AAFX TRADING

Daily Market Lookup

  • The dollar nudged higher against both developed and emerging markets currencies on Friday, as a fresh wave of caution hit global markets in the wake of real estate group China Evergrande’s failure to pay all holders of its dollar bond on Thursday. At least three holders of the bond told Reuters that they had still not been paid as of 8 AM in Hong Kong on Friday. The company has a 30-day grace period before it is officially classified as being in default, but the news was a further reminder of the challenges facing Chinese authorities as they try to stop contagion spreading through local financial markets. The People’s Bank of China again intervened in the money market to keep conditions orderly, although the scale of its seven and 14-day repos, at only 71 billion yuan ($10.9 billion), was slightly lower than earlier in the week. The official yuan rate was essentially flat at 6.4633 to the dollar. In Europe, the euro kept its weak tone as markets priced in the widening policy gap between the Federal Reserve and the European Central Bank, which President Christine Lagarde said is still far from starting a tightening cycle. The single currency was little changed from Thursday’s close at $1.1733, up over half a cent from the lows of Wednesday but still down by half a cent on the week. Fed chair Jerome Powell, vice-chair Richard Clarida and board member Michelle Bowman are all due to speak late at an event that begins at 10 AM ET. The economic data calendar is headed by business confidence surveys from Germany and Italy, which come a day after IHSMarkit’s flash purchasing managers index for September showed a sharper-than-expected slowdown in activity. The pound is caught in a two-way tussle between the threats of food and energy shortages and the prospect of higher inflation that would force the Bank of England to raise interest rates. The Bank’s monetary policy committee made only a modest shift towards tightening its policy at Thursday’s meeting. In emerging markets, the Turkish lira remained under pressure after the central bank’s surprise decision to cut interest its key rate by 1 percent on Thursday, despite having an inflation rate that’s currently running at over 20%. The dollar is up 2.5% against the lira this week and 5.7% over the last month, making the Turkish currency the worst performer of all G20 currencies.
  • The dollar hovered above a one-week low versus major peers on Friday, taking a breather after its biggest drop in almost a month overnight, as questions lingered about the fate of embattled property giant China Evergrande Group. The safe-haven dollar got hurt after Beijing injected fresh cash into the financial system on Thursday, when Evergrande announced it would make interest payments on an onshore bond. However, some holders of its offshore bonds said they had not received coupon payments by a Thursday deadline. More dollar bond interest is due next week. Hawkish comments from the Bank of England (BOE) on Thursday pushed up yields globally, a day after U.S. the Federal Reserve said it could begin reducing its monthly bond purchases by as soon as November, and that interest rates could rise quicker than expected by next year. The BOE said two of its policymakers had voted for an early end to pandemic-era government bond-buying and markets brought forward their expectations for an interest rate rise to March. Several Fed officials are due to speak on Friday, including Chair Jerome Powell, who gives opening remarks at a Fed Listens event.
  • Gold was up on Friday morning in Asia, recovering from a more than 1% fall during the previous session. A dollar near a one-week low gave the yellow metal a boost, although the U.S. Federal Reserve’s plans to begin asset tapering quicker than planned kept it on track for a third consecutive week of declines The Bank of England and Norges Bank handed down their respective policy decisions on Thursday. While the former kept its interest rate unchanged at 0.10%, the latter raised its interest rate to 0.25% from the previous month’s 0%. The Fed said that it would likely begin asset tapering within 2021 and hike interest rates in 2022 when it handed down its latest policy decision a day earlier. On the data front, Japanese data released earlier in the day said that he national core consumer price index (CPI) grew 0% year-on-year in August. The national CPI contracted 0.4% year-on-year and 0.2% month-on-month respectively. The manufacturing purchasing managers index (PMI) for September was 51.2.
  • Oil was up Friday morning in Asia, rising for a fourth day with the focus on tighter supplies and a strong appetite for riskier assets like crude oil alongside high hopes for the economic recovery from COVID-19. Meanwhile, U.S. Energy Information Administration (EIA) data said that capacity utilization rates at U.S. East Coast refineries increased to 93%, the highest since May 2019. U.S. crude oil supply data released on Wednesday showed that inventories fell to the lowest in almost three years, with the damage from hurricanes Ida and Nicholas keeping draws elevated. The black liquid saw brief losses earlier as China concluded its first public sale of state reserves. State-owned PetroChina and private refiner and chemical producer Hengli Petrochemical bought four cargoes totaling about 4.43 million barrels, according to sources with direct knowledge of the auction. However, the auction will have little impact on the market due to the size of the sale relative to China's consumption and imports, WoodMac analysts said ahead of its start. Some members of the Organization of the Petroleum Exporting Countries (OPEC) and allies (OPEC+) have also struggled to raise output due to under-investment or delays to maintenance work due to COVID-19. Still, U.S. oil refiners looking to replace the U.S. Gulf crude lost to the two hurricanes were able to turn to Iraqi and Canadian oil, while Asian buyers have been switching to Middle Eastern and Russian supplies, according to analysts and traders.

 

 
Intraday RESISTANCE LEVELS
24th 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 73.50-74.90 75.50 76.30-77.00
EURO/USD 1.1750-1.1800 1.1850 1.1910-1.1945
GBP/USD 1.3730-1.3810 1.3850 1.3910-1.3960
USD/JPY 110.50-111.70 112.50 113.00-113.50

Intraday SUPPORTS LEVELS
24th September 2021 S1 S2 S3
GOLD-XAU 1,751-1,745 1,736 1,730-1,721
Silver-XAG 22.30-22.00 21.50 21.00-20.50
Crude Oil 72.50--71.90 71.50 70.70-70.10
EURO/USD 1.1705-1.1640 1.1600 1.1560-1.1510
GBP/USD 1.3670-1.3610 1.3560 1.3500-1.3450
USD/JPY 109.50-109.10 108.401 107.45-107.00

Intra-Day Strategy (24th 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 Thursday made its intraday high of US$1776.52/oz and low of US$1737.73/oz. Gold down 1.439% at US$1742.72/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 1767-1774 and 1784-1790-1805. Sell in between 1760-1805 keeping stop loss closing above 1805, targeting 1751-1745-1734 and 1728-1718.11

 
Intraday Support Levels
S1     1,751-1,745
S2     1,736
S3     1,730-1,721
Intraday Resistance Levels
R1     1,760-1,767
R2     1,774
R3     1,784-1,790

Technical Indicators

Name   Value Action
14DRSI  

39.689

Buy
20-DMA   1785.25 Sell
50-DMA  

1793.48

Sell
100-DMA   1799.921 Sell
200-DMA   1801.83 Sell
STOCH(5,3)   25.254 Buy
MACD(12,26,9)   -8.653 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$22.86/oz and low of US$22.45/oz settled down by 0.868% at US$22.48/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     22.30-22.00
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   43.2231 Sell
20-DMA   24.0311111111111111111111111 Buy
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 Thursday made an intra‐day high of US$73.37/bbl, intraday low of US$71.51/bbl and settled up by 1.746% to close at US$73.09/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 73.50-74.90 with stop loss at 74.90; targeting 70.95-70.10-69.55-69.10 and 68.3-67.90-67.25. Buy above 72.50-70.10 with risk daily closing below 70.10 and targeting 70.95-71.50 and 71.90-72.50.

 
Intraday Support Levels
S1     72.50--71.90
S2     71.50
S3     70.70-70.10

Intraday Resistance Levels
R1     73.50-74.90
R2     75.50
R3     76.30-77.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.973 Sell
20-DMA   70.53 Buy
50-DMA   69.62 Buy
100-DMA   68.05 Buy
200-DMA   66.40 Buy
STOCH(5,3)   88.130 Buy
MACD(12,26,9)   1.0991 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1682/EUR, high of US$1.1749/EUR and settled the day up by 0.437% to close at US$1.1737/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 1.1750-1.2050 targeting 1.1640-1.1601 and 1.1550-1.1500 with stop-loss at daily closing above 1.1910. Buy above 1.1700-1.1510 with risk below 1.1510, 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 Sell1
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$1.3611/GBP, high of US$1.3750/GBP and settled the day up by 0.760% to close at US$1.3718/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 1.3730-1.4100 with targets at 1.3670-1.3615 and 1.3571-1.3550-1.3510 stop-loss should be 1.3890. Buy above 1.3670-1.3450 with targets 1.3720-1.3810-1.3890 and 1.3955 and 1.3990-1.4025-1.4100 with stop loss closing below 1.3550.

 
Intraday Support Levels
S1     1.3670-1.3610
S2     1.3560
S3     1.3500-1.3450

Intraday Resistance Levels
R1     1.3730-1.3810
R2     1.3850
R3     1.3910-1.3960

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

46.305

Buy
20-DMA   1.3748 Buy
50-DMA   1.3791 Buy
100-DMA   1.3816 Buy
200-DMA   1.3723 Buy
STOCH(5,3)   38.1461 Sell
MACD(12,26,9)   0.00032 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY109.72/USD and made an intraday high of JPY110.34/USD and settled the day down 0.301% at JPY110.31/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     108.401
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

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