AAFX TRADING

Daily Market Lookup

  • The dollar edged lower in early European trade Wednesday in calm trading ahead of next week’s Federal Reserve meeting, while the U.K. budget places sterling in focus. The Federal Reserve has now gone into a blackout period ahead of next week’s policy-setting meeting, and ahead of this traders are focusing on the release of a series of important data releases. Wednesday’s sees the release of the September durable goods orders, but the 3Q GDP release on Thursday and the September core PCE deflator on Friday will attract the most attention. Sterling could be vulnerable Wednesday as U.K. Chancellor of the Exchequer Rishi Sunak delivers his annual budget. Much of the talk ahead of this set piece has been about Sunak loosening the purse strings, following leaks that he is set to end the public sector pay freeze, but the Chancellor still faces a tricky balancing act in this year’s budget. Too much largesse and he risks sparking more inflation with the Bank of England already looking at tightening monetary policy, but too little and he risks strangling an already hesitant recovery. USD/CAD traded largely flat at 1.2391 ahead of the Bank of Canada latest policy-setting meeting later this session. The central bank is expected to reduce its weekly government bond purchases again, marking the fourth time over the past 12 months the central bank has rolled back its program, paving the way for the start of interest rate increases next year.
  • The U.S. dollar edged up on Tuesday in narrow-range trading as markets awaited news from upcoming central bank meetings that might spark volatility. The greenback mostly hovered around a point midway between its one-year high reached earlier this month and the one-month low touched early on Monday. Analysts said the dollar might continue to hold steady pending a slew of central bank meetings and economic data that could shift views on interest rates, inflation and growth rates. Yields on 10-year U.S. and German government securities also stayed in narrow ranges before the yield on the benchmark U.S. 10-year note slipped to 1.6185% in the afternoon in New York. The Bank of Canada meets on Wednesday and the European Central Bank and Bank of Japan convene on Thursday. Next week brings meetings of the U.S. Federal Reserve, Bank of England, Reserve Bank of Australia and Norway's Norges Bank. The euro was down 0.1% at $1.1597. The euro has been weakened recently by expectations that the ECB will take a dovish stance when it meets. Doing so would come in the face of news on Tuesday that inflation expectations for the euro zone among bond investors had reached a seven-year high above 2.07%. Bigger currency movements came from the British pound, the Australian dollar and the Japanese yen. The Bank of Japan is expected to maintain its massive stimulus program and slash this year's inflation forecast when it meets on Thursday, showing again that it has no intention of following other central banks in backing away from pandemic policies.
  • Oil prices fell on Wednesday after industry data showed crude oil stockpiles rose more than expected and fuel inventories unexpectedly increased last week in the United States, the world's largest oil consumer. Crude oil inventories rose 2.3 million barrels in the week ending Oct. 22, market sources citing American Petroleum Institute figures said late on Tuesday. That was more than the expectations for a 1.9 million barrel gain. Gasoline inventories rose by 500,000 barrels and distillate stocks increased by 1 million barrels, compared with a forecast for both to drop. With Brent rising the past eight weeks and WTI climbing for the past 10 weeks, prices are starting to look overbought, analysts said. Storage tanks at the Cushing, Oklahoma, delivery hub for WTI oil have been depleted more than they have been in the last three years, while the prices of longer-dated futures contracts point to supplies staying at those levels for months. But a patchy recovery around the world from the worst health crisis in 100 years, after the COVID-19 pandemic dented demand for months on end, has often led to doubts over the sustainability of prices. Crude oil tanks at the Cushing, Oklahoma storage hub are more depleted than they have been in the last three years, and prices of further dated oil contracts suggest they will stay lower for months. U.S. demand for crude among refiners making gasoline and diesel has surged as the economy has recovered from the worst of the pandemic. Demand across the globe means other countries have looked to the United States for crude barrels, also boosting draws out of Cushing. Analysts expect the draw on inventories to continue in the short-term, which could further boost U.S. crude prices that have already climbed by about 25% in the last two months. The discount on U.S. crude futures to the international Brent benchmark should stay narrow. Cushing stockpiles have dropped to 31.2 million barrels, the lowest since October 2018, the Energy Information Administration said last week, or about half of where inventories were at this time a year ago.
  • Inventories have fallen because of a ramp-up in U.S. demand, which has encouraged domestic refiners to keep crude at home to provide fuel such as gasoline and distillates to U.S. consumers, said Reid I'Anson, senior commodity analyst at Kpler. In addition, U.S. production has been slow to recover from declines seen in 2020. At the end of 2019, the nation was producing roughly 13 million barrels of oil per day (bpd), but in recent weeks has been less than 11.5 million bpd. At the same time, product supplied by refineries - a proxy for demand - is about just 1% below pre-pandemic peaks. As a result, the spread between U.S. crude and international benchmark Brent, has collapsed. The spread between U.S. crude delivered to Cushing and Brent narrowed to roughly $1.09 a barrel this week from $4.47 earlier this month, which had been about the widest spread since May 2020. In the next three months, Rystad Energy expects refinery runs in the United States to increase by 500,000 to 600,000 barrels per day. This would outpace production gains of 300,000-400,000 barrels per day, and keep the WTI/Brent spread narrow.

 

 
Intraday RESISTANCE LEVELS
27th 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 83.10-84.00 84.60 85.10-85.60
EURO/USD 1.1660-1.1750 1.1800 1.1850-1.1900
GBP/USD 1.3770-1.3810 1.3860 1.3910-1.3950
USD/JPY 114.20-114.90 115.50 116.00-116.90

Intraday SUPPORTS LEVELS
27th October 2021 S1 S2 S3
GOLD-XAU 1,779-1,770 1,760 1,745-1,740
Silver-XAG 23.90-23.75 23.50 22.60-22.20
Crude Oil 82.50-81.90 81.50 81.00-80.30
EURO/USD 1.1590-1.1540 1.1510 1.1460-1.1420
GBP/USD 1.3710-1.3670 1.3610 1.3560-1.3510
USD/JPY 113.50-113.00 112.50 111.70-110.50

Intra-Day Strategy (27th 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 Tuesday made its intraday high of US$1808.21/oz and low of US$1782.29/oz. Gold down 0.826% at US$1792.38/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 1781-1736 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     1,745-1,740
Intraday Resistance Levels
R1     1,790-1,804
R2     1,810
R3     1,816-1,832

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 Tuesday made its intraday high of US$24.56/oz and low of US$23.86/oz settled down by 1.706% 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 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     23.90-23.75
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 Tuesday made an intra‐day high of US$84.40/bbl, intraday low of US$82.63/bbl and settled up by 0.760% to close at US$84.00/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 83.10-86.00 with stop loss at 86.00; targeting 82.50-81.90-81.00 and 80.50-78.90-78.00. Buy above 82.10-80.30 with risk daily closing below 80.30 and targeting 84.00-84.60-85.10 and 85.60-86.00.

 
Intraday Support Levels
S1     82.50-81.90
S2     81.50
S3     81.00-80.30

Intraday Resistance Levels
R1     83.10-84.00
R2     84.60
R3     85.10-85.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   66.403 Sell
20-DMA   80.30 Buy
50-DMA   76.10 Buy
100-DMA   72.46 Buy
200-DMA   66.78 Buy
STOCH(5,3)   64.128 Sell
MACD(12,26,9)   2.742 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.1584/EUR, high of US$1.1625/EUR and settled the day up by 0.0921% to close at US$1.1594/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 Tuesday made an intra‐day low of US$1.373/GBP, high of US$1.3832/GBP and settled the day up by 0.005% 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 1.3710-1.3560 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     1.3710-1.3670
S2     1.3610
S3     1.3560-1.3510

Intraday Resistance Levels
R1     1.3770-1.3810
R2     1.3860
R3     1.3910-1.3950

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 Tuesday made intra‐day low of JPY113.67/USD and made an intraday high of JPY114.30/USD and settled the day up 0.157% at JPY114.14/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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