AAFX TRADING

Daily Market Lookup

  • The dollar was consolidating at lower levels in early trade in Europe on Thursday, after the revival of some concerns over China’s real estate crisis interrupted the momentum of higher-yielding currencies. China Evergrande shares plunged as it resumed trading after a break of nearly three weeks, as the embattled developer was forced to abandon a proposed asset disposal that would have helped meet its short-term obligations. As such, the company is likely to fall into formal default when the grace period on one of its dollar bonds expires on Friday. The dollar’s biggest gains were against commodity currencies, as the Evergrande news cast fresh doubt on the demand trajectory for iron ore, copper and oil from a sector that is a big contributor to Chinese GDP. The yuan, however, remained stable, mainly because of confidence in Beijing’s assurances that it can stop a systemic crisis. The dollar ticked up 0.1% to 6.4011 yuan. The figures underlined the vulnerability of the U.K. economy to the higher interest rates that most market participants see coming before the end of the year. A higher debt servicing bill will reduce the space that the U.K. Treasury has to support the economy. Later Thursday, the U.S. will release weekly jobless claims data. Analysts expect initial jobless claims to tick up to 300,000, from a post-pandemic low of 293,000 the previous week. There is little else of market-moving data due, although the Central Bank of Turkey’s meeting will be in the spotlight after the recent upheaval at the institution. The lira has plunged to all-time lows after President Recep Tayyip Erdogan fired the only policy makers to resist a course that is failing to keep inflation under control.
  • The dollar was up, with the pound was just shy of its Tuesday peak on Thursday morning in Asia, over firming expectations that the Bank of England (BOE) will hike interest rates as soon as November 2021. Commodity currencies stood near multi-month highs, with strong raw material prices and increasing risk sentiment turning investors away from the safe-haven U.S. currency, which had recently been boosted by expectations that the U.S. Federal Reserve will begin asset tapering. Across the Atlantic, the Fed is widely expected to announce the beginning of asset tapering at its meeting in November 2021. However, it is not expected to begin interest rate hikes until 2022. Meanwhile, commodity currencies led gains against the dollar after oil prices climbed to their highest levels in many years. The Australian dollar was at a three-and-a-half-month high while its New Zealand counterpart hit a four-month peak. The dollar dipped on Wednesday as risk sentiment improved and as investors focused on rising commodity prices and when global central banks are likely to begin hiking interest rates to fend off persistently high inflation.
  • The greenback hit a one-year high against a basket of other currencies last week as market participants ramped up bets that the Federal Reserve will raise rates sooner than expected to quell rising price pressures. Those bets have faded, however, while investors are pricing for even more aggressive rate increases in other countries and as commodity-linked currencies including the Canadian and Australian dollars outperform. Rai expects the dollar may outperform if investors pare back rate hike expectations in other countries, though "that's something that's going to take some time to correct." Market participants are pricing for the Fed to raise rates twice by the end of 2022. Fed Governor Randal Quarles on Wednesday said that while it is time for the Fed to begin dialing down its bond-buying program, it would be premature to start raising interest rates in the face of high inflation that is likely to recede next year. The Fed also said in its latest Beige Book that the U.S. economy grew at a "modest to moderate" rate in September and early October, as the latest surge of COVID-19 cases crested and began to recede. The British pound gained 0.30% in the day to $1.3831 after data showed that British inflation slowed unexpectedly last month. The figures did little to change expectations that the Bank of England will become the world's first major central bank to raise rates.

 

 
Intraday RESISTANCE LEVELS
21st October 2021 R1 R2 R3
GOLD-XAU 1,790-1,804 1,810 1,816-1,832
Silver-XAG 24.55-25.50 25.80 26.10-26.50
Crude Oil 81.90-82.50 83.10 84.00
EURO/USD 1.1660-1.1750 1.1800 1.1850-1.1900
GBP/USD 1.3810-1.3860 1.3910 1.3950-1.3990
USD/JPY 114.20-114.90 115.50 116.00-116.90

Intraday SUPPORTS LEVELS
21st October 2021 S1 S2 S3
GOLD-XAU 1,779-1,770 1,760 1,745-1,736
Silver-XAG 24.05-23.75 23.50 22.60-22.20
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 (21st 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 Wednesday made its intraday high of US$1788.31/oz and low of US$1766.76/oz. Gold up 0.725% at US$1781.78/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 1779-1736 with risk below 1736, targeting 1790-1804-1810 and 1816-1832. Sell in between 1790-1832 keeping stop loss closing above 1832, targeting 1780-1774-1760 and 1745-1737.

 
Intraday Support Levels
S1     1,779-1,770
S2     1,760
S3     1,745-1,736
Intraday Resistance Levels
R1     1,790-1,804
R2     1,810
R3     1,816-1,832

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 Wednesday made its intraday high of US$24.40/oz and low of US$23.55/oz settled up by 2.638% at US$24.27/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     24.05-23.75
S2     23.50
S3     22.60-22.20

Intraday  Resistance Levels
R1     24.55-25.50
R2     25.80
R3     26.10-26.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.707 Buy
20-DMA   23.19 Sell
50-DMA   23.47 Sell
100-DMA   24.18 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 Wednesday made an intra‐day high of US$83.46/bbl, intraday low of US$80.63/bbl and settled up by 1.304% to close at US$83.35/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 Wednesday made an intraday low of US$1.1616/EUR, high of US$1.1657/EUR and settled the day up by 0.150% to close at US$1.1649/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 Wednesday made an intra‐day low of US$1.3741/GBP, high of US$1.3833/GBP and settled the day up by 0.225% to close at US$1.3822/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     1.3810-1.3860
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 Wednesday made intra‐day low of JPY114.07/USD and made an intraday high of JPY114.69/USD and settled the day down 0.111% at JPY114.23/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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING