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  • The U.S. dollar pared its gains on Wednesday after minutes from the Federal Reserve's July meeting showed that Fed officials are concerned the U.S. central bank could raise rates too far as part of its commitment to get inflation under control. In a glimpse of the emerging debate at the central bank, "many" participants noted a risk that the Fed "could tighten the stance of policy by more than necessary to restore price stability," a fact that they said made sensitivity to incoming data all the more important, the minutes showed. It comes after Fed Chairman Jerome Powell said at the July meeting that the impact of Fed rate increases to date is still building in the economy, and depending on how inflation responds in coming months that could allow the central bank to begin to slow the pace of rate increases. The size of the Fed’s next expected rate hike is expected to depend on consumer price inflation and jobs data for August, which will be released before its September meeting. The odds of a 75 basis-point hike in September dropped to 40% after the meeting minutes, from 52% earlier on Wednesday, with a 50 basis-point hike now seen as a 60% probability. Looser financial conditions as benchmark 10-year Treasury yields hold below 3% and as the credit and stock markets improve has also increased speculation the Fed may need to be more aggressive in hiking rates to make an impact. Retail sales data on Wednesday were solid, helping to reduce concerns about an economic slowdown. New Zealand's central bank on Wednesday delivered its seventh straight interest rate hike and signaled a more hawkish tightening path over coming months to rein in stubbornly high inflation, which briefly boosted the currency. Sterling also faded after an initial jump on data showing that consumer price inflation in Britain rose to 10.1% in July, the highest level in 40 years.
  • The European Central Bank said on Wednesday it would harmonise how banks offer cryptoassets to ensure they have enough capital and expertise in a sector some European Union lawmakers have described as the Wild West. Several crypto companies like Binance and Crypto.com have been authorised in EU countries such as Italy, France, Spain, Greece or Germany after complying with national safeguards to combat money laundering and terrorist financing. This comes ahead of pan-EU licensing rules from 2023 at the earliest. The ECB said banks were also considering whether to get involved in the crypto sector, but that national rules diverged quite extensively. The ECB, which directly regulates top euro zone lenders such as Deutsche Bank, said it would examine if crypto activities were in line with a bank's risk "profile", which determines how much capital to hold. The ECB will also check if a bank can identify and assess risks from cryptoassets and if board members and IT staff have "robust experience" in the sector. Global regulators at the Basel Committee in Switzerland are assessing whether there should be specific capital buffers for holdings of crypto assets at banks. The EU is also reviewing its bank capital requirements law. Ville Niinisto, a Green Party member of the European Parliament, has proposed an amendment that bank holdings of bitcoin and other cryptocurrencies not backed by assets should not exceed 1% of a bank's core tier 1 measure of capital. Such a cap would need the backing of the full parliament and EU states to become law, a lengthy process.
  • U.S. oil companies are working around a century-old shipping law to supply fuel to the U.S. East Coast, according to data from Refinitiv and oil trading sources, as high demand for gasoline and global disruptions in fuel markets sent prices higher. Buckeye Partners LP’s terminal in the Bahamas, also known as Borco, where they are blended into finished gasoline to be sent to the U.S. East Coast. The uncommon trade is a sign of heavy demand for products up and down the coast, home of some of the nation's largest consumer markets. The trade represents a legal workaround to the Jones Act, which requires goods moved between U.S. ports to be carried by ships built domestically and staffed by U.S. crew. There is a limited quantity of those vessels, which raises the cost of those shipments. Since March, at least eight vessels have transported gasoline components from the Gulf Coast to the Borco terminal in the Bahamas, and then delivered finished gasoline from there to ports along the Atlantic, according to shipping data. Normally, Gulf Coast sellers make bigger profits either by exporting products, or by sending gasoline or diesel to the East Coast by way of the Houston-to-New Jersey Colonial Pipeline, which carries roughly 2.5 million barrels per day of gasoline and other fuels. That line is jammed right now as U.S. East Coast refineries struggle to meet demand. Those refiners are running at more than 98% capacity, according to the U.S. Energy Information Administration. Shippers submit requests to Colonial to move refined products on Colonial, but right now those requests exceed the line's overall capacity. Space on the line is more expensive than in years, traders said, making it suddenly profitable to transport goods with the Bahamas stop. This trade does not run afoul of the Jones Act, but it was uncommon before Russia's invasion of Ukraine, and did not occur in 2021, according to available shipping data. In 2021, the United States exported 146,000 barrels of gasoline components in total to the Bahamas, according to the EIA. In May 2022 alone, the most recent data available, that figure was 498,000 barrels. Last year, the United States imported 699,000 barrels of finished gasoline from the Bahamas, or 1.8% of all imports of that product for the year. So far in 2022, the United States has already imported 1.2 million barrels of gasoline from the Bahamas. In March, the Agean Star and Gulf Rastaq loaded fuel components in Houston, discharged at Borco and later supplied finished gasoline to Savannah, Georgia, and Jacksonville, Florida, according to shipping data.

 

 
Intraday RESISTANCE LEVELS
18th August 2022 R1 R2 R3
GOLD-XAU 1,774-1,785 1,792-1,798 1,809-1,818
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 1.2110 1.2150-1.2245 1.2300-1.2355
USD/JPY 136.00-137.00 137.90 138.50-139.40

Intraday SUPPORTS LEVELS
18th August 2022 S1 S2 S3
GOLD-XAU 1,760 1,746 1,741-1,732
Silver-XAG 20.00-19.80 19.50-18.90 18.60-17.80
Crude Oil 86.80-86.10 84.90 83.7-83.00
EURO/USD 1.0150-1.0090 1.0030 1.0030
GBP/USD 1.2060-1.2010 1.1930-1.1890 1.1805-1.1760
USD/JPY 135.20-134.10 133.00-132.50 131.90-130.75

Intra-Day Strategy (18th 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$1782.24/oz and low of US$1759.75/oz. Gold is down by 0.759% at US$1761.91/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 1774-1835 keeping stop loss closing above 1835, targeting 1760-1746 and 1741-1732-1707. Buy in between 1760-1707 with risk below 1707, targeting 1774-1785-1798 and 1809-1818.

 
Intraday Support Levels
S1     1,760
S2     1,746
S3     1,741-1,732
Intraday Resistance Levels
R1     1,774-1,785
R2     1,792-1,798
R3     1,809-1,818

Technical Indicators

Name   Value Action
14DRSI  

47.0745

Buy
20-DMA   1770.39 Sell
50-DMA  

1782.53

Sell
100-DMA   1808.60 Sell
200-DMA   1823.30 Sell
STOCH(5,3)   7.635 Sell
MACD(12,26,9)   -27.400 Buy

Silver - XAG

AAFX TRADING

Silver on Wednesday made its intraday high of US$20.30/oz and low of US19.90/oz settled down by 0.646% at US$20.12/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 Wednesday made an intra‐day high of US$88.61/bbl, an intraday low of US$85.44/bbl, and settled up by 0.0564% to close at US$86.78/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 86.50-83.70 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     86.80-86.10
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 Wednesday made an intraday low of US$1.0145/EUR, a high of US$1.0202/EUR, and settled the day up by 0.077% to close at US$1.0178/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 1.0150-0.9800 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     1.0030

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 Wednesday made an intra‐day low of US$1.2027/GBP, a high of US$1.2142/GBP, and settled the day down 0.372% to close at US$1.2046/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 1.2110-1.2150-1.2245 and 1.2310-1.2405-1.2479 with stop loss closing below 1.1700. Sell in between 1.2110-1.2550 with targets at 1.2010-1.1930 and 1.1870-1.1805 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.2060-1.2010
S2     1.1930-1.1890
S3     1.1805-1.1760

Intraday Resistance Levels
R1     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 Wednesday made an intra‐day low of JPY133.89/USD and made an intraday high of JPY135.49/USD and settled the day up by 0.602% at JPY134.96/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     135.20-134.10
S2     133.00-132.50
S3     131.90-130.75

INTRADAY RESISTANCE LEVELS
R1     136.00-137.00
R2     137.90
R3     138.50-139.40

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

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