AAFX TRADING

Daily Market Lookup

  • Gold was down on Tuesday morning in Asia. The dollar, which usually moves inversely to gold, inched up 0.07% on Tuesday, recovering from a near one-month trough hit during the previous session. Investors await policy decisions from the meetings from the Bank of Japan and the European Central Bank (ECB) on Thursday, both due on Thursday. Neither of the central banks are likely to announce a change in policy, though the ECB might address how inflationary pressures could affect policy, according to Reuters. The U.S. Federal Reserve and the Bank of England are also set to meet next week. However, Bank of England interest rate-setter Silvana Tenreyro said she needed more time to judge how the end of the government’s job-saving furlough scheme was affecting the labour market, which is a signal that she sees no urgency to raise rates, according to Reuters.
  • The dollar edged higher Tuesday, rebounding from a one-month low although gains are small ahead of the release of key economic data and next week’s Federal Reserve meeting. The dollar was hit late last week following comments by Federal Reserve Chair Jerome Powell stating that it’s not yet time to begin raising U.S. interest rates. The Fed has now gone into a blackout period ahead of next week’s policy-setting meeting, an eagerly-anticipated gathering where the central bank is expected to confirm the start of the withdrawal of its bond-buying stimulus. In the absence of any Fed communication, it will be the U.S. data that the market concentrates on this week. Tuesday’s data slate includes new home sales for September and October CB consumer confidence numbers, but it’s the 3Q GDP release on Thursday and the September core PCE deflator on Friday that will attract the most attention. The dollar inched higher against the safe-haven yen while easing a touch against riskier currencies on Tuesday as solid company earnings and a glimmer of improvement in U.S.-China trade ties lifted sentiment, while rates expectations weighed on the euro. China's Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen held a video call which readouts from both sides suggested was at least not acrimonious. Anticipation of the ECB pushing back on market inflation forecasts - as well as a soft German sentiment survey on Monday - have dragged on the euro ahead of Thursday. The ECB will likely underscore its dovish guidance, while U.S. GDP will show the economy's rebound stalling, Westpac's analysts said, though the scene remains set for the Federal Reserve to announce a reduction in bond purchases next week. Central bank meetings in Japan and Canada are also scheduled this week and rising inflation in Canada has increased pressure on policymakers to pull forward rate hikes. Traders are watching Wednesday's meeting for any hawkish clues. No changes are expected from the Bank of Japan, although Reuters has reported that policymakers are discussing an end to a COVID-19 loan scheme. Beyond Friday, the Fed, the RBA and the Bank of England meet next week with markets having priced a roughly 60% chance that the Bank of England raises interest rates to head off inflation.
  • The dollar was up in early trading Tuesday morning in Asia, following a high reached overnight during the U.S. trading session. The strengthening of the dollar comes as reports in China suggests the government may be shifting its focus away from tighter regulation of sectors it is concerned about and towards shoring up growth. Concerns are rising in China that power shortages could lead to production stoppages and shortages of products down the supply chain, which could affect growth. Xinhua News Agency reported an outline of the government’s strategy to deal with the 10 most pressing challenges for the country’s economy. The report provided hints as to the policy direction that the country’s leaders could take during a series of meetings over the next few weeks, including a plenary session of the 19th Central Committee next month and the Central Economic Work Conference. According to Xinhua, the new priorities are likely to be boosting private consumption and investment, after growth slowed to 4.9% during the third quarter of the year.
  • Gold was down on Tuesday morning in Asia. The dollar, which usually moves inversely to gold, inched up 0.07% on Tuesday, recovering from a near one-month trough hit during the previous session. Investors await policy decisions from the meetings from the Bank of Japan and the European Central Bank (ECB) on Thursday, both due on Thursday. Neither of the central banks are likely to announce a change in policy, though the ECB might address how inflationary pressures could affect policy, according to Reuters. The U.S. Federal Reserve and the Bank of England are also set to meet next week. However, Bank of England interest rate-setter Silvana Tenreyro said she needed more time to judge how the end of the government’s job-saving furlough scheme was affecting the labour market, which is a signal that she sees no urgency to raise rates, according to Reuters.
  • The dollar edged higher Tuesday, rebounding from a one-month low although gains are small ahead of the release of key economic data and next week’s Federal Reserve meeting. The dollar was hit late last week following comments by Federal Reserve Chair Jerome Powell stating that it’s not yet time to begin raising U.S. interest rates. The Fed has now gone into a blackout period ahead of next week’s policy-setting meeting, an eagerly-anticipated gathering where the central bank is expected to confirm the start of the withdrawal of its bond-buying stimulus. In the absence of any Fed communication, it will be the U.S. data that the market concentrates on this week. Tuesday’s data slate includes new home sales for September and October CB consumer confidence numbers, but it’s the 3Q GDP release on Thursday and the September core PCE deflator on Friday that will attract the most attention. The dollar inched higher against the safe-haven yen while easing a touch against riskier currencies on Tuesday as solid company earnings and a glimmer of improvement in U.S.-China trade ties lifted sentiment, while rates expectations weighed on the euro. China's Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen held a video call which readouts from both sides suggested was at least not acrimonious. Anticipation of the ECB pushing back on market inflation forecasts - as well as a soft German sentiment survey on Monday - have dragged on the euro ahead of Thursday. The ECB will likely underscore its dovish guidance, while U.S. GDP will show the economy's rebound stalling, Westpac's analysts said, though the scene remains set for the Federal Reserve to announce a reduction in bond purchases next week. Central bank meetings in Japan and Canada are also scheduled this week and rising inflation in Canada has increased pressure on policymakers to pull forward rate hikes. Traders are watching Wednesday's meeting for any hawkish clues. No changes are expected from the Bank of Japan, although Reuters has reported that policymakers are discussing an end to a COVID-19 loan scheme. Beyond Friday, the Fed, the RBA and the Bank of England meet next week with markets having priced a roughly 60% chance that the Bank of England raises interest rates to head off inflation.
  • The dollar was up in early trading Tuesday morning in Asia, following a high reached overnight during the U.S. trading session. The strengthening of the dollar comes as reports in China suggests the government may be shifting its focus away from tighter regulation of sectors it is concerned about and towards shoring up growth. Concerns are rising in China that power shortages could lead to production stoppages and shortages of products down the supply chain, which could affect growth. Xinhua News Agency reported an outline of the government’s strategy to deal with the 10 most pressing challenges for the country’s economy. The report provided hints as to the policy direction that the country’s leaders could take during a series of meetings over the next few weeks, including a plenary session of the 19th Central Committee next month and the Central Economic Work Conference. According to Xinhua, the new priorities are likely to be boosting private consumption and investment, after growth slowed to 4.9% during the third quarter of the year.
  • Oil prices edged lower on Tuesday after rising earlier in the day and analysts said prices were set to sustain a rally driven by strong demand in the United States, the world's biggest consumer of oil and its products. While China's red-hot power and coal markets have cooled somewhat after government intervention, energy prices remain elevated worldwide as temperatures fall with the onset of the northern winter. Goldman Sachs (NYSE:GS) said Brent was likely to push above its year-end forecast of $90 a barrel. The bank estimated switching to oil from gas may add 1 million barrels per day (bpd) to oil demand. Gasoline and distillate consumption is back in line with five-year averages in the United States after more than a year of depressed demand. The market will be closely watching U.S. inventory levels this week. Crude oil stockpiles are forecast to have risen by 1.7 million barrels last week, according to a Reuters poll of analysts. Gasoline and distillate inventories were expected to fall, however. [EIA/S] Sandu said traders were also awaiting clarity on the outcome of talks between Iran and Western powers after the United States said efforts were at "crucial phase" to revive a 2015 nuclear agreement with Iran, which could open the way for exports of its crude.

 

 
Intraday RESISTANCE LEVELS
26th 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 1.3810-1.3860 1.3910 1.3950-1.3990
USD/JPY 114.20-114.90 115.50 116.00-116.90

Intraday SUPPORTS LEVELS
26th 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 (26th 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$1809.94/oz and low of US$1792.12/oz. Gold up 0.798% at US$1807.39/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 Monday made its intraday high of US$24.60/oz and low of US$24.27/oz settled down by 0.9206% at US$24.55/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 24.05-22.90, targeting 24.45-25.05-25.50 and 25.80-26.10-26.50 with stop loss should be place on the breakage below 21.90. Sell in between 24.55-26.50 with stop loss above 26.50; targeting 24.05-23.75-23.50 and 22.60-22.00.

 
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 Monday made an intra‐day high of US$84.95/bbl, intraday low of US$83.05/bbl and settled up by 1.624% to close at US$83.34/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 Monday made an intraday low of US$1.1590/EUR, high of US$1.1664/EUR and settled the day down by 0.286% to close at US$1.1606/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$1.3736/GBP, high of US$1.3791/GBP and settled the day up by 0.240% to close at US$1.3764/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 Friday made intra‐day low of JPY113.43/USD and made an intraday high of JPY113.91/USD and settled the day up 0.157% at JPY113.70/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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