AAFX TRADING

Daily Market Lookup

  • The dollar was up on Tuesday morning in Asia, while the yen hit a fresh three-year low. The Japanese currency continued a sharp fall over bets that surging energy prices will drive Japan's demand for dollars. Bets also rose that the U.S. will hike interest rates well ahead of its peers. These factors were affecting the yen, because Japan is a net energy importer "and so spiking energy prices are effectively a tax on consumption" and because it "reiterates the fact that Bank of Japan will probably be one of the last major central banks to even consider reducing ultra-accommodative monetary policy,” she added Soaring energy prices, and their inflationary impact, also make it likelier that the U.S. Federal Reserve will begin asset tapering as planned in November 2021 and hike interest rates in 2022 despite last Friday’s disappointing U.S. jobs report. Other central banks are also paying attention to price concerns, with the Bank of England signaling that it will hike interest rates to curb inflation. The South Korean won fell to 1,200 per dollar for the first time in 14 months after the Bank of Korea kept its interest rate steady at 0.75% as it handed down its policy decision earlier in the day. The dollar was little changed in early trading in Europe Tuesday but still firmly in an upward trend, supported by rising long-term interest rates and by high demand from commodity buyers.
  • The dollar is being firmly underpinned by the rising trend in U.S. bond yields, as the market positions for a reduction in bond purchases by the Federal Reserve from next month onward. The benchmark 10-year Treasury yield hit a new five-month high of 1.63% during the Asian session after a quiet day when the cash bond market was closed for the Columbus Day holiday. Demand for Treasuries will be tested later Tuesday at 1 PM ET with a 10-year note auction. Before that, the U.S. will also publish its monthly JOLTS job openings survey. Vacancies have surged in recent months, hitting 10.934 million in August. Vacancies are also at record levels in the U.K., topping 1 million for the first time in August, according to data released early Tuesday. The Office for National Statistics also recorded a 235,000 rise in employment in the three months through August, meaning that more people are now in work in the U.K. than in February 2020. All of that was unable to lift sterling much, however, given that the market has already all-but priced in a first interest rate hike by the end of the year. GBP/USD rose less than 0.1% to $1.3607, while EUR/GBP rose by 0.1% 0.8501. The euro also inched higher against the dollar to $1.1567, but analysts see it staying under pressure after the European Central Bank indicated it won’t be hurried into tightening policy. ECB chief economist Philip Lane said on Monday he still believes the bulk of inflation pressure is coming from temporary factors. Widening interest rate differentials are also helping the dollar against the yen. USD/JPY inched down in European trading but had hit a new three-year high of 113.49 overnight. The other supportive factor for the dollar remains the strength of energy markets. Crude oil prices have stayed firmly above $80 a barrel overnight, having hit seven-year highs on Monday. Base metals and agricultural commodities have also performed strongly over the last month. Given that oil and other commodities are traded overwhelmingly in dollars that raises the amount of dollars that need to be bought – at least until high prices start to destroy demand.
  • Oil rose towards $84 a barrel on Tuesday, within sight of a three-year high, supported by a rebound in global demand that is contributing to energy shortages in big economies such as China. With demand growing as economies recover from pandemic lows, the Organization of the Petroleum Exporting Countries and allied producers, or OPEC+, is sticking to plans to gradually bring back output, rather than quickly boost supply. The price of Brent has surged by over 60% this year. As well as OPEC+ supply restraint, the rally has been spurred by record European gas prices, which have encouraged a switch to oil for power generation. Power prices have surged to record highs in recent weeks, driven by widespread energy shortages in Asia, Europe and the United States. The energy crisis affecting China is expected to last through to the end of the year. With prices rising, OPEC+ has come under pressure from consumer nations. A U.S. official on Monday said the White House stands by its calls for oil-producing countries to "do more."
  • Gold was up on Tuesday morning in Asia, after trading flat as the Asian session opened. The dollar also inched upwards over wide expectations that the U.S. Federal Reserve will begin asset tapering in November 2021. The dollar, which normally moves inversely to gold, inched up on Tuesday and remained near a one-year high touched in September. Surging energy prices and wide expectations that the U.S. Federal Reserve will soon begin asset tapering contributed to the dollar’s rally. Investors will also monitor comments from Atlanta Fed President Raphael Bostic, due later in the day, and the minutes from the Fed’s latest meeting, due on Wednesday. However, across the Atlantic, the tune was slightly different. Current levels of inflation in the eurozone will not trigger monetary policy action as growth in services prices and wages remains weak, European Central Bank chief economist Philip Lane said on Monday. The Bank of Korea also kept its interest rate unchanged at 0.75% as it handed down its policy decision earlier in the day.

 

 
Intraday RESISTANCE LEVELS
12th 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 80.50-81.00 81.50 81.90-82.5081.90-82.50
EURO/USD 1.1590-1.1640 1.1750 1.1800-1.1850
GBP/USD 1.3610-1.3670 1.3710 1.3770-1.3840
USD/JPY 113.50-114.00 114.90 115.50-116.00

Intraday SUPPORTS LEVELS
12th October 2021 S1 S2 S3
GOLD-XAU 1,745-1,736 1.1460 1,724
Silver-XAG 22.20-21.50 21.00 20.50-19.90
Crude Oil 79.50-78.90 78.00 77.50-76.30
EURO/USD 1.1560-1.1510 1.1460 1.1420-1.1350
GBP/USD 1.3560-1.3510 1.3450 1.3400-1.3350
USD/JPY 113.00-112.50 111.70 110.50-109.50

Intra-Day Strategy (12th 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 Monday made its intraday high of US$1760.90/oz and low of US$1750.01/oz. Gold up 0.100% at US$1753.96/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     1.1460
S3     1,724
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   Buy 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 Friday made its intraday high of US$22.80/oz and low of US$22.48/oz settled down by 0.423% at US$22.56/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 Monday made an intra‐day high of US$79.06/bbl, intraday low of US$78.28/bbl and settled up by 1.104% to close at US$79.93/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 79.50-81.50 with stop loss at 81.50; targeting 78.90-78.00-77.50 and 76.30-75.70. Buy above 78.90-75.70 with risk daily closing below 75.70 and targeting 77.50-78.00-78.90 and 80.50-80.90-81.50.

 
Intraday Support Levels
S1     79.50-78.90
S2     78.00
S3     77.50-76.30

Intraday Resistance Levels
R1     80.50-81.00
R2     81.50
R3     81.90-82.5081.90-82.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.502 Sell
20-DMA   75.13 Buy
50-DMA   72.28 Buy
100-DMA   69.8269.82 Buy
200-DMA   64.81 Buy
STOCH(5,3)   88.130 Sell
MACD(12,26,9)   2.492 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1548/EUR, high of US$1.1586/EUR and settled the day down by 0.146% to close at US$1.1550/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 1.1590-1.1910 targeting 1.1590-1.1550 and 1.1510-1.1460-1.1420 with stop-loss at daily closing above 1.1910. Buy above 1.1560-1.1410 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 Monday made an intra‐day low of US$1.3583/GBP, high of US$1.3673/GBP and settled the day down by 0.146% to close at US$1.3593/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 1.3560-1.3790 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     1.3400-1.3350

Intraday Resistance Levels
R1     1.3610-1.3670
R2     1.3710
R3     1.3770-1.3840

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

50.526

Buy
20-DMA   1.3642 Buy
50-DMA   1.3716 Buy
100-DMA   1.3769 Buy
200-DMA   1.3708 Buy
STOCH(5,3)   82.766 Sell
MACD(12,26,9)   -0.004 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY112.11/USD and made an intraday high of JPY113.40/USD and settled the day up 0.975% at JPY113.24/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 113.00-109.50 with targets of 113.50-114.00 and 114.90-115.60-116.00 with stop below 106.00. Sell below 113.50-115.90 with risk above 115.90 targeting 1101.10-110.50-109.60 and 109.00-108.50-108.00.

 
Intraday Support Levels
S1     113.00-112.50
S2     111.70
S3     110.50-109.50

INTRADAY RESISTANCE LEVELS
R1     113.50-114.00
R2     114.90
R3     115.50-116.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   65.00 Buy
20-DMA   110.86 Sell
50-DMA   110.37 Sell
100-DMA   109.89 Sell
200-DMA   109.00 Sell
STOCH(9,6)   73.683 Buy
MACD(12,26,9)   -0.0131 Sell

AAFX TRADING
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