AAFX TRADING

Daily Market Lookup

  • The dollar was down on Tuesday morning in Asia, remaining near the bottom of its recent range. Weaker-than-expected U.S. factory data and increasing bets that monetary policy will normalize faster in other countries also contributed to the U.S. currency’s losses. The dollar has stayed in a range between 93.671 and a one-year high of 94.563 hit last Tuesday for the past three weeks. However, with the U.S. Federal Reserve’s asset tapering in November and a first interest-rate increase in 2022 already priced in, the dollar has been on a downward trend. Data released on Monday in the U.S. showed that industrial production contracted 1.3% month-on-month and grew a smaller-than-expected 4.6% year-on-year, in September. The dollar languished near the bottom of its recent range against major peers on Tuesday, knocked back by weak U.S. factory data overnight and on market wagers of faster normalisation of monetary policy in other countries. Over the past week though, it has trended lower, with a tapering of Federal Reserve stimulus as early as next month already priced in, along with a first interest-rate increase next year. A recovery in risk sentiment has also weighed on the safe-haven U.S. currency. Elsewhere, Bank of England Governor Andrew Bailey sent a fresh signal for early U.K. rate hikes by saying on Sunday that the central bank will "have to act" to counter rising inflation risks. In New Zealand, bets for faster policy normalisation were stoked on Monday by data showing the fastest consumer-price inflation in more than a decade. The U.K. and New Zealand led a rise in short-term bond yields globally, with rates in Europe and Australia climbing comparatively more than those in the U.S., pressuring the dollar. U.S. manufacturing output was hurt as an ongoing global shortage of semiconductors depressed motor vehicle output, providing further evidence that supply constraints were hampering economic growth.
  • The dollar dipped on Monday after data showed production at U.S. factories fell by the most in seven months in September, erasing earlier gains on expectations that the Federal Reserve may be closer to raising interest rates than previously expected. U.S. manufacturing output was hurt as an ongoing global shortage of semiconductors depressed motor vehicle output, providing further evidence that supply constraints were hampering economic growth. Supply disruptions are adding to concerns about high inflation and adding to expectations that the U.S. central bank will need to act to stamp out price increases. "Prospects for global central banks to be more aggressive to counter growing inflation fears may put the USD under some pressure, though the Fed in turn may act sooner than previously expected, supportive of the dollar," said Ronald Simpson, managing director, global currency analysis, at Action Economics. Sterling briefly hit a 20-month high against the euro after Bank of England Governor Andrew Bailey sent a fresh signal that the central bank was gearing up to raise interest rates as inflation risks mount. Analysts at Bank of America noted on Monday that commodity-linked currencies, including the Norwegian krone and the Canadian and Australian dollars, had been the best performers since the summer as energy prices rise, while the euro and the yen had been the worst.
  • Gold was up on Tuesday morning in Asia, thanks to declines in both the dollar and U.S. bond yields that provided some support to the yellow metal. The dollar, which normally moves inversely to gold, was down on Monday and remained near the lower part of its recent range. Benchmark U.S. benchmark 10-year Treasury yields were also on a downward trend. U.S. factory data released on Monday showed that industrial production contracted 1.3% month-on-month and grew a smaller-than-expected 4.6% year-on-year, in September. An ongoing global semiconductor shortage contributed to a decrease in motor vehicle output, further proof that supply constraints are hampering economic recovery from COVID-19. Meanwhile, Monday’s Bank of Canada business outlook survey anticipated stronger demand as COVID-19 outbreaks are brought under control. However, it also said current supply constraints could limit sales and put upward pressure on costs. Russian palladium producer Nornickel, the world’s largest, said on Monday that it has begun a contest for scientists to find new ways to use the metal. Palladium has been hit by a chip shortage in the auto industry, Nornickel’s top consumer sector.
  • Oil prices continued its high on Tuesday after starting the week at its its highest level in years. As winter approaches the northern hemisphere, the prices for oil, coal and gas are likely to remain elevated, according to analysts. In China, the temperature forecast has fallen to near freezing point in areas of the north, stated AccuWeather.com. But rising U.S. oil output may cap prices. A further gain in production at the largest shale formation in the U.S. is expected next month, according to an official report. China’s slowed economic growth may also impact prices as China’s GDP grew 0.2% quarter-on-quarter and 4.9% year-on-year in the third quarter of 2021. Oil prices fell on Tuesday, with Brent down a second straight day, after Chinese data showed slowing economic growth and U.S. factory output dropped in September, raising fresh concerns about demand amid patchy recovery from the coronavirus pandemic. Factory output in the United States dropped the most in seven months last month as a global shortage of semiconductors slowed auto production, further evidence that supply constraints are a strain on economic growth. In China, the world's second-biggest economy, bottlenecks also contributed to a decline in the growth rate to a one-year low as energy shortages and sporadic outbreaks of coronavirus hit the country. China's daily crude oil processing rate fell again last month to the lowest level since May last year. But with temperatures falling as the northern hemisphere winter approaches, prices of oil, coal and gas are likely to remain elevated, analysts said. Colder weather has already started to grip China, with the temperature forecast to fall to near freezing point in areas of the north, according to AccuWeather.com. Also helping keep a lid on prices, U.S. oil output is rising. Production in the largest shale formation in the U.S. is expected to gain further next month, according to an official report.

 

 
Intraday RESISTANCE LEVELS
19th October 2021 R1 R2 R3
GOLD-XAU 1,779-1,790 1,804 1,810-1,820
Silver-XAG 23.50-23.75 24.05 24.55-25.40
Crude Oil 81.90¬-82.50 83.10 84.00
EURO/USD 1.1660-1.1750 1.1800 1.1850-1.1900
GBP/USD 1.3800-1.3860 1.3910 1.3950-1.3990
USD/JPY 114.20-114.90 115.50 116.00-116.90

Intraday SUPPORTS LEVELS
19th October 2021 S1 S2 S3
GOLD-XAU 1,770-1,760 1,745 1,736-1,728
Silver-XAG 22.90-22.60 22.20 21.50-21.00
Crude Oil 81.50-81.00 80.50 79.50-78.90
EURO/USD 1.1590-1.1540 1.1510 1.1460-1.1420
GBP/USD 1.3770-1.3710 1.3670 1.3610-1.3560
USD/JPY 113.50-113.00 112.50 111.70-110.50

Intra-Day Strategy (19th October 2021)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Sell
EUR/USD Neutral to Buy
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Monday made its intraday high of US$1772.00/oz and low of US$1760.24/oz. Gold down 0.144% at US$1764.70/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 1774-1721 with risk below 1721, targeting 1779-1784-1790 and 1804-1810. Sell in between 1774-1804 keeping stop loss closing above 1805, targeting 1774-1760-1745 and 1737-1728.

 
Intraday Support Levels
S1     1,770-1,760
S2     1,745
S3     1,736-1,728
Intraday Resistance Levels
R1     1,779-1,790
R2     1,804
R3     1,810-1,820

Technical Indicators

Name   Value Action
14DRSI  

51.538

Buy
20-DMA   1768.33 Buy
50-DMA  

1776.55

Buy
100-DMA   1787.33 Buy
200-DMA   1794.47 Sell
STOCH(5,3)   33.680 Sell
MACD(12,26,9)   0.912 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$23.43/oz and low of US$22.99/oz settled down by 0.600% at US$23.17/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     23.50-23.75
R2     24.05
R3     24.55-25.40

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.130 Buy
20-DMA   22.95 Sell
50-DMA   23.40 Sell
100-DMA   24.17 Sell
200-DMA   24.52 Sell
STOCH(5,3)   77.556 Sell
MACD(12,26,9)   -0.587 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$83.11/bbl, intraday low of US$81.13/bbl and settled down by 0.635% to close at US$81.43/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 81.90-83.90 with stop loss at 83.90; targeting 81.00-80.50-78.90 and 78.00-77.50-76.30. Buy above 81.50-78.90 with risk daily closing below 78.90 and targeting 81.90-82.50 and 83.10-84.00.

 
Intraday Support Levels
S1     81.50-81.00
S2     80.50
S3     79.50-78.90

Intraday Resistance Levels
R1     81.90¬-82.50
R2     83.10
R3     84.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   73.485 Sell
20-DMA   77.81 Buy
50-DMA   74.14 Buy
100-DMA   71.08 Buy
200-DMA   65.75 Buy
STOCH(5,3)   74.130 Sell
MACD(12,26,9)   2.782 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1570/EUR, high of US$1.1621/EUR and settled the day up by 0.1544% to close at US$1.1609/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1700), which become immediate resistance level, break above will target 1.1825. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

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. Sell below 1.1660-1.1910 targeting 1.1590-1.1550 and 1.1510-1.1460-1.1420 with stop-loss at daily closing above 1.1910.

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

Intraday  Resistance Levels
R1     1.1660-1.1750
R2     1.1800
R3     1.1850-1.1900

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.064 Buy
20-DMA   1.1626 Buy
50-DMA   1.1700 Sell
100-DMA   1.1824 Sell
200-DMA   1.1826 Sell
STOCH(5,3)   86.891 Buy
MACD(12,26,9)   -0.003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3708/GBP, high of US$1.3764/GBP and settled the day down by 0.0946% to close at US$1.3724/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3760) 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 Buy

Based on the charts and explanations above; buy in between 1.3770-1.3560 with targets 1.3790-1.3860-1.3910 and 1.3950-1.3990 with stop loss closing below 1.3550. Sell in between 1.3800-1.3990 with targets at 1.3770-1.3710-1.3670 and 1.3610-1.3560 with stop loss should be 1.3790.

 
Intraday Support Levels
S1     1.3770-1.3710
S2     1.3670
S3     1.3610-1.3560

Intraday Resistance Levels
R1     1.3800-1.3860
R2     1.3910
R3     1.3950-1.3990

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

58.825

Buy
20-DMA   1.3665 Buy
50-DMA   1.3709 Buy
100-DMA   1.3760 Buy
200-DMA   1.3706 Buy
STOCH(5,3)   87.766 Buy
MACD(12,26,9)   -0.004 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY114.00/USD and made an intraday high of JPY114.44/USD and settled the day up 0.0963% at JPY114.31/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 113.50-110.50 with targets of 114.20-114.90-115.60 and 116.00-116.90 with stop below 106.00. Sell below 114.20-116.90 with risk above 116.90 targeting 113.50-113.00-112.50 and 111.70-110.50-109.60.

 
Intraday Support Levels
S1     113.50-113.00
S2     112.50
S3     111.70-110.50

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

AAFX TRADING
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