AAFX TRADING

Daily Market Lookup

  • The dollar pushed higher in early European trade Monday, rallying to a month-high on the back of safety flows given concerns about the health of Chinese property giant Evergrande and ahead of this week’s crucial Federal Reserve meeting. Worries about the financial health of Evergrande have hit equities, prompting risk-off sentiment within the foreign exchange market, to the benefit of the safe-haven dollar. Evergrande is China's second-largest property developer by sales, and has managed to rack up some $300 billion in debts. Doubts are growing over whether it will be able to make a bond interest payment of $83.5 million due on Thursday. A messy default could have wider implications on the Chinese economy at a time when growth is already looking fragile. However, the main focus remains on the Federal Reserve, with the U.S. central bank set to hold a two-day policy meeting this week, ending on Wednesday. The Fed is widely expected to stick with broad plans for tapering this year but will hold off providing details or a timeline at this meeting. That said, Friday’s U.S. consumer sentiment release showed improving confidence, while retail sales were surprisingly strong in August, implying an improving economy. The Fed isn’t the only central bank meeting this week, with the likes of the Bank of England, the Bank of Japan and the Swiss National Bank also scheduled to get together. But the main news could come from Scandinavia, with Norway's Norges Bank expected to become the first central bank in western Europe to lift rates. The dollar rallied to a month-high in Asia on Monday as looming catastrophe at indebted developer China Evergrande added extra nerves to a cautious mood, with investors bracing for the Federal Reserve to take another step towards tapering this week. Evergrande, with $300 billion in debts, has a bond interest payment of $83.5 million due on Thursday and said on Sunday it begun repaying some investors with real estate, sparking selling in other developers and its lenders. The fear is that without a bailout, a messy collapse or liquidation ripples through China's property sector at a time when growth is already looking fragile. Onshore Chinese markets were shut for the mid-Autumn break but the offshore yuan fell through its 200-day moving average to a three-week low of 6.4848 per dollar. Ahead this week, no fewer than a dozen central banks hold meetings, but traders' top focus is on the Fed where expectations for a tapering signal are keeping the dollar bid. The Fed concludes a two-day meeting on Wednesday and consensus is that it will stick with broad plans for tapering this year but will hold off providing details or a timeline for a at least a month. Creeping U.S. yields, however, which at the 10-year tenor rose for a fourth straight week last week, point to risks of a hawkish surprise or a shift in projections to show hikes as soon a 2022, both of which could support the dollar. Among the other major central banks, the Bank of England is expected to leave policy settings unchanged, but traders see potential for gains in the pound if the bank adopts a hawkish tone or more members call for asset purchase tapering. There is no expectation of policy shifts at the resolutely dovish Bank of Japan on Wednesday, but a day later Norway's Norges Bank is expected to become the first G10 central bank to lift rates. The oil-sensitive Canadian dollar was also on the back foot ahead of an election on Monday where polling points to an advantage for incumbent Prime Minister Justin Trudeau but a likelihood he remains leader of a minority government.
  • Gold was down on Monday morning in Asia, hitting a more than five-week low. Meanwhile, the dollar strengthened and investors await the latest U.S. Federal Reserve policy decision. All eyes are on whether the Fed will announce that it will begin asset tapering as it hands down its policy decision on Wednesday. The central bank will also likely release fresh economic projections and a new read on officials’ expectations vis-a-vis interest rate hikes. Investors are starting to think that an asset tapering announcement could be imminent and that there could be a hawkish surprise in the dot plots, SPI Asset Management managing partner Stephen Innes told Reuters. Other central banks, including those in Japan, the U.K., Switzerland, Sweden, Norway, Indonesia, the Philippines, Taiwan, Brazil, South Africa, Turkey and Hungary, will also hand down their respective policy decisions throughout the week.
  • Oil prices dropped on Monday, extending last week's losses after the U.S. dollar jumped to a three-week high and the U.S. rig count rose, although nearly a quarter of U.S. Gulf of Mexico output stayed offline in the wake of two hurricanes. Oil fell with the greenback near a three-week high following a rally on Friday on better-than-expected U.S. retail sales data. That bolstered expectations for the U.S. Federal Reserve to begin reducing asset purchases later this year. ING said a tapering announcement this week would "likely put some downward pressure on oil and the broader commodities complex," although it added such a step was more likely in November. A stronger greenback makes U.S. dollar-priced oil more expensive for holders of other currencies, curtailing demand. A rise in the U.S. rig count also kept a lid on oil prices. The oil and gas rig count rose by nine to 512 in the week to Sept. 17, its highest since April 2020 and double the level from this time last year, Baker Hughes said on Friday. By Friday, 23% of U.S. Gulf of Mexico crude output, or 422,078 barrels per day, remained shut, the Bureau of Safety and Environmental Enforcement said. Oil fell alongside a greenback that was near a three-week high on Friday. U.S. data released on the same day showed that September’s Michigan Consumer Expectations and Michigan Consumer Sentiment indexes were at 67.1 and 71 respectively. Expectations are also mounting that the U.S. Federal Reserve will begin asset tapering later in 2021, with the central bank due to hand down its latest policy decision on Wednesday.

 

 
Intraday RESISTANCE LEVELS
20th September 2021 R1 R2 R3
GOLD-XAU 1,760-1,767 1,774 1,784-1,790
Silver-XAG 22.90-23.50 23.75 24.05-24.45
Crude Oil 71.50-71.90 72.50 73.50-74.90
EURO/USD 1.1750-1.1800 1.1850 1.1910-1.1945
GBP/USD 1.3810-1.3850 1.3900 1.3950-1.3990
USD/JPY 110.50-111.70 112.50 113.00-113.50

Intraday SUPPORTS LEVELS
20th September 2021 S1 S2 S3
GOLD-XAU 1,751-1,745 1,734 1,728-1,718
Silver-XAG 22.40-22.00 21.50 21.00-20.50
Crude Oil 70.70-70.10 69.55 69.10-68.30
EURO/USD 1.1705-1.1640 1.1600 1.1560-1.1510
GBP/USD 1.3720-1.3670 1.3610 1.3560-1.3500
USD/JPY 109.50-109.10 108.40 107.45-107.00

Intra-Day Strategy (20th September 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 Friday made its intraday high of US$1767.45/oz and low of US$1747.30/oz. Gold up 0.0712% at US$1754.84/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 1751-1717 with risk below 1717, targeting 1760-1767-1774 and 1784-1790-1805. Sell in between 1760-1805 keeping stop loss closing above 1805, targeting 1751-1745-1734 and 1728-1718.

 
Intraday Support Levels
S1     1,751-1,745
S2     1,734
S3     1,728-1,718
Intraday Resistance Levels
R1     1,760-1,767
R2     1,774
R3     1,784-1,790

Technical Indicators

Name   Value Action
14DRSI  

47.737

Buy
20-DMA   1797.79 Sell
50-DMA  

1799.36

Sell
100-DMA   1803.36 Sell
200-DMA   1803.59 Sell
STOCH(5,3)   23.254 Buy
MACD(12,26,9)   4.653 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$23.12/oz and low of US$22.32/oz settled down by 2.409% at US$22.35/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 22.40-21.00, targeting 23.50-24.45-25.05 and 25.50-26.00-26.65 with stop loss should be place on the breakage below 21.90. Sell in between 22.90-24.70 with stop loss above 25.00; targeting 23.25-22.90 and 22.50-22.10-21.90.

 
Intraday  Support Levels
S1     22.40-22.00
S2     21.50
S3     21.00-20.50

Intraday  Resistance Levels
R1     22.90-23.50
R2     23.75
R3     24.05-24.45

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.223 Buy
20-DMA   24.03 Sell
50-DMA   24.56 Sell
100-DMA   25.14 Sell
200-DMA   25.05 Buy
STOCH(5,3)   8.556 Sell
MACD(12,26,9)   -0.108 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$72.44/bbl, intraday low of US$70.98/bbl and settled down by 0.729% to close at US$71.73/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 71.50-74.90 with stop loss at 74.90; targeting 70.95-70.10-69.55-69.10 and 68.3-67.90-67.25. Buy above 70.10-66.40 with risk daily closing below 66.40 and targeting 70.95-71.50n and 71.90-72.50.

 
Intraday Support Levels
S1     70.70-70.10
S2     69.55
S3     69.10-68.30

Intraday Resistance Levels
R1     71.50-71.90
R2     72.50
R3     73.50-74.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.973 Sell
20-DMA   68.85 Buy
50-DMA   68.81 Buy
100-DMA   67.44 Buy
200-DMA   62.77 Buy
STOCH(5,3)   90.130 Sell
MACD(12,26,9)   0.439 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.1723/EUR, high of US$1.1788/EUR and settled the day down by 0.330% to close at US$1.1724/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 1.1800-1.2050 targeting 1.1750-1.1640-1.1601 and 1.1550-1.1500 with stop-loss at daily closing above 1.1910. Buy above 1.1750-1.1640 with risk below 1.1640, targeting 1.1910-1.1950-1.1985 and 1.2050-1.2100.

 
Intraday Support Levels
S1     1.1705-1.1640
S2     1.1600
S3     1.1560-1.1510

Intraday  Resistance Levels
R1     1.1750-1.1800
R2     1.1850
R3     1.1910-1.1945

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.530 Buy
20-DMA   1.1801 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 Friday made an intra‐day low of US$1.3723/GBP, high of US$1.3812/GBP and settled the day down by 0.352% to close at US$1.3740/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 1.3900-1.4100 with targets at 1.3850-1.3720-1.3615 and 1.3571-1.3550-1.3510 stop-loss should be 1.3890. Buy above 1.3720-1.3550 with targets 1.3180-1.3890-1.3955 and 1.3990-1.4025-1.4100 with stop loss closing below 1.3550.

 
Intraday Support Levels
S1     1.3720-1.3670
S2     1.3610
S3     1.3560-1.3500

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

48.977

Buy
20-DMA   1.3801 Buy
50-DMA   1.3819 Buy
100-DMA   1.3833 Buy
200-DMA   1.3726 Buy
STOCH(5,3)   31.146 v
MACD(12,26,9)   0.00032 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY109.19/USD and made an intraday high of JPY109.55/USD and settled the day down 0.301% at JPY109.92/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 110.50-111.70-112.50 and 113.00-113.50 with stop below 106.00. Sell below 110.50-113.50 with risk above 113.50 targeting 109.60-109.00-108.50 and 108.00-107.50-106.80.

 
Intraday Support Levels
S1     109.50-109.10
S2     108.40
S3     107.45-107.00

INTRADAY RESISTANCE LEVELS
R1     110.50-111.70
R2     112.50
R3     113.00-113.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.047 Buy
20-DMA   109.89 Sell
50-DMA   109.87 Sell
100-DMA   109.48 Sell
200-DMA   108.60 Sell
STOCH(9,6)   41.683 Sell
MACD(12,26,9)   0.0131 Sell

AAFX TRADING
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