AAFX TRADING

Daily Market Lookup

  • The dollar slipped to its weakest level in more than two years against the yuan and ground lower against other Asian currencies as Democrat Joe Biden edged ever so closer to the White House in a nail-biting U.S. presidential election. Financial markets, however, were braced for days or even weeks of uncertainty as Republican incumbent President Donald Trump has opened a multi-pronged attack on vote counts in several states by pursuing lawsuits and a recount. That could hamper the dollar in the short run, traders say. Elsewhere, sterling fell against the dollar and the euro after a media report that the Bank of England, which announces a policy decision later on Thursday, is considering negative interest rates. The Federal Reserve, which is expected to keep policy on hold on Thursday, is also in focus as traders navigate market volatility in the wake of a knife-edge U.S. election that has pushed up the yuan and the Mexican peso. Biden has claimed the pivotal Midwestern states of Wisconsin and Michigan. Late reporting showed the former vice president with a lead in Nevada and Arizona, while Trump held a lead in Georgia. Expectations that a Biden win will take a slightly softer tone on trade policy is likely to weaken the dollar against the currencies of countries that often faced the threat of tariffs during Trump's administration, analysts said. Emerging market currencies such as the Malaysian ringgit and the Indonesian rupiah also rose against the greenback. Even if Biden manages to surmount the legal challenges from Trump to become the next president, Republicans look likely to retain control of the Senate and can use that to stymie Biden's fiscal policy agenda - another complicating factor for currency traders. Some analysts said Republican control of the Senate would prevent a Biden government from raising corporate taxes, which is positive for equities. However, a divided government also decreases the chances of big fiscal stimulus, which could be seen as a negative, other analysts said.
  • The dollar was up on Thursday morning in Asia, avoiding big moves as markets await the outcome of a nail-biting U.S. presidential election. Democrat candidate Joe Biden has 264 of the 270 electoral votes needed to declare victory, compared to incumbent President Donald Trump’s 214, according to Bloomberg, claiming victory in the states of Wisconsin and Michigan earlier in the day. The election now hangs on the vote count from a few remaining swing states, and Trump is already pursuing lawsuits and a recount in Pennsylvania and Michigan. The uncertainty could negatively impact the dollar in the short run, some investors warned. Even if Biden were to overcome the challenge posed by Trump and become the next president, the failure to achieve a Democrat sweep of the Senate and House of Representatives could hamper his fiscal agenda for big stimulus packages to aid the COVID-19-hit economy and pose an additional challenge to investors. A Biden administration could also give a boost to some currencies, such as the Mexican peso, that suffered under the tariffs imposed by the Trump administration at the expense of the dollar. Biden is widely expected to take a softer tone on trade policy than Trump. The peso steadied from Wednesday’s 0.9% gain earlier in the day. The pound saw losses over news that the Bank of England, due to announce its monetary policy later in the day, is considering negative interest rates. The Federal Reserve will also hand down its monetary policy later in the day, which is widely expected to remain the same.
  • Gold held losses while oil gained as tight races in key battleground states in the U.S. election left investors scrambling to parse the shifting odds in a fraught battle for the presidency. The unresolved outcome -- due to an unusually large number of mail-in ballots because of the coronavirus -- spurred the market to reassess the potential scale and timing of a much-needed U.S. fiscal stimulus package, the trajectory of the dollar and appetite for risk. On Wednesday afternoon, Democrat Joe Biden won Wisconsin, according to the Associated Press, while CNN and NBC projected the democratic nominee beat President Donald Trump in Michigan, offering him a clearer path to victory. With millions of ballots still to be counted, Trump falsely declared early Wednesday he had won re-election and said he would ask the Supreme Court to intervene. Meanwhile, Biden’s campaign said he was on track to be next president of the U.S.. The results so far -- with Democrats facing a narrower majority in the House and long odds for taking the Senate -- point to a smaller Covid-19 relief bill than the roughly $2 trln that had been discussed by the Trump administration and congressional Democrats before the Nov. 3 election. With a potential “blue wave” off the table, bond traders are pricing in less fiscal support, sending yields reeling. The stakes have never been higher in a U.S. presidential election. Whoever wins will have the monumental task of leading the nation in its fight against the corona virus, which has claimed more than 230K lives in the country and decimated the economy. On a global level, the next president will also play an integral role in shaping domestic as well as international efforts against climate change, the use of fossil fuels and the pace of energy transition Crude futures extended gains after a U.S. government report showed domestic supplies falling by 8 million barrels last week and distillate inventories also declining.

 

 
Intraday RESISTANCE LEVELS
5th November 2020 R1 R2 R3
GOLD-XAU 1,916 1,934 1,940-1,954
Silver-XAG 24.90-25.65 26.05 26.80-27.60
Crude Oil 38.90-39.40 40.35 41.00-41.90
EURO/USD 1.1750-1.1790 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
5th November 2020 S1 S2 S3
GOLD-XAU 1,900-1,884 1,875 1,868-1,860
Silver-XAG 24.00-23.30 22.90 22.20-21.50
Crude Oil 37.90-37.00 36.50 35.70-34.75
EURO/USD 1.1710-1.1635 1.1570 1.1500-1.1420
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 (5th 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 Wednesday made its intraday high of US$1916.26/oz and low of US$1881.16/oz. Gold down 0.245% at US$1902.92/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 1900-1847 with risk below 1854, targeting 1916-1934-1940 and 1944-1954. Sell below 1916-1954 keeping stop loss closing above 1954, targeting 1900-1874-1868 and 1860-1854.

 
Intraday Support Levels
S1     1,900-1,884
S2     1,875
S3     1,868-1,860
Intraday Resistance Levels
R1     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 Wednesday made its intraday high of US$24.49/oz and low of US$23.21/oz settled down by 1.314% at US$23.87/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 24.90-28.00 with stop loss above 28.00; targeting 24.00-23.30-22.90 and 22.20-21.50.

 
Intraday  Support Levels
S1     24.00-23.30
S2     22.90
S3     22.20-21.50

Intraday  Resistance Levels
R1     24.90-25.65
R2     26.05
R3     26.80-27.60

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 Wednesday made an intra‐day high of US39.40/bbl, intraday low of US$37.41/bbl and settled up by 2.457% to close at US$37.41/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 Wednesday an intraday low of US$1.1601/EUR, high of US$1.1770/EUR and settled the day up by 0.058% to close at US$1.1720/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 1.1710-1.1460 with risk below 1.1460, targeting 1.1750-1.1790-1.1860 and 1.1900-1.1955. Sell below 1.1750-1.1950 targeting 1.1710-1.1635-1.1570 and 1.1500-1.1460 with stop-loss at daily closing above 1.1950.

 
Intraday Support Levels
S1     1.1710-1.1635
S2     1.1570
S3     1.1500-1.1420

Intraday  Resistance Levels
R1     1.1750-1.1790
R2     1.1860
R3     1.1900-1.1950

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.812 Buy
20-DMA   1.1757 Buy
50-DMA   1.1774 Buy
100-DMA   1.1670 Buy
200-DMA   1.1327 Buy
STOCH(5,3)   68.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2913/GBP, high of US$1.31396/GBP and settled the day down by 0.502% to close at US$1.2986/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 Wednesday made intra‐day low of JPY105.34/USD and made an intraday high of JPY105.34/USD and settled the day up by 0.0440% at JPY104.48/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 105.00-108.00 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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