AAFX TRADING

Daily Market Lookup

  • The dollar stood at its strongest levels of the year on Wednesday, after rising along with U.S. yields on investor concerns that the Federal Reserve will start to withdraw policy support just as global growth slows. The yen, which is sensitive to U.S. yields as higher rates can draw flows from Japan, touched an 18-month low of 111.685 per dollar, before rebounding a fraction to 111.47. It showed little reaction to the election of Fumio Kishida as leader of Japan's ruling Liberal Democratic Party (LDP), virtually ensuring he will become the country's next prime minister. Sterling, which took a beating on Tuesday amid worries over the economic impact of a shortage of gas and a scramble for fuel, extended losses to its lowest since January at $1.3505. U.S. Treasury yields have surged in recent days as tapering looms before the end of the year and as inflation starts to look stickier than first thought. The benchmark 10-year yield eased on Wednesday but at 1.5132% is still up some 20 basis points in a week. Meanwhile, energy prices are surging and concerns are mounting about China's growth outlook - now at risk both from a messy collapse of developer China Evergrande and power outages that are hitting output. China's yuan has been resilient in the face of the dollar's strength, but dipped on Wednesday after Japan's giant Government Pension Investment Fund said it wouldn't buy Chinese government bonds even after their inclusion in a major index. MSCI's emerging markets currency index suffered its sharpest fall in three weeks overnight and extended its decline on Wednesday to a one-month low. [EMRG/FRX] Central bank meetings loom next week in both countries and swaps pricing points to the Reserve Bank of New Zealand following in the footsteps of Norges Bank and lifting rates. European Central Bank (ECB) President Christine Lagarde, Fed Chair Jerome Powell, Bank of England Governor Andrew Bailey and Bank of Japan Governor Haruhiko Kuroda are panelists at an ECB forum at 1545 GMT.
  • The dollar edged lower in early European trade Wednesday, but remained near its best levels this year as higher U.S. Treasury yields, potential Federal Reserve tapering and global growth concerns stemmed any losses. U.S. Treasury yields edged lower early Wednesday, with the benchmark 10-year yielding below 1.53%, but the dollar has been generally supported by the recent surge in yields, up more than 25 basis points in five sessions to peak at around 1.56%. These gains followed the Federal Reserve indicating at its policy-setting meeting last week that it could begin asset tapering as soon as November, concluding around mid-2022, opening the way for interest rate hikes after that. Federal Reserve Chairman Jerome Powell also highlighted “upside risks” to inflation in his testimony to the Senate Banking Committee on Tuesday, not helped by surging global energy prices. The dollar is also benefiting from its status as a safe haven as concerns grow about the growth outlook in China, the second largest economy in the world, with power outages hitting production and property developer China Evergrande Group (HK:3333) still at risk of collapse despite raising $1.5 billion with the sale of a stake in a banking affiliate. The proceeds will not be available to pay bondholders, however. Closer to home, Treasury Secretary Janet Yellen recently warned that the debt ceiling must be raised or suspended by sometime in October or the U.S. government will be unable to pay its bills.
  • Gold was up on Wednesday morning in Asia, remaining near a seven-week low. A dollar near ten-month highs and rising U.S Treasury yields also applied pressure on the safe-haven asset, with expectations of an earlier-than-expected interest rate hike. Both U.S. Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen warned that a default due to a failure to raise the debt ceiling would have catastrophic consequences in their testimonies before a Senate Banking Committee hearing on Tuesday. Powell and Yellen will also testify before a House Banking Committee hearing on Thursday. Central bank chiefs, including Powell, the Bank of England’s Andrew Bailey, the Bank of Japan’s Haruhiko Kuroda, and the European Central Bank (ECB)’s Christine Lagarde will also participate in an ECB Forum panel later in the day. Meanwhile, the U.S. Conference Board (CB) Consumer Confidence index fell for a third consecutive month and was at 109.3 in September. In Asia Pacific, data from the Hong Kong Census and Statistics Department showed on Tuesday that China’s net gold imports via Hong Kong in August fell modestly from August.
  • Oil was down Wednesday morning in Asia as investors digested a surprise build in U.S. crude oil supplies. U.S. crude oil supply data from the American Petroleum Institute, released on Tuesday, showed a build of 4.127 million barrels for the week ending Sep. 24. Forecasts prepared by Investing.com had predicted a draw of 2.333 million barrels, while a 6.108-million-barrel draw was recorded during the previous week. Investors now await crude oil supply data from the U.S. Energy Information Administration (EIA), due later in the day. If EIA data confirms the build, it would be the first increase in U.S. inventories in eight weeks. The surprise build halted the black liquid’s recent rally that was supported by a tightening global market as China, the world’s top oil exporter faces an energy crunch. Increasing fuel demand as economic recovery from COVID-19 continues, and strong gains in natural gas also contributed to the rally. Although there is a pause for now, “oil prices will remain supported and elevated,” Oversea-Chinese Banking Corp. economist Howie Lee told Bloomberg. Meanwhile, concerns are also growing about a debt-ceiling impasse in the U.S. after Republicans in the Senate blocked a Democrat move to raise the debt limit. U.S. Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen both warned that a default due to a failure to raise the debt ceiling would be catastrophic in their testimonies before a Senate Banking Committee hearing on Tuesday. The pair will also testify before a House Banking Committee hearing on Thursday.

 

 
Intraday RESISTANCE LEVELS
29th September 2021 R1 R2 R3
GOLD-XAU 1,745-1,751 1,760 1,767-1,774
Silver-XAG 22.90-23.50 23.75 24.05-24.45
Crude Oil 74.90-75.50 76.30 77.00-77.50
EURO/USD 1.1750-1.1800 1.1850 1.1910-1.1945
GBP/USD 1.3610-1.3670 1.3560 1.3730-1.3810
USD/JPY 111.70-112.50 113.00 113.50-114.00

Intraday SUPPORTS LEVELS
29th September 2021 S1 S2 S3
GOLD-XAU 1,736-1,730 1,721 1,715-1,710
Silver-XAG 22.00 21.50 21.00-20.50
Crude Oil 73.50-72.50 71.90 71.40-70.80
EURO/USD 1.1640 1.1600 1.1560-1.1510
GBP/USD 1.3510-1.3450 1.3400 1.3340-1.3290
USD/JPY 111.10-110.50 109.50 109.10-108.40

Intra-Day Strategy (29th 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 Tuesday made its intraday high of US$1750.94/oz and low of US$1728.09/oz. Gold down 0.926% at US$1733.71/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 1736-1717 with risk below 1717, targeting 1745-1751-1767 and 1774-1784. Sell in between 1745-1790 keeping stop loss closing above 1805, targeting 1737-1728 and 1718-1710.

 
Intraday Support Levels
S1     1,736-1,730
S2     1,721
S3     1,715-1,710
Intraday Resistance Levels
R1     1,745-1,751
R2     1,760
R3     1,767-1,774

Technical Indicators

Name   Value Action
14DRSI  

39.689

Buy
20-DMA   1785.25 Sell
50-DMA  

1793.48

Sell
100-DMA   1799.92 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 Tuesday made its intraday high of US$22.62/oz and low of US$22.09/oz settled down by 0.926% at US$22.43/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     22.00
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 Tuesday made an intra‐day high of US$76.49/bbl, intraday low of US$74.08/bbl and settled down by 1.468% to close at US$74.08/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 74.90-77.50 with stop loss at 77.50; targeting 73.50-72.50-71.90 and 70.95-70.10-69.55. Buy above 75.50-71.10 with risk daily closing below 71.10 and targeting 76.30-77.00-77.50 and 78.00-78.50.

 
Intraday Support Levels
S1     73.50-72.50
S2     71.90
S3     71.40-70.80

Intraday Resistance Levels
R1     74.90-75.50
R2     76.30
R3     77.00-77.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   68.340 Sell
20-DMA   71.01 Buy
50-DMA   69.86 Buy
100-DMA   68.21 Buy
200-DMA   63.53 Buy
STOCH(5,3)   91.130 Buy
MACD(12,26,9)   1.309 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1667/EUR, high of US$1.1700/EUR and settled the day down by 0.111% to close at US$1.1682/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 1.1700-1.2050 targeting 1.1640-1.1601 and 1.1550-1.1500 with stop-loss at daily closing above 1.1910. Buy above 1.1690-1.1510 with risk below 1.1510, targeting 1.1910-1.1950-1.1985 and 1.2050-1.2100.

 
Intraday Support Levels
S1     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   32.720 Buy
20-DMA   1.1759 Sell
50-DMA   1.1798 Sell
100-DMA   1.1854 Sell
200-DMA   1.1867 Sell
STOCH(5,3)   41.891 Buy
MACD(12,26,9)   -0.003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Tuesday made an intra‐day low of US$1.3520/GBP, high of US$1.3716/GBP and settled the day down by 1.182% to close at US$1.3533/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 1.3610-1.3810 with targets at 1.3510 stop-loss should be 1.3890. Buy above 1.3510-1.3450 with targets 1.3610-1.3670-1.3720 and 1.3810-1.3890-1.3955 with stop loss closing below 1.3550.

 
Intraday Support Levels
S1     1.3510-1.3450
S2     1.3400
S3     1.3340-1.3290

Intraday Resistance Levels
R1     1.3610-1.3670
R2     1.3560
R3     1.3730-1.3810

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)   38.146 Sell
MACD(12,26,9)   0.00032 Sell

USD/JPY

AAFX TRADING

USD/JPY on Tuesday made intra‐day low of JPY110.95/USD and made an intraday high of JPY111.63/USD and settled the day up 0.421% at JPY111.46/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 111.10-108.50 with targets of 111.70-112.50 and 113.00-113.50 with stop below 106.00. Sell below 111.70-114.00 with risk above 114.00 targeting 111.10-110.50-109.60 and 109.00-108.50-108.00.

 
Intraday Support Levels
S1     111.10-110.50
S2     109.50
S3     109.10-108.40

INTRADAY RESISTANCE LEVELS
R1     111.70-112.50
R2     113.00
R3     113.50-114.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   62.610 Buy
20-DMA   109.97 Sell
50-DMA   109.90 Sell
100-DMA   109.59 Sell
200-DMA   108.77 Sell
STOCH(9,6)   96.683 Buy
MACD(12,26,9)   -0.0131 Sell

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