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  • The U.S. dollar index surged to a one-month high on Thursday as Federal Reserve officials spoke of the need for further rate hikes, and investors reevaluated Wednesday's minutes from the U.S. central bank's July meeting as being more hawkish than originally thought. The Fed needs to keep raising borrowing costs to bring high inflation under control, a string of U.S. central bank officials said on Thursday, even as they debated how fast and how high to lift them. St. Louis Fed President James Bullard said he is leaning toward supporting a third straight 75-basis-point interest rate hike in September. San Francisco Fed President Mary Daly said hiking rates by 50 or 75 basis points next month would be a "reasonable" way to get short-term borrowing costs to "a little bit above" 3% by the end of this year, and on their way to a little bit higher in 2023. The dollar pared gains on Wednesday after the Fed's July meeting minutes showed central bank officials were concerned they could raise rates too far in their commitment to get inflation under control, which was interpreted as modestly dovish. The minutes also flagged an important dimension of the Fed's debate in coming months: when to slow down the rate increases. But analysts said it was wrong to focus on these parts of the minutes instead of the overriding view that rates need to keep heading higher. The odds of a 75 basis-point hike in September have dropped to 42% since the meeting minutes, from 52% earlier on Wednesday, with a 50 basis-point hike now assigned a 58% probability. However, consumer price inflation and jobs data for August, due before the Fed's September meeting, will likely affect the size of a rate hike. The September meeting will also offer new information on how far Fed officials expect rates to rise. Traders see the benchmark rate peaking at 3.66% in March. Trevisani said he expected the Fed to go up to around 4%, adding that even that is unlikely to be enough to tame prices rising at an annual pace of 8.5%. Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell last week and the prior period's data was revised sharply lower, while a separate report from the Philadelphia Fed on Thursday revealed a measure of employment at factories in the Mid-Atlantic region surged in August. A report from the National Association of Realtors, however, showed existing home sales dropped 5.9% to a seasonally adjusted annual rate of 4.81 million units in July, the lowest level since May 2020.
  • Gold prices fell slightly on Friday, and were set to end the week lower as hawkish signals from the U.S. Federal Reserve on the path of U.S. interest rates drove up the dollar. The dollar index was boosted by comments from Federal Reserve officials that the bank would stick to a sharp pace of rate hikes this year to bring down runaway inflation. St. Louis Fed President James Bullard on Thursday said he currently supports a third consecutive 75 basis point (bps) rate hike in September. San Francisco Fed President Mary Daly also flagged a potential 50 to 75 bps hike during the Fed’s next meeting, with a target of keeping rates above 3% by the year-end. Their comments came after the minutes of the Fed’s July meeting showed on Wednesday that most members of the central bank supported raising rates substantially to combat inflation. This put the dollar on course to gain for the week, pressuring most metal prices. Rising interest rates this year have seen the dollar largely overtake gold as a preferred safe haven, sapping the yellow metal of its gains made during the onset of the Russia-Ukraine crisis. China is the world’s largest importer of the red metal, and is currently struggling to shore up factory activity after a series of COVID-19 lockdowns. Trouble in the country’s massive real estate market also spells more headwinds for the economy, which is likely to weigh on the prices of copper and other industrial metals in the medium term.
  • Oil prices dipped on Friday after two days of gain, as market participants weighed worries about global economic slowdown - that could dampen fuel demand - against expectations of tighter supplies toward year-end. While bullish U.S. weekly data bolstered optimism for improved fuel demand for the near-term, lingering recession fears and a possible increase in output by OPEC+ will likely limit oil price's upside, said Satoru Yoshida, a commodity analyst with Rakuten Securities. U.S. crude inventories fell sharply as the nation exported a record 5 million barrels of oil a day in the most recent week, with oil companies finding heavy demand from European nations looking to replace crude from warring Russia. Keeping crude supplies snug, U.S. oil refineries plan to keep running near full throttle this quarter, according to executives and estimates, as refiners set aside worries about recession and sliding retail prices to deliver more fuel. The rise in U.S. fuel production could partly offset lower oil products exports from China this year as Beijing prioritises the local market to curb domestic fuel inflation. On supplies, Haitham Al Ghais, new secretary general of the Organization of the Petroleum Exporting Countries, told Reuters that policymakers, lawmakers and insufficient oil and gas sector investments are to blame for high energy prices, not his group. The group together with allies such as Russia, known as OPEC+, are due to meet on Sept. 5 to adjust production. OPEC is keen to ensure Russia remains part of the OPEC+ oil production deal after 2022, Al Ghais said. In a sign of improving supplies, the price gap between prompt and second-month Brent futures narrowed about $5 a barrel from the end of July. Record U.S. crude exports, the resumption of Libya's production and sustained exports from Russia and Iran have eased global supply tightness ahead of peak refinery maintenance. Russia forecasts rising output and exports untilthe end of 2025, an economy ministry document seen by Reutersshowed, saying revenue from energy exporuntil therise 38% thisyear, partly due to higher oil export volumes. Iran, meanwhile, increased its oil exports in June and July and could raise them further this month by offering a deeper discount to Russian crude for its main buyer China, firms tracking the flows said..

 

 
Intraday RESISTANCE LEVELS
19th August 2022 R1 R2 R3
GOLD-XAU 1,760-1,774 1,785 1,792-1,798
Silver-XAG 20.70-21.00 21.45 21.57-22.50
Crude Oil 90.50-91.30 92.35 93.00-94.30
EURO/USD 1.0090-1.0150 1.0190 1.0190
GBP/USD 1.1930-1.2060 1.2010-1.2110 1.2150-1.2245
USD/JPY 137.00-137.90 138.50 139.40-140.00

Intraday SUPPORTS LEVELS
19th August 2022 S1 S2 S3
GOLD-XAU 1,746-1,741 1,732 1,721-1,706
Silver-XAG 20.00-19.80 19.50-18.90 18.60-17.80
Crude Oil 89.00-88.20 86.80 86.10-84.90
EURO/USD 1.0030-0.9995 0.9950 0.9910-0.9850
GBP/USD 1.1890-1.1805 1.1760 1.1695
USD/JPY 136.00-135.20 134.10 133.00-132.50

Intra-Day Strategy (19th 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$1772.37/oz and low of US$1755.31/oz. Gold is down by 0.192% at US$1758.30/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     1,746-1,741
S2     1,732
S3     1,721-1,706
Intraday Resistance Levels
R1     1,760-1,774
R2     1,785
R3     1,792-1,798

Technical Indicators

Name   Value Action
14DRSI  

44.520

Buy
20-DMA   1768.53 Sell
50-DMA  

1781.28

Sell
100-DMA   1807.44 Sell
200-DMA   1822.58 Sell
STOCH(5,3)   6.008 Sell
MACD(12,26,9)   1.270 Buy

Silver - XAG

AAFX TRADING

Silver on Thursday made its intraday high of US$19.93/oz and low of US19.93/oz settled down by 1.228% at US$19.53/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 19.10-16.90, 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 Thursday 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 90.20-95.00 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 93.00-94.30.

 
Intraday Support Levels
S1     89.00-88.20
S2     86.80
S3     86.10-84.90

Intraday Resistance Levels
R1     90.50-91.30
R2     92.35
R3     93.00-94.30

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.420 Sell
20-DMA   91.47 Buy
50-DMA   96.66 Buy
100-DMA   98.62 Buy
200-DMA   94.27 Buy
STOCH(5,3)   41.887 Sell
MACD(12,26,9)   -2.867 Buy

EUR/USD

AAFX TRADING

EUR/USD on Thursday made an intraday low of US$1.0079/EUR, a high of US$1.0192/EUR, and settled the day down by 8.438% to close at US$1.0088/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 1.0090-1.0430, targeting 1.0030-0.9950-0.9860 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     1.0030-0.9995
S2     0.9950
S3     0.9910-0.9850

Intraday  Resistance Levels
R1     1.0090-1.0150
R2     1.0190
R3     1.0190

TECHNICAL INDICATORS
Name   Value Action
14DRSI   39.220 Buy
20-DMA   1.0192 Buy
50-DMA   1.0289 Sell
100-DMA   1.0478 Sell
200-DMA   1.0785 Sell
STOCH(5,3)   11.104 Buy
MACD(12,26,9)   11.104 Buy

GBP/USD

AAFX TRADING

GBP/USD on Thursday made an intra‐day low of US$1.1922/GBP, a high of US$1.2079/GBP, and settled the day down 1.00% to close at US$1.1925/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     1.1890-1.1805
S2     1.1760
S3     1.1695

Intraday Resistance Levels
R1     1.1930-1.2060
R2     1.2010-1.2110
R3     1.2150-1.2245

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 Thursday made an intra‐day low of JPY134.64/USD and made an intraday high of JPY135.89/USD and settled the day up by 0.675% at JPY135.88/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 137.00-140.00 with risk above 140.00 targeting 136.00-135.20-134.10 and 133.00-132.50-131.90. Long positions above 136.00-132.50 with targets of 137.00-137.90-138.50 and 139.40-140.00 with stops below 128.50.

 
Intraday Support Levels
S1     136.00-135.20
S2     134.10
S3     133.00-132.50

INTRADAY RESISTANCE LEVELS
R1     137.00-137.90
R2     138.50
R3     139.40-140.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.518 Buy
20-DMA   134.75 Sell
50-DMA   134.16 Sell
100-DMA   131.21 Sell
200-DMA   125.87 Buy
STOCH(9,6)   94.298 Buy
MACD(12,26,9)   94.298 Sell

AAFX TRADING
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