AAFX TRADING

Daily Market Lookup

  • The dollar rose on Wednesday amid nervousness that surging energy prices could spur inflation and interest rate hikes, and as trader’s awaited U.S. jobs data for clues on the timing of Federal Reserve policy tightening. The greenback has won support as investors brace for the Fed to begin tapering asset purchases this year and lay the ground for an exit from pandemic-era interest rate settings well before central banks in Europe and Japan. The dot plot is a chart that indicates Fed policymaker expectations for where interest rates will be in the future. Fed funds futures markets are priced for rate hikes to begin around November 2022, but anticipate rates topping out at just over 1% through most of 2025 even though Fed members project rates reaching 1.75% in 2024. U.S. non-farm payrolls data due on Friday is seen as crucial to informing the Fed's tone and timing, especially should the figures wildly impress or disappoint. Private payrolls figures, a sometimes unreliable guide, are due around 1215 GMT. A large miss on market expectations for around 428,000 jobs to have been added in September could dampen expectations for Friday's broader figure, which is forecast at 473,000. Nervousness about higher energy prices dragging on growth or flowing through to broader inflation took the edge from the support that the surge had lent to commodity-linked currencies. The Canadian dollar eased from a one-month peak and the Norwegian crown pulled back from a three-month top. Sterling has recovered some of last week's sharp sell-off against the dollar, but lost momentum through the Asian session and it fell 0.4% to $1.3570 and held just below Tuesday's three-week peak on the euro.
  • The dollar traded higher Wednesday, with this safe haven boosted by concerns rising energy prices will translate into higher inflation, prompting the Federal Reserve to promptly tighten its monetary policy. This hawkish tone has added to expectations that the Federal Reserve will begin tapering asset purchases this year and prepare for an early increase in the rockbottom pandemic-era interest rate settings. The dollar also has benefited from climbing bond yields as investors fretted about the lack of agreement in U.S. Congress over the country’s debt ceiling and the potential for a default. In addition there remains concerns about the Chinese property sector, the news that another Chinese property developer, Fantasia, has also failed to repay $205 million of bonds, suggesting concerns extend well beyond Evergrande. Attention now turns to the release of the ADP private payrolls release later Wednesday, as a guide to Friday’s important official employment report. The ADP number is expected to rise by 428,000 jobs in September, up from 374,000 jobs the previous month, while Friday’s nonfarm payrolls are seen rising by 488,000 jobs, up from 235,000 jobs added the previous month.
  • Gold was down on Wednesday morning in Asia as the dollar strengthened and U.S. Treasury yields rose. The focus will also be on the latest U.S. jobs report, due later in the week. The jobs report, including non-farm payrolls, is due on Friday and will be critical in determining the U.S. Federal Reserve’s timeline to begin asset tapering. Supply bottlenecks are continuing to drive most of the recent increase in inflation and will subside, Chicago Fed President Charles Evans said on Tuesday. He added that the Fed is close to beginning asset tapering. The U.S. services purchasing managers index (PMI) was 54.9 for September, while the Institute of Supply Management (ISM) non-manufacturing PMI was 61.9, according to data released on Tuesday. Meanwhile, the Perth Mint’s sales of gold products in September jumped about 83% to their highest level since April 2021, and silver sales rose nearly 23%. The National Bank of Poland could buy another 100 tons of gold for its reserves in 2022, governor Adam Glapinski said on Tuesday. In Asia Pacific, the Reserve Bank of New Zealand handed down its policy decision earlier in the day, where it hiked interest rates to 0.50% from the previous month’s 0.25%. The Reserve Bank of India will hand down its decision on Friday. In other precious metals, silver dropped 0.4% and palladium was down 0.3%, while platinum eased 0.2% to $960.11.
  • U.S. oil prices rose for a fifth day on Wednesday to their highest since 2014 amid global concerns about energy supply on signs of tightness in crude, natural gas and coal markets. Brent crude prices also climbed for a fourth day on the supply anxiety, particularly after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, decided on Monday to stay with their planned output increase rather than boosting it further. On Monday, OPEC+ agreed to adhere to its July pact to boost output by 400,000 barrels per day (bpd) each month until at least April 2022, phasing out 5.8 million bpd of existing production cuts. Late last month, the OPEC+ Joint Technical Committee (JTC) said it expected a 1.1 million bpd supply deficit this year, which could turn into a 1.4 million bpd surplus next year. Oil prices have surged more than 50% this year, adding to inflationary pressures that crude-consuming nations such as the United States and India are concerned will derail recovery from the COVID-19 pandemic. Despite pressure to ramp up output, OPEC+ was concerned that a fourth global wave of COVID-19 infections could hit the demand recovery, a source told Reuters a little before Monday's talks. However, inventory data from the United States, the world's biggest oil consumer, showed some signs of slowing fuel demand. The American Petroleum Institute reported U.S. oil inventories rose by 951,000 barrels in the week to Oct. 1, website Oilprice.com reported on Tuesday. Gasoline and distillate fuel inventories also climbed, the website reported, citing the API data.

 

 
Intraday RESISTANCE LEVELS
6th October 2021 R1 R2 R3
GOLD-XAU 1,760-1,770 1,779 1,790-1,804
Silver-XAG 22.60-22.90 23.50 23.75-24.05
Crude Oil 79.50-80.50 80.90 81.50-82.20
EURO/USD 1.1590-1.1640 1.1750 1.1800-1.1850
GBP/USD 1.3610-1.3670 1.3710 1.3750-1.3790
USD/JPY 111.70-112.50 113.00 113.50-114.00

Intraday SUPPORTS LEVELS
6th October 2021 S1 S2 S3
GOLD-XAU 1,745-1,736 1,724 1,717-1,710
Silver-XAG 22.20-21.50 21.00 20.50-19.90
Crude Oil 78.90-78.00 77.50 76.30-75.70
EURO/USD 1.1560-1.1510 1.1460 1.1420-1.1350
GBP/USD 1.3560-1.3510 1.3450 1.3400-1.3340
USD/JPY 111.10-110.50 109.50 109.10-108.40

Intra-Day Strategy (6th October 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$1769.96/oz and low of US$1748.58/oz. Gold down 0.551% at US$1759.92/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 1745-1700 with risk below 1700, targeting 1760-1767 and 1774-1784-1790. Sell in between 1760-1800 keeping stop loss closing above 1805, targeting 1745-1737-1728 and 1718-1710.

 
Intraday Support Levels
S1     1,745-1,736
S2     1,724
S3     1,717-1,710
Intraday Resistance Levels
R1     1,760-1,770
R2     1,779
R3     1,790-1,804

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 Thursday made its intraday high of US$22.69/oz and low of US$22.36/oz settled down by 0.348% at US$22.36/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 22.20-19.55, targeting 22.60-22.90-23.50 and 24.45-25.05-25.50 with stop loss should be place on the breakage below 21.90. Sell in between 22.60-24.70 with stop loss above 25.00; targeting 21.50-21.00-20.50 and 19.90-19.55.

 
Intraday  Support Levels
S1     22.20-21.50
S2     21.00
S3     20.50-19.90

Intraday  Resistance Levels
R1     22.60-22.90
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 Tuesday made an intra‐day high of US$79.21/bbl, intraday low of US$77.26/bbl and settled up by 1.861% to close at US$78.81/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 78.00-81.50 with stop loss at 81.50; targeting 77.50-76.30-75.70 and 74.90-74.20-73.50. Buy above 77.50-74.90 with risk daily closing below 74.90 and targeting 77.50-78.00-78.90 and 80.50-80.90-81.50.

 
Intraday Support Levels
S1     78.90-78.00
S2     77.50
S3     76.30-75.70

Intraday Resistance Levels
R1     79.50-80.50
R2     80.90
R3     81.50-82.20

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 Tuesday made an intraday low of US$1.1579/EUR, high of US$1.1621/EUR and settled the day down by 0.1893% 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     1.1560-1.1510
S2     1.1460
S3     1.1420-1.1350

Intraday  Resistance Levels
R1     1.1590-1.1640
R2     1.1750
R3     1.1800-1.1850

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$1.3583/GBP, high of US$1.3647/GBP and settled the day up by 0.154% to close at US$1.3624/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 1.3610-1.3790 with targets at 1.3560-1.3510-1.3450 and 1.3400-1.3340-1.3290 with stop loss should be 1.3790. Buy above 1.3560-1.3340 with targets 1.3610-1.3670-1.3710 and 1.3750-1.3790 with stop loss closing below 1.3550.

 
Intraday Support Levels
S1     1.3560-1.3510
S2     1.3450
S3     1.3400-1.3340

Intraday Resistance Levels
R1     1.3610-1.3670
R2     1.3710
R3     1.3750-1.3790

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 JPY110.85/USD and made an intraday high of JPY111.29/USD and settled the day up 0.619% at JPY110.91/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 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     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

AAFX TRADING
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