AAFX TRADING

Daily Market Lookup

  • The U.S. dollar hit its lowest level since mid-June against the Japanese yen on Monday as investors weighed the likelihood that the Federal Reserve will not raise interest rates as aggressively as some had expected. The U.S. dollar index was volatile after data showed U.S. manufacturing activity nN9N2WB01T slowed less than expected in July. But a key report for investors this week will be the U.S. monthly jobs report on Friday. The dollar index is up roughly 10% for the year so far, boosted by investor expectations of an aggressive rate hike policy from the Fed. Last week, the Fed raised the benchmark overnight interest rate by three-quarters of a percentage point. The move came on top of a 75 basis points hike last month and smaller moves in May and March, in an effort by the U.S. central bank to cool inflation. Also last week, the dollar crumbled against the yen, and two-year yields in the U.S. Treasury market also fell, after data showed the U.S. economy shrank for a second straight quarter. On Monday, the dollar sank to its lowest level versus the yen since mid-June, and was down from a late 1998 peak of nearly 140 yen which it hit last month. The dollar was last down 1.2% at 131.65.
  • The U.S. dollar edged lower Monday, weakening especially against the Japanese yen as the market reassessed the Federal Reserve’s tightening path. Data released Friday offered a mixed inflation picture, with the personal consumption expenditures price index showing the fastest inflation since 2005 while the final University of Michigan report showed slipping consumer inflation expectations. However, the very weak second quarter U.S. GDP release has created the impression that the Federal Reserve has now done the majority of its tightening, with the economy starting to feel the effects of the sharp rise in interest rates. The big economic focus for this week will be the monthly U.S. jobs report on Friday, with 250,000 jobs expected to have been created in July, a drop from the 372,000 added the previous month. USD/JPY fell 0.8% to 132.12, just above the fresh six-week low seen earlier in the session, with the Japanese yen the prime beneficiary of the lower U.S. interest rate expectations. These have led to a drop in Treasury yields, narrowing the yield gap that had opened up between the U.S. and Japan that helped drive the USD/JPY pair to a 24-year high.. Elsewhere, EUR/USD rose 0.1% to 1.0230, benefiting from the dollar weakness, but gains are tenuous after German retail sales suffered their sharpest annual fall in decades in June. Sales in the Eurozone’s largest economy fell by 8.8% from a year earlier, the largest since Destatis started compiling pan-German retail sales data in 1994, while in month-on-month terms, they fell 1.6%, as rampant inflation ate into consumers’ spending power. USD/CNY rose 0.1% to 6.7533 after a private poll by Caixin on Monday showed manufacturing activity grew more slowly than expected in July, while the official survey on Sunday indicated the sector actually contracted last month.
  • Gold prices rose on Tuesday as signs of weakening economic activity across the globe drove demand for the safe haven, while copper prices extended losses into a third consecutive day. The yellow metal has received a significant boost to demand in recent sessions, rising for four out of the past five amid signs of worsening economic conditions. Weak U.S. GDP data had triggered safe haven buying into gold last week, with a surprise contraction in Chinese factory activity furthering the case for the precious metal on Monday. Gold prices added 0.6% at the beginning of the week. Manufacturing readings from the United States and the Eurozone also disappointed markets, increasing concerns over slowing economic growth. On the other hand, Copper Futures expiring in September plunged 1% to $3.4955, as a decline in manufacturing activity pointed to weak demand for the red metal. The metal is set for a third straight day of losses, and has lost over 3% since Friday. Copper is particularly sensitive to manufacturing trends, given its use in a wide variety of industrial applications. A bulk of the pressure on copper prices is coming from signs of weakening activity in China, which is the world’s largest importer of the metal. But other industrial metals fared far better. U.S.-traded Nickel Futures jumped over 2% to $24,344 on expectations that a broader switch to electric vehicles will drive more demand for the metal. Nickel is a key component in the lithium-ion batteries used in electric vehicles. Positive auto sales from India- the fifth largest car market by sales, also helped boost the outlook for nickel.
  • Oil prices edged lower on Tuesday as investors absorbed a bleak outlook for fuel demand with data pointing to a global manufacturing downturn just as major crude producers meet this week to determine whether to increase supply Recessionary concerns were heightened on Monday as surveys from the United States, Europe and Asia showed that factories struggled for momentum in July. Flagging global demand and China's strict COVID-19 restrictions slowed production. The price drops also come as market participants await the outcome of a meeting on Wednesday between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, to decide on September output. Two of eight OPEC+ sources in a Reuters survey said that a modest increase for September would be discussed at the Aug. 3 meeting. The rest said output is likely to be held steady. A Fox Business news reporter said Saudi Arabia will push OPEC+ to increase oil production at the meeting. Meanwhile the United States on Monday imposed sanctions on Chinese and other firms it said helped to sell tens of millions of dollars' in Iranian oil and petrochemical products to East Asia as it seeks to raise pressure on Tehran to curb its nuclear programme. Also casting a cloud over the market is the possibility of a visit to Taiwan by U.S. Speaker of the House Nancy Pelosi, despite Beijing's warnings against it. The visit would mark the first time a high-profile U.S. official has been on the island in over 25 years, which could escalate tensions between the U.S. and China.

 

 
Intraday RESISTANCE LEVELS
2nd August 2022 R1 R2 R3
GOLD-XAU 1,774-1,785 1,798 1,809-1,818
Silver-XAG 20.35-20.70 21.45 21.57-22.50
Crude Oil 94.00-94.90 96.00 96.90-98.00
EURO/USD 1.0290-1.0335 1.0390 1.0430-1.0470
GBP/USD 1.2245-1.2300 1.2405 1.2479-1.2550
USD/JPY 131.50-131.90 132.50 133.10-134.10

Intraday SUPPORTS LEVELS
2nd August 2022 S1 S2 S3
GOLD-XAU 1,760-1,746 1,741 1,732-1,707
Silver-XAG 19.80-19.50 18.90 18.60-17.80
Crude Oil 92.35-91.30 90.50 89.00-88.30
EURO/USD 1.0190-1.0150 1.0010 0.9950-0.9900
GBP/USD 1.2170-1.2100 1.2010-1.1930 1.1870-1.1810
USD/JPY 130.70-130.24 129.35 128.00-126.75

Intra-Day Strategy (2nd August 2022)
GOLD-XAU Sell on Strength
Silver-XAG Buy on Dips
Crude Oil Neutral to Sell
EUR/USD Neutral to Sell
GBP/USD Neutral to Buy
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

Gold on Monday made its intraday high of US$1775.18/oz and low of US$1758.27/oz. Gold up 0.407% at US$1772.06/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 a2lso 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: Sell on Strength

Sell below 1774-1818 keeping stop loss closing above 1818, targeting 1760-1746-1741 and 1732-1707-1700. Buy in between 1760-1707 with risk below 1707, targeting 1774-1785-1798 and 1809-1818.

 
Intraday Support Levels
S1     1,760-1,746
S2     1,741
S3     1,732-1,707
Intraday Resistance Levels
R1     1,774-1,785
R2     1,798
R3     1,809-1,818

Technical Indicators

Name   Value Action
14DRSI  

33.708

Buy
20-DMA   1746.30 Sell
50-DMA  

1794.58

Sell
100-DMA   1826.12 Sell
200-DMA   1834. Sell
STOCH(5,3)   7.367 Sell
MACD(12,26,9)   -27.400 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$20.50/oz and low of US$20.07/oz settled up by 0.310% at US$20.35/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 19.80-16.90, targeting 20.45-20.70-21.45 and 21.60-22.50 with stop loss should be place on the breakage below 16.90. Sell in between 20.35-23.75 with stop loss above 23.75; targeting 18.90-18.40-17.90 and 17.50-16.90-16.40.

 
Intraday  Support Levels
S1     19.80-19.50
S2     18.90
S3     18.60-17.80

Intraday  Resistance Levels
R1     20.35-20.70
R2     21.45
R3     21.57-22.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.865 Buy
20-DMA   19.54 Buy
50-DMA   20.35 Sell
100-DMA   21.41 Sell
200-DMA   22.44 Sell
STOCH(5,3)   92.797 Sell
MACD(12,26,9)   -0.131 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$97.62/bbl, intraday low of US$91.66/bbl and settled down by 4.40% to close at US$93.22/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 0will 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 94.00-98.00 with stop loss at 98.00; targeting 92.30-91.30-90.50 and 89.00-88.30. Buy above 92.30-88.30 with risk daily closing below 88.30 and targeting 94.00-94.90-96.00 and 96.90-98.00-98.90.

 
Intraday Support Levels
S1     92.35-91.30
S2     90.50
S3     89.00-88.30

Intraday Resistance Levels
R1     94.00-94.90
R2     96.00
R3     96.90-98.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.197 Sell
20-DMA   98.88 Buy
50-DMA   102.69 Buy
100-DMA   101.85 Buy
200-DMA   94.99 Buy
STOCH(5,3)   67.76 Sell
MACD(12,26,9)   -3.175 Buy

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.0204/EUR, high of US$1.0275/EUR and settled the day up by 0.499% to close at US$1.0259/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which become immediate support, break below will target 1.0647. 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 Sell

Sell below 1.0290-1.0430, targeting 1.0190-1.0010 and 0.9950-0.9860 with stop-loss at daily closing above 1.0430. Buy above 1.0190-0.9800 with risk below 0.9800, targeting 1.0290-1.0335-1.0390 and 1.0430-1.0470.

 
Intraday Support Levels
S1     1.0190-1.0150
S2     1.0010
S3     0.9950-0.9900

Intraday  Resistance Levels
R1     1.0290-1.0335
R2     1.0390
R3     1.0430-1.0470

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.764 Buy
20-DMA   1.0228 Buy
50-DMA   1.0361 Sell
100-DMA   1.0565 Sell
200-DMA   1.0868 Sell
STOCH(5,3)   83.589 Buy
MACD(12,26,9)   -0.0041 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2147/GBP, high of US$1.2293/GBP and settled the day up 0.805% to close at US$1.2245/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2834) is become immediate resistance level. 14-D RSI is currently in oversold 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 1.1290-1.1700 with target 1.2245-1.2310 and 1.2405-1.2479 with stop loss closing below 1.1700. Sell in between 1.2245-1.2550 with targets at 1.2190-1.2100-1.2010 and 1.1930-1.1870-1.1810 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2170-1.2100
S2     1.2010-1.1930
S3     1.1870-1.1810

Intraday Resistance Levels
R1     1.2245-1.2300
R2     1.2405
R3     1.2479-1.2550

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

60.310

Buy
20-DMA   1.2091 Buy
50-DMA   1.2206 Buy
100-DMA   1.2464 Sell
200-DMA   1.2815 Sell
STOCH(5,3)   80.940 Sell
MACD(12,26,9)   -0.0006 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY131.58/USD and made an intraday high of JPY133.55/USD and settled the day down by 1.218% at JPY131.60/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

Sell below 131.50-134.50 with risk above 134.50 targeting 130.70-130.25-129.35 and 128.00-126.75. Long positions above 130.20-126.75 with targets of 131.50-131.90-133.10 and 134.10-135.25-136.30 with stop below 130.20.

 
Intraday Support Levels
S1     130.70-130.24
S2     129.35
S3     128.00-126.75

INTRADAY RESISTANCE LEVELS
R1     131.50-131.90
R2     132.50
R3     133.10-134.10

TECHNICAL INDICATORS
Name   Value Action
14DRSI   28.600 Buy
20-DMA   135.21 Sell
50-DMA   133.93 Sell
100-DMA   130.24 Sell
200-DMA   124.68 Buy
STOCH(9,6)   6.551 Buy
MACD(12,26,9)   0.538 Sell

AAFX TRADING
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