AAFX TRADING

Daily Market Lookup

  • The dollar was up on Friday morning in Asia but remained near its weakest level in a month. A stronger euro, as investors bet on earlier European interest rate hikes, capped gains for U.S. currency. Japanese data released earlier in the day showed that the Tokyo core consumer price index (CPI) grew 0.1% year-on-year, while the Tokyo CPI ex food and energy contracted 0.2% month-on-month, in October. Industrial production contracted 5.4% month-on-month, the jobs/applications ratio was at 1.16 and the unemployment rate at 2.8% in September. The euro was largely flat at $1.16855 after climbing as high as $1.1692 for the first time since Sep. 28 during the previous session. The European Central Bank (ECB) handed down its policy decision on Thursday, with comments by President Christine Lagarde interpreted by some as not going far enough in affirming the central bank's dovish stance. Lagarde's "pushback was not forceful enough," opening the way for the euro to test $1.1680 in the near term, TD Securities strategists said in a note. However, "extrapolating euro strength beyond that seems like a big ask a week ahead of the U.S. Federal Reserve's meeting where assert tapering will be announced," the note added. Foreign exchange markets saw big moves as central banks, including the Bank of Canada and the Bank of Japan, handed down policy decisions earlier on the week. Meanwhile, the Reserve Bank of Australia on Thursday declined to buy a government bond at the heart of its stimulus program and continued the stance on Friday. The Fed and the Bank of England (BOE) will hand down their policy decisions in the following week. While the Fed is expected to begin asset tapering from November onwards, BOE is expected to announce an interest rate hike.
  • The dollar languished near its weakest level in a month against major peers on Friday, hurt by a stronger euro as traders bet on earlier European interest rate hikes and as an equity rally sapped demand for safer assets. An index of global shares rose to the cusp of a record peak this week, powered by an earnings-driven rally to consecutive record highs on Wall Street, including overnight. The euro was propelled on Thursday after comments by European Central Bank President Christine Lagarde were interpreted in some quarters as not going far enough in affirming the central bank's dovish stance. Foreign-exchange markets have become volatile around central bank activity. The Fed is widely expected to begin to taper stimulus from next month, with interest rate lift-off following next year. Lagarde's "pushback was not forceful enough," opening the way for the euro to test $1.1680 in the near term, TD Securities strategists wrote in a note. However, "extrapolating (euro strength) beyond that seems like a big ask a week ahead of the Fed's meeting where taper will be announced," they said. Traders will have their eyes on economic gauges from both regions later in the day, with Europe seeing a preliminary reading of the consumer price index, while the U.S. gets personal spending and income data. The pound has been buffeted recently by speculation over whether the Bank of England would proceed with an interest rate hike at its meeting next week. That uptick was fuelled when the RBA declined to buy a government bond at the heart of its stimulus program, fanning speculation the central bank will allow rates to rise earlier than expected. The central bank again resisted buying the key bond earlier on Friday.
  • Gold was down on Friday morning in Asia, but set for a third consecutive weekly gain. Retreating U.S. bond yields and a dollar headed for a third weekly decline helped to cap losses for the yellow metal. Benchmark 10-year U.S. Treasury yields were set for their biggest weekly decline since early September 2021. Investors are now calculating what the furious flattening of the U.S. yield curve suggests about expectations for economic growth and the rate at which the U.S. Federal Reserve could tighten monetary policy as inflation continues to rise. U.S. data released on Thursday showed that the GDP grew a smaller-than-expected 2% quarter-on-quarter, while the GDP price index grew 5.7% quarter-on-quarter, in the third quarter of 2021. Separate data showed that 281,000 initial jobless claims were filed throughout the week. Investors now await the Fed’s policy decision, due to be handed down on Nov. 3, while the European Central Bank (ECB) handed down its decision on Thursday. Although ECB President Christine Lagarde acknowledged higher inflation, she pushed back against market bets that inflationary pressures would trigger an interest rate hike as soon as 2022. Meanwhile, investors have also trimmed their gold price forecasts for the rest of 2021 and into 2022, according to Thursday’s Reuters poll.
  • Oil prices edged up on Friday but were headed for their first weekly losses in at least eight weeks after U.S. oil stocks rose more than expected and Iran flagged it was resuming talks with Western powers which could lead to an end to sanctions. Both benchmarks, which touched multi-year highs on Monday, were on track to fall about 1% for the week - the first weekly drop in 10 weeks for WTI and the first in eight weeks for Brent. The heat has come out of a two-month rally stoked by tight gas and coal prices in Europe and China which had spurred fuel-switching in power generation to fuel oil and diesel while oil supplies were tight. U.S. oil stocks rose much more than expected in the week to Oct. 22, data from the Energy Information Administration showed on Wed. All eyes are on the next meeting of the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies, together called OPEC+, on Nov. 4. Analysts expect the bloc to stick to its plan to add 400,000 barrels per day of supply each month until April 2022. Concerns about erratic demand growth persist, with China looking to curb pollution ahead of the Beijing Winter Olympics and restricting mobility to curb any outbreaks of COVID-19. China reported 64 new confirmed coronavirus cases for Oct. 28, compared with 39 a day earlier, the country's health authority said on Friday.

 

 
Intraday RESISTANCE LEVELS
29th 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 82.50-83.10 84.00 84.60-85.10
EURO/USD 1.1700-1.1750 1.1800 1.1850-1.1900
GBP/USD 1.3780-1.3810 1.3860 1.3910-1.3950
USD/JPY 114.20-114.90 115.50 116.00-116.90

Intraday SUPPORTS LEVELS
29th October 2021 S1 S2 S3
GOLD-XAU 1,790-1,779 1,770 1,760-1,745
Silver-XAG 23.90-23.75 23.50 22.60-22.20
Crude Oil 81.90-81.50 81.00 80.30-79.50
EURO/USD 1.1650-1.1590 1.1540 1.1510-1.1460
GBP/USD 1.3750-1.3670 1.3610 1.3560-1.3510
USD/JPY 113.50-113.00 112.50 111.70-110.50

Intra-Day Strategy (29th 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$1810.34/oz and low of US$1792.21/oz. Gold up 0.113% at US$1798.63/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 1804-1840 keeping stop loss closing above 1840, targeting 1790-1780-1774 and 1760-1745-1737.

 
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  

58.769

Buy
20-DMA   1781.40 Buy
50-DMA  

1780.67

Buy
100-DMA   1788.09 Buy
200-DMA   1794.37 Sell
STOCH(5,3)   56.96 Sell
MACD(12,26,9)   7.266 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$24.23/oz and low of US$23.94/oz settled down by 0.008% at US$24.04/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 Thursday made an intra‐day high of US$82.63/bbl, intraday low of US$80.08/bbl and settled up by 0.884% to close at US$82.45/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 82.50-85.00 with stop loss at 85.00; targeting 81.90-81.50-81.00 and 80.50-78.90-78.00. Buy above 81.90-79.30 with risk daily closing below 79.00 and targeting 82.50-83.10-84.00 and 84.60-85.10-85.60.

 
Intraday Support Levels
S1     81.90-81.50
S2     81.00
S3     80.30-79.50

Intraday Resistance Levels
R1     82.50-83.10
R2     84.00
R3     84.60-85.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.764 Sell
20-DMA   80.32 Buy
50-DMA   76.27 Buy
100-DMA   72.62 Buy
200-DMA   66.91 Buy
STOCH(5,3)   44.485 Sell
MACD(12,26,9)   2.445 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.1581/EUR, high of US$1.1691/EUR and settled the day up by 0.667% to close at US$1.1679/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 1.1650-1.1410 with risk below 1.1410, targeting 1.1640-1.1750-1.1800-1.1985 and 1.2050-1.2100. Sell below 1.1700-1.1910 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     1.1650-1.1590
S2     1.1540
S3     1.1510-1.1460

Intraday  Resistance Levels
R1     1.1700-1.1750
R2     1.1800
R3     1.1850-1.1900

TECHNICAL INDICATORS
Name   Value Action
14DRSI   54.641 Buy
20-DMA   1.1630 Buy
50-DMA   1.1682 Sell
100-DMA   1.1760 Sell
200-DMA   1.1811 Sell
STOCH(5,3)   67.891 Buy
MACD(12,26,9)   -0.003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.3721/GBP, high of US$1.3814/GBP and settled the day up by 0.304% to close at US$1.3781/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     1.3750-1.3670
S2     1.3610
S3     1.3560-1.3510

Intraday Resistance Levels
R1     1.3780-1.3810
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 Thursday made intra‐day low of JPY113.25/USD and made an intraday high of JPY113.86/USD and settled the day down 0.210% at JPY113.56/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   109.00 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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