AAFX TRADING

Daily Market Lookup

  • The dollar edged higher in early European trade Friday, with the result of the contentious U.S. presidential election still unknown and the possibility of a legal battle likely to lead to prolonged uncertainty. The U.S. presidential battle still remains undecided early Friday, but Democratic candidate Joe Biden has an edge over President Donald Trump, with a few important states still counting votes. Trump's legal challenges to vote counts in Nevada, Pennsylvania, Georgia and Michigan have so far had no effect. Trump has also questioned the election’s credibility. “If you count the legal votes, I easily win. If you count the illegal votes, they can try to steal the election from us,” he said late on Thursday, as usual without presenting any evidence. “FX markets have reacted to news of a much closer U.S. election by selling currencies most exposed to the global recovery story and buying USD and JPY,” said ING analyst Chris Turner, in a research note. Uncertainty about the U.S. economic recovery from the pandemic is also growing, along with the number of Covid-19 cases, with Wednesday’s private payrolls data and Thursday’s initial jobless claims both disappointing. This put the focus squarely on October’s nonfarm payrolls data, due later in the day, which is forecast to show a slight slowdown in job creation. U.S. Federal Reserve (Fed) Statement unchanged on Thursday, but Chair Jerome Powell stated that more fiscal and monetary support was needed as rising coronavirus cases clouded the outlook for the economic recovery. EU Internal Market Commissioner Thierry Breton said Friday there was only a "50/50" chance that Britain and the European Union will be able to reach a deal over the terms of Britain's exit from the EU.
  • The dollar was up on Friday morning in Asia, reversing earlier losses even as a victor is yet to be declared in the U.S. presidential elections and expectations that large stimulus packages to support the COVID-19-hit economy will be rolled out soon diminish. Democrat Joe Biden is close to declaring a victory, with 264 of the 270 electoral votes needed to win and Pennsylvania, Georgia, Nevada and North Carolina still counting votes. Incumbent President Donald Trump has 214 votes and has already mounted legal challenges to vote counts in Nevada, Pennsylvania, Georgia and Michigan as well as requesting a recount in Wisconsin, adding to the uncertainty. An additional challenge to a Biden presidency is that Republicans retain control of the Senate, making it difficult to push through stimulus packages with large price tags. Investors’ expectations of less fiscal spending have led to a large decline in long-term Treasury yields, which alongside a rally in shares and other risk assets, is expected to put the dollar under consistent selling in the long term, some investors warned. Uncertainty about the U.S. economic recovery from COVID-19 is also growing, with investors digesting Thursday’s monetary policy released by the Federal Reserve and awaiting non-farm payrolls data, due later in the day. These worries could lead to declines in the greenback into 2021, some investors warned. The number of COVID-19 cases continues to rise, with several U.S. states reporting record levels of COVID-19 cases after the election. An ongoing trade dispute with China, with a deadline for Chinese traders to stop buying at least seven categories of Australian commodities arriving, also has Australian exporters on edge. The Bank of England also handed down its monetary policy on Thursday.
  • Gold was down on Friday morning in Asia, with investors still awaiting the results from the U.S. presidential election. Although Democrat candidate Joe Biden currently holds the lead, the possibility of a contested result remains. Biden has so far claimed 264 of the 270 electoral votes needed to win, with incumbent President Donald Trump holding 214 votes. Pennsylvania, Georgia, Nevada and North Carolina are currently still counting votes, with Trump already mounting legal challenges to vote counts in Nevada, Pennsylvania, Georgia and Michigan as well as requesting a recount in Wisconsin. Trump won a court order in Pennsylvania that requires the state to segregate mail-in ballots from voters from those asked to provide missing proof of identification during an extended period for allowing such fixes. The order also allows observers to watch the counting of mail-in ballots in Philadelphia more closely. However, lawsuits filed in Georgia and Michigan were both dismissed. Trump also cast doubt on the election’s integrity, saying “If you count the legal votes, I easily win. If you count the illegal votes, they can try to steal the election from us." A Biden presidency would also potentially face a Republican Senate, which could thwart the passage of large stimulus packages that form part of Biden’s legislative agenda. Meanwhile, the Federal Reserve handed down its monetary policy on Thursday, keeping it loose as expected. However, Federal Reserve Chairman Jerome Powell hinted at a possible shift in Fed bond purchases in coming months, saying “at this meeting my colleagues and I discussed our asset purchases.” Powell also said more fiscal and monetary support will be needed as the uptick in COVID-19 cases dims the economic recovery outlook. Across the Atlantic, the Bank of England also handed down its monetary policy on Thursday, which boosts an already huge bond-buying stimulus by a bigger-than-expected GBP150 billion ($195.76 billion). The U.K. entered a second lockdown to curb the rising number of COVID-19 cases and continues to work towards a Brexit trade deal with the European Union before the end-of-year deadline.

 

 
Intraday RESISTANCE LEVELS
6th November 2020 R1 R2 R3
GOLD-XAU 1,940-1,953 1,967 1,974-1,992
Silver-XAG 25.65 26.05 26.80-27.60
Crude Oil 38.90-39.40 40.35 41.00-41.90
EURO/USD 1.1860-1.1900 1.1950 1.1970-1.2000
GBP/USD 1.3150-1.3190 1.3250 1.3290-1.3340
USD/JPY 103.90-104.50 105.00 105.40-105.90

Intraday SUPPORTS LEVELS
6th November 2020 S1 S2 S3
GOLD-XAU 1,934-1,916 1,900 1,884-1,875
Silver-XAG 24.90-24.00 23.30 22.90-22.20
Crude Oil 37.90-37.00 36.50 35.70-34.75
EURO/USD 1.1790-1.1750 1.1710 1.1635-1.1570
GBP/USD 1.3100-1.3020 1.2950 1.2820-1.2750
USD/JPY 103.10-102.50 102.00 101.50-101.10

Intra-Day Strategy (6th 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 Thursday made its intraday high of US$1952.68/oz and low of US$1901.96/oz. Gold up 2.414% at US$1948.86/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 1934-1875 with risk below 1875, targeting 1944-1954-1966 and 1974-1992. Sell below 1944-1974 keeping stop loss closing above 1992, targeting 1934-1916-1900 and 1874-1868-1860.

 
Intraday Support Levels
S1     1,934-1,916
S2     1,900
S3     1,884-1,875
Intraday Resistance Levels
R1     1,940-1,953
R2     1,967
R3     1,974-1,992

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 Thursday made its intraday high of US$25.45/oz and low of US$23.87/oz settled down by 5.987% at US$25.31/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 24.90-21.50 targeting 25.65-26.00 and 26.50-26.90-27.60, stop breakage below 21.50. Sell below 25.65-28.00 with stop loss above 28.00; targeting 24.90-24.00 and 23.30-22.90-22.20.

 
Intraday  Support Levels
S1     24.90-24.00
S2     23.30
S3     22.90-22.20

Intraday  Resistance Levels
R1     25.65
R2     26.05
R3     26.80-27.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.681 Buy
20-DMA   24.32 Buy
50-DMA   24.97 Buy
100-DMA   23.84 Buy
200-DMA   20.04 Buy
STOCH(5,3)   83.268 Buy
MACD(12,26,9)   -0.032 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US39.52/bbl, intraday low of US$38.45/bbl and settled up by 1.704% to close at US$38.63/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 37.90-34.10 with risk daily closing below 34.10 and targeting 38.90-39.40-40.35 and 41.00-41.90. Sell in between 38.50-41.90 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   39.43 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 Thursday an intraday low of US$1.17100/EUR, high of US$1.1859/EUR and settled the day up by 0.855% 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 1.1790-1.1460 with risk below 1.1460, targeting 1.1860- 1.1900-1.1950. Sell below 1.1860-1.1970 targeting 1.1790-1.1710-1.1635 and 1.1570-1.1500 with stop-loss at daily closing above 1.1970.

 
Intraday Support Levels
S1     1.1790-1.1750
S2     1.1710
S3     1.1635-1.1570

Intraday  Resistance Levels
R1     1.1860-1.1900
R2     1.1950
R3     1.1970-1.2000

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 Thursday made an intra‐day low of US$1.2931/GBP, high of US$1.3154/GBP and settled the day down by 1.218% to close at US$1.3144/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 1.3150-1.3490 with targets at 1.3100-1.3020-1.2940 and 1.2820-1.2750-1.2705 stop-loss should be 1.3490. Buy above 1.3100-1.2600 with targets 1.3150-1.3190 1.3250 and 1.3400-1.3450 with stop loss closing below 1.2650.

 
Intraday Support Levels
S1     1.3100-1.3020
S2     1.2950
S3     1.2820-1.2750

Intraday Resistance Levels
R1     1.3150-1.3190
R2     1.3250
R3     1.3290-1.3340

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

58.539

Buy
20-DMA   1.3005 Sell
50-DMA   1.2979 Buy
100-DMA   1.2900 Buy
200-DMA   1.2703 Buy
STOCH(5,3)   79.940 Buy
MACD(12,26,9)   -0.005 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY103.43/USD and made an intraday high of JPY104.43/USD and settled the day down by 1.00% at JPY103.44/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 103.90-108.00 with risk above 108.00 targeting 103.10-102.50-102.00 and 101.50-101.10. Long positions above 103.10-101.00 with targets of 103.90-104.00-106.90 and 107.50-107.90-108.40 with stop below 105.00.

 
Intraday Support Levels
S1     103.10-102.50
S2     102.00
S3     101.50-101.10

INTRADAY RESISTANCE LEVELS
R1     103.90-104.50
R2     105.00
R3     105.40-105.90

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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