AAFX TRADING

Daily Market Lookup

  • The dollar clung on in choppy trade on Wednesday, after its biggest surge for weeks as Federal Reserve officials talked up the potential for further aggressive interest rate hikes. Pelosi's arrival in Taiwan, which China considers a breakaway province, prompted anger in Beijing, with warplanes buzzing the Taiwan Strait and the announcement of live-fire military drills -- though investors felt this was expected. On Tuesday, Fed officials Mary Daly and Charles Evans signalled that they and their colleagues remain resolute and "completely united" over getting rates up to a level that will more significantly curb economic activity. The comments by "the normally very dovish Daly" and "the equally very dovish Evans" helped yields and the dollar higher, and the dollar index could top 108 in the next few weeks, according to Kristina Clifton, a strategist at Commonwealth Bank of Australia, writing in a note to clients. The Australian dollar slumped on Tuesday after the central bank opened the door to a slowdown or pause in the pace of future hikes. It was last steady at $0.6930.
  • The U.S. dollar edged higher in early European trade Wednesday, maintaining the overnight gains on raised geopolitical tensions and after Federal Reserve officials pointed to more rate hikes ahead. Data released Tuesday showed the number of vacancies across the U.S. fell more sharply than expected in June to its lowest level since September, an ominous precursor to Friday’s official employment report. However, this sign of a cooling U.S. labor market was not enough to persuade Fed policymakers that now was the time to ease back the central bank’s aggressive monetary policy tightening. A trio of Fed officials, including known doves San Francisco Fed President Mary Daly and Chicago Fed President Charles Evans, signaled on Tuesday that there would be no let-up in the hefty rate hikes, even though they could significantly curb economic activity. This resulted in U.S. Treasury yields climbing, with the United States 2-Year back past 3%, lifting the dollar index by the most in about three weeks. The dollar also received some demand from safe-haven flows after U.S. House of Representatives Speaker Nancy Pelosi visited Taiwan, a territory that is still claimed by China. Pelosi is the highest-ranking U.S. official to visit the island in 25 years, and her presence in Taiwan threatens to further destabilize Sino-U.S. ties.
  • Gold prices sank on Wednesday, with futures shedding nearly 1% after hawkish comments from several Federal Reserve officials drove up the dollar with the prospect of sharper interest rate hikes. But the gains were cut short after two Fed officials outlined the possibility of more steep interest rate hikes to combat rampant inflation. Speaking to CNBC, San Francisco Fed President Mary Daly said the Fed has a “long way to go” before inflation can be tamed, which likely points to more interest rate hikes. Separately, Chicago Fed President Charles Evans flagged another major rate hike, but expressed hope that such a move could be avoided. The dollar has largely overtaken gold as a safe haven buy this year, with its appeal boosted by the prospect of more interest rate hikes. After raising rates four times this year, the Fed will now meet in late-September to decide on its next course of action. Inflation has reached a staggering 9.1% annual rate in the U.S., putting pressure on the bank to tighten policy further. Dollar strength weighed on most other major metals on Wednesday, with silver and platinum futures reeling from 2% drops each. Industrial metals, particularly copper, were hit hard this week by a swathe of weak manufacturing data from across the globe. With economic activity steadily declining this year, the outlook for metal prices remains dim.
  • Oil futures dropped in early trade on Wednesday after data pointed to an unexpected rise in U.S. crude stockpiles, while traders awaited an OPEC+ meeting for more clarity on crude production this year. Crude prices saw a volatile session on Tuesday amid concerns over rising U.S.-China tensions after House of Representatives Speaker Nancy Pelosi's Taiwan trip drew ire from the Chinese government. Data from the American Petroleum Institute (API) showed U.S. oil inventories rose by about 2.2 million barrels in the week to July 29, up from a fall of about 4 million barrels in the previous week. Economists had expected inventories to drop by 0.4 million. The API figures are likely to herald a similar upside in official government inventory figures, due later on Wednesday. The rise in inventories also comes just before a meeting of the Organization of Petroleum Exporting Countries and its allies (OPEC+), set to begin later in the day. While U.S. President Joe Biden has been repeatedly calling upon Saudi Arabia- which leads the group- to raise production, market consensus is that most members will be hesitant to hike supply during an economic downturn. The OPEC+ bought production back up to pre-pandemic levels this year, as supply disruptions caused by the Russia-Ukraine war saw crude prices shoot up to nearly $140 a barrel. But weak manufacturing data from industrial powerhouse China suggests that crude demand may be languid for the remainder of the year. Mixed readings from the United States and the Eurozone also pointed to a slowdown in growth, which severely dented oil prices at the start of the week. Strength in the dollar has also weighed on oil prices in recent months, as investors expect the Federal Reserve to continue hiking rates to combat rampant inflation. The dollar jumped over 1% on Tuesday as fears of an escalation in U.S.-China tensions drove safe haven demand for the greenback.

 

 
Intraday RESISTANCE LEVELS
3rd 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
3rd 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.
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 1.1870-1.1810 1.1870-1.1810
USD/JPY 130.70-130.24 129.35 128.00-126.75

Intra-Day Strategy (3rd 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 made its intraday high of US$1770.61/oz and low of US$1754.96/oz. Gold down 0.620% at US$1765.32/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   1834.0 Sell
STOCH(5,3)   7.367 Sell
MACD(12,26,9)   -27.400 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$20.50/oz and low of US$19.94/oz settled down by 1.813% at US$19.97/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.

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 Tuesday made an intra‐day high of US$95.69/bbl, intraday low of US$91.79/bbl and settled up by 0.088% to close at US$93.07/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 Tuesday made an intraday low of US$1.0162/EUR, high of US$1.0293/EUR and settled the day down by 0.920% to close at US$1.0165/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 Tuesday made an intra‐day low of US$1.2157/GBP, high of US$1.2293/GBP and settled the day down 0.665% to close at US$1.2164/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     1.1870-1.1810
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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