support the black liquid during Monday’s joint ministerial monitoring committee meeting. Despite the concerns, OPEC+ will press ahead with plans to pare production cuts to 5.7 mn bpd from January onwards, from the 7.7 mn bpd cut in place through December. However, these plans to increase output from January could reportedly be reversed should the need arise. Rising output from Libya, which is operating outside the OPEC+ pact, was adding to oversupply concerns, the note added. Libyan production is seeing a rapid increase, playing catch up after almost all the country’s output was shut down in January due to the outbreak of armed conflict. Sharara, the biggest field, is now reportedly at around 150K bpd, or half of its capacity, since it re-opened on Oct. 11. Investors are now looking to crude oil supply data from the American Petroleum Institute, due later in the day.

 

 
Intraday RESISTANCE LEVELS
20th October 2020 R1 R2 R3
GOLD-XAU 1,916-1,934 1,944 1,955-1,968
Silver-XAG 25.00-25.65 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 105.90 106.90 107.60-108.00

Intraday SUPPORTS LEVELS
20th October 2020 S1 S2 S3
GOLD-XAU 1,890-1,882 1,875 1,865-1,848
Silver-XAG 24.40-24.00 23.30 22.90-22.20
Crude Oil 40.80-40.00 39.70 39.00-38.40
EURO/USD 1.1730-1.1690 1.1635 1.1570-1.1500
GBP/USD 1.2940-1.2900 1.2820 1.2710-1.2670
USD/JPY 105.40-104.90 104.30 103.90-103.10

Intra-Day Strategy (20th 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$1918.49/oz and low of US$1896.60/oz. Gold up 0.208% at US$1903.57/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 Monday made its intraday high of US$24.96/oz and low of US$24.09/oz settled up by 0.919% at US$24.35/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     24.40-24.00
S2     23.30
S3     22.90-22.20

Intraday  Resistance Levels
R1     25.00-25.65
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 Monday made an intra‐day high of US41.44/bbl, intraday low of US$40.77/bbl and settled down by 0.258% to close at US$40.85/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   53.194 Sell
20-DMA   40.07 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 Monday an intraday low of US$1.1702/EUR, high of US$1.1793/EUR and settled the day up by 0.419% to close at US$1.1769/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     1.1730-1.1690
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 Monday made an intra‐day low of US$1.2890/GBP, high of US$1.3023/GBP and settled the day up by 0.377% to close at US$1.2939/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 Monday made intra‐day low of JPY105.29/USD and made an intraday high of JPY105.49/USD and settled the day up by 0.077% at JPY105.42/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     105.40-104.90
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   47.716 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

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