AAFX TRADING

Daily Market Lookup

  • The safe-haven dollar edged higher on Tuesday, erasing earlier losses as risk appetite dwindled ahead of key inflation figures that could offer clues on how aggressive the Federal Reserve will be in its expected interest rate hike in September. The greenback had drifted lower in thin summer trading from the start of the session but then reversed course as U.S. stock markets slid on profit warnings, global inflationary concerns, and data that showed U.S. worker productivity fell sharply in the second quarter. The big focus for traders is on Wednesday's U.S. Consumer Price Index report, which is expected to show that decades-high inflation eased in July following back-to-back 75-basis point hikes by the Fed in June and July. But data on Friday showed that U.S. employers hired far more workers than expected last month, with wages still rising at a strong clip, boosting bets for another mammoth rate hike by the Fed at its Sept. 20-21 meeting. Money-market futures show traders see about a two-thirds chance of a 75 bps hike next month. Economists polled by Reuters see year-on-year headline inflation at 8.7% - relatively high, but below last month's 9.1% figure. The Fed targets inflation at 2%. Heightened expectations for aggressive near-term hikes, have pushed short-dated Treasury yields further above long-term peers. The dollar's safe haven status, though, makes the greenback's reaction a little harder to predict, especially as growth and geopolitical worries swirl. China extended military drills near Taiwan, and the self-ruled island's foreign minister said China was using the drills launched in protest against U.S. House Speaker Nancy Pelosi's visit as an excuse to prepare for an invasion. The U.S. dollar edged lower in early European trade Tuesday, adopting something of a holding pattern ahead of the release of the key U.S. consumer inflation data. Friday’s strong July U.S. jobs report increased expectations that the U.S. Federal Reserve will continue its aggressive monetary tightening with another hike of 75 basis points in September. A large fall in the CPI release could provide sufficient evidence that inflation has peaked to persuade the Fed to relax its aggressive tightening path, and the dollar has edged lower in tight trading ranges ahead of the number. GBP/USD rose 0.1% to 1.2086, with sterling traders focusing on Friday’s release of U.K. GDP for June, which is expected to show a sharp slowdown of 1.2% on the month as the country struggles with rising interest rates and soaring inflation.
  • Gold prices were steady on Wednesday as safe haven demand rose ahead of key U.S. inflation data, while copper prices plummeted after weak Chinese factory inflation pointed to laggard demand for the industrial metal. Buying into the yellow metal has been supported this week by anticipation of U.S. CPI inflation data, due at 0830 ET on Wednesday. While the reading is expected to have declined slightly from last month to an annual 8.7% rate in July, inflation is still expected to remain pinned at 40-year highs. This, coupled with a stellar payrolls report for July, could open the door to a bigger-than-expected interest rate hike by the Federal Reserve next month. While this scenario would be negative for gold, investors are also betting that growing recession risks across the globe will drive safe haven demand for the metal. The United States logged two consecutive quarters of economic contraction, while China barely avoided a contraction in the second quarter. The Euro zone is also bracing for a potential recession. Data on Wednesday showed Chinese inflation grew less than expected in July, indicating that the world’s second largest economy is still grappling with the aftermath of COVID lockdowns. The reading- which indicated an extended downturn in Chinese factory activity- severely dented the prices of industrial metals. China's producer price index grew 4.2% annually in July, down from 6.1% in June and below expectations of 4.8%. Extended weakness in Chinese factory activity has weighed heavily on industrial metals this year, despite metal imports to the country remaining steady.
  • Oil prices eased on Wednesday after industry data showed U.S. crude inventories unexpectedly rose last week, signaling a potential hiccup in demand, though concerns over supply kept losses in check. U.S. crude stocks rose by about 2.2 million barrels for the week ended Aug. 5, according to market sources citing American Petroleum Institute figures. Analysts polled by Reuters had forecast that crude inventories would rise by around 100,000 barrels. Official government data is due on Wednesday at 10:30 a.m. EDT The European Union on Monday put forward a "final" text to revive the 2015 Iran nuclear deal which would boost Iran's crude exports. A senior EU official said he expected a final decision on the proposal within "very, very few weeks". Both oil benchmarks were volatile on Tuesday, both rising and falling by more than $1 a barrel during the session, but they settled slightly lower as investors weighed recessionary concerns with news that some oil exports had been suspended on the Russia-to-Europe Druzhba pipeline that transits Ukraine Ukraine halted oil flows on the Druzhba oil pipeline to parts of central Europe because Western sanctions had prevented a payment from Moscow for transit fees from going through. Flows along the southern route of the Druzhba pipeline have been affected while the northern route serving Poland and Germany was uninterrupted. The Czech Republic's pipeline company MERO said it expected Russian oil supplies through the Druzhba pipeline to the Czech Republic to restart within several days. Adding to supplies, the operator of the giant Kashagan oilfield in Kazakhstan has started gradually restoring output after an emergency shutdown last week caused by a gas leak. The Kashagan oilfield produces about 300,000 barrels per day..

 

 
Intraday RESISTANCE LEVELS
10th August 2022 R1 R2 R3
GOLD-XAU 1,790-1,798 1,809 1,818-1,827
Silver-XAG 20.70-21.00 21.45 21.57-22.50
Crude Oil 90.50-91.30 92.35 93.00-94.70
EURO/USD 1.0290-1.0335 1.0390 1.0430-1.0470
GBP/USD 1.2110-1.2150 1.2245 1.2300-1.2405
USD/JPY 135.20-136.00 136.75 137.40-138.00

Intraday SUPPORTS LEVELS
10th August 2022 S1 S2 S3
GOLD-XAU 1,785-1,774 1,760 1,746-1,741
Silver-XAG 20.35-19.80 19.50-18.90 18.60-17.80
Crude Oil 89.00-88.30 87.00 86.40- 85.50
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 (10th 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 Tuesday made its intraday high of US$1800.43/oz and low of US$1783.18/oz. Gold is up by 0.299% at US$1794.27/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 1790-1835 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     1,785-1,774
S2     1,760
S3     1,746-1,741
Intraday Resistance Levels
R1     1,790-1,798
R2     1,809
R3     1,818-1,827

Technical Indicators

Name   Value Action
14DRSI  

57.516

Buy
20-DMA   1765.17 Sell
50-DMA  

1783.73

Sell
100-DMA   1812.42 Sell
200-DMA   1826.05 Sell
STOCH(5,3)   80.749 Sell
MACD(12,26,9)   -27.400 Buy

Silver - XAG

AAFX TRADING

Silver on Tuesday made its intraday high of US$20.73/oz and low of US$20.40/oz settled down by 3.87% at US$20.52/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     20.35-19.80
S2     19.50-18.90
S3     18.60-17.80

Intraday  Resistance Levels
R1     20.70-21.00
R2     21.45
R3     21.57-22.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   59.961 Buy
20-DMA   19.54 Buy
50-DMA   20.33 Sell
100-DMA   21.30 Sell
200-DMA   22.33 Sell
STOCH(5,3)   74.746 Sell
MACD(12,26,9)   0.1095 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Tuesday made an intra‐day high of US$91.95/bbl, an intraday low of US$86.42/bbl, and settled down by 0.1700% to close at US$89.81/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 89.00-95.00 with stop loss at 95.00; targeting 88.30-87.00 and 86.40-85.50-84.90. Buy above 89.00-84.90 with risk daily closing below 84.90 and targeting 90.50-91.30-92.35 and 94.00-94.70-96.00.

 
Intraday Support Levels
S1     89.00-88.30
S2     87.00
S3     86.40- 85.50

Intraday Resistance Levels
R1     90.50-91.30
R2     92.35
R3     93.00-94.70

TECHNICAL INDICATORS
Name   Value Action
14DRSI   37.504 Sell
20-DMA   94.22 Buy
50-DMA   99.41 Buy
100-DMA   101.21 Buy
200-DMA   94.68 Buy
STOCH(5,3)   26.576 Sell
MACD(12,26,9)   -3.655 Buy

EUR/USD

AAFX TRADING

EUR/USD on Tuesday made an intraday low of US$1.0187/EUR, a high of US$1.0247/EUR, and settled the day up by 0.174% to close at US$1.0211/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 Tuesday made an intra‐day low of US$1.2062/GBP, a high of US$1.2129/GBP, and settled the day down 0.024% to close at US$1.2073/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     1.2110-1.2150
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 Tuesday made an intra‐day low of JPY135.197/USD and made an intraday high of JPY135.19/USD and settled the day up by 0.090% at JPY135.00/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 135.20-138.00 with risk above 138.00 targeting 134.10-133.10-132.50 and 131.90-130.70-130.25. Long positions above 134.20-130.75 with targets of 135.25-136.30-136.75 and 137.40-138.00 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   49.229 Buy
20-DMA   135.01 Sell
50-DMA   134.08 Sell
100-DMA   130.67 Sell
200-DMA   125.17 Buy
STOCH(9,6)   86.382 Buy
MACD(12,26,9)   -0.361 Sell

AAFX TRADING
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