AAFX TRADING

Daily Market Lookup

  • The dollar traded near a 2 1/2-week high to major peers on Monday as quickening inflation in the United States boosted the case for earlier Federal Reserve interest rate hikes ahead of a policy decision on Tuesday. The safe-haven Japanese currency weakened after a strong showing for the ruling party in weekend elections eased doubts about the new prime minister's popularity. Japanese Prime Minister Fumio Kishida's ruling Liberal Democratic Party defied expectations and held its strong majority in Sunday's parliamentary election, solidifying his position in a fractious party and allowing him to ramp up stimulus. Monetary policy in the United States and elsewhere is in sharp focus this week, with the Federal Open Market Committee widely expected to announce a tapering of stimulus. A 4.4% surge in the government's index of core personal consumption expenditures - the Fed's preferred inflation measure - solidified market expectations for a rates lift-off around the middle of next year. Following the data, futures on the fed funds rate, which track short-term rate expectations, priced in a 90% chance of quarter-point tightening by June 2022, factoring in another rate increase by December. Those bets could be shaken again this Friday, with the release of the closely watched monthly payrolls report. The dollar "looks well-positioned to build on gains through a potentially decisive week of event risk," Westpac strategists wrote in a note to clients, predicting a "brisk" $15 billion per month tapering of asset purchases and a jobs number "at least as strong as consensus." Any dips in the dollar index to the mid-93 level are a buying opportunity, they said.
  • The dollar was up on Monday morning in Asia, remaining near a two-and-a-half-week high. Increasing inflation in the U.S. that strengthened the case for earlier U.S. Federal Reserve interest rate hikes gave the U.S. currency a boost. The dollar also approached a one-and-a-half-week high to the yen after Japanese Prime Minister Fumio Kishida's ruling Liberal Democratic Party held its strong majority in Sunday's parliamentary election in a surprise move. This reduces the political uncertainty in the country and allows Kishida to press forward with ramping up stimulus. Data released on Friday showed that the U.S. personal consumption expenditures price index was at 4.4 year-on-year while growing 0.3% month-on-month, in September. The Fed's preferred inflation measure continued a run of inflation at levels not seen in 30 years and solidified market expectations for an interest rate hike around mid-2022 Following the data’s release, futures on the fed funds rate, which track short-term rate expectations, priced in a 90% chance of quarter-point tightening by June 2022, factoring in another rate increase by December. The dollar index continued to rebound from prior-day losses on Friday after U.S. government bond yields rose on news that the Federal Reserve's preferred inflation measure showed prices continuing to rise faster than its 2% target. The fall in the euro more than reversed its big gain the day before and came as traders tried to sort through inflation reports and central bank comments to divine the course of interest rates for different currencies. Volatility in the foreign exchange and interest rate markets has increased throughout the week around central bank actions and economic data. Next week could bring more of the same around policy meetings of the U.S. Federal Reserve, the Bank of England and the Reserve Bank of Australia. Another reason for the volatility, Chandler and others said, was month-end portfolio repositioning on the day of the week when markets tend to be the least liquid. U.S. interest rate markets have been unusually volatile as traders prepare for the Federal Reserve to raise rates around mid-2022. European data on Friday showed inflation in the 19 countries sharing the euro rose to 4.1% in October from 3.4% a month earlier, beating a consensus forecast of 3.7% and creating a policy dilemma for the European Central Bank. ECB President Christine Lagarde's failure during a Thursday press conference to push back against market expectations of higher interest rates has brought out bears, with Danske Bank strategists expecting the euro to fall to $1.10 over the next 12 months.
  • Oil prices dropped on Monday as China's release of gasoline and diesel reserves eased concerns over tight global supply, while investors cashed in ahead of a Nov. 4 meeting of major crude producers that could increase future production targets. The drops came after China said in a rare official statement that it had released reserves of the two fuels to increase market supply and support price stability in some regions. All eyes are on the Nov. 4 meeting of the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies, together called OPEC+, with analysts expecting them to stick to a plan to add 400,000 barrels per day of supply in December. Money managers cut their net long U.S. crude futures and options positions in the week to Oct. 26, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. Oil prices rallied to multi-year highs last week, helped by the decision by OPEC+ to maintain its planned output increase rather than raising it on global supply concerns. U.S. President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery as part of a broad effort to pressure OPEC+ to increase oil supply. But Iraq's state oil marketing company, SOMO, said on Saturday Iraq sees no need to take any decision to increase its production capabilities beyond what has already been planned for OPEC countries. A Reuters poll showed that oil prices are expected to hold near $80 as the year ends, as tight supplies and higher gas bills encourage a switch to crude for use as a power generation fuel. Spurred by rising oil prices, U.S. energy firms added oil and natural gas rigs for a 15th month in a row in October, taking them to the highest since April 2020, energy services firm Baker Hughes Co said on Friday.

 

 
Intraday RESISTANCE LEVELS
1st November 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 1.1590-1.1650 1.1700 1.1750-1.1800
GBP/USD 1.3680-1.3750 1.3780 1.3810-1.3860
USD/JPY 114.90 115.50 116.00-116.90

Intraday SUPPORTS LEVELS
1st November 2021 S1 S2 S3
GOLD-XAU 1,790-1,779 1,770 1,760-1,745
Silver-XAG 23.75 23.50 22.60-22.20
Crude Oil 81.90-81.50 81.00 80.30-79.50
EURO/USD 1.1540-1.1510 1.1460 1.1420-1.1390
GBP/USD 1.3610-1.3560 1.3510 1.3450-1.3390
USD/JPY 114.20-113.50 113.00 112.50-111.70

Intra-Day Strategy (1st November 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$1801.09/oz and low of US$1771.85/oz. Gold down 0.870% at US$1783.26/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 Monday made its intraday high of US$24.07/oz and low of US$23.64/oz settled down by 0.685% at US$23.90/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 23.75-22.90, 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     23.75
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$82.89/bbl, intraday low of US$80.81/bbl and settled down by 0.0242% to close at US$82.42/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 Friday made an intraday low of US$1.1534/EUR, high of US$1.1689/EUR and settled the day down by 1.06% to close at US$1.1555/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 1.1540-1.1410 with risk below 1.1410, targeting 1.1590-1.1640-1.1750 and 1.1800-1.1985-1.2050. Sell below 1.1590-1.1800 targeting 1.1540-1.1510-1.1460 and 1.1420-1.1390 with stop-loss at daily closing above 1.1910.

 
Intraday Support Levels
S1     1.1540-1.1510
S2     1.1460
S3     1.1420-1.1390

Intraday  Resistance Levels
R1     1.1590-1.1650
R2     1.1700
R3     1.1750-1.1800

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 Friday made an intra‐day low of US$1.3667/GBP, high of US$1.3803/GBP and settled the day down by 0.719% to close at US$1.3681/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 1.3610-1.3390 with targets 1.3680-1.3750-1.3790 and 1.3860-1.3910-1.3950 with stop loss closing below 1.3390. Sell in between 1.3680-1.3860 with targets at 1.3610-1.3560-1.3510 and 1.3450-1.3390 with stop loss should be 1.3790.

 
Intraday Support Levels
S1     1.3610-1.3560
S2     1.3510
S3     1.3450-1.3390

Intraday Resistance Levels
R1     1.3680-1.3750
R2     1.3780
R3     1.3810-1.3860

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

45.207

Buy
20-DMA   1.3710 Buy
50-DMA   1.3721 Buy
100-DMA   1.3758 Buy
200-DMA   1.3758 Buy
STOCH(5,3)   19.766 Sell
MACD(12,26,9)   -0.004 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made intra‐day low of JPY113.38/USD and made an intraday high of JPY114.09/USD and settled the day up 0.313% at JPY113.92/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     114.20-113.50
S2     113.00
S3     112.50-111.70

INTRADAY RESISTANCE LEVELS
R1     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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