AAFX TRADING

Daily Market Lookup

  • The dollar was heading for a second week of declines on Friday as sentiment stayed tilted towards riskier assets, while an intervention by the Australian central bank put a halt to the Aussie dollar's recent surge. It had managed to stem losses on Thursday, bouncing on better U.S. jobs and housing data, but the rally petered out on Friday morning in Asia, where risk sentiment was boosted news that beleaguered developer China Evergrande Group has supplied funds to pay interest on a U.S. dollar bond, averting a default. But traders are still trying to assess whether the dollar has scope to fall further, or if this is a temporary blip on a march higher. On Friday, benchmark 10-year U.S. Treasury yields were at 1.6872%, slightly off from Thursday's multi-month high of 1.7%, as markets continue to prepare themselves for an announcement by the Federal Reserve that it will start to wind down its massive bond buying programme, which is widely expected for November. Mackel said part of the reason for the dollar's weakness had been strong performances by currencies from most commodity exporting countries. These were quieter on Friday, however, as traders took profits, analysts said, and energy prices softened. The British pound paused for breath at $1.3798, off a month peak hit earlier in the week, to which it had been carried by growing expectations of an interest rate hike to combat rising inflationary pressures. China's yuan eased against the dollar on Friday after the FX regulator warned of possible action if the currency market is hit by greater volatility following its recent rally. But the yuan still looked set for the biggest weekly gain since May. The dollar was down on Friday morning in Asia and was set for a second week of declines even as upbeat economic data gave the U.S. currency an earlier boost. Data released on Thursday in the U.S. said that existing home sales rose to a rate of 6.29 million units in September, a growth of 7% month-on-month. The better-than-expected data gave the dollar a boost, which it held onto as the Asian session opened. However, some investors were concerned, with the dollar index down 0.18% for the week and set to post a second week of declines.
  • The dollar gained on Thursday against a basket of currencies, erasing earlier losses, boosted by better jobs and housing data, and as U.S. Treasury yields rose. Data showed that the number of Americans filing new claims for unemployment benefits dropped to a 19-month low last week, pointing to a tightening labor market, though a shortage of workers could keep the pace of hiring moderate in October. U.S. home sales also surged to an eight-month high in September, but higher prices as supply remains tight are squeezing first-time buyers out of the housing market. Fed Governor Christopher Waller said on Thursday that the U.S. central bank should let its $8 trillion balance sheet shrink over the next couple of years. 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 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. The euro fared better against emerging European currencies, rising 0.3% against the Polish zloty and 0.4% against the Hungarian forint ahead of a summit meeting that is likely to be overshadowed by the EU’s dispute with Poland over the rule of law. 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.
  • Gold was up on Friday morning in Asia, and was poised for its second weekly gain. A dollar trending downwards provided some relief from higher U.S. bond yields and increasing bets that central banks globally could soon begin asset tapering. The U.S. Federal Reserve should let its $8 trillion balance sheet reduce over the next couple of years, Fed Governor Christopher Waller said on Thursday. His colleague, Atlanta Fed President Raphael Bostic, said he expects high inflation to persist into 2022 and the U.S. central bank should raise interest rates by the end of 2022. Fed Chairman Jerome Powell will also take part in a policy panel discussion later in the day. In Asia Pacific, the Bank of Japan is deliberating whether to phase out a COVID-19 loan program should the number of COVID-19 cases in the country continue to fall, according to Reuters. The central bank could potentially exit a key crisis mode policy sooner than expected if it decides to phase the program out.
  • Oil was down Friday morning in Asia as U.S. supplies continue to tighten. The black liquid was set for a flat finish to the week, with easing coal and gas prices curbing the fuel-switching that had increased demand for oil products. The market hit multi-year highs earlier in the week as concerns about coal and gas shortages in China, India and Europe led to power providers switching to diesel and fuel oil. Meanwhile, Wednesday’s data from the U.S. Energy Information Administration showed crude stocks at Cushing fell to 31.2 million barrels, their lowest level since October 2018. Despite the low levels, U.S. crude was set for a 0.5% rise for the week, not far off a seven-year high hit earlier in the week. Some steam had come out of the market as investors were shifting their focus away from soaring front-month crude prices, according to Royal Bank of Canada (RBC) analysts.

 

 
Intraday RESISTANCE LEVELS
22nd 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
22nd 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 (22nd 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 Thursday made its intraday high of US$1789.36/oz and low of US$1776.41/oz. Gold up 0.0589% at US$1782.69/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 Thursday made its intraday high of US$24.47/oz and low of US$23.99/oz settled down by 0.580% at US$24.14/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 Thursday made an intra‐day high of US$83.70/bbl, intraday low of US$80.58/bbl and settled down by 1.146% to close at US$82.37/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 Thursday made an intraday low of US$1.1618/EUR, high of US$1.1666/EUR and settled the day up by 0.220% to close at US$1.1622/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 Thursday made an intra‐day low of US$1.3775/GBP, high of US$1.3832/GBP and settled the day up by 0.252% to close at US$1.3787/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 Thursday made intra‐day low of JPY113.64/USD and made an intraday high of JPY114.41/USD and settled the day down 0.232% at JPY113.95/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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