AAFX TRADING

Daily Market Lookup

  • The dollar found support on Monday, as surging coronavirus cases in Europe and the United States and a lack of progress toward a U.S. stimulus package put traders in a cautious mood, although hopes for a Brexit trade deal held sterling steady. The United States has recorded its highest ever number of new COVID-19 cases for two consecutive days and so has France. Spain announced a new state of emergency and Italy has ordered restaurants and bars to shut by 6 p.m. U.S. House Speaker Nancy Pelosi said on Sunday that she expected a White House response on Monday regarding the latest stimulus spending plan, but there have been few tangible signs that a long-stalled deal is actually nearer. Hopes for a breakthrough in the trade-deal stalemate between Britain and Europe held the pound steady above $1.30. Over the weekend, Britain's Northern Island minister said there was a good chance of a trade deal. The week ahead holds three major central bank meetings and the final sprint to the polls in the United States. The Bank of Canada and Bank of Japan are expected to hold fire for now, while the market assumes the European Central Bank will sound cautious on inflation and growth, even if it skips a further easing on Thursday. Analysts also reckon that a Joe Biden victory next week, especially if the Democrats win control of the Senate, would likely herald a large U.S. stimulus package. But investors are treading carefully. Elsewhere, China's top leaders chart the country's economic course for 2021-2025 at a key meeting starting on Monday, and may adopt a lower or more flexible growth target. Later on Monday, investors are watching for a German sentiment survey at 0900 GMT, following a robust Purchasing Managers' Index figure last week, and U.S. housing data, due at 1400 GMT.
  • The dollar fell Friday and is set for a weekly loss, with experts suggesting a reprieve for the greenback is unlikely, as a disappointment over stimulus may not send investors rushing into the world reserve currency. The bank also suggested that a bullish round of economic data in the coming week will ease fears of a double-dip recession, dealing another blow to safe-haven demand in the greenback. Third-quarter GDP, expected to show a huge 35% quarter-on-quarter annualized bounce, and fresh insights on U.S. consumer confidence and durable goods orders will "not be supporting double dip fears just yet,” the Dutch bank said.
  • Oil fell more than 2% on Monday, extending last week's losses as growing cases of COVID-19 in the United States and Europe raised worries about crude demand, while the prospect of increased supply also hurt sentiment. The United States reported its highest number yet of new coronavirus infections in two days through Saturday, while in France new cases hit a record of more than 50,000 on Sunday, underlining the severity of the outbreak. On the supply side, Libya's National Oil Corp on Friday ended its force majeure on exports from two key ports and said production would reach 1 million barrels per day (bpd) in four weeks, a quicker ramp-up than many analysts had predicted. OPEC+, a grouping of producers including the Organization of the Petroleum Exporting Countries (OPEC) and Russia, is also set to increase output by 2 million bpd in January 2021 after cutting production by a record amount earlier this year. Russian President Vladimir Putin indicated last week he may agree to extending OPEC+ oil production reductions. In the United States, energy companies increased their rig count by five to take the total to 287 in the week to Oct. 23, the most since May, energy services firm Baker Hughes Co (N:BKR) said. The rig count is an indicator of future supply. Still, investors increased their net long positions in U.S. crude futures and options during the week through Oct. 20, the U.S. Commodity Futures Trading Commision said on Friday. As OPEC and its allies ruminate over whether to ease their collective production cuts at the end of the year, a very interested – though perhaps distracted by the US election – Trump administration will be watching closely from Washington. The OPEC+ agreement, forged in April during the worst of the pandemic market meltdown, saw the 23-country alliance rein in nearly 10% of global crude supply and was critical in clawing back US oil prices from negative territory to about $40/b now. The deal was a relief to the beleaguered US oil industry that President Donald Trump saw as vital to his re-election campaign. But the cuts, already tapered once to 7.8 million b/d from 9.7 million b/d in August, are scheduled to roll back further to 5.8 million b/d starting in January. With a second wave of coronavirus infections weighing on the oil market’s outlook, the additional barrels from the quota easing, along with a ramp-up in output from Libya, threaten to undo the price recovery and hit already impaired producers around the world. Many OPEC+ ministers appear increasingly open to keeping the current cuts in place — a move sure to be welcomed by Trump — though no final decision has been made and not all members are convinced, delegates have told S&P Global Platts. The alliance will meet Nov. 30-Dec. 1 to make its determination, almost a month after the Nov. 3 US presidential election, in which Trump lags in the polls to Democratic rival Joe Biden. Should Trump pull off a victory, he could put diplomatic pressure on OPEC+ officials, in particular with key US ally Saudi Arabia, to prevent the oil market from backsliding.

 

 
Intraday RESISTANCE LEVELS
26th October 2020 R1 R2 R3
GOLD-XAU 1,916-1,934 1,944 1,955-1,968
Silver-XAG 24.40-25.00 25.65 26.05-26.80
Crude Oil 39.70-40.00 40.80 42.00-42.50
EURO/USD 1.1860 1.1900 1.1950-1.2010
GBP/USD 1.3100-1.3190 1.3250 1.3400-1.3450
USD/JPY 104.90-105.40 105.90 106.90-107.60

Intraday SUPPORTS LEVELS
26th October 2020 S1 S2 S3
GOLD-XAU 1,890 1,882 1,875-1,865
Silver-XAG 24.00 23.30 22.90-22.20
Crude Oil 38.90-38.00 37.70 37.05-36.50
EURO/USD 1.1790-1.1730 1.1690 1.1635-1.1570
GBP/USD 1.3020-1.2940 1.2900 1.2820-1.2750
USD/JPY 104.30-103.90 103.10 102.50-102.00

Intra-Day Strategy (26th 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$1914.13/oz and low of US$1894.19/oz. Gold down 0.108% at US$1900.77/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 1890-1870 with risk below 1870, targeting 1916-1934-1944 and 1955-1964-1976. Sell below 1916-1980 keeping stop loss closing above 1955, targeting 1900-1882 and 1869-1862-1850.

 
Intraday Support Levels
S1     1,890
S2     1,882
S3     1,875-1,865
Intraday Resistance Levels
R1     1,916-1,934
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 Friday made its intraday high of US$24.40/oz and low of US$24.40/oz settled down by 0.400% at US$24.60/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     24.00
S2     23.30
S3     22.90-22.20

Intraday  Resistance Levels
R1     24.40-25.00
R2     25.65
R3     26.05-26.80

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 US40.96/bbl, intraday low of US$39.61/bbl and settled down by 2.192% to close at US$39.74/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 38.90-36.50 with risk daily closing below 36.50 and targeting 39.70-40.50-41.20 and 42.00-42.50-43.10. Sell in between 39.50-43.85 with stop loss at 44.00; targeting 39.00-38.40-37.50 and 36.40-36.00.

 
Intraday Support Levels
S1     38.90-38.00
S2     37.70
S3     37.05-36.50

Intraday Resistance Levels
R1     39.70-40.00
R2     40.80
R3     42.00-42.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.498 Sell
20-DMA   40.03 Sell
50-DMA   40.44 Buy
100-DMA   40.37 Sell
200-DMA   38.01 Sell
STOCH(5,3)   13.130 Sell
MACD(12,26,9)   0.016 Sell

EUR/USD

AAFX TRADING

EUR/USD on Friday an intraday low of US$1.1786/EUR, high of US$1.1864/EUR and settled the day up by 0.374% to close at US$1.1861/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     1.1790-1.1730
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 Friday made an intra‐day low of US$1.3018/GBP, high of US$1.3122/GBP and settled the day down by 0.276% to close at US$1.3039/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 1.3100-1.3490 with targets at 1.3020-1.2940-1.2820 and 1.2735-1.2650 stop-loss should be 1.3270. Buy above 1.3020-1.2600 with targets 1.3100-1.3190 1.3250 and 1.3400-1.3450 with stop loss closing below 1.2650.

 
Intraday Support Levels
S1     1.3020-1.2940
S2     1.2900
S3     1.2820-1.2750

Intraday Resistance Levels
R1     1.3100-1.3190
R2     1.3250
R3     1.3400-1.3450

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 Friday made intra‐day low of JPY104.54/USD and made an intraday high of JPY104.93/USD and settled the day up by 0.0868% at JPY104.73/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     104.30-103.90
S2     103.10
S3     102.50-102.00

INTRADAY RESISTANCE LEVELS
R1     104.90-105.40
R2     105.90
R3     106.90-107.60

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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