AAFX TRADING

Daily Market Lookup

  • The dollar fell to two-week lows in early European trade Tuesday, continuing the weakness stemming from Federal Reserve Chairman Jerome Powell’s dovish speech at the end of last week and looking ahead to Friday’s key employment report. The U.S. currency is still suffering the consequences of Federal Reserve Chair Jerome Powell declining on Friday to offer a firm signal on when the central bank plans to cut its asset purchases, surprising many in the market who had been looking for a concrete timetable. Helping the general risk-on tone was the official end of the U.S. military presence in Afghanistan, with the last aircraft departing from Kabul airport, meeting President Joe Biden’s timetable, without any further American casualties. Attention now turns to Friday’s nonfarm payrolls release, particularly given the importance the central bank has placed upon a recovery in the labor market in its tapering thinking. The payrolls are currently expected to increase by around 750,000 in August, a drop from the growth of 943,000 the previous month, but concerns are rising that the delay in outlining a timetable for tapering was caused by expectations of a poor number. Weaker jobs numbers could instead cement a case for later action - perhaps a pre-announcement in November with a formal decision in December. Manufacturing PMI dipped to 50.1 from 50.4 last month, showing factory activity expanded at a slower pace. The non-manufacturing PMI in August slumped to 47.5, the lowest reading since February 2020.
  • The dollar hovered near two-week lows against a basket of currencies on Tuesday, as investors looked to U.S. jobs figures later this week for clues on taper timing, while the Chinese yuan shrugged off soft factory and services sector surveys. The U.S. currency steadied from falls after Federal Reserve Chair Jerome Powell on Friday offered no signal on when the central bank plans to cut its asset purchases beyond saying it could be "this year. Weaker jobs numbers, due to be released on Friday, could instead cement a case for later action - a pre-announcement in November with a formal decision in December. Trade on Tuesday, however, is likely to be driven more by month-end flows from various businesses for their import and export transactions, traders said. The euro zone's consumer price data due at 0900 GMT is expected to show that inflation in the currency bloc has gathered pace in August though the rise will be widely seen as transitory. The currency is also supported by vague hopes of a thaw in U.S.-China diplomatic relations as U.S. climate envoy John Kerry is due to visit Tianjin, while U.S. Treasury Secretary is reportedly mulling a visit to China, she added. Emerging market currencies also held firm, with the MSCI emerging market currency index hitting a three-week high of 1,733.93 on Monday. It last stood at 1,732.54.
  • Gold was up on Tuesday morning in Asia, with a weakening dollar giving the yellow metal a boost. Investors are now looking to U.S. economic data due later in the week to gains clues to when the U.S. Federal Reserve will begin asset tapering. The greenback steadied from its falls after Fed Chairman Jerome Powell did not provide a clear timeline for asset tapering and interest rate hikes during the previous week’s Jackson Hole symposium. He only suggested that the asset tapering timeline could be “within 2021.” However, Fed President Loretta Mester said she is not yet convinced that recent inflation readings will be enough to satisfy the conditions to begin asset tapering, despite the U.S. economy’s continuing recovery from COVID-19. The latest U.S. jobs report, including non-farm payrolls, will be released on Friday. Data released on Monday showed that pending home sales fell 1.8% month-on-month in July. The world’s second-largest economy is still feeling the impact of recent strict lockdowns to curb the latest COVID-19 outbreak in the country as well as high material prices.
  • Oil prices slipped on Tuesday amid concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output. The prices were also weighed down by weaker manufacturing data from China, where factory activity expanded at a slower pace in August compared with the previous month. Hurricane Ida knocked out at least 94% of the offshore Gulf of Mexico oil and gas production and caused "catastrophic" damage to Louisiana's grid. The loss of power could last three weeks, utilities officials said, slowing efforts to repair and restart energy facilities, which could also take at least two weeks to fully resume operations. With "catastrophic" damage to the grid in Louisiana, power outages could last three weeks, utility officials said, which would slow efforts to repair and restart energy facilities. On the supply side, about 1.72 million bpd of oil production and 2.01 million cubic feet per day of natural gas output remained offline in the U.S. side of the Gulf of Mexico following evacuations at 288 platforms. Also keeping a lid on oil prices is the prospect that the Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, will agree to go ahead with plans to add another 400,000 bpd of supply each month through December. OPEC+ will meet on Wednesday. Delegates say they expect the production increase to go ahead, however Kuwait's oil minister said on Sunday that plan could be reconsidered amid concerns about raging COVID-19 infections in Asia limiting fuel demand.

 

 
Intraday RESISTANCE LEVELS
31st August 2021 R1 R2 R3
GOLD-XAU 1,819-1,830 1,840 1,851-1,860
Silver-XAG 24.45-24.75 25.50 26.00-26.50
Crude Oil 68.90-69.55 70.10 70.95-71.50
EURO/USD 1.1850 1.1910 1.1950-1.1990
GBP/USD 1.3810-1.3850 1.3900 1.3950-1.3990
USD/JPY 110.54-111.70 112.50 113.00-113.50

Intraday SUPPORTS LEVELS
31st August 2021 S1 S2 S3
GOLD-XAU 1,805-1,790 1,784 1,767-1,760
Silver-XAG 24.05-23.75 23.30 22.90-22.50
Crude Oil 68.30-67.25 66.50 65.45-64.90
EURO/USD 1.1800-1.1750 1.1705 1.1640-1.1601
GBP/USD 1.3720-1.3670 1.3610 1.3571-1.3550
USD/JPY 109.60-109.10 108.40 107.45-107.00

Intra-Day Strategy (31st 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 Monday made its intraday high of US$1823.12/oz and low of US$1807.64/oz. Gold down 0.415% at US$1810.09/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 1805-1743 with risk below 1743, targeting 1817-1825-1830 and 1840-1850. Sell in between 1817-1850 keeping stop loss closing above 1830, targeting 1805-1784-1767 and 1760-1751-1742.

 
Intraday Support Levels
S1     1,805-1,790
S2     1,784
S3     1,767-1,760
Intraday Resistance Levels
R1     1,819-1,830
R2     1,840
R3     1,851-1,860

Technical Indicators

Name   Value Action
14DRSI  

58.728

Buy
20-DMA   1795.09 Sell
50-DMA  

1798.58

Sell
100-DMA   1803.77 Sell
200-DMA   1803.77 Sell
STOCH(5,3)   45.254 Buy
MACD(12,26,9)   -15.653 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$24.20/oz and low of US$23.90/oz settled up by 0.0499% at US$24.01/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

Buy in between 24.05-21.90, targeting 24.45-25.05 and 25.50-26.00-26.65 with stop loss should be place on the breakage below 21.90. Sell in between 24.45-26.00 with stop loss above 26.00; targeting 23.75-23.25-22.90 and 22.50-22.10-21.90.

 
Intraday  Support Levels
S1     24.05-23.75
S2     23.30
S3     22.90-22.50

Intraday  Resistance Levels
R1     24.45-24.75
R2     25.50
R3     26.00-26.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.870 Buy
20-DMA   24.20 Sell
50-DMA   24.00 Sell
100-DMA   24.78 Sell
200-DMA   25.14 Buy
STOCH(5,3)   87.556 Buy
MACD(12,26,9)   -0.580 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$69.47/bbl, intraday low of US$67.59/bbl and settled up by 0.273% to close at US$68.96/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 68.90-71.50 with stop loss at 71.50; targeting 68.5-67.90-67.25 and 66.50-65.45-64.90. Buy above 68.30-64.05 with risk daily closing below 64.05 and targeting 69.00-69.55-70.10 and 70.95-71.50.

 
Intraday Support Levels
S1     68.30-67.25
S2     66.50
S3     65.45-64.90

Intraday Resistance Levels
R1     68.90-69.55
R2     70.10
R3     70.95-71.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.950 Sell
20-DMA   67.79 Buy
50-DMA   68.58 Buy
100-DMA   67.01 Buy
200-DMA   62.03 Buy
STOCH(5,3)   89.130 Sell
MACD(12,26,9)   0.9685 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday an intraday low of US$1.1782/EUR, high of US$1.1809/EUR and settled the day up by 0.0245% to close at US$1.1795/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     1.1800-1.1750
S2     1.1705
S3     1.1640-1.1601

Intraday  Resistance Levels
R1     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 Monday made an intra‐day low of US$1.3733/GBP, high of US$1.3774/GBP and settled the day up by 0.041% to close at US$1.3756/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 1.3810-1.3990 with targets at 1.3720-1.3615-1.3571 and 1.3550-1.3510 stop-loss should be 1.3890. Buy above 1.3720-1.3550 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     1.3720-1.3670
S2     1.3610
S3     1.3571-1.3550

Intraday Resistance Levels
R1     1.3810-1.3850
R2     1.3900
R3     1.3950-1.3990

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 Monday made intra‐day low of JPY109.69/USD and made an intraday high of JPY109.95/USD and settled the day up 0.0573% at JPY109.91/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 109.60-106.50 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     109.60-109.10
S2     108.40
S3     107.45-107.00

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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