AAFX TRADING

Daily Market Lookup

  • The dollar made up some losses on Thursday after a steep drop the previous day on softer than expected inflation data out of the U.S. The headline U.S. consumer price index rose by 8.5% on an annual basis in July and was flat compared with June, below estimates of 8.7% and 0.2%, due in part to a decline in petrol costs. The print led some investors to revise their expectations for a Federal Reserve interest rate hike in September, with the uptick now seen at 50 basis points instead from 75 basis points, according to the CME's Fedwatch tool. Fed policymakers also warned following the data that they would maintain rate hikes until inflation pressures subside. Aggressive Fed monetary tightening to quell soaring price growth has undergirded recent strength in the dollar, as traders seek the relative safety of the currency amid concerns that the rate increases may weigh on broader economic growth. The dollar touched a one-month low in the wake of the release of the inflation data.
  • Gold prices slipped on Thursday as fears of a U.S. recession were eased by soft inflation data, while copper prices stuck to five-week highs as the dollar retreated. Gold prices had rallied to a one-month high on Wednesday after data showed that U.S. inflationary pressures eased in July, which dented the dollar. But they had shortly retreated from their peak, as the data triggered a widespread rally in risk-driven assets. Gold prices now appear to be caught between a weakening dollar and improved risk appetite. U.S. producer price inflation, due at 0830 ET on Thursday, may provide further cues to the yellow metal. Producer price inflation is expected to mirror a fall in consumer prices. But any signs that this trend did not extend to factory prices could dent risk appetite Weakness in the dollar, amid growing bets on a smaller interest rate hike by the Federal Reserve in September boosted industrial metal prices. But the spike in industrial metal prices comes despite a decline in factory activity across the globe. Producer price inflation in China fell through July, while manufacturing activity contracted in the face of COVID-19 lockdowns. Industrial activity in the U.S. and Eurozone is also declining in the wake of surging commodity prices and increased supply chain issues earlier this year.
  • Oil prices drifted lower on Thursday after gaining more than $1 in the previous session, as concerns over supply disruptions eased and markets looked for evidence of improving fuel demand. Oil is struggling to find direction, suggesting investors have not reached a consensus on the outlook for supply and demand, analysts from Haitong Futures said. U.S. crude oil stocks rose by 5.5 million barrels in the most recent week, the U.S. Energy Information Administration said, more than the expected increase of 73,000 barrels. Gasoline product supplied rose in the most recent week to 9.1 million barrels per day, though that figure still shows demand down 6% over the past four weeks compared with the year-ago period. The premium for front-month WTI futures over barrels loading in six months' time was pegged at $4.38 a barrel on Thursday, the lowest in four months, indicating easing tightness in prompt supplies. The resumption of flows on the Russia-to-Europe Druzhba pipeline further calmed market worries over global supplies. Russian state oil pipeline monopoly Transneft restarted oil flows via the southern leg of the Druzhba oil pipeline. Ukraine had suspended Russian oil pipeline flows to parts of central Europe since early this month because Western sanctions prevented it from receiving transit fees from Moscow, Transneft said on Tuesday. Meanwhile, physical oil prices around the world have begun to sag alongside futures, reflecting easing concerns over Russian-led supply disruptions and heightened worries about a possible global economic slowdown. Monthly oil reports from the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) are expected later on Thursday. Oil prices fell slightly on Thursday, but retained most of their recent gains as softer-than-expected U.S. inflation data drove expectations of a smaller rate hike by the Federal Reserve. Prices rallied off weekly lows on Wednesday after the U.S. consumer price index showed that inflationary pressures eased in July- a result of a series of interest rate hikes by the Federal Reserve to contain runaway prices.
  • The dollar index slumped after the reading, as investors began penciling in a 50 basis point rate hike by the Fed during its September meeting. Initial expectations were for a 75 basis point hike. A slower pace of monetary policy tightening, coupled with easing inflation is expected to take off some pressure on U.S. economic activity, which could spur a recovery in crude demand. Additionally, concerns over a supply crunch in Europe, stemming from Ukraine halting the Druzhba oil pipeline from Russia, had also supported prices. But exports to Europe are expected to resume soon. But in the near-term, oil likely faces a supply glut amid waning demand in major economies. U.S. government data on Wednesday confirmed that crude oil inventories grew substantially more than expected in the past week, indicating that demand has remained subdued. Inventories rose by 5.458 million barrels in the week to August 5, well above analyst estimates for a build of 73,000 barrels. Crude stockpiles had also unexpectedly risen by nearly five million barrels in the prior week. Weak factory activity in China, as seen by sluggish PMIs and a drop in producer price inflation, also indicates that crude demand in the second-largest economy will remain subdued. Data on U.S. factory price inflation, due at 0830 ET on Thursday, will show whether inflationary pressures on U.S. industries are easing. The reading is expected to mirror a drop seen in consumer prices.

 

 
Intraday RESISTANCE LEVELS
11th 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 91.30-92.35 93.00 94.70-95.50
EURO/USD 1.0335-1.0390 1.0430 1.0470-1.0520
GBP/USD 1.2245-1.2300 1.2355` 1.2380-1.2420
USD/JPY 132.50-133.10 134.10 135.20-136.00

Intraday SUPPORTS LEVELS
11th 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 90.50-89.00 88.30 87.00-86.40
EURO/USD 1.0290-1.0190 1.0150 1.0010-0.9950
GBP/USD 1.2150-1.2110 1.2060 1.2010-1.1930
USD/JPY 131.90-130.75 130.20 129.40-128.50

Intra-Day Strategy (11th 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 Wednesday made its intraday high of US$1807.81/oz and low of US$1787.55/oz. Gold is down by 0.130% at US$1792.11/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 Wednesday made its intraday high of US$20.83/oz and low of US$20.34/oz settled up by 0.365% at US$20.58/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 Wednesday made an intra‐day high of US$91.76/bbl, an intraday low of US$87.13/bbl, and settled up by 1.208% to close at US$90.95/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     90.50-89.00
S2     88.30
S3     87.00-86.40

Intraday Resistance Levels
R1     91.30-92.35
R2     93.00
R3     94.70-95.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.308 Sell
20-DMA   93.67 Buy
50-DMA   98.78 Buy
100-DMA   99.86 Buy
200-DMA   94.61 Buy
STOCH(5,3)   62.291 Sell
MACD(12,26,9)   -3.655 Buy

EUR/USD

AAFX TRADING

EUR/USD on Wednesday made an intraday low of US$1.0201/EUR, a high of US$1.0368/EUR, and settled the day up by 0.849% to close at US$1.0298/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 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 1.0335-1.0430, 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     1.0290-1.0190
S2     1.0150
S3     1.0010-0.9950

Intraday  Resistance Levels
R1     1.0335-1.0390
R2     1.0430
R3     1.0470-1.0520

TECHNICAL INDICATORS
Name   Value Action
14DRSI   56.204 Buy
20-DMA   1.0230 Buy
50-DMA   1.0327 Sell
100-DMA   1.0520 Sell
200-DMA   1.0824 Sell
STOCH(5,3)   73.410 Buy
MACD(12,26,9)   -0.011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Wednesday made an intra‐day low of US$1.2064/GBP, a high of US$1.2276/GBP, and settled the day up 1.123% to close at US$1.2208/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 1.2190-1.1700 with a target of 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 1.2150-1.2100-1.2060 and 1.2010-1.1930-1.1870 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2150-1.2110
S2     1.2060
S3     1.2010-1.1930

Intraday Resistance Levels
R1     1.2245-1.2300
R2     1.2355`
R3     1.2380-1.2420

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 Wednesday made an intra‐day low of JPY132.02/USD and made an intraday high of JPY135.30/USD and settled the day down by 1.579% at JPY132.87/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 132.50-136.00 with risk above 136.00 targeting 132.50-131.90-130.70 and 130.25-129.40-128.50. Long positions above 131.90-128.50 with targets of 132.50-133.10-134.10 and 135.25-136.30-136.75 with stops below 128.50.

 
Intraday Support Levels
S1     131.90-130.75
S2     130.20
S3     129.40-128.50

INTRADAY RESISTANCE LEVELS
R1     132.50-133.10
R2     134.10
R3     135.20-136.00

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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