AAFX TRADING

Daily Market Lookup

  • The dollar hit a one-month low on Wednesday as investors who are optimistic about a pre-election U.S. stimulus package sought out riskier currencies, while the strong recovery in China's economy helped drive the yuan to a two-year high. President Donald Trump has raised hopes for a stimulus breakthrough, saying he was willing to accept a large aid bill, despite opposition from his own Republican Party. Doubts that any package can actually pass the Senate are keeping the dollar from breaching last month's two-year lows. Such worries and the drawn-out and oscillating fortunes of the U.S. stimulus bill have held the dollar in its range this month and will determine its next moves. The Japanese yen has likewise been held in stasis as the brightening mood weakens the greenback, but the simultaneous rise in U.S. yields attracts investment flows from Japan out of yen and in to dollars. The yen edged up 0.1% on Wednesday. In contrast to the dollar's dependence on stimulus hopes, the yuan extended a remarkable rally on Wednesday, hitting a 27-month high and pulling China-exposed Asian currencies with it. The yuan has soared 7.6% on the dollar since May as China has led the global coronavirus recovery and its stock and bond markets have soaked up offshore capital flows. A firm onshore guidance rate fixing on Wednesday assuaged worries that policymakers are concerned about its rise. Data on Monday showed China's economic growth accelerating as the pandemic recedes, and a state planning official on Wednesday said auto sales and production could hit last year's levels. The U.S. Federal Reserve releases its "Beige Book" economic survey at 1800 GMT.
  • The dollar was down on Wednesday morning in Asia over continued optimism over the U.S. Congress passing the latest stimulus measures before the Nov. 3 presidential election, boosting risk sentiment and pushing the dollar down to a near one-week low. President Donald Trump signaled that he was willing to accept a package with a larger price tag despite Republican opposition, saying on Tuesday, “I want to do it even bigger than the Democrats.” House of Representatives Speaker Nancy Pelosi also was hopeful that the Republican-Democrat gap on the stimulus measures’ price tag is narrowing, saying, “I hope so. That’s the plan,” for an agreement to be reached the following week. Stimulus measures are seen as a short-term weight on the greenback, as spending supports the economy and increases investors’ risk appetite. The expectations also sparked a selloff in U.S. bonds, and the Federal Reserve will release its ‘Beige Book’ economic survey later in the day. The yuan continues to bask in the glow of data released earlier in the week suggests that China is leading the economic recovery from the COVID-19 pandemic. Offshore yuan was headed towards a more than two-year peak on Tuesday. Investors continue to keep an eye on the progress of Brexit talks between the U.K. and the European Union. Meanwhile, European Central Bank President Christine Lagarde and chief economist Philip Lane will host a broad strategy review event in Frankfurt later in the day.
  • Oil prices eased on Wednesday after a surprise build-up in U.S. crude stockpiles stoked concerns about a global supply glut even as a spike in global COVID-19 cases fuelled fears of slower recovery in fuel demand. Crude inventories rose by 584,000 barrels in the week to Oct. 16 to about 490.6 million barrels, data from industry group the American Petroleum Institute showed, compared with analysts' expectations in a Reuters poll for a draw of 1 million barrels. Adding to pressure, worldwide COVID-19 cases crossed 40 million on Tuesday, with some parts of Europe imposing renewed lockdown measures. On the supply side, Russia's energy minister said on Tuesday it was too early to discuss the future of global oil production curbs beyond December, less than a week after saying plans to scale back existing output restrictions should proceed. Earlier this year the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - together known as OPEC+ - agreed to trim production cuts in January from a current 7.7 million barrels per day (bpd) to roughly 5.7 million bpd. At the same time, OPEC member Libya, which is exempt from the cuts, is also ramping up production after armed conflict shut almost all of the country's output in January, pumping more oil into an oversupplied market. Meanwhile, some support for prices came from the White House and Democrats in the U.S. Congress moving closer to agreement on a new coronavirus relief package that could boost fuel demand as President Donald Trump said he was willing to accept a large aid bill. The American Petroleum Institute reported crude inventories climbed by almost 600,000 barrels, according to people familiar with the data. That would be the second gain in three weeks if confirmed by government figures on Wednesday. Futures advanced on Tuesday as U.S. lawmakers moved closer to a package to bolster the economic recovery from the virus-driven downturn. Oil’s recovery is facing pressure from a resurgent coronavirus and expanding supply from Libya, despite China offering some support to demand. OPEC+ has warned the market faces a precarious outlook, with key ally Russia saying that the group won’t be making any decision on the direction of its output cuts before a ministerial meeting scheduled for Nov. 30-Dec. 1.

 

 
Intraday RESISTANCE LEVELS
21st October 2020 R1 R2 R3
GOLD-XAU 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 1.1860 1.1900 1.1950-1.2010
GBP/USD 1.3020-1.3100 1.3190 1.3250-1.3400
USD/JPY 105.40-105.90 106.90 107.60-108.00

Intraday SUPPORTS LEVELS
21st October 2020 S1 S2 S3
GOLD-XAU 1,916-1,890 1,882 1,875-1,865
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 1.1800-1.1730 1.1690 1.1635-1.1570
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 (21st 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$1914.03/oz and low of US$1894.39/oz. Gold up 0.171% at US$1904.93/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     1,916-1,890
S2     1,882
S3     1,875-1,865
Intraday Resistance Levels
R1     1,934
R2     1,944
R3     1,955-1,968

Technical Indicators

Name   Value Action
14DRSI  

52.576

Buy
20-DMA   1897.03 Buy
50-DMA  

1923.97

Buy
100-DMA   1876.12 Buy
200-DMA   1757.17 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$24.91/oz and low of US$24.30/oz settled up by 0.952% at US$24.59/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 Tuesday made an intra‐day high of US41.89/bbl, intraday low of US$40.48/bbl and settled up by 0.524% to close at US$41.69/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 Tuesday an intraday low of US$1.1759/EUR, high of US$1.1793/EUR and settled the day up by 0.434% to close at US$1.1820/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 1.1800-1.1460 with risk below 1.1460, targeting 1.1860 and 1.1900-1.1955-1.2010. Sell below 1.1860-1.2000 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     1.1800-1.1730
S2     1.1690
S3     1.1635-1.1570

Intraday  Resistance Levels
R1     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 Tuesday made an intra‐day low of US$1.2910/GBP, high of US$1.2978/GBP and settled the day up by 0.045% to close at US$1.2945/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 Tuesday made intra‐day low of JPY105.33/USD and made an intraday high of JPY105.74/USD and settled the day up by 0.540% at JPY105.48/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     105.40-105.90
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

AAFX TRADING
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