AAFX TRADING

Daily Market Lookup

  • The dollar was down on Friday morning in Asia, set for its first weekly decline since the start of September. It retreated from a one-year high as investors focus on when the U.S. Federal Reserve will start to hike interest rates. Improving risk sentiment, which boosted global stocks, commodity prices, and bond yields, also weighing on the safe-haven dollar. It only maintained the momentum of the past five weeks against the yen, its fellow safe haven. The U.S. currency had rallied since early September 2021 on expectations the Fed would begin asset tapering earlier than expected as the economic recovery from COVID-19 continues and energy prices continue to climb. Minutes from the central bank’s latest meeting that took place on Wednesday said that that asset tapering is likely to begin in November 2021 but that officials remain sharply divided over inflation. Money markets are now pricing in about 50/50 odds of a 25-basis point rate hike by July 2022. U.S. data, including retail sales as well as the University of Michigan consumer sentiment and Michigan consumer expectations indexes, will be released later in the day. This follows data released on Thursday that showed that the producer price index rose 0.5% month-on-month in September, and a lower-than-expected 293,000 initial jobless claims were filed throughout the week.
  • The dollar headed for its first weekly decline versus major peers since the start of last month, falling back from a one-year high as traders turned their attention to when the U.S. Federal Reserve will start raising interest rates. Improved market sentiment, which has lifted global stocks, commodity prices and bond yields, is also weighing on the safe-haven dollar. The greenback had rallied since early September on expectations the U.S. central bank would tighten monetary policy more quickly than previously expected amid an improving economy and surging energy prices. Minutes of the Fed's September meeting confirmed this week that a tapering of stimulus is all but certain to start this year, although policymakers are sharply divided over inflation and what they should do about it. Money markets are currently pricing in about 50/50 odds of a 25 basis point rate hike by July. The next major test of the U.S. economy's health comes later on Friday with the release of retail sales figures.
  • The dollar was slightly lower on Thursday in choppy trading, having erased most of its early session losses, as investors bet the Federal Reserve would begin tapering its asset purchases next month and attention turned to the timing of interest rate hikes. The greenback had rallied since early September on expectations the U.S. central bank would tighten monetary policy more quickly than previously expected amid an improving economy and surging inflation. But the dollar reversed course on Wednesday, even after the minutes of the Fed's Sept. 21-22 policy meeting confirmed the tapering of stimulus is likely to start this year and data showed that pricing pressures were still hitting U.S. consumers. The market is expecting that the Fed will begin tapering its asset purchases as early as next month, and that the wind-down of the massive bond-buying program will happen fairly quickly, Osborne added. A return in risk appetite may also have dented demand for the safe-haven greenback, with U.S. equity markets notching solid gains on upbeat earnings, said Vassili Serebriakov, FX and macro strategist at UBS. Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell sharply last week to the lowest level since mid-March 2020. In another report, the Labor Department said its producer price index for final demand rose, but the increase was less than economists polled by Reuters expected, both on a monthly and a year-on-year basis.
  • Oil prices climbed on Friday, heading for gains of more than 2% for the week, on increasing signs of robust demand and tighter supplies over the next few months as rocketing gas and coal prices stoke a switch to oil products. Analysts pointed to a sharp drop in OECD oil stockpiles, to their lowest level since 2015. Demand has picked up with recovery from the COVID-19 pandemic, with a further boost coming from industry turning away from expensive gas and coal to fuel oil and diesel for power. The International Energy Agency on Thursday said the energy crunch is expected to boost oil demand by 500,000 barrels per day (bpd). That would result in a supply gap of around 700,000 bpd through the end of this year, until the Organization of the Petroleum Countries and allies, together called OPEC+, add more supply, as planned in January. RBC Capital Markets analysts said the global oil market is shaping up for a strong bull cycle, led by supply tightening and demand strengthening at the same time. Investors shrugged off a higher than expected gain in U.S. crude stocks last week as refinery crude runs fell. Crude inventories rose by 6.1 million barrels in the week to Oct. 8 to 427 million barrels, compared with analysts' expectations in a Reuters poll for a 702,000-barrel rise, the Energy Information Administration said on Thursday. Meanwhile, crude oil supply data from the U.S. Energy Information Administration showed a 6.088-million-barrel build for the week ended Oct. 8. This was much bigger than the 702,00-barrel build in forecasts prepared by Investing.com and the 2.346-million-barrel build reported the week before Data from the American Petroleum Institute, released a day earlier, showed a build of 5.213 million barrels. However, Organization for Economic Co-operation and Development (OECD) oil stockpiles have declined sharply to their lowest level since 2015. Fuel demand is picking up as economic recovery from COVID-19 progresses, with a turn away from expensive gas and coal to fuel oil and diesel for power giving the black liquid a further boost.

 

 
Intraday RESISTANCE LEVELS
15th October 2021 R1 R2 R3
GOLD-XAU 1,804-1,810 1,820 1,824-1,834
Silver-XAG 23.50 23.75 24.05-24.50
Crude Oil 81.50-81.90 82.50 83.00-83.90
EURO/USD 1.1640-1.1750 1.1800 1.1850-1.1900
GBP/USD 1.3710-1.3770 1.3800 1.3860-1.3900
USD/JPY 114.20-114.90 115.50 116.00-116.90

Intraday SUPPORTS LEVELS
15th October 2021 S1 S2 S3
GOLD-XAU 1,790-1,779 1,770 1,760-1,745
Silver-XAG 22.90-22.60 22.20 21.50-21.00
Crude Oil 81.00-80.50 79.50 78.90-78.00
EURO/USD 1.1590-1.1540 1.1510 1.1460-1.1420
GBP/USD 1.3670-1.3610 1.3560 1.3510-1.3450
USD/JPY 113.50-113.00 112.50 115.50

Intra-Day Strategy (15th 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 Thursday made its intraday high of US$1800.44/oz and low of US$1786.57/oz. Gold up 0.1634% at US$1795.56/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     1,790-1,779
S2     1,770
S3     1,760-1,745
Intraday Resistance Levels
R1     1,804-1,810
R2     1,820
R3     1,824-1,834

Technical Indicators

Name   Value Action
14DRSI  

58.823

Buy
20-DMA   1748.61 Buy
50-DMA  

1770.53

Buy
100-DMA   1788.58 Buy
200-DMA   1795.23 Sell
STOCH(5,3)   89.680 Buy
MACD(12,26,9)   0.912 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$23.56/oz and low of US$22.88/oz settled up by 1.846% at US$23.50/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 22.90-19.55, 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 23.50-24.70 with stop loss above 25.00; targeting 21.50-21.00-20.50 and 19.90-19.55.

 
Intraday  Support Levels
S1     22.90-22.60
S2     22.20
S3     21.50-21.00

Intraday  Resistance Levels
R1     23.50
R2     23.75
R3     24.05-24.50

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 Thursday made an intra‐day high of US$81.13/bbl, intraday low of US$79.80/bbl and settled up by 0.1477% to close at US$80.89/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 81.50-83.90 with stop loss at 83.90; targeting 81.00-80.50-78.90 and 78.00-77.50-76.30. 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     81.00-80.50
S2     79.50
S3     78.90-78.00

Intraday Resistance Levels
R1     81.50-81.90
R2     82.50
R3     83.00-83.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   71.502 Sell
20-DMA   75.13 Buy
50-DMA   72.28 Buy
100-DMA   69.82 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 Thursday made an intraday low of US$1.1583/EUR, high of US$1.1623/EUR and settled the day up by 0.345% to close at US$1.1595/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 1.1550-1.1410 with risk below 1.1410, targeting 1.1640-1.1750-1.1800-1.1985 and 1.2050-1.2100.

 
Intraday Support Levels
S1     1.1590-1.1540
S2     1.1510
S3     1.1460-1.1420

Intraday  Resistance Levels
R1     1.1640-1.1750
R2     1.1800
R3     1.1850-1.1900

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 Thursday made an intra‐day low of US$1.3652/GBP, high of US$1.3733/GBP and settled the day up by 0.112% to close at US$1.3671/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 1.3710-1.3970 with targets at 1.3710-1.3670-1.3610 and 1.3560-1.3510-1.3450 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     1.3670-1.3610
S2     1.3560
S3     1.3510-1.3450

Intraday Resistance Levels
R1     1.3710-1.3770
R2     1.3800
R3     1.3860-1.3900

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 Thursday made intra‐day low of JPY113.204/USD and made an intraday high of JPY113.71/USD and settled the day up 0.377% at JPY113.67/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     113.50-113.00
S2     112.50
S3     115.50

INTRADAY RESISTANCE LEVELS
R1     114.20-114.90
R2     115.50
R3     116.00-116.90

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

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