AAFX TRADING

Daily Market Lookup

  • The U.S. dollar edged higher in early European trade Friday, rebounding to a degree after a two-day selloff as weaker than expected inflation data prompted a rethink of the Federal Reserve’s likely tightening path. This dollar weakness was caused by Thursday's data showing U.S. producer prices unexpectedly fell in July a day after the country’s consumer prices came in unchanged, suggesting that inflation pressures in the U.S. we’re easing. This resulted in the markets altering their view on the Fed's super-charged tightening path, considering it more likely that the U.S. central bank will hike interest rates by 50 basis points in September, and not by the 75 bps previously expected. However, this new position is under threat. Fed policymakers have come out in numbers to warn that the central bank will remain tough despite the slight softening in inflation numbers. San Francisco Fed President Mary Daly was the latest to comment, stating on Thursday that a 50 bps interest rate hike in September "makes sense", but that she is open to a bigger rate hike if data warrants. Elsewhere, GBP/USD fell 0.1% to 1.2203 after data showed that the U.K. economy shrank in the second quarter for the first time in five quarters, but by a fraction less than expected. Gross domestic product fell 0.1% in the three months through June, a slightly better outcome than the 0.2% expected but a sharp drop from the 0.8% gain posted in the previous quarter. The Bank of England last week predicted the country’s economy would fall into a prolonged recession at the end of the year, and this release opens the possibility that the recession could come sooner. The dollar was slightly lower on Thursday following a 1% loss the previous day when data showed U.S. inflation was not as hot as anticipated in July, prompting traders to dial back future rate hike expectations by the Federal Reserve. Investors slashed bets on the possibility that the Fed will raise interest rates by 75 basis points for a third consecutive time to help tame decades-high inflation when it meets in September after a report on Wednesday showed U.S. consumer prices were unchanged in July. The dollar recorded its biggest decline in five months following the report as traders readjusted their forecasts to factor in the chance that inflation may have peaked. Fed funds futures traders are now pricing in a 58% chance of a 50-basis-point hike in September and a 42% chance of a 75-basis-point increase. The currency's drop may have been cushioned by Fed officials who attempted to temper expectations of significantly looser policy, with Neel Kashkari telling a conference on Wednesday that the central bank was "far, far away from declaring victory" on inflation. Data on Thursday showed that U.S. producer prices unexpectedly fell in July amid a drop in the cost for energy products and that underlying producer inflation appears to be on a downward trend, while jobless claims rose for a second straight week in a labor market that remains tight. The positive inflation data helped equity markets surge on Wednesday and into Thursday, but the rally fizzled as investors questioned the Fed's next steps. The euro and Japanese yen were among the currencies to benefit from the dollar's weakness on Wednesday.
  • Gold prices retreated on Friday, as hawkish comments on interest rate hikes by the Federal Reserve outweighed optimism over signs of cooling U.S. inflation. But overnight comments from Fed officials on the path of policy tightening kept investors uncertain over future interest rates. San Francisco Fed President Mary Daly said she was open to a 75 basis point rate hike in September, noting that inflation still remained around 40-year highs, Reuters reported. Chicago Fed President Charles Evans also said this week that the Fed would need to raise rates to at least 3.25% to 3.5% by the year-end, to combat inflation. Their comments offset optimism over an unexpected fall in U.S. producer price inflation in July, data showed on Thursday. This came after a reading on Wednesday showed U.S. consumer price inflation remained static through July, after rising exponentially earlier in the year. While both readings caused a pullback in the dollar index, investors remained uncertain over the path of U.S. monetary policy this year, given that there is more inflation and employment data due before the Fed’s next meeting. Treasury yields also rose this week Among industrial metals, copper futures fell 0.3%, as concerns over slowing manufacturing activity across the globe continued to weigh on the red metal. While copper is set for a mild weekly gain on weakness in the dollar, it still faces risks from a slowdown in major importer China. Rising COVID cases in some parts of the mainland are likely to trigger more losses in copper prices.
  • Oil prices were muted on Friday, but were headed for strong weekly gains on the back of easing inflation risks, a strong demand forecast, and the prospect of OPEC supply cuts. Oil’s biggest boost this week was data on Wednesday that showed U.S. CPI inflation grew less than expected in July, pointing to a smaller rate hike by the Federal Reserve. This weighed on the dollar and benefited commodity prices. But oil extended its rally on Thursday after the IEA said soaring natural gas prices could push consumers into oil for heating purposes, shoring up demand. The IEA raised its outlook for 2022 oil demand by 380,000 bpd, to 2.1 million bpd. 2022 oil demand is expected at 99.7 million bpd. In contrast, the Organization of Petroleum Exporting Countries (OPEC) cut its annual demand growth outlook by 260,000 bpd to 3.1 million bpd- although its expectations for demand still remained higher than that seen by the IEA. But a lower demand outlook for the OPEC also opens the door to potential supply cuts, a move that is a net positive for oil prices. Demand concerns- particularly in the face of falling factory activity across the globe- had pummeled crude prices last week, pushing them to lows last seen in February. But a reversal in this trend, especially as inflationary pressures ease, could spur a resurgence in crude demand. But other indicators show that this trend may be far away. U.S. crude stockpiles rose unexpectedly for two consecutive weeks, pointing to sluggish demand on the ground. U.S. gasoline prices have also eased from record highs hit in mid-June, while demand among crude refiners has also dipped.

 

 
Intraday RESISTANCE LEVELS
12th August 2022 R1 R2 R3
GOLD-XAU 1,792-1,798 1,809 1,818-1,827
Silver-XAG 20.70-21.00 21.45 21.57-22.50
Crude Oil 94.45-95.50 94.45-95.50 98.65-99.80
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 134.10-135.20 136.00 137.00-137.90

Intraday SUPPORTS LEVELS
12th 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 93.00-92.35 91.30 90.50-89.00
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 132.50-133.10 131.90-130.75 130.20-129.40

Intra-Day Strategy (12th 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 Thursday made its intraday high of US$1799.22/oz and low of US$1783.45/oz. Gold is down by 0.145% at US$1789.50/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     1,792-1,798
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 Thursday made its intraday high of US$20.62/oz and low of US$20.23/oz settled down by 1.36% at US$20.30/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 Thursday made an intra‐day high of US$94.28/bbl, an intraday low of US$90.64/bbl, and settled up by 2.603% to close at US$93.31/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, 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 95.00-99.80 with stop loss at 99.80; targeting 88.30-87.00 and 86.40-85.50-84.90. Buy above 93.0-89.00 with risk daily closing below 89.0 and targeting 94.45-96.00-96.80 and 97.50-98.65-99.80.

 
Intraday Support Levels
S1     93.00-92.35
S2     91.30
S3     90.50-89.00

Intraday Resistance Levels
R1     94.45-95.50
R2     94.45-95.50
R3     98.65-99.80

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 Thursday made an intraday low of US$1.0274/EUR, a high of US$1.0364/EUR, and settled the day up by 0.192% to close at US$1.0318/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   1.0230 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 Thursday made an intra‐day low of US$1.2181/GBP, a high of US$1.2276/GBP, and settled the day up 0.087% to close at US$1.2198/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  

57.146

Buy
20-DMA   1.2119 Buy
50-DMA   1.2187 Buy
100-DMA   1.2415 Sell
200-DMA   1.2763 Sell
STOCH(5,3)   71.726 Sell
MACD(12,26,9)   0.002 Sell

USD/JPY

AAFX TRADING

USD/JPY on Thursday made an intra‐day low of JPY131.73/USD and made an intraday high of JPY135.30/USD and settled the day up by 0.088% at JPY132.99/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 134.10-137.9 with risk above 137.90 targeting 132.50-131.90-130.70 and 130.25-129.40-128.50. Long positions above 132.50-128.50 with targets of 134.10 and 135.25-136.30-136.75 with stops below 128.50.

 
Intraday Support Levels
S1     132.50-133.10
S2     131.90-130.75
S3     130.20-129.40

INTRADAY RESISTANCE LEVELS
R1     134.10-135.20
R2     136.00
R3     137.00-137.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.635 Buy
20-DMA   135.52 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
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING