AAFX TRADING

Daily Market Lookup

  • The dollar edged lower in early European trade Thursday, but remained near its one-year high on the back of ongoing safe-haven demand and expectations for tighter U.S. monetary policy in the near future. Stock markets have edged higher Thursday, rebounding after Tuesday’s equity-market rout a day earlier, but U.S. Treasury yields remain elevated, with the benchmark 10-year yield still close to its highest levels since June, providing the dollar with support. Pushing yields higher are concerns that the Federal Reserve could start tapering its bond-buying program before the end of the year in a period of slowing global economic growth and persistently high inflation. Also helping the safe-haven dollar is the current impasse over the U.S. debt ceiling that threatens to shut the government down. Senate Majority Leader Chuck Schumer said late Wednesday that lawmakers had reached an agreement to extend government spending until Dec. 3, but this just kicks the can down the road and the threat of a catastrophic default remains real, albeit one that has been averted many times before in similar situations. Also helping the greenback are concerns about the growth outlook in China, the second largest economy in the world, especially after factory activity unexpectedly contracted in September as high raw material prices and power cuts continued to pressure manufacturers. The dollar was down on Thursday morning in Asia, but was near a one-year high as the U.S. Federal Reserve prepares to begin asset tapering in November 2021. The USD/CNY pair inched up 0.01% to 6.4710. Chinese economic data released earlier in the day showed that September’s manufacturing purchasing managers index (PMI) was at 49.6. The non-manufacturing PMI and the Caixin manufacturing PMI were at 53.2 and 50 respectively. The safe-haven dollar saw a bid over concerns that the Fed could start tapering in a period of slowing global economic growth and persistently high inflation. It also got a boost as an impasse over the U.S. debt ceiling that threatens to shut the government down continues. U.S. Senate Republicans blocked efforts by the Democrats to avert a potentially crippling U.S. credit default as federal funding expires on Thursday and borrowing authority on around Oct. 18. Fed Chairman Jerome Powell and European Central Bank (ECB) President Christine Lagarde spoke at an ECB forum on Wednesday alongside Bank of England and Bank of Japan Governors Andrew Bailey and Haruhiko Kuroda. The central bank chiefs said that they were keeping an eye on inflation, but were cautiously optimistic that the phenomenon will be temporary.
  • Gold was up on Thursday morning in Asia, after tumbling to a seven-week trough during the previous session, but rising U.S. Treasury yields continued to apply pressure. Central bank heads including U.S. Federal Reserve Chairman Jerome Powell and European Central Bank (ECB) President Christine Lagarde, alongside Bank of England and Bank of Japan Governors Andrew Bailey and Haruhiko Kuroda, spoke at an ECB forum on Wednesday. Although they are monitoring inflation, they were cautiously optimistic that the phenomenon will be temporary. In Asia Pacific, China released data earlier in the day showed that September’s manufacturing purchasing managers index (PMI) was at a lower-than-expected 49.6. However, the non-manufacturing PMI and the Caixin manufacturing PMI were at a better-than-expected 53.2 and 50 respectively.
  • Oil was down Thursday morning in Asia, continuing its downward trends as the latest, official data confirmed a build in U.S. crude supplies. After two days of price losses, some investors could be looking for the next barrier to breach after Brent futures climbed above the $80 mark for the first time in around three years on Tuesday. U.S. crude oil supply data from the U.S. Energy Information Administration, released on Wednesday, showed a build of 4.578 million barrels in the week to Sep. 24. Forecasts prepared by Investing.com had predicted a draw of 1.652 million barrels, while a 3.481-million-barrel draw was recorded during the previous week. Crude oil supply data from the American Petroleum Institute, released the day before, showed a build of 4.127 million barrels. The build comes as U.S. production returned more or less to their levels pre-Hurricane Ida, which hit the Gulf of Mexico area in late August 2021, with output rising to 11.1 million barrels per day last week. On the production side, the OPEC+ is widely expected to maintain a deal that adds 400,000 barrels per day (bpd) to its output for November at its next meeting on Oct. 4. In Asia Pacific, a growing power crisis and housing market concerns in China continue to be of concern to investors. Any economic fallout in the world’s biggest crude importer will impact fuel demand, according to analysts. Oil prices were mixed on Thursday as selling prompted by an unexpected rise in U.S. inventories eased, with analysts predicting supply may not keep up with a recovery in demand. Crude inventories were up by 4.6 million barrels in the week to Sept. 24 to 418.5 million, EIA data showed, compared with analysts' expectations in a Reuters poll for a 1.7 million-barrel drop. Both contracts tilted into higher territory earlier in the session, following two days of losses, with oil bulls possibly looking for the next barrier to breach after Brent rose above $80 for the first time in three years on Tuesday. Citigroup is forecasting oil balances to be in a 1.5 million-barrel-per-day deficit on average over the next six months, even with continued supply increases. Next week, the Organization of the Petroleum Exporting Countries and allies including Russia, a grouping known as OPEC+, are expected to hold to a pact on adding 400,000 barrels per day (bpd) to their output for November. The rise in U.S. inventories came as production in the Gulf returned to around the levels they were before Hurricane Ida hit about a month ago. Output rose to 11.1 million barrels per day last week, but U.S. drillers haven't been so quick to turn the taps on after being slammed by shareholders for fast and loose expansion in the past.

 

 
Intraday RESISTANCE LEVELS
30th September 2021 R1 R2 R3
GOLD-XAU 1,736-1,745 1,751 1,760-1,770
Silver-XAG 22.00-22.90 23.50 23.75-24.05
Crude Oil 74.90-75.50 76.30 77.00-77.50
EURO/USD 1.1640-1.1750 1.1800 1.1850-1.1910
GBP/USD 1.3450-1.3510 1.3560 1.3610-1.3670
USD/JPY 111.70-112.50 113.00 113.50-114.00

Intraday SUPPORTS LEVELS
30th September 2021 S1 S2 S3
GOLD-XAU 1,724-1,717 1,710 1,700-1,684
Silver-XAG 21.50-21.00 20.50 19.90-19.55
Crude Oil 74.20-73.50 72.50 71.90-71.40
EURO/USD 1.1590-1.1560 1.1510 1.1460-1.1420
GBP/USD 1.3400-1.3340 1.3290 1.3250-1.3170
USD/JPY 109.50 109.50 109.10-108.40

Intra-Day Strategy (30th 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 Wednesday made its intraday high of US$1745.48/oz and low of US$1721.58/oz. Gold down 0.446% at US$1726.08/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 1722-1684 with risk below 1684, targeting 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     1,724-1,717
S2     1,710
S3     1,700-1,684
Intraday Resistance Levels
R1     1,736-1,745
R2     1,751
R3     1,760-1,770

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 Wednesday made its intraday high of US$22.53/oz and low of US$21.40/oz settled down by 4.15% at US$21.51/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 21.50-19.55, targeting 22.00-22.90-23.50 and 24.45-25.05-25.50 with stop loss should be place on the breakage below 21.90. Sell in between 22.00-24.70 with stop loss above 25.00; targeting 21.50-21.00-20.50 and 19.90-19.55.

 
Intraday  Support Levels
S1     21.50-21.00
S2     20.50
S3     19.90-19.55

Intraday  Resistance Levels
R1     22.00-22.90
R2     23.50
R3     23.75-24.05

TECHNICAL INDICATORS
Name   Value Action
14DRSI   28.481 Buy
20-DMA   22.82 Sell
50-DMA   23.72 Sell
100-DMA   24.54 Sell
200-DMA   24.75 Buy
STOCH(5,3)   14.556 Sell
MACD(12,26,9)   -0.587 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Wednesday made an intra‐day high of US$75.95/bbl, intraday low of US$73.53/bbl and settled up by 0.447% to close at US$74.55/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 74.20-71.10 with risk daily closing below 71.10 and targeting 74.90-75.50-76.30 and 77.00-77.50-78.00.

 
Intraday Support Levels
S1     74.20-73.50
S2     72.50
S3     71.90-71.40

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   64.554 Sell
20-DMA   71.91 Buy
50-DMA   70.38 Buy
100-DMA   68.57 Buy
200-DMA   63.85 Buy
STOCH(5,3)   58.130 Sell
MACD(12,26,9)   1.560 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.1588/EUR, high of US$1.1689/EUR and settled the day down by 0.733% to close at US$1.1596/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 1.1640-1.1910 targeting 1.1590-1.1550 and 1.1510-1.1460-1.1420 with stop-loss at daily closing above 1.1910. Buy above 1.1590-1.1410 with risk below 1.1410, targeting 1.1640-1.1750-1.1800-1.1985 and 1.2050-1.2100.

 
Intraday Support Levels
S1     1.1590-1.1560
S2     1.1510
S3     1.1460-1.1420

Intraday  Resistance Levels
R1     1.1640-1.1750
R2     1.1800
R3     1.1850-1.1910

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 Wednesday made an intra‐day low of US$1.3410/GBP, high of US$1.3553/GBP and settled the day down by 0.790% to close at US$1.3425/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 1.3450-1.3670 with targets at 1.3400-1.3340-1.3290 and 1.3250-1.3170. stop loss should be 1.3670. Buy above 1.3400-1.3170 with targets 1.3450-1.3510-1.3560 and 1.3610-1.3670-1.3720 with stop loss closing below 1.3550.

 
Intraday Support Levels
S1     1.3400-1.3340
S2     1.3290
S3     1.3250-1.3170

Intraday Resistance Levels
R1     1.3450-1.3510
R2     1.3560
R3     1.3610-1.3670

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 Wednesday made intra‐day low of JPY111.20/USD and made an intraday high of JPY112.04/USD and settled the day up 0.436% at JPY111.95/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 111.60-108.50 with targets of 111.70-112.50 and 113.00-113.50 with stop below 106.00. Sell below 112.0-114.00 with risk above 114.00 targeting 111.10-110.50-109.60 and 109.00-108.50-108.00.

 
Intraday Support Levels
S1     109.50
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

AAFX TRADING
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