AAFX TRADING

Daily Market Lookup

  • The U.S. dollar clawed back early losses against risk-sensitive currencies on Wednesday after preliminary results suggested President Donald Trump has a slight edge over Democratic challenger Joe Biden in Florida, a key battleground state. That undercut rising expectations in markets this week that Biden will likely win the presidency and adopt a large stimulus to support the economy Trump was narrowly leading Biden in Florida, while other competitive swing states that will help decide the election outcome, such as Georgia and North Carolina, remained up in the air. The dollar index measuring the greenback against a basket of currencies (=USD) stood at 93.626, flat on the day. It had shed 0.9% on Tuesday, its biggest daily drop since late March as traders had bet on a Biden victory. A win for Biden, expected to be less confrontational in trade issues with China and other trade partners than Trump, could be a boon for currencies that have suffered from tariffs imposed by the president. The offshore Chinese yuan, seen as a currency that has much to lose if Trump wins due to his hawkish stance on China on trade and several other issues, dropped 0.25% to 6.6959 dollar . Investors were braced for the possibility that the election results may not become clear on Wednesday, with markets hedging against the risk of a contested election or a potentially drawn out process as mail in ballots were counted.
  • The dollar was up on Wednesday morning in Asia, continuing its gains as polls close on election day in the U.S., with investors turning to the safe-haven asset as results from eastern states start coming in. The economy and COVID-19 were the top two issues for voters, according to an Edison Research exit poll on Tuesday. The uncertainty continues as vote counting could go on for several days, delaying the outcome. Currently, Democrat candidate Joe Biden has 85 electoral votes, leading over incumbent President Donald Trump’s 72 votes, according to Bloomberg. Trump won Indiana’s electoral votes, the first state to be decided, but the overall race is still too close to call and it could take several days for the results to be announce A Biden presidency is expected to pass big stimulus packages to support the COVID-19-hit economy, which is expected to boost riskier currencies such as the AUD and the NZD, although whether Biden is more successful in pushing those packages through Congress hinges on whether the Democrats win the Senate and the House of Representatives. Biden is also expected to be less confrontational with China and other partners in trade issues, which will boost currencies in countries where Trump imposed tariffs, such as China’s yuan. However, some investors warned that the closer the vote is to call, the higher the risk the election will be contested. Data released earlier in the day showed that October's Caixin Services Purchasing Managers Index (PMI) rose to 56.8, up from September's 54.8 figure. The GBP/USD pair inched down 0.08% to 1.3047, with the U.K. and the European Union continuing Brexit trade talks. The Federal Reserve and the Bank of England will hand down their respective monetary policies on Thursday.
  • Gold was down on Wednesday morning in Asia as investors push into the dollar over U.S. election outcome concerns. Uncertainty over the U.S. election results is drawing investors to the greenback. With the outcome of the U.S. presidential election very much in the balance, investors looking to a second Trump term are moving toward the dollar to hedge their positions. Democrat Joe Biden has been widely predicted to win the vote; however, the race is tighter than expected, with President Trump currently ahead in his must-win state of Florida, other battleground states are too close to call. With the likely narrow margins of victory for either side, a clear result may also take weeks to become known, and potentially lead to severe social disruption. Investors who had factored in a Biden win had also looked to the likelihood of a Democrat president delivering a large COVID-19 stimulus program, which would have pushed the dollar down, and brought up gold prices. With the current uncertainty, many are now hedging by taking dollar positions.
  • Oil was up on Wednesday morning in Asia, with Brent crude moving back above the $40 mark. Large falls in U.S. inventories, combined with likely supply cuts boosted prices. U.S. crude stockpiles fell steeply by 8.01 million barrels for the week ending October 30, the latest American Petroleum Institute data showed. Forecast prepared by Investing.com had expected a 600,000-barrel build. The sharp fall boosted oil prices by over 3% in late trading yesterday, with the market holding on to its gains in Asia this morning. Adding to positive investor sentiment is the likelihood of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group led by Russia and known as OPEC+, maintaining current production restrictions. Algeria, this year’s holder of the OPEC presidency, Saudi Arabia, and Russia are pushing to extend the supply cuts well into 2021. However, oil still has considerable ground to make up after slumping over 10% in the previous week over concerns about the COVID-19 pandemic’s escalation slashing demand and the uncertainty over today’s U.S. presidential election outcome. Investors await crude oil supply data from the U.S. Energy Information Administration, due later in the day.

 

 
Intraday RESISTANCE LEVELS
4th November 2020 R1 R2 R3
GOLD-XAU 1,900-1,916 1,934 1,940-1,954
Silver-XAG 24.00-25.00 25.65 26.05-26.80
Crude Oil 38.90-39.40 40.35 41.00-41.90
EURO/USD 1.1710-1.1790 1.1860 1.1900-1.1950
GBP/USD 1.3020 1.3100 1.3190-1.3250
USD/JPY 105.40 105.90 106.90-107.60

Intraday SUPPORTS LEVELS
4th November 2020 S1 S2 S3
GOLD-XAU 1,884-1,875 1,868 1,860-1,854
Silver-XAG 23.30-22.90 22.20 21.50-21.00
Crude Oil 37.90-37.00 36.50 35.70-34.75
EURO/USD 1.1635-1.1570 1.1500 1.1420-1.1350
GBP/USD 1.2950-1.2820 1.2750 1.2705-1.2650
USD/JPY 104.50-103.90 103.10 102.50-102.00

Intra-Day Strategy (4th November 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$1910.46/oz and low of US$1886.87/oz. Gold up 0.863% at US$1907.76/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 1884-1847 with risk below 1854, targeting 1887-1900 and 1916-1934-1944. Sell below 1887-1934 keeping stop loss closing above 1940, targeting 1874-1868-1860 and 1854-1847.

 
Intraday Support Levels
S1     1,884-1,875
S2     1,868
S3     1,860-1,854
Intraday Resistance Levels
R1     1,900-1,916
R2     1,934
R3     1,940-1,954

Technical Indicators

Name   Value Action
14DRSI  

40.912

Buy
20-DMA   1898.99 Buy
50-DMA  

1914.76

Buy
100-DMA   1888.66 Buy
200-DMA   1769.33 Buy
STOCH(5,3)   15.503 Buy
MACD(12,26,9)   -8.45 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$24.37/oz and low of US$23.89/oz settled up by 0.795% at US$24.21/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 23.30-21.05 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     23.30-22.90
S2     22.20
S3     21.50-21.00

Intraday  Resistance Levels
R1     24.00-25.00
R2     25.65
R3     26.05-26.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.681 Buy
20-DMA   24.21 Buy
50-DMA   25.29 Buy
100-DMA   23.25 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 US38.46/bbl, intraday low of US$36.74/bbl and settled up by 5.451% to close at US$38.21/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 38.50-34.10 with risk daily closing below 34.10 and targeting 38.90-39.40-40.35 and 41.00-41.90. Sell in between 38.90-41.90 with stop loss at 41.90; targeting 37.90-37.00-36.50 and 35.70-34.75-33.80.

 
Intraday Support Levels
S1     37.90-37.00
S2     36.50
S3     35.70-34.75

Intraday Resistance Levels
R1     38.90-39.40
R2     40.35
R3     41.00-41.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.979 Sell
20-DMA   39.43 Sell
50-DMA   39.69 Sell
100-DMA   40.35 Buy
200-DMA   37.37 Sell
STOCH(5,3)   76.130 Sell
MACD(12,26,9)   1.053 Sell

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1629/EUR, high of US$1.1739/EUR and settled the day up by 0.624% to close at US$1.1712/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 1.1635-1.1460 with risk below 1.1460, targeting 1.1710-1.1790-1.1860 and 1.1900-1.1955. Sell below 1.1710-1.1950 targeting 1.1635-1.1570 and 1.1500-1.1460 with stop-loss at daily closing above 1.1950.

 
Intraday Support Levels
S1     1.1635-1.1570
S2     1.1500
S3     1.1420-1.1350

Intraday  Resistance Levels
R1     1.1710-1.1790
R2     1.1860
R3     1.1900-1.1950

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.804 Buy
20-DMA   1.1769 Buy
50-DMA   1.1784 Buy
100-DMA   1.1653 Buy
200-DMA   1.1313 Buy
STOCH(5,3)   12.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.2903/GBP, high of US$1.3078/GBP and settled the day up by 1.049% to close at US$1.3015/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 1.3020-1.3490 with targets at 1.2940-1.2820-1.2750 and 1.2705-1.2650 stop-loss should be 1.3270. Buy above 1.2950-1.2600 with targets 1.30-1.3190 1.3250 and 1.3400-1.3450 with stop loss closing below 1.2650.

 
Intraday Support Levels
S1     1.2950-1.2820
S2     1.2750
S3     1.2705-1.2650

Intraday Resistance Levels
R1     1.3020
R2     1.3100
R3     1.3190-1.3250

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

46.539

Buy
20-DMA   1.2979 Sell
50-DMA   1.2994 Buy
100-DMA   1.2873 Buy
200-DMA   1.2704 Buy
STOCH(5,3)   23.940 Buy
MACD(12,26,9)   -0.005 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY104.42/USD and made an intraday high of JPY104.79/USD and settled the day down by 0.223% at JPY104.44/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     104.50-103.90
S2     103.10
S3     102.50-102.00

INTRADAY RESISTANCE LEVELS
R1     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   107.15 Sell
STOCH(9,6)   18.253 Sell
MACD(12,26,9)   -0.099 Sell

AAFX TRADING
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