AAFX TRADING

Daily Market Lookup

  • 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.
  • The dollar rallied on Friday but was set for a weekly drop as traders weighed improving U.S. inflation data against comments from Federal Reserve officials who cautioned the battle against rising prices was far from over. U.S. import prices declined for the first time in seven months in July on lower costs for both fuel and non-fuel products, data showed on Friday, in the third report this week to hint inflation may have topped out. Another two key inflation measures, for consumer prices and producer prices, cooled in July, data on Wednesday and Thursday showed, prompting traders to pare back views that the Fed will raise interest rates by 75 basis points for a third consecutive time when it meets in September. After four straight down days, including a more than 1% drop on Wednesday, the dollar rallied against its major rivals on Friday, but was still on track for a decline of around 0.84 for the week. The greenback's turnaround followed a steady drumbeat from Fed officials who made clear they would continue to tighten. San Francisco Federal Reserve Bank President Mary Daly said on Thursday she was open to the possibility of another 75 basis point hike in September Traders were pricing in around a 42.5% chance of a 75 bps Fed rate hike in September and a 57.5% chance of 50 bps. The British pound fell 0.6% to $1.2141 versus the dollar. Data showed UK GDP contracted by less than forecast in June, even though an extra public holiday had been expected to cause a big drag. The euro has been 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. Commerzbank (ETR:CBKG) said in a note it had revised its euro-dollar forecast lower, as it expects a euro-area recession as a base scenario, having previously been a "risk scenario". The bank said it expects the euro to fall to $0.98 in December and to not recover until later in 2023.
  • Oil prices fell on Tuesday as bleak economic data from top crude buyer China renewed fears of a global recession. China's central bank cut lending rates to revive demand as the nation's economy slowed unexpectedly in July, with factory and retail activity squeezed by Beijing's zero-COVID policy and a property crisis. China's fuel product exports are expected to rebound in August to near a one-year high after Beijing issued more quotas, adding pressure to already-cooling refining margins. Investors also watched talks to revive the 2015 Iran nuclear deal. More oil could enter the market if Iran and the United States accept an offer from the European Union, which would remove sanctions on Iranian oil exports, analysts said. Iran responded to the European Union's "final" draft text to save a 2015 nuclear deal on Monday, an EU official said, but provided no details on Iran's response to the text. The Iranian foreign minister called on the United States to show flexibility to resolve three remaining issues. In the United States, output in the major U.S. shale oil basins will rise to 9.049 million barrels per day (bpd) in September, the highest since March 2020, the U.S. Energy Information Administration (EIA) said in a report on Monday. In the Permian, the biggest U.S. shale oil basin, output will hit a record 5.408 million bpd, it said. Market participants awaited industry data on U.S. crude stockpiles due later on Tuesday. Oil and gasoline stockpiles likely fell last week, while distillate inventories rose, a preliminary Reuters poll showed on Monday. [EIA/S]
  • The premium for front-month WTI futures over barrels loading in six months stood at $3.46 a barrel on Tuesday, the lowest level in four months, suggesting easing tightness in prompt supplies

 

 
Intraday RESISTANCE LEVELS
16th August 2022 R1 R2 R3
GOLD-XAU 1,785-1,792 1,798-1,809 1,818-1,827
Silver-XAG 20.70-21.00 21.45 21.57-22.50
Crude Oil 88.20-89.00 90.50-91.30 92.35-93.00
EURO/USD 1.0190-1.0290 1.0335 1.0390-1.0430
GBP/USD 1.2060-1.2110 1.2150-1.2245 1.2300-1.2355
USD/JPY 134.10-135.20 134.10-135.20 134.10-135.20

Intraday SUPPORTS LEVELS
16th August 2022 S1 S2 S3
GOLD-XAU 1,774-1,760 1,746 1,741-1,732
Silver-XAG 20.00-19.80 19.50-18.90 18.60-17.80
Crude Oil 87.00-86.10 84.90 83.7-83.00
EURO/USD 1.0150-1.0090 1.0030 0.9995-0.9950
GBP/USD 1.2010-1.1930 1.1890 1.1805-1.1760
USD/JPY 132.50-133.10 131.90-130.75 130.20-129.40

Intra-Day Strategy (16th 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 Monday made its intraday high of US$1802.20/oz and low of US$1772.89/oz. Gold is down by 1.229% at US$1779.35/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     1,774-1,760
S2     1,746
S3     1,741-1,732
Intraday Resistance Levels
R1     1,785-1,792
R2     1,798-1,809
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 Monday made its intraday high of US$20.86/oz and low of US$20.08/oz settled down by 2.437% at US$20.25/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     20.00-19.80
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 Monday made an intra‐day high of US$91.49/bbl, an intraday low of US$86.30/bbl, and settled down by 4.460% to close at US$87.29/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 88.20-95.00 with stop loss at 95.00; targeting 87.00 and 86.10-84.90-83.70. Buy above 87.00-83.70 with risk daily closing below 83.70; targeting 88.20-89.00-90.50 and 91.30-92.35-93.00

 
Intraday Support Levels
S1     87.00-86.10
S2     84.90
S3     83.7-83.00

Intraday Resistance Levels
R1     88.20-89.00
R2     90.50-91.30
R3     92.35-93.00

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 Monday made an intraday low of US$1.0154/EUR, a high of US$1.0267/EUR, and settled the day down by 0.919% to close at US$1.0154/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 1.0190-1.0430, 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     1.0150-1.0090
S2     1.0030
S3     0.9995-0.9950

Intraday  Resistance Levels
R1     1.0190-1.0290
R2     1.0335
R3     1.0390-1.0430

TECHNICAL INDICATORS
Name   Value Action
14DRSI   43.220 Buy
20-DMA   1.0217 Buy
50-DMA   1.0311 Sell
100-DMA   1.0507 Sell
200-DMA   1.0805 Sell
STOCH(5,3)   73.410 Buy
MACD(12,26,9)   -0.011 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2053/GBP, a high of US$1.2147/GBP, and settled the day down 0.624% to close at US$1.2053/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 1.2010-1.1700 with a target of 1.2110-1.2150-1.2245 and 1.2310-1.2405-1.2479 with stop loss closing below 1.1700. Sell in between 1.2060-1.2550 with targets at 1.2010-1.1930 and 1.1870-1.1805 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2010-1.1930
S2     1.1890
S3     1.1805-1.1760

Intraday Resistance Levels
R1     1.2060-1.2110
R2     1.2150-1.2245
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 Monday made an intra‐day low of JPY132.55/USD and made an intraday high of JPY133.59/USD and settled the day down by 0.048% at JPY133.30/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     134.10-135.20
R3     134.10-135.20

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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