AAFX TRADING

Daily Market Lookup

  • The dollar edged lower Monday, trading near one-month lows as investors continue to assess the likelihood of U.S. rate hikes in the near term, while the Turkish lira slumped following a surprise rate cut and heightened political tension. Weighing on the dollar were comments from Federal Reserve Chair Jerome Powell on Friday indicating that it’s not yet time to begin raising interest rates. The central bank is widely expected to begin reining in its bond-buying program next month, but investors have also priced in Fed rate hikes starting in the second half of next year. While Powell tried to downplay expectations of early U.S. rate hikes, the prospect of inflation hastening the pace of rate hikes outside the United States is growing. The Bank of Japan and the European Central Bank are set to hand down their respective policy decisions on Thursday. Nothing new is expected from those central banks, but markets are pricing in a near 60% chance of a hike from the Bank of England next week. Elsewhere, USD/TRY rose 2.3% to 9.7990, with the Turkish lira falling to a record low against the dollar after President Tayyip Erdogan said he had ordered the expulsion of the ambassadors of the United States and nine other Western countries for demanding the release of businessman Osman Kavala, who has been held in prison for four years without being convicted. The currency had already hit record lows last week after the Turkish central bank cut its policy rate by 200 basis points, a move that surprised the market given the country’s rising inflation. The dollar was down on Monday morning in Asia, steadying after its steepest weekly loss in more than a month, as investors gauge the relative pace of interest rate hikes from central banks. The greenback softened, particularly against the yen, after U.S. Federal Reserve Chairman Jerome Powell said on Friday that asset tapering should begin soon. He did, however, say that it was not yet time for interest rate hikes. Powell’s remarks came after investors priced in Fed interest rate hikes starting in the second half of 2022. However, they have already begun trimming long dollar positions in anticipation that other central banks will move sooner. Some investors were cautious about further gains, with the Fed is expected to begin asset tapering soon. Investors now await U.S. data, including core durable goods orders that will be released on Wednesday and the GDP for the third quarter following a day later. The Bank of Japan and the European Central Bank will also hand down their respective policy decisions on Thursday. Meanwhile, the Turkish lira was braced for selling, as state banks are expected to follow a surprise interest rate cut from the Central Bank of the Republic of Turkey.
  • Gold was up on Monday morning in Asia, clawing back gains from the prior session’s losses. U.S. Federal Reserve chief Jerome Powell’s view that inflation could ease in 2022 and the central bank was on track to begin asset tapering soon had contributed to the downward trend. Gold futures edged up 0.16% to $1,799.01 by 11:59 PM ET (3:59 AM GMT). The dollar, which usually moves inversely to gold, edged down on Monday. However, the greenback steadied from its steepest weekly loss in more than a month, thus applying further pressure to the yellow metal. Gold had rallied to its highest since early September 2021 on Friday, before giving up some gains on Powell’s comments on asset tapering. Inflation could persist for longer, and the Fed could begin asset tapering soon but remain patient on interest rate hikes as employment was still low, he said at a discussion panel on Friday. However, U.S. Treasury Secretary Janet Yellen said on Sunday the U.S. was not losing control of inflation, which could return to normal by the second half of 2022. Investors also await policy decisions from the Bank of Japan and the European Central Bank (ECB), both due on Thursday. Although neither central bank is expected to change policy, market indicators suggested higher inflation than the ECB’s guidance. Speculators cut their net long positions in gold in the week to Oct. 19, according to data from the U.S. Commodity Futures Trading Commission data released on Friday.
  • Oil prices climbed on Monday, extending pre-weekend gains to hit multi-year highs as global supply remained tight amid solid fuel demand in the United States and elsewhere in the world as economies pick up from coronavirus pandemic-induced slumps. After more than a year of depressed fuel demand, gasoline and distillate consumption is back in line with five-year averages in the United States, the world's largest fuel consumer. Meanwhile, U.S. energy firms last week cut oil and natural gas rigs for the first time in seven weeks even as oil prices rose, energy services firm Baker Hughes Co said in its closely followed report on Friday. Money managers raised their net long U.S. crude futures and options positions in the week to October 19, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday, underlining strong market sentiment. Oil prices have also been bolstered by worries about coal and gas shortages in China, India and Europe, which spurred fuel-switching to diesel and fuel oil for power. But analysts warn there may be some corrections in the coming weeks as the sharp rise in crude prices has led to a growing sense of caution. WTI futures contracts are currently in steep backwardation, meaning later-dated contracts trade are at a lower price than the current contract. Normally later months trade at a higher price, reflecting the costs of storing oil.

 

 
Intraday RESISTANCE LEVELS
25th October 2021 R1 R2 R3
GOLD-XAU 1,804-1,810 1,816 1,832-1,840
Silver-XAG 24.55-25.50 25.80 26.10-26.50
Crude Oil 84.00-84.60 85.10 85.60-86.00
EURO/USD 1.1660-1.1750 1.1800 1.1850-1.1900
GBP/USD 1.3910 1.3910 1.3950-1.3990
USD/JPY 114.20-114.90 115.50 116.00-116.90

Intraday SUPPORTS LEVELS
25th October 2021 S1 S2 S3
GOLD-XAU 1,790-1,779 1,770 1,760-1,745
Silver-XAG 24.05-23.75 23.50 22.60-22.20
Crude Oil 83.10-82.50 81.90 81.50-81.00
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 (25th 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 Friday made its intraday high of US$1813.65/oz and low of US$1782.74/oz. Gold up 0.534% at US$1782.74/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 1790-1736 with risk below 1736, targeting 1804-1810 and 1816-1832. Sell in between 1804-1832 keeping stop loss closing above 1832, targeting 1780-1774-1760 and 1745-1737.

 
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     1,816
R3     1,832-1,840

Technical Indicators

Name   Value Action
14DRSI  

59.705

Buy
20-DMA   1775.02 Buy
50-DMA  

1778.25

Buy
100-DMA   1787.37 Buy
200-DMA   1794.20 Sell
STOCH(5,3)   64.515 Sell
MACD(12,26,9)   4.247 Buy

Silver - XAG

AAFX TRADING

Silver on Friday made its intraday high of US$24.81/oz and low of US$24.10/oz settled down by 0.530% at US$24.26/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   66.284 Buy
20-DMA   23.40 Sell
50-DMA   23.54 Sell
100-DMA   24.18 Sell
200-DMA   24.51 Sell
STOCH(5,3)   73.950 Sell
MACD(12,26,9)   -0.587 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Friday made an intra‐day high of US$83.90/bbl, intraday low of US$81.48/bbl and settled up by 1.624% to close at US$83.65/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 84.00-86.00 with stop loss at 86.00; targeting 81.00-80.50-78.90 and 78.00-77.50-76.30. Buy above 83.10-81.00 with risk daily closing below 81.00 and targeting 84.00-84.60-85.10 and 85.60-86.00.

 
Intraday Support Levels
S1     83.10-82.50
S2     81.90
S3     81.50-81.00

Intraday Resistance Levels
R1     84.00-84.60
R2     85.10
R3     85.60-86.00

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 Friday made an intraday low of US$1.1620/EUR, high of US$1.1655/EUR and settled the day up by 0.195% to close at US$1.1644/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 Friday made an intra‐day low of US$1.3735/GBP, high of US$1.3814/GBP and settled the day down by 0.240% to close at US$1.3754/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     1.3910
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 JPY113.40/USD and made an intraday high of JPY114.20/USD and settled the day down 0.364% at JPY113.51/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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