AAFX TRADING

Daily Market Lookup

  • The dollar jumped from one-week lows on Thursday after two regional Federal Reserve presidents suggested a faster pace of reducing the U.S. central bank's asset purchases, comments that pushed the greenback toward a key resistance level. The dollar index, which measures the greenback against a basket of six major trading currencies, traded a bit higher just before the remarks by James Bullard, the president of the St. Louis Fed, who is considered a hawk on policy. Bullard said in comments to CNBC that he was skeptical that inflation would moderate and for that reason the Fed needed to start tapering its bond-purchasing program. Dallas Fed President Robert Kaplan said the strength of the U.S. economy still puts the Fed on track to begin reducing its monthly bond purchases in October or soon after. The market will likely discount what Bullard said, in part because he is a non-voting member of the Fed's policy-setting committee, but "his voice is heard in the room and you have to assume therefore it does have some impact," Ricchiuto said. Bullard and Kaplan's comments came as the Fed's annual Jackson Hole, Wyoming, symposium opened, with the spotlight on Fed Chair Jerome Powell's speech on Friday. Analysts doubt Powell will offer new hints about when the Fed may start to cut its asset purchases. Powell will reiterate Kaplan's message last week of being flexible and will have done a good job if the markets don't move when he speaks, said Lee Ferridge, North American head of multi-asset strategy at State Street (NYSE:STT) Global Markets. Currency market swings have eased ahead of Powell's speech, with implied euro-dollar volatility at a one-week low. Meanwhile, more central banks worldwide are exiting or contemplating exiting from ultra-easy accommodative policies. South Korea's central bank on Thursday raised interest rates for the first time in three years.
  • The dollar climbed Thursday, as Fed's Jackson Hole symposium draws closer, but the carrot of Fed bond tapering isn't likely to save the greenback as the well of the good news for the reserve currency is running dry. The somber outlook on the dollar comes on the eve of the Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole symposium. The symposium has traditionally served as platform for the Fed to tee up monetary policy announcements, but there is a sense of the uncertainty on how much Powell is likely to shed on monetary policy. Some suggest that with the monthly jobs report and the Fed's September meeting on the horizon, Powell will opt for caution. Others suggest the Fed chief could use the annual symposium to finetune the central bank's signaling ahead of the announcement later this month. The backdrop of tighter monetary policy isn't likely to spur a meaningful move higher in the greenback, however, as most of the good news appears to be priced already," Desjardins added. Others appear to be signing from the same hymn sheet, reigning in their bets on a rally in yields, often an ally to the greenback. But even as the most of the good news appears to have been priced in for dollar upside, the path of the pandemic can quickly turn fortunes around for the greenback. In the event of an unfortunate return of pandemic mania, traders are likely to run into the safe arms of the king dollar.
  • Oil was up Friday morning in Asia, and is set to end the week on a high note. Energy companies began shutting down production in the Gulf of Mexico ahead of a potential hurricane forecast to hit on the weekend, increasing concerns about the near-term supply disruption. Companies started evacuating their workers from Gulf of Mexico oil production platforms on Thursday, with BHP and BP (NYSE:BP) halting production at their offshore platforms ahead of the hurricane. The possibility of supply disruptions in the region, which accounts for 17% of U.S. crude oil production and 5% of dry natural gas production, helped the black liquid claw back from Thursday’s losses. These losses were partly due to output returning at a Petróleos Mexicanos offshore oil platform following a fire earlier in the week. Investors are also monitoring the dollar’s moves on Friday, with U.S. Federal Reserve Chairman Jerome Powell due to give a speech later in the day that could potentially reveal a timeline for asset tapering and interest rate hikes. Oil’s three-day rally snapped on Thursday after U.S. crude prices neared the key $70-per-barrel resistance while Covid hospitalizations in the country approached the year’s highs. A stronger dollar amid expectations of a stimulus taper likely to be announced by the Federal Reserve at its Jackson Hole symposium on Friday also weighed on oil and most commodities. The dollar’s rally ahead of the Fed’s Jackson Hole event also caused some unwinding of the long money in oil, said market watchers.

 

 
Intraday RESISTANCE LEVELS
27th August 2021 R1 R2 R3
GOLD-XAU 1,805¬1,817 1,830 1,840-1,851
Silver-XAG 23.75-24.00 24.45 24.75-25.50
Crude Oil 68.30-68.55 69.00 69.55-70.10
EURO/USD 1.1800-1.1850 1.1910 1.1950-1.1990
GBP/USD 1.3720-1.3810 1.3850 1.3900-1.3950
USD/JPY 110.54-111.70 112.50 113.00-113.50

Intraday SUPPORTS LEVELS
27th August 2021 S1 S2 S3
GOLD-XAU 1,790-¬1,784 1,767 1,760-1,751
Silver-XAG 23.30-22.90 22.50 22.15-21.85
Crude Oil 67.25-66.50 65.45 64.90-64.05
EURO/USD 1.1750-1.1705 1.1640 1.1601-1.1550
GBP/USD 1.3670-1.3610 1.3571 1.3550-1.3500
USD/JPY 109.90¬-109.60 109.10 108.40-107.45

Intra-Day Strategy (27th August 2021)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Sell
EUR/USD Neutral to Sell
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Thursday made its intraday high of US$1798.08/oz and low of US$1779.95/oz. Gold up 0.671% at US$1792.28/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in neutral territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Buy in between 1784-1743 with risk below 1743, targeting 1790-1805-1817 and 1825-1830. Sell in between 1794-1830 keeping stop loss closing above 1830, targeting 1784-1767-1760 and 1751-1742-1734.

 
Intraday Support Levels
S1     1,790-¬1,784
S2     1,767
S3     1,760-1,751
Intraday Resistance Levels
R1     1,805¬1,817
R2     1,830
R3     1,840-1,851

Technical Indicators

Name   Value Action
14DRSI  

37.170

Buy
20-DMA   1784.03 Sell
50-DMA  

1799.86

Sell
100-DMA   1806.12 Sell
200-DMA   1804.94 Sell
STOCH(5,3)   45.254 Buy
MACD(12,26,9)   -15.653 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$23.85/oz and low of US$23.42/oz settled down by 1.204% at US$23.54/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. 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 positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. 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 positive crossover to show upside move for the intraday trade.

 
Intraday  Support Levels
S1     23.30-22.90
S2     22.50
S3     22.15-21.85

Intraday  Resistance Levels
R1     23.75-24.00
R2     24.45
R3     24.75-25.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.923 Buy
20-DMA   24.04 Sell
50-DMA   25.50 Sell
100-DMA   25.50 Sell
200-DMA   25.20 Buy
STOCH(5,3)   51.556 Buy
MACD(12,26,9)   -0.580 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Thursday made an intra‐day high of US$68.17/bbl, intraday low of US$66.89/bbl and settled down by 0.447% to close at US$67.60/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. MACD is above zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in neutral 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 Sell

Sell in between 68.30-70.10 with stop loss at 70.10; targeting 67.25-66.50-65.45 and 64.90-63.20-62.60. Buy above 67.25-64.05 with risk daily closing below 64.05 and targeting 68.30-68.60-69.00 and 69.55-70.10.

 
Intraday Support Levels
S1     67.25-66.50
S2     65.45
S3     64.90-64.05

Intraday Resistance Levels
R1     68.30-68.55
R2     69.00
R3     69.55-70.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.412 Sell
20-DMA   71.84 Buy
50-DMA   69.87 Buy
100-DMA   67.12 Buy
200-DMA   61.39 Buy
STOCH(5,3)   10.130 Sell
MACD(12,26,9)   0.9685 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday an intraday low of US$1.1745/EUR, high of US$1.1783/EUR and settled the day up by 0.134% to close at US$1.1750/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.2143), which become immediate Support level, break above will target 1.2090. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and still giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently in overbought region and giving no directions to consider right now.

Trading Strategy: Neutral to Sell

Sell below 1.1750-1.1910 targeting 1.1640-1.1601 and 1.1550-1.1500 with stop-loss at daily closing above 1.1910. Buy above 1.1705-1.1460 with risk below 1.1460, targeting 1.1750-1.1800 and 1.1840-1.1910-1.1990.

 
Intraday Support Levels
S1     1.1750-1.1705
S2     1.1640
S3     1.1601-1.1550

Intraday  Resistance Levels
R1     1.1800-1.1850
R2     1.1910
R3     1.1950-1.1990

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.682 Buy
20-DMA   1.1809 Sell
50-DMA   1.1979 Sell
100-DMA   1.1932 Sell
200-DMA   1.1904 Sell
STOCH(5,3)   8.891 Sell
MACD(12,26,9)   -0.003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3688/GBP, high of US$1.3767/GBP and settled the day down by 0.454% to close at US$1.3698/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3867) 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 overbought territory and giving positive crossover to confirm bullish 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 in between 1.3720-1.3950 with targets at 1.3615-1.3571 and 1.3550-1.3510 stop-loss should be 1.3890. Buy above 1.3690-1.3550 with targets 1.3715-1.3750-1.3810 and 1.3860-1.3890-1.3955 with stop loss closing below 1.3550.

 
Intraday Support Levels
S1     1.3670-1.3610
S2     1.3571
S3     1.3550-1.3500

Intraday Resistance Levels
R1     1.3720-1.3810
R2     1.3850
R3     1.3900-1.3950

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

42.637

Buy
20-DMA   1.3767 Buy
50-DMA   1.3825 Buy
100-DMA   1.3840 Buy
200-DMA   1.3713 Buy
STOCH(5,3)   71.146 Buy
MACD(12,26,9)   -0.004 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made intra‐day low of JPY109.92/USD and made an intraday high of JPY110.22/USD and settled the day up 0.309% at JPY110.08/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

Long positions above 110.00-106.50 with targets of 110.54-111.70-112.50 and 113.00-113.50 with stop below 106.00. Sell below 110.55-113.50 with risk above 113.50 targeting 109.60-109.00-108.50 and 108.00-107.50-106.80.

 
Intraday Support Levels
S1     109.90¬-109.60
S2     109.10
S3     108.40-107.45

INTRADAY RESISTANCE LEVELS
R1     110.54-111.70
R2     112.50
R3     113.00-113.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.047 Buy
20-DMA   109.86 Sell
50-DMA   109.86 Sell
100-DMA   109.34 Sell
200-DMA   108.39 Sell
STOCH(9,6)   7.253 Sell
MACD(12,26,9)   0.110 Sell

AAFX TRADING
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