AAFX TRADING

Daily Market Lookup

  • The dollar was up on Wednesday morning in Asia, but investors are avoiding big moves and risks ahead of the U.S. presidential election on Nov. 3. In Europe, reports that France could reintroduce a national lockdown to curb the spread of COVID-19 sent the Euro tumbling against the dollar. The euro was down against the dollar on Wednesday, a third consecutive trading session in the red for the single currency. Despite its gains, sentiment for the greenback showed signs of turning bearish, with the election less than a week away. Some investors are prepping for increased volatility in the market over the second wave of COVID-19 cases in Europe and the U.S threatening economic growth, and the uncertainty over the election outcome so keeping investors on tenterhooks. French President Emmanuel Macron is due to give a televised address later in the day. Although no details about what the speech will cover were given, it is widely expected that the government will re-impose a national lockdown starting Thursday. But the focus remains on the U.S., which is also struggling with its own second wave. U.S. polls show that Democrat candidate Joe Biden is ahead of incumbent President Donald Trump, but memories of Trump’s surprise victory four years ago has some investors wary of predicting the election outcome. The possibility of a disputed election as legal battles between the two parties over how to count the votes already cast continue, will be negative for the dollar. The dollar received an additional blow after Trump admitted that it was unlikely that Congress would pass the latest stimulus measures before the election. The AUD’s gains were capped by data showing that Australia’s Consumer Price Index (CPI) rose 1.6% quarter-on-quarter during the previous quarter, higher than the 1.5% predicted in forecasts prepared by Investing.com. The Reserve Bank of Australia is also tipped to announce lower interest rates and increased government debt purchases after its next meeting on Nov. 3. Across the Tasman Sea, the NZD/USD pair inched down 0.06% to 0.6703. The GBP/USD pair inched down 0.06% to 1.3035. Investors are keeping an eye on the negotiations for a last-hour Brexit trade deal between the U.K. and the European Union, with the pound likely to be supported by increased hopes of a deal being reached between the two parties. The euro fell against the dollar on Wednesday following a media report that France's government was leaning toward reinstating a national lockdown to curb a resurgence in coronavirus cases. The spike in infections "is certainly a concern for France and southern Europe, so the euro's upside is heavy", said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo. He added that he does not expect the dollar to gain much against other currencies, "because people have been overly complacent about how markets will react after the U.S. election" Traders are bracing for more volatility in currency markets as the virus spreads in Europe, Britain, and the United States, fanning concerns that economic growth will weaken once again. French President Emmanuel Macron will give a televised address on Wednesday evening His office has not said what the speech is about, but local media has reported that the government is exploring imposing a lockdown from midnight on Thursday Traders, however, say the bigger focus is on the United States, which is also struggling to contain the coronavirus as people vote early before elections on Nov. 3. Domestic polls show Democrat rival Joe Biden has a lead over Republican incumbent President Donald Trump, but some investors are sceptical because the polls did not predict Trump's victory four years ago. Legal battles between Republicans and Democrats over how to count votes have raised the risk that the outcome of the election will be disputed, which is a negative factor for the dollar, some analysts say Sentiment for the greenback has also weakened after Trump conceded that an additional round of U.S. fiscal stimulus is unlikely before the election.
  • Oil prices slid about 2 percent on Wednesday, giving up most of the previous day's gains, as a surge in U.S. crude stocks and growing coronavirus infections in the United States and Europe fanned fears of a supply glut in oil and weaker fuel demand. U.S. crude oil and gasoline stocks rose last week, data from industry group the American Petroleum Institute showed, with crude inventories rising by 4.6 million barrels to about 495.2 million barrels, against analysts' expectations in a Reuters poll for a build of 1.2 million barrels Energy firms and ports along the U.S. Gulf Coast prepared on Tuesday for Zeta, the 11th hurricane of the season, as it entered the Gulf of Mexico. The United States, Russia, France and other countries have registered record numbers of infections in recent days, and European governments have introduced new curbs to try to rein in the fast-growing outbreaks. President Donald Trump acknowledged on Tuesday that a coronavirus economic relief deal would likely come after the election, with the White House unable to bridge differences with fellow Republicans in the U.S. Senate as well as congressional Democrats. The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, plans to scale back the size of its production cuts in January from a current 7.7 million barrels per day (bpd) to roughly 5.7 million bpd in January. While still an enormous amount, this may not be enough to offset weak demand. Adding to pressure, Libya's production should rebound to 1 million bpd in coming weeks, complicating efforts by other OPEC members and allies to restrict output.

 

 
Intraday RESISTANCE LEVELS
28th 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
Crude Oil 39.70-40.00 40.80 42.00-42.50
EURO/USD 1.1790-1.1860 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
28th October 2020 S1 S2 S3
GOLD-XAU 1900-1,890 1,882 1,875-1,865
Silver-XAG 24.40-24.00 23.30 22.90-22.20
Crude Oil 38.90-38.00 37.70 37.05-36.50
EURO/USD 1.1730 1.1690 1.1635-1.1570
GBP/USD 1.3020-1.2940 1.2900 1.2820-1.2750
USD/JPY 104.10-103.90 103.10 102.50-102.00

Intra-Day Strategy (28th 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$1911.35/oz and low of US$1897.80/oz. Gold down 0.310% at US$1907.38/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 1900-1870 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     1900-1,890
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  

50.576

Buy
20-DMA   1903.03 Buy
50-DMA  

1918.97

Buy
100-DMA   1886.12 Buy
200-DMA   1766.17 Buy
STOCH(5,3)   39.503 Buy
MACD(12,26,9)   -1.45 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$24.29/oz and low of US$24.18/oz settled up by 1.478% at US$24.29/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
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 Tuesday made an intra‐day high of US39.90/bbl, intraday low of US$38.59/bbl and settled up by 0.695% to close at US$38.95/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   39.95 Sell
50-DMA   40.28 Sell
100-DMA   40.37 Buy
200-DMA   37.81 Sell
STOCH(5,3)   12.130 Sell
MACD(12,26,9)   0.016 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1778/EUR, high of US$1.1838/EUR and settled the day down by 0.182% to close at US$1.1786/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     1.1730
S2     1.1690
S3     1.1635-1.1570

Intraday  Resistance Levels
R1     1.1790-1.1860
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 Wednesday made an intra‐day low of US$1.2999/GBP, high of US$1.3078/GBP and settled the day up by 0.186% to close at US$1.3041/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 Tuesday made intra‐day low of JPY104.38/USD and made an intraday high of JPY104.88/USD and settled the day down by 0.354% at JPY104.46/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 105.00-108.00 with risk above 108.00 targeting 104.50-103.90 and 103.50-103.10. Long positions above 104.10-102.00 with targets of 106.90-107.50 and 107.90-108.40-109.40 with stop below 105.00.

 
Intraday Support Levels
S1     104.10-103.90
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   33.726 Buy
20-DMA   105.25 Sell
50-DMA   105.51 Sell
100-DMA   106.09 Sell
200-DMA   18.253 Sell
STOCH(9,6)   18.253 Sell
MACD(12,26,9)   -0.099 Sell

AAFX TRADING
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