AAFX TRADING

Daily Market Lookup

  • The safe-haven U.S. dollar rose on Monday after a new batch of disappointing data from China bolstered global recession worries, while the yuan weakened following a People's Bank of China surprise rate cut. Chinese industrial output, retail sales and fixed-asset investment all fell short of analyst estimates on Monday, as a nascent recovery from draconian COVID-19 lockdowns faltered. The dollar was also supported by Federal Reserve policymakers' hawkish comments in response to early signs that U.S. inflation may have peaked. Richmond Fed President Thomas Barkin told CNBC on Friday that he would like to see inflation running at the Fed's 2% target for "some time" before stopping rate hikes. Last week, fueling investor hopes for less aggressive Fed tightening, U.S. data showed the first decline in import prices for seven months, following statistics showing U.S. consumer and producer prices also cooling. Analysts will scour minutes of the Fed's most recent meeting, due to be released on Wednesday, for more clues on policymakers' thinking, while retail sales data on Friday will give some fresh insight on the economy's health. Money markets now price 43.5% odds of another 75 basis-point rate hike by the Federal Open Market Committee in September, versus 56.5% probability of a slowing in the pace of tightening. The euro eased 0.24% to $1.0232, weighed down by Europe's struggles with the war in Ukraine, the hunt for non-Russian energy sources and a hit to the German economy from scant rainfall. The U.S. dollar edged higher in early European trade Monday, benefiting from its safe haven status, while the Chinese yuan dipped after a batch of disappointing data from China prompted the country’s central bank to cut interest rates. Economic data released earlier Monday showed China’s economic growth rate unexpectedly slowing in July, as the world’s second largest economy struggled to shake off the hit to growth in the second quarter from strict COVID restrictions. Industrial output grew 3.8% in July from a year earlier, with the growth rate below the 4.6% increase expected, while retail sales rose 2.7% from a year ago, missing forecasts for 5.0% growth and the 3.1% growth seen in June. While the Chinese economy is slowing sufficiently to prompt the central bank to cut interest rates, the debate in the U.S. is the extent to which the Federal Reserve will next hike rates U.S. inflation data was weaker than expected last week fueling investor hopes that the central bank could ease back on its aggressive tightening, even as a number of Fed policymakers seemed keen to continue the hawkish rhetoric. This puts the release of the minutes of the Fed’s July meeting, on Wednesday, firmly in focus, while retail sales data on Friday will give some fresh insight into the economy's health. Yet, despite Monday’s dollar gains, speculators decreased their net long U.S. dollar positions last week, according to U.S. Commodity Futures Trading Commission data released on Friday.
  • Oil prices dropped for a second session on Monday as weak China economic data triggered concerns about demand at the world's largest crude importer while the head of the world's top exporter, Saudi Aramco said it was ready to ramp up output. China's economy unexpectedly slowed in July, while refinery output slipped to 12.53 million barrels per day, its lowest since March 2020, government data showed. Oil demand could stay on the downtrend for the rest of the year as the threat of COVID-19 restrictions encourages precautionary savings and reduces oil consumption, he added. Saudi Aramco stands ready to raise crude oil output to its maximum capacity of 12 million bpd if requested to do so by the Saudi Arabian government, Chief Executive Amin Nasser told reporters on Sunday. Oil prices rebounded more than 3% last week after a damaged oil pipeline component disrupted output at several offshore Gulf of Mexico platforms and as investors pared back expectations for interest rate increases in the United States. Producers had moved to reactivate some of the halted production after repairs were completed late Friday, a Louisiana official said. Energy services firm Baker Hughes Co reported on Friday that U.S. oil rig count rose by 3 to 601 last week. The rig count, an early indicator of future output, has been slow to grow with oil production only seen recovering from pandemic-related cuts next year. Global oil markets remained supported by tight supplies in the run-up to EU sanctions on Russian crude oil and refined product supplies this winter. More supplies could come if Iran and the United States accept an offer from the European Union to revive the 2015 nuclear deal, which would will lift sanctions on Iranian oil exports, analysts said.
  • Gold’s naysayers have done all they can to pooh-pooh the yellow metal’s return to $1,800. But the negative talk hasn’t been able to stick long enough to do the damage they intended, despite gold’s occasional bearish forays into $1,700 territory this week. Gold’s gains came after the dollar — which is a contrarian trade to the yellow metal — weakened this week on ebbing U.S. inflation data. The Consumer Price Index, one of most universally-followed gauges on inflation, showed zero growth in the United States for July after a 1.3% rise in June. Over the year to last month, the so-called CPI also slowed, expanding by 8.5% from a previous 9.1%. The U.S. Producer Price Index, meanwhile, fell 0.5% in July, reinforcing the theme of inflation in retreat from four-decade highs. Gold is supposed to be a hedge against inflation but it has not been able to hold up to that billing for most of the past two years since hitting record highs above $2,100 in August 2020. One reason for that has been the rallying dollar, which is up 11% this year after a 6% gain in 2021, on expectations of strong rate hikes by the Federal Reserve to curb inflation currently at near four-decade highs. The dollar fell this week despite various Fed officials saying the slowdown in July inflation won’t be enough to make them go easy with rate hikes. San Francisco Fed President Mary Daly, in an interview with the Financial Times, also warned it is far too early for the U.S. central bank to "declare victory" in its fight against inflation. However, Daly said that a half-percentage point rate rise was her "baseline" but did not rule out a third consecutive 0.75% point rate rise at the central bank's next policy meeting in September, according to the report. Calling inflation "unacceptably" high, Chicago Fed President Charles Evans said he believes the Fed will likely need to lift its policy rate to 3.25%-3.5% this year and to 3.75%-4% by the end of next year, in line with what Fed Chair Jerome Powell signaled after the central bank’s latest meeting in July.

 

 
Intraday RESISTANCE LEVELS
15th 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 90.50-91.30 92.35-93.00 94.45-95.50
EURO/USD 1.0290-1.0335 1.0390-1.0430 1.0470-1.0520
GBP/USD 1.2110-1.2150 1.2245 1.2300-1.2355
USD/JPY 134.10-135.20 136.00 137.00-137.90

Intraday SUPPORTS LEVELS
15th 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 89.00-88.20 87.00 86.10-83.7
EURO/USD 1.0190 1.0150 1.0010-0.9950
GBP/USD 1.2060-1.2010 1.1930 1.1890-1.1805
USD/JPY 132.50-133.10 131.90-130.75 130.20-129.40

Intra-Day Strategy (15th 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$1802.63/oz and low of US$1784.87/oz. Gold is up by 0.707% at US$1802.12/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 Friday made its intraday high of US$20.82/oz and low of US$20.23/oz settled up by 2.46% at US$20.79/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 Friday made an intra‐day high of US$94.11/bbl, an intraday low of US$90.58/bbl, and settled down by 2.22% to close at US$91.27/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 90.50-95.00 with stop loss at 95.00; targeting 89.00-88.20-87.00 and 86.10-84.90-83.70. Buy above 89.00-83.70 with risk daily closing below 83.70; targeting 90.50-91.30-92.35 and 93.00-94.45-96.00.

 
Intraday Support Levels
S1     89.00-88.20
S2     87.00
S3     86.10-83.7

Intraday Resistance Levels
R1     90.50-91.30
R2     92.35-93.00
R3     94.45-95.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.672 Sell
20-DMA   93.24 Buy
50-DMA   98.21 Buy
100-DMA   99.53 Buy
200-DMA   94.54 Buy
STOCH(5,3)   61.74 Sell
MACD(12,26,9)   -2.898 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.0237/EUR, a high of US$1.0326/EUR, and settled the day down by 0.579% to close at US$1.0258/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 1.0290-1.0430, 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
S2     1.0150
S3     1.0010-0.9950

Intraday  Resistance Levels
R1     1.0290-1.0335
R2     1.0390-1.0430
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 Friday made an intra‐day low of US$1.2098/GBP, a high of US$1.2215/GBP, and settled the day down 0.554% to close at US$1.2130/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 1.2110-1.1700 with a target of 1.2245-1.2310 and 1.2405-1.2479 with stop loss closing below 1.1700. Sell in between 1.2110-1.2550 with targets at 1.2060-1.2010-1.1930 and 1.1870-1.1805 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2060-1.2010
S2     1.1930
S3     1.1890-1.1805

Intraday Resistance Levels
R1     1.2110-1.2150
R2     1.2245
R3     1.2300-1.2355

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

47.106

Buy
20-DMA   1.2109 Buy
50-DMA   1.2179 Buy
100-DMA   1.2407 Sell
200-DMA   1.2755 Sell
STOCH(5,3)   40.428 Sell
MACD(12,26,9)   0.002 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made an intra‐day low of JPY132.87/USD and made an intraday high of JPY133.88/USD and settled the day up by 0.379% at JPY133.48/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
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