AAFX TRADING

Daily Market Lookup

  • The dollar was up on Tuesday morning in Asia, remaining below recent highs as the Reserve Bank of Australia (RBA) led key central banks in handing down their policy decisions. The RBA kept its November interest rate unchanged at 0.10% as it handed down its policy decision earlier in the day. The decision comes as the central bank failed to defend its yield target as bonds sold off over recent sessions, and the Reserve Bank of New Zealand is likely to track its Antipodean counterpart’s moves in its next policy decision. Other central banks could take their cues from the RBA decision, with the U.S. Federal Reserve and Bank of England handing down their policy decisions on Wednesday and Thursday respectively. All three face the common dilemma of surging inflation. Meanwhile, trader positioning is indicative of bets on higher rates, as speculators crowd in to short the yen. The dollar pushed higher in early European trading Monday, continuing the previous session’s gains after strong inflation numbers cemented the case for tapering at this week’s Federal Reserve meeting. This follows the release of data Friday which showed the Fed’s favorite inflation measure, core personal consumption expenditures index, rising at an annual 4.4% in September, the fastest since 1991. The central bank holds a two-day policy-setting meeting this week, concluding on Wednesday, and is widely expected then to announce a tapering of stimulus. However, these continued inflationary pressures have solidified market expectations that the Fed will start increasing interest rates earlier than previously guided. Influential investment bank Goldman Sachs (NYSE:GS) has responded by bringing forward its forecast by a year to July 2022 for the first U.S. interest rate hike following the pandemic. USD/JPY traded 0.3% higher at 114.33, just below the strongest level since Oct. 20, after Japanese Prime Minister Fumio Kishida's ruling Liberal Democratic Party defied expectations and held onto its strong majority in Sunday's parliamentary election. This could mean that he now has leeway to push through more stimulus to boost the beleaguered economy, at the expense of the yen. GBP/USD dropped 0.2% to 1.3659 ahead of Thursday’s Bank of England meeting, which could see the central bank lift interest rates if it judges the country’s economy to be strong enough to cope as inflation mounts. The country’s central bank is under pressure to drop a commitment to keep yields on its April 2024 target bond at 0.1% as house prices soar. Late last week it chose not to defend the 0.1% target for three-year bond yields, which consequently rose to over 0.8%.
  • 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 USD/CNY pair inched down 0.01% to 6.4046, with China's Caixin manufacturing purchasing managers index (PMI) for October at 50.6. The manufacturing and non-manufacturing PMIs, released the day before, were at 49.2 and 52.4 respectively. 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 Fed is widely expected to announce that it will begin asset tapering when it hands down its policy decision on Wednesday. The Reserve Bank of Australia will hand down its policy decision on Tuesday, with the Bank of England following on Thursday.
  • Oil prices were steady on Tuesday as key producer group OPEC undershot its expected pace of output increases last month, while the world's top oil consumer China ramped up operating rates to meet a spike in diesel demand. Oil rallied to multi-year highs last week, helped by a post-pandemic demand rebound and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sticking to gradual, monthly production increases of 400,000 barrels per day (bpd), despite calls for more oil from major consumers. The increase in OPEC's oil output in October fell short of the rise planned under a deal with allies, a Reuters survey found on Monday, as involuntary outages in some smaller producers offset higher supplies from Saudi Arabia and Iraq. OPEC pumped 27.50 million barrels per day (bpd) in October, the survey found, a rise of 190,000 bpd from the previous month but below the 254,000 increase permitted under the supply deal. Meanwhile, national oil firms in China have ramped up refinery run rates, increasing its appetite for crude oil, to avert a diesel shortage in the world's second-largest oil user. U.S. crude oil stocks were expected to have risen last week, while gasoline and distillate inventories were seen falling, a preliminary Reuters poll showed on Monday. The poll was conducted ahead of reports from the American Petroleum Institute, an industry group, due on Tuesday, and the EIA, statistical arm of the U.S. Department of Energy, due on Wednesday.

 

 
Intraday RESISTANCE LEVELS
2nd 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 84.00-84.60 85.00 85.40-86.00
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 114.20-114.90 115.50 116.00-116.90

Intraday SUPPORTS LEVELS
2nd 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 83.10-82.50 81.90 81.50-81.00
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 113.50-113.00 112.50 111.70-111.00

Intra-Day Strategy (2nd 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 Monday made its intraday high of US$1795.70/oz and low of US$1779.00/oz. Gold up 0.564% at US$1793.04/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$24.08/oz and low of US$23.73/oz settled up by 0.577% at US$24.02/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 Monday made an intra‐day high of US$83.95/bbl, intraday low of US$81.84/bbl and settled up by 0.630% to close at US$83.00/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 84.00-86.00 with stop loss at 86.00; targeting 83.10-82.50-81.90 and 81.50-81.00-80.50. Buy above 83.10-79.30 with risk daily closing below 79.00 and targeting 84.00-84.60-85.10 and 85.60-86.20.

 
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     85.00
R3     85.40-86.00

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 Monday made an intraday low of US$1.1545/EUR, high of US$1.1608/EUR and settled the day up by 0.378% to close at US$1.1603/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   47.647 Buy
20-DMA   1.1617 Buy
50-DMA   1.1672 Sell
100-DMA   1.1752 Sell
200-DMA   1.1806 Sell
STOCH(5,3)   35.891 Sell
MACD(12,26,9)   -0.003 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.3641/GBP, high of US$1.3692/GBP and settled the day down by 0.154% to close at US$1.3662/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 Monday made intra‐day low of JPY113.93/USD and made an intraday high of JPY114.43/USD and settled the day down 0.098% at JPY113.99/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     111.70-111.00

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

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