AAFX TRADING

Daily Market Lookup

  • The dollar was down on Thursday morning in Asia, but remained close to a 14-month high against the euro. Investor concerns that surging energy prices, and the resultant inflation, could impair the economic recovery from COVID-19 persist, while also keeping an eye on the U.S. Federal Reserve’s timeline to begin asset tapering. Meanwhile, crude oil hit a seven-year high overnight before easing from its recent gains, while natural gas climbed to a record peak in Europe and coal prices from major exporters also hit all-time highs. Investors also continue to monitor progress on the U.S. debt ceiling negotiations, after Senate Minority Leader Mitch McConnell said his Republican party would allow an extension of the federal debt ceiling into December 2021. They also await the latest U.S. jobs report, including non-farm payrolls, to be released on Friday. The ADP non-farm employment change for September, released on Wednesday, was a higher-than-expected 568,000 as subsiding numbers of COVID-19 cases allowed Americans to travel, eat out at restaurants, and re-start other high-contact activities. The report could provide clues to the Fed’s timeline to begin asset tapering, widely expected to happen as soon as November 2021. The dollar held close to a 14-month high against the euro on Thursday, as a surge in energy prices raised the risk for the Federal Reserve to act sooner to normalise policy. Overnight, crude oil rallied to a seven-year high before taking a breather from its recent torrid gains, while natural gas jumped to a record peak in Europe and coal prices from major exporters also hit all-time highs. The Federal Reserve, which has till now mainly contended that inflationary pressures will prove transitory, has said it is likely to begin reducing its monthly bond purchases as soon as November, before following up with interest rate increases, which could come as early as next year. The closely watched non-farm payrolls report on Friday could provide additional clues to the timing of the Fed's next moves. Economists expect continued improvement in the labor market, with a consensus forecast for 473,000 jobs to have been added in September, a Reuters poll showed. The dollar will also continue to benefit in its role as a safe haven, as high energy prices and worries about a slowdown in China persist through 2021, he said. Elsewhere, jitters around the U.S. debt ceiling - which had perversely supported the dollar - eased somewhat after the Senate appeared near to a temporary deal to avert a federal debt default in the next two weeks.
  • Gold was down on Thursday morning in Asia, remaining flat as the dollar remained near a one-year high. Investors also kept moves small, with the latest U.S. jobs report due later in the week. On the data front, the U.S. ADP non-farm employment change for September was a higher-than-expected 568,000. Subsiding numbers of COVID-19 cases boosted high-contact activity such as dining out at restaurants and travel. Investors now await the jobs report, including non-farm payrolls, due on Friday to glean clues about the U.S. Federal Reserve’s timeline to begin asset tapering. In other central bank news, the Reserve Bank of India will hand down its policy decision on Friday. Meanwhile, investors also continue to monitor a debate in the U.S. Senate to increase the debt ceiling. Although the Republican and Democrat parties are nearing a deal for a temporary increase to avert a federal debt default in the next two weeks, the bipartisan debate continues.
  • Oil was down Thursday morning in Asia, dropping for a second session as U.S. crude oil supply data showed a surprise build. Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration showed a build of 2.346 million barrels in the week to Oct. 1. Forecasts prepared by Investing.com predicted a 418,000-barrel draw, while a 4.578-million-barrel build was recorded during the previous week. Crude oil supply data from the American Petroleum Institute released the day before, showed a build of 951,000 barrels. The black liquid rallied to its highest since 2014 during the past week as a global energy crunch could increase demand as the northern hemisphere winter approaches. Saudi Aramco said the crunch has already boosted consumption, while the U.S. is reportedly considering the release of emergency oil reserves. However, “high energy prices are mostly centered around supply-side issues and they do not look like they will persist beyond winter,” Oversea-Chinese Banking Corp. economist Howie Lee told Bloomberg. Meanwhile, the Organization of the Petroleum Exporting Countries and allies (OPEC+) said earlier in the week that it would not deviate from its plans for a gradual increase in oil output. OPEC+'s decision on Monday to stick with a plan to raise oil output modestly and gradually, despite prices surging to multi-year highs, was partly driven by concern that demand and prices could weaken, sources close to the group told Reuters. The other big reason is money. After seeing their income slide during the pandemic-induced demand and price collapse in 2020, the OPEC+ oil producers' alliance led by Russia and top exporter Saudi Arabia are enjoying the boost in revenues, three OPEC+ sources said. OPEC+ brought in record production cuts of about 10 million barrels per day (bpd) in April 2020, or about 10% of global output, after restrictions around the world to curb the spread of the coronavirus paralysed oil demand and hit prices hard. OPEC+ has faced calls this year from consumers, such as the United States and India, for extra supply. The group, sources said, was considering a larger boost of 800,000 bpd - almost 1% of world output, ahead of Monday's meeting. But by Monday morning, the signals from OPEC+ sources ahead of their virtual meeting later that day had changed. The most likely outcome was that OPEC+ would stick to the existing plan to hike output by 400,000 bpd. OPEC+ is mindful, sources say, of the prospect that prices can reverse gains just as quickly. This happened in 2018 when Brent crude fell from above $85 in October to below $50 by the end of the year. Another OPEC+ source had said before Monday's meeting the group had faced pressure to ramp up production faster, but added: "We are scared of the fourth wave of corona, no one wants to make any big moves." Concern was also expressed by some members of the group that a further boost in output could upset next year's market balance - which OPEC+ already sees as surplus - and risk building up inventories to above the five-year average in the second half, another source said. Oil rose above $81 on Monday after OPEC+ stuck with its plan, and has surged even higher in the aftermath of the decision, reaching almost $84 on Wednesday. The extra income for OPEC members will help to ease the pain of last year's price plunge. OPEC earned $321 billion in 2020 from petroleum exports, down 43% from 2019, based on OPEC's Annual Statistical Bulletin.

 

 
Intraday RESISTANCE LEVELS
7th 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 77.50-78.00 78.90 79.50-80.50
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
7th 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 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 (7th 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 Wednesday made its intraday high of US$1765.08/oz and low of US$1759.92/oz. Gold up 0.151% 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 Wednesday made its intraday high of US$22.66/oz and low of US$22.19/oz settled down by 0.0088% at US$22.59/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 Wednesday made an intra‐day high of US$79.50/bbl, intraday low of US$76.58/bbl and settled down by 2.63% to close at US$76.66/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     76.30-75.70
S2    
S3    

Intraday Resistance Levels
R1     77.50-78.00
R2     78.90
R3     79.50-80.50

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$1.1528/EUR, high of US$1.1605/EUR and settled the day down by 0.359% to close at US$1.1552/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 Wednesday made an intra‐day low of US$1.3543/GBP, high of US$1.3630/GBP and settled the day down by 0.3119% to close at US$1.3580/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 Wednesday made intra‐day low of JPY111.19/USD and made an intraday high of JPY111.78/USD and settled the day down 0.0619% at JPY111.38/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

AAFX TRADING
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING