AAFX TRADING

Daily Market Lookup

  • The dollar fell on Monday, losing some of the gains it had made from Friday's U.S. jobs data, as currency markets pulled back on their initial reaction. Higher-than-expected U.S. employment figures last week saw the dollar strengthen against major peers. The data was seen by traders as an indication that the U.S. Federal Reserve could raise interest rates more aggressively to combat inflation. Traders were pricing in a roughly 69% chance of the Fed raising rates by 75 basis points at its September meeting, according to Refinitiv data. Fed Governor Michelle Bowman said on Saturday that the Fed should consider more 75 bps hikes at coming meetings to bring inflation back down. Markets are now waiting for U.S. inflation data on Wednesday to give further clues about the health of the world's largest economy. Analysts polled by Reuters expect annual inflation eased to 8.7% in July from 9.1% previously. The U.S. dollar posted more gains against the Japanese yen in early European trade Monday, although was subdued overall after last week’s strong U.S. nonfarm payrolls number raised expectations for further aggressive monetary tightening by the Federal Reserve. The prime driver behind these moves was the red-hot July U.S. jobs report, which stated that nonfarm payrolls increased by over 500,000 last month, over double the amount expected. This suggests the country’s labor market remains strong, even after a series of hefty interest rate rises to combat inflation, and gave the Federal Reserve considerable license to continue with a super-sized hike in September. Attention will now turn to Wednesday’s U.S. consumer price index release, with another large number likely to cement another increase along the lines of the 75 basis points hike seen from the Fed last time out. The July CPI figure is expected to ease to 8.7% on an annual basis from 9.1% previously, but the core CPI, which excludes volatile food and energy prices, is expected to increase by 0.5% month-over-month, pushing the annual rate up to 6.1% from 5.9% in June. Elsewhere, EUR/USD edged lower to 1.0178, with the single currency struggling to benefit from the risk-on sentiment seen in the stock markets after Moody's cut its outlook on Italian debt to negative following the resignation of the highly regarded Mario Draghi as prime minister, throwing Italian politics into turmoil. U.K. GDP for June, as well as the second quarter, is due for release on Friday, and is expected to show a sharp slowdown of 1.2% on the month as the country struggles with a severe cost-of-living crisis.
  • Oil prices inched up from multi-month lows on Monday as lingering worries about demand weakening on the back of a darkened economic outlook outweighed some positive economic data from China and the United States. Front-month Brent prices last week hit the lowest since February, tumbling 13.7% and posting their largest weekly drop since April 2020, while WTI lost 9.7%, as concerns about a recession hitting oil demand weighed on prices. Both contracts recouped some losses on Friday after jobs growth in the United States, the world's top oil consumer, unexpectedly accelerated in July. On Sunday, China also surprised markets with faster-than-expected growth in exports. China, the world's top crude importer, brought in 8.79 million barrels per day (bpd) of crude in July, up from a four-year low in June, but still 9.5% less than a year earlier, customs data showed. In Europe, Russian crude and oil products exports continued to flow ahead of an impending embargo from the European Union that will take effect on Dec. 5. Last week, the Bank of England warned of a protracted recession in Britain. Gasoline demand in the United States continues to weaken despite falling prices at the pump, and stockpiles are rising. In terms of U.S. production, energy firms last week cut the number of oil rigs by the most since September in the first drop in 10 weeks.
  • As those in the gold market began Friday’s trading, the ominous question was whether the yellow metal’s prices will survive another wrecker-ball of a U.S. jobs report. U.S. nonfarm payrolls report for July suggested that longs in the game might not get crushed yet. U.S. employers added 528,000 jobs last month, according to the report that smashed economists’ forecasts for an addition of just 250,000 posts — making the Federal Reserve’s already arduous task of curbing inflation even harder. Yet gold, which typically encounters a meltdown in any situation that calls for stiff Fed rate hikes — and a U.S. jobs report that’s more than twice stronger than forecast certainly qualifies as one of those situations — held relatively well under the circumstances. One reason for gold surviving the jobs report was probably that neither the U.S. dollar nor Treasury bond yields — which together are the biggest beneficiaries of any Fed rate hike — rallied too much on Friday. The Fed has already hiked interest rates four times since March, bringing key lending rates from nearly zero to as high as 2.5%. It has another three rate revisions left before the year is over, with the first of that due on September 21. Until the jobs report released on Friday, expectations had been for a 50 basis point hike in September. Now, money market traders are pricing in a 62% chance of a 75-basis point hike for next month — the same as in June and July. The labor market has been the juggernaut of the U.S. economy, powering its recovery from the 2020 coronavirus outbreak. Unemployment reached a record high of 14.8% in April 2020, with the loss of some 20 million jobs after the COVID-19 breakout. Since then, hundreds of thousands of jobs have been added every month, with the trend not letting up in July despite a negative 0.9% growth in second-quarter gross domestic product this year, after a minus 1.6% in the first quarter that together accounted for a recession. As thankful as the Biden administration and economic policy-makers at the Fed are for such jobs resilience, the runaway labor market — and associated wage pressures — has been a headache to monetary authorities fighting the worst U.S. inflation since the 1980s. Hourly wages have risen month after month since April 2021, expanding by a cumulative 6.7% over the past 16 months, or an average of 0.4% a month. Inflation, measured by the Consumer Price Index, meanwhile expanded by 9.1% in the year to June, its highest in four decades. The Fed’s tolerance for inflation is a mere 2% per year, some 4-1/2 times less than the current CPI reading.

 

 
Intraday RESISTANCE LEVELS
8th August 2022 R1 R2 R3
GOLD-XAU 1,785-1,798 1,809 1,818-1,827
Silver-XAG 20.35-20.70 21.45 21.57-22.50
Crude Oil 88.30- 89.00 90.50 91.30-92.35
EURO/USD 1.0290-1.0335 1.0390 1.0430-1.0470
GBP/USD 1.2100-1.2150 1.2245 1.2300-1.2405
USD/JPY 135.20-136.00 136.75 137.40-138.00

Intraday SUPPORTS LEVELS
8th August 2022 S1 S2 S3
GOLD-XAU 1,774 1,760 1,746-1,741
Silver-XAG 19.80-19.50 18.90 18.60-17.80
Crude Oil 87.00-86.40 85.50 84.90-84.00
EURO/USD 1.0190-1.0150 1.0010 0.9950-0.9900
GBP/USD 1.2060-1.2010 1.1930 1.1870-1.1810
USD/JPY 134.10-133.10 132.50 131.90-130.70

Intra-Day Strategy (8th 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 Friday made its intraday high of US$1794.83/oz and low of US$1764.91/oz. Gold is up by 0.911% at US$1774.79/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 the 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 1785-1835 keeping stop loss closing above 1835, targeting 1774-1760-1746 and 1741-1732-1707. Buy in between 1771-1707 with risk below 1707, targeting 1785-1798 and 1809-1818.

 
Intraday Support Levels
S1     1,774
S2     1,760
S3     1,746-1,741
Intraday Resistance Levels
R1     1,785-1,798
R2     1,809
R3     1,818-1,827

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 Friday made its intraday high of US$20.30/oz and low of US$19.54/oz settled down by 1.44% at US$19.88/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. MACD is below the zero line and histograms are decreasing trend and it will bring a bearish stance in the upcoming sessions. RSI is approaching the neutral region, indicating a buy signal for now. The Stochastic Oscillator is in the oversold region and gives a positive crossover to show an 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 placed 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 Friday made an intra‐day high of US$90.04/bbl, an intraday low of US$86.36/bbl, and settled up by 0.462% to close at US$87.79/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 the zero line and histograms are in increasing mode will bring a bullish stance in the upcoming sessions. The Stochastic Oscillator is in the neutral region and gives a positive crossover for confirmation of a bullish stance; while the RSI is in the 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 88.30-98.00 with stop loss at 98.00; targeting 87.00-86.40 and 85.50-84.90. Buy above 87.00-84.90 with risk daily closing below 84.90 and targeting 89.00-90.50-91.30 and 92.35-94.00-94.90-96.00.

 
Intraday Support Levels
S1     87.00-86.40
S2     85.50
S3     84.90-84.00

Intraday Resistance Levels
R1     88.30- 89.00
R2     90.50
R3     91.30-92.35

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 Friday made an intraday low of US$1.0141/EUR, a high of US$1.0251/EUR, and settled the day down by 0.657% to close at US$1.0177/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which become immediate support, a break below will target 1.0647. MACD is above the zero line and histograms are increasing mode which will bring a bullish view. Stochastic is in overbought territory and giving positive crossovers to for the bullish outlook for intraday. 14D RSI is currently in a 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 bel.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 Friday made an intra‐day low of US$1.2002/GBP, a high of US$1.2168/GBP, and settled the day down 0.739% to close at US$1.2066/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2834) is becoming a resistance level. 14-D RSI is currently in an oversold region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and gives a positive crossover to confirm bullish a stance. MACD is above zero line but histograms are increasing leading movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.2060-1.1700 with a target of 1.2100-1.2150-1.2245-1.2310 and 1.2405-1.2479 with stop loss closing below 1.1700. Sell in between 1.2100-1.2550 with targets at 1.2060-1.2010 and 1.1930-1.1870-1.1810 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2060-1.2010
S2     1.1930
S3     1.1870-1.1810

Intraday Resistance Levels
R1     1.2100-1.2150
R2     1.2245
R3     1.2300-1.2405

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 Friday made an intra‐day low of JPY132.51/USD and made an intraday high of JPY135.49/USD and settled the day up by 1.611% at JPY135.01/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 the overbought region and chances of downward are expected based on RSI. MACD is above the 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 a 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     134.10-133.10
S2     132.50
S3     131.90-130.70

INTRADAY RESISTANCE LEVELS
R1     135.20-136.00
R2     136.75
R3     137.40-138.00

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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING