AAFX TRADING

Daily Market Lookup

  • The dollar continued to weaken in early European trade Wednesday, with riskier currencies more in vogue as investors look to the new administration in the U.S. for additional stimulus amid solid progress towards Covid-19 vaccines. The greenback is also close to a two-month low against the Australian dollar and a two-year low against the New Zealand dollar, both considered barometers of risk sentiment due to their close ties with the global commodities trade. Risk appetite has improved after the outgoing President Donald Trump's administration began cooperating with the transition to a Joe Biden presidency, and after reports that former Federal Reserve head Janet Yellen, an advocate of bigger fiscal stimulus, is set to become Treasury Secretary. This has added to the general optimism surrounding the likelihood of the prompt delivery of multiple Covid-19 vaccines, with positive news from Pfizer (NYSE:PFE), Moderna (NASDAQ:MRNA) and AstraZeneca (NASDAQ:AZN) of their trials over the last couple of weeks. There is an abundance of U.S. economic data due for release later in the session, ahead of Thursday’s Thanksgiving holiday, including the Federal Reserve’s minutes of the most recent Federal Open Market Committee meeting, U.S. jobless claims and GDP data. Sterling will remain in focus Wednesday, remaining bid as traders expect a trade deal to be agreed between the U.K. and the European Union in the near future given the end of year deadline and recent optimistic noises emerging from the talks. On Tuesday, influential U.S. investment bank JPMorgan (NYSE:JPM) raised its odds of a Brexit trade deal to 80%, up from two-thirds.
  • The dollar was down on Wednesday morning in Asia, after increasing optimism over a global economic recovery saw investors turn towards riskier assets. However, markets saw small moves overall. The optimism, prompted by the possibility of a COVID-19 vaccine becoming available soon and clarity over the incoming U.S. presidential administration, saw the Dow Jones Industrial Average rose above 30,000 for the first time during the previous session. Asia Pacific shares were up on Wednesday. With AstraZeneca PLC (LON:AZN) reporting positive results for its candidate AZD 1222 on Monday, and candidates from Pfizer Inc (NYSE:PFE) and Moderna Inc (NASDAQ:MRNA) also reporting positive results over the past two weeks, hope is rising that a vaccine will be available soon. Incumbent President Donald Trump's administration has reluctantly starting to co-operate with President-elect Joe Biden’s administration for a smooth transition, adding to the optimism. However, Trump has given no indication that he will stop the legal challenges he has mounted against the presidential election results. With a vaccine and the likely nomination of former Federal Reserve Chairman Janet Yellen, a vocal advocate for more fiscal spending, as Biden’s Secretary of the Treasury removing two large uncertainties for investors, the dollar’s decline only looks likely to continue in the short term as its appeal as a safe harbor currency is diminished. Another indication of the increased risk appetite was cryptocurrency bitcoin, associated with extreme volatility, trading near an all-time high. The U.S. will release a slew of data later in the day, ahead of Thursday’s Thanksgiving holiday. These include the Federal Reserve’s minutes of the most recent Federal Open Market Committee meeting, U.S. jobless claims and GDP data.
  • Oil was up on Wednesday morning in Asia, as the market responded to the anticipated roll out of COVID-19 vaccinations and certainty in the U.S. political sphere, both pointing to increased demand. The gains came despite data from the American Petroleum Institute showing a 3.8-million-barrel build in crude oil supplies for the week ending Nov. 20. The forecast was for a fall of 0.333 million barrels, and the previous week also showed a build of 4.174 million barrels. Anticipation of a COVID-19 vaccination program hitting the ground in December is continuing to push oil higher as markets look to future hikes in demand. Oil futures are now at heights not seen since the onset of the coronavirus pandemic in March. With a third vaccine candidate now anticipated to be approved by the end of the year, investors are looking toward a return to pre-pandemic conditions and the consequent rise in consumption of oil products. Positivity also continues as the U.S. presidential transition begins after weeks of delay. Current President Donald Trump had refused to allow President-elect Joe Biden’s incoming administration the usual government access and funding given to an incoming administration, while he attempted to overturn election results in the courts. The return to the normal standards of political process has calmed markets fearful of a destabilizing transition period leading to the Biden administration scrambling for control at the beginning of its tenure. The markets have also responded positively to the Biden camp’s plans to install ex-Federal Reserve Chairman Janet Yellen as U.S. Secretary of the Treasury. Yellen is seen as a moderate, stabilizing influence in economic circles. Investors are currently waiting to see which way the Organization of Petroleum Exporting Countries and their allies (OPEC+) will respond to the rise in prices. A number of OPEC+ members are strongly feeling the pinch of the cartel’s current production restrictions, put in place to reduce global supply and maintain prices, and are likely to push for the removal of those limits OPEC+ had previously been expected to extend supply cuts well into 2021, with the decisions being made at the 180th Meeting of the OPEC Conference on Nov. 30 and the 12th OPEC and non-OPEC Ministerial Meeting on Dec. 1. Crude oil supply data from the U.S. Energy Information Administration is due later in the day.

 

 
Intraday RESISTANCE LEVELS
25th November 2020 R1 R2 R3
GOLD-XAU 1,821-1,833 1.840 1,848-1,860
Silver-XAG 23.90-24.95 25.65 26.05-26.80
Crude Oil 45.90-46.50 47.50 48.60-49.30
EURO/USD 1.1905-1.1950 1.1970 1.2010
GBP/USD 1.3400-1.3440 1.3480 1.3550
USD/JPY 104.50-105.00 105.40 105.90-106.40

Intraday SUPPORTS LEVELS
25th November 2020 S1 S2 S3
GOLD-XAU 1,805 1,796 1,790-1,781
Silver-XAG 23.20 22.00-21.50 22.00-21.50
Crude Oil 44.60-44.00 43.60 43.00-42.50
EURO/USD 1.1840-1.1790 1.1750 1.1700-1.1635
GBP/USD 1.3340-1.3290 1.3250 1.3200-1.3150
USD/JPY 103.90 104.50-105.00 102.05

Intra-Day Strategy (25th 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$1838.91/oz and low of US$1800.28/oz. Gold down 1.613% at US$1806.74/oz.

Technicals in Focus:

In daily charts, prices are below 50DMA (1899) and breakage above will call for 1916. 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 oversold territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1800-1781 with risk below 1781, targeting 1821-1833-1840 and 1848-1860. Sell below 1821-1860 keeping stop loss closing above 1860, targeting 1805-1796 and 1790-1781.

 
Intraday Support Levels
S1     1,805
S2     1,796
S3     1,790-1,781
Intraday Resistance Levels
R1     1,821-1,833
R2     1.840
R3     1,848-1,860

Technical Indicators

Name   Value Action
14DRSI  

32.763

Buy
20-DMA   1877.19 Sell
50-DMA  

1880.96

Sell
100-DMA   1909.62 Sell
200-DMA   1796.62 Buy
STOCH(5,3)   7.503 Sell
MACD(12,26,9)   -19.276 Sell

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$23.62/oz and low of US$23.91/oz settled down by 1.387% at US$23.23/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 50DMA (24.30), breakage above will lead to 25.00. MACD is below zero line and histograms are decreasing trend and it will bring bearish stance in the upcoming sessions. RSI is approaching neutral region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy silver in between 23.20-21.60, targeting 23.90-24.95-25.65 and 26.05-26.40-26.80 with stop loss should be place on the breakage below 21.50. 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     23.20
S2     22.00-21.50
S3     22.00-21.50

Intraday  Resistance Levels
R1     23.90-24.95
R2     25.65
R3     26.05-26.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.681 Buy
20-DMA   24.17 Sell
50-DMA   24.28 Sell
100-DMA   24.59 Sell
200-DMA   20.43 Buy
STOCH(5,3)   20.268 Sell
MACD(12,26,9)   -0.1573 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US45.20/bbl, intraday low of US$42.85/bbl and settled up by 4.46% to close at US$44.76/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 40.58 which is a support level and breakage below will call for 40.10. MACD is above 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 upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 44.60-42.00 with risk daily closing below 42.00 and targeting 45.90-46.50-47.50 and 48.60-49.30. Sell in between 45.80-49.30 with stop loss at 49.30; targeting 44.60-44.00-43.60 and 43.00-42.50-41.50.

 
Intraday Support Levels
S1     44.60-44.00
S2     43.60
S3     43.00-42.50

Intraday Resistance Levels
R1     45.90-46.50
R2     47.50
R3     48.60-49.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   69.489 Sell
20-DMA   40.46 Buy
50-DMA   40.16 Buy
100-DMA   40.64 Buy
200-DMA   36.63 Buy
STOCH(5,3)   85.130 Buy
MACD(12,26,9)   1.1835 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday an intraday low of US$1.1830/EUR, high of US$1.1895/EUR and settled the day up by 0.416% to close at US$1.1889/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 1.1860-1.1635 with risk below 1.1600, targeting 1.1900-1.1950 and 1.1970-1.2010. Sell below 1.1905-1.2010 targeting 1.1860-1.1790 and 1.1750-1.1710-1.1635 with stop-loss at daily closing above 1.2010.

 
Intraday Support Levels
S1     1.1840-1.1790
S2     1.1750
S3     1.1700-1.1635

Intraday  Resistance Levels
R1     1.1905-1.1950
R2     1.1970
R3     1.2010

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.812 Buy
20-DMA   1.1794 Buy
50-DMA   1.1774 Buy
100-DMA   1.1748 Buy
200-DMA   1.1386 Buy
STOCH(5,3)   55.758 Sell
MACD(12,26,9)   0.0011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3291/GBP, high of US$1.3379/GBP and settled the day up by 0.247% to close at US$1.3355/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 1.3400-1.3550 with targets at 1.3340-1.3290-1.3200 and 1.3150-1.3100-1.3020 stop-loss should be 1.3550. Buy above 1.3340-1.2880 with targets 1.3400-1.3450 and 1.3480-1.3550 with stop loss closing below 1.2800.

 
Intraday Support Levels
S1     1.3340-1.3290
S2     1.3250
S3     1.3200-1.3150

Intraday Resistance Levels
R1     1.3400-1.3440
R2     1.3480
R3     1.3550

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

63.539

Buy
20-DMA   1.3132 Sell
50-DMA   1.3005 Buy
100-DMA   1.2988 Buy
200-DMA   1.2717 Buy
STOCH(5,3)   78.940 Buy
MACD(12,26,9)   -0.005 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY104.13/USD and made an intraday high of JPY104.75/USD and settled the day down by 0.0210% at JPY104.43/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 104.50-108.00 with risk above 108.00 targeting 103.90-103.10-102.50 and 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     103.90
S2     104.50-105.00
S3     102.05

INTRADAY RESISTANCE LEVELS
R1     104.50-105.00
R2     105.40
R3     105.90-106.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.726 Buy
20-DMA   104.61 Sell
50-DMA   105.11 Sell
100-DMA   105.73 Sell
200-DMA   106.28 Sell
STOCH(9,6)   34.253 Sell
MACD(12,26,9)   -0.099 Sell

AAFX TRADING
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