AAFX TRADING

Daily Market Lookup

  • The dollar was down on Wednesday morning in Asia, with a new surge of U.S. COVID-19 cases and questions over how a COVID-19 vaccine will be delivered tempering optimism from earlier in the week that a vaccine would become available quickly. The dollar saw gains after Pfizer Inc and BioNTech released positive interim phase III results from their COVID-19 vaccine candidate BNT-162b2 on Monday, with the results suggesting that the vaccine was 90% effective in preventing infection. Although the news saw the dollar gain against safe-harbor currencies such as the yen and the Swiss franc, and prompted a rise in global shares, concerns about logistical hurdles such as shipping the vaccine at extremely cold temperatures and other hurdles, such as the vaccine’s efficacy and longevity, curbed investors’ enthusiasm. However, some investors remained cautiously optimistic over the dollar’s long-term prospects. A continuing second wave of COVID-19 cases in the U.S. saw some states impose restrictions with the advent of winter in the Northern Hemisphere bringing colder weather and worries over soaring hospitalizations. Of the over 51 million global cases recorded as of Nov. 11, over 10.2 million cases are U.S. cases, according to data from Johns Hopkins University.
  • The dollar edged down slightly on Tuesday and the Japanese yen recovered some of the previous session's losses after news of progress towards a COVID-19 vaccine boosted risk appetite in global markets. The dollar which is considered to be a safe haven and so typically falls on positive news rose after the announcement, as investors quit their long positions in safe currencies such as the Japanese yen and Swiss franc. The safe-haven Japanese yen tumbled to a 20-day low versus the dollar. But these moves eased on Tuesday, with the yen and franc clawing back some of their losses, as market participants tempered their initial pro-risk reaction, in light of uncertainty about how or when a vaccine could be rolled out. But Lee Hardman, currency analyst at MUFG, said that despite the uncertainties "it is still an important step forward to exit the COVID crisis and provides a reminder not to bet against human ingenuity". The dollar has lost around 1.4% this month as Democrat Joe Biden's victory in the U.S. presidential election provided a major boost to market sentiment. U.S. President Donald Trump plans to push ahead with legal challenges to the presidential election results and will hold a series of campaign-style rallies to build support.
  • Oil prices climbed over 1% on Wednesday, after an industry report showed U.S. crude inventories have fallen more than expected, while hopes of an effective COVID-19 vaccine continued to bolster sentiment. Crude stockpiles fell by 5.1 million barrels last week to about 482 million barrels, industry group data showed on Tuesday, compared with analysts' expectations in a Reuters poll for a reduction of 913,000 barrels. Oil prices also "continue to revel on the back of Pfizer 's vaccine announcement," Innes said. Both Brent and U.S. oil prices are up more than 10% this week since initial trials data showed the experimental COVID-19 vaccine being developed by Pfizer Inc (N:PFE) and Germany's BioNTech (DE:22UAy) was 90% effective. Although oil prices are supported by the positive news on vaccine, overall fuel demand outlook remains clouded amid re-imposed corona virus restrictions in Europe and United States. Renewed restrictions in Europe and the United States to combat the corona virus have slowed the pace of fuel demand recovery, offsetting a rebound in Asian economies where consumption has almost returned to pre-COVID levels. Oil rose to its highest in more than two months in London on optimism that a potential corona virus vaccine will boost demand, offsetting immediate concerns over growing virus lockdowns. Futures in London climbed 2.9% to the highest since early September, adding to Monday’s gain following encouraging results from a large-scale vaccine trial. Oil extended gains after the industry-funded American Petroleum Institute was said to report that U.S. crude inventories fell by 5.15 million barrels last week. The report also showed gasoline and distillate stockpiles fell. While headline prices are advancing, there have also been sharp moves in the structure of the futures curve. Brent for six months ahead was at its strongest versus 12 months out since March, a sign that traders are growing more positive on supply and demand balances for the second half of the year. In fact, the head of Vitol Group, the world’s largest independent oil trader said oil demand should recover to pre-pandemic levels by the northern hemisphere’s fall season next year. But before a viable, widely distributed vaccine is available, growing lockdown restrictions in parts of Europe and surging cases worldwide present lingering threats to a sustained demand recovery. Meanwhile, the continued return of Libyan supply remains a complicating factor for the OPEC+ alliance’s plan to taper output cuts in January. Still, an improving picture in Asia offers a bright spot; with consumption recovering in China and oil demand in Japan roughly back to normal. In further signs of strength, the spread between West Texas Intermediate’s December 2021 contract firmed to its strongest since February against that for the following December. The Middle Eastern Dubai benchmark is now in a structure known as backwardation, where nearer-dated futures trade higher than longer-dated ones in a bullish sign. Short-covering, a rush to buy futures to cover bearish wagers, has also helped support the rally. Monday’s price rally came after a mammoth short position had built up in the oil market.

 

 
Intraday RESISTANCE LEVELS
11th November 2020 R1 R2 R3
GOLD-XAU 1,900-1,916 1,933 1,940-1,953
Silver-XAG 24.40-24.95 25.65 26.05-26.80
Crude Oil 42.50-43.00 43.90 44.50-45.00
EURO/USD 1.1860-1.1900 1.1950 1.1970-1.2000
GBP/USD 1.3290-1.3340 1.3390 1.3440-1.3480
USD/JPY 105.40-105.90 106.40 106.95-107.50

Intraday SUPPORTS LEVELS
11th November 2020 S1 S2 S3
GOLD-XAU 1,882-1,874 1,860 1,848-1.840
Silver-XAG 23.90-23.20 22.60 22.00-21.60
Crude Oil 41.90-41.00 40.35 39.40-38.90
EURO/USD 1.1790 1.1750 1.1710-1.1635
GBP/USD 1.3250-1.3190 1.3100-1.3020 1.3100-1.3020
USD/JPY 105.00-104.50 103.90 103.10-102.50

Intra-Day Strategy (11th 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$1890.27/oz and low of US$1859.53/oz. Gold up 0.750% at US$1876.58/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 1882-1848 with risk below 1848, targeting 1900-1909-1916 and 1933-1959-1967. Sell below 1900-1967 keeping stop loss closing above 1967, targeting 1880-1867-1860 and 1848.

 
Intraday Support Levels
S1     1,882-1,874
S2     1,860
S3     1,848-1.840
Intraday Resistance Levels
R1     1,900-1,916
R2     1,933
R3     1,940-1,953

Technical Indicators

Name   Value Action
14DRSI  

46.912

Buy
20-DMA   1901.45 Buy
50-DMA  

1909.83

Buy
100-DMA   1900.40 Buy
200-DMA   1780.87 Buy
STOCH(5,3)   39.503 Sell
MACD(12,26,9)   -1.276 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$24.48/oz and low of US$23.89/oz settled up by 0.406% 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 23.90-21.60 targeting 24.40-24.95-26.00 and 26.40-26.80 and 27.60-28.00, stop breakage below 23.50. Sell below 24.95-26.80 with stop loss above 26.80; targeting 24.00-23.20-22.60 and 22.00-21.60.

 
Intraday  Support Levels
S1     23.90-23.20
S2     22.60
S3     22.00-21.60

Intraday  Resistance Levels
R1     24.40-24.95
R2     25.65
R3     26.05-26.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.681 Buy
20-DMA   24.30 Buy
50-DMA   24.76 Buy
100-DMA   24.04 Buy
200-DMA   20.14 Buy
STOCH(5,3)   32.268 Buy
MACD(12,26,9)   -0.0373 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US42.00/bbl, intraday low of US$39.62/bbl and settled up by 4.61% to close at US$41.92/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

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.

 
Intraday Support Levels
S1     41.90-41.00
S2     40.35
S3     39.40-38.90

Intraday Resistance Levels
R1     42.50-43.00
R2     43.90
R3     44.50-45.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.979 Sell
20-DMA   39.29 Sell
50-DMA   39.43 Sell
100-DMA   40.39 Buy
200-DMA   37.09 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$1.1779/EUR, high of US$1.1842/EUR and settled the day up by 0.0067% to close at US$1.1813/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 1.1860-1.1460 with risk below 1.1460, targeting 1.1900-1.1950. Sell below 1.1900-1.2010 targeting 1.1860-1.1790-1.1710 and 1.1635 1.1570 with stop-loss at daily closing above 1.2010.

 
Intraday Support Levels
S1     1.1790
S2     1.1750
S3     1.1710-1.1635

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.812 Buy
20-DMA   1.1771 Buy
50-DMA   1.1771 Buy
100-DMA   1.1689 Buy
200-DMA   1.1339 Buy
STOCH(5,3)   92.758 Sell
MACD(12,26,9)   0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3154/GBP, high of US$1.3277/GBP and settled the day up by 0.807% to close at US$1.3270/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 1.3290-1.3490 with targets at 1.3250-1.3150-1.3100 and 1.3020-1.2940-1.2820 stop-loss should be 1.3490. Buy above 1.3250-1.2600 with targets 1.3250 1.3250 and 1.3400-1.3450 with stop loss closing below 1.2650.

 
Intraday Support Levels
S1     1.3250-1.3190
S2     1.3100-1.3020
S3     1.3100-1.3020

Intraday Resistance Levels
R1     1.3290-1.3340
R2     1.3390
R3     1.3440-1.3480

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 Tuesday made intra‐day low of JPY104.81/USD and made an intraday high of JPY105.48/USD and settled the day down by 0.087% at JPY105.25/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 105.40-108.00 with risk above 108.00 targeting 105.00-104.50-103.10 and 102.50-102.00-101.50. 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     105.00-104.50
S2     103.90
S3     103.10-102.50

INTRADAY RESISTANCE LEVELS
R1     105.40-105.90
R2     106.40
R3     106.95-107.50

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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