AAFX TRADING

Daily Market Lookup

  • The U.S. dollar hit a fresh five-week high versus major peers on Monday after more Federal Reserve officials flagged the likelihood of continued aggressive monetary tightening ahead of the central bank's key Jackson Hole symposium this week. The euro sank to a new five-week trough after Russia announced a three-day halt to European gas supplies via the Nord Stream 1 pipeline at the end of this month, exacerbating the region's energy crisis. China's yuan dropped to its lowest in nearly two years after the central bank cut key lending rates, adding to a string of monetary easing measures aimed at shoring up an economy reeling from COVID-19 clampdowns and a property crisis. It gained 2.33% last week - its best weekly rally since April 2020 - amid a chorus of Fed policymakers stressing that more needs to be done to rein in decades-high inflation. The latest was Richmond Fed President Thomas Barkin on Friday, saying the "urge" among central bankers was towards faster, front-loaded rate increases. Money markets currently indicate 46.5% odds for another supersized 75 basis point rate hike on Sept. 21, with a 53.5% chance for a half-point rise. Economists in a Reuters poll lean toward a 50 basis-point increase with recession risks on the rise. The dollar rose as high as 6.8308 yuan in onshore trading for the first time since September 2020 after the People's Bank of China cut the one- and five-year loan prime rates, as widely expected. That came after it eased other key borrowing benchmarks in a surprise move last week. Bundesbank President Joachim Nagel told German newspaper Rheinischen Post that the German economy, among the most exposed to disruptions in Russian gas supply, is "likely" to suffer a recession over the winter if the energy crisis continues to deepen. But he added that even if a German recession is increasingly probable, the European Central Bank must keep raising rates to tame inflation. The U.S. dollar index hit a five-week high and posted its biggest weekly gain since April 2020 on Friday as investors adjusted for the likelihood that the Federal Reserve will keep hiking rates to battle inflation. The U.S. central bank needs to keep raising borrowing costs to tame decades-high inflation, a string of its officials said on Thursday, even as they debated how fast and how high to lift them. The Fed is seen as having more room to hike rates than central banks of other large economies which are more fragile. The euro was also dented on Friday after Gazprom said the Nord Stream 1 pipeline, which supplies gas from Russia to Europe under the Baltic Sea, will be shut down from Aug. 31 to Sept. 2 for maintenance. Fed funds futures traders are pricing in a 55% expectation that the Fed will hike rates by 50 basis points in September and a 45% probability of a 75 basis points increase. U.S. central bank officials have "a lot of time still" before they need to decide how large an interest rate increase to approve at their Sept. 20-21 policy meeting, Richmond Fed President Thomas Barkin said on Friday. Fed Chair Jerome Powell will update the market on his views at the annual Jackson Hole symposium on Aug. 25-27.
  • Gold prices slipped further on Monday as uncertainty over the Federal Reserve’s path of monetary tightening persisted, while copper prices fell on more manufacturing troubles in major importer China. Prices had retreated last week as hawkish comments from several Fed officials suggested that the central bank was likely to commit to raising interest rates at a sharp clip to combat overheated inflation. Given that the comments came in the wake of data showing some softening in U.S. inflation, traders grew uncertain over how the Fed would tighten policy at its next meeting. Data shows that traders are almost evenly split between a 50 and 75 basis point hike by the Fed during its September meeting. Soft inflation readings had initially skewed this trend largely towards a 50 basis point hike. The dollar index rose marginally on Monday, holding last week’s gains as focus turned to Fed Chair Jerome Powell’s address to the Jackson Hole Symposium this Friday. The prospect of rising U.S. interest rates has seen the dollar largely overtake gold as a safe haven this year, despite the yellow metal gaining substantially in the initial onset of the Russia-Ukraine conflict in February. In industrial metals, copper prices extended their decline as concerns grew over slowing demand in major importer China. A severe energy crunch in the Sichuan province- which saw the suspension of some factories- also provided negative lead-ins for copper. Weak industrial data from China saw copper prices fall through last week, with the trend expected to continue. But the red metal did take some relief on stimulus measures by Beijing, which aim to shore up infrastructure spending in the country.
  • Oil prices slumped on Monday, ending three days of gains, as investors were concerned aggressive U.S. interest rate hikes will weaken the global economy and dent fuel demand while a strengthening dollar also added to pressure. Both Brent and WTI climbed for a third straight day on Friday, but fell about 1.5% for the week on a stronger dollar and demand fears. The dollar index rose to a five-week high on Monday after Richmond Fed President Thomas Barkin said the "urge" among central bankers was towards faster, front-loaded interest rate increases. A stronger dollar makes oil more expensive for buyers in other currencies. Investors will be paying close attention to comments by Fed Chair Jerome Powell when he addresses an annual global central banking conference in Jackson Hole, Wyoming, on Friday. The Fed is seen as having more room to hike rates than central banks of other large economies which are more fragile. Prices also fell on worries over slowing fuel demand in China, the world's largest oil importer, because of a power crunch in the southwest caused by a heatwave. China's southwestern province of Sichuan will extend curbs on industrial power consumers until Aug. 25 as it tries to deal with dwindling hydropower output and surging household electricity demand following a long heatwave, financial news service Caixin said. In a sign of overall concern about the Chinese economy, Beijing cut its benchmark lending rate and lowered the mortgage reference by a bigger margin on Monday, adding to last week's easing measures, to revive an economy hobbled by a property crisis and a resurgence of COVID cases. Meanwhile, the leaders of the United States, Britain, France and Germany discussed efforts to revive the 2015 Iran nuclear deal, the White House said on Sunday, though no further details were provided.

 

 
Intraday RESISTANCE LEVELS
22nd August 2022 R1 R2 R3
GOLD-XAU 1,760-1,774 1,785 1,792-1,798
Silver-XAG 19.50--19.80 20.00-20.70 21.00-21.45
Crude Oil 90.50-91.30 92.35 93.00-94.30
EURO/USD 1.0090-1.0150 1.0190 1.0290-1.0335
GBP/USD 1.1890-1.1930 1.2060-1.2010 1.2110-1.2150
USD/JPY 137.00-137.90 138.50 139.40-140.00

Intraday SUPPORTS LEVELS
22nd August 2022 S1 S2 S3
GOLD-XAU 1,741 1,732 1,721-1,706
Silver-XAG 18.90 18.60-17.80
Crude Oil 88.20-86.80 86.10 84.90-84.00
EURO/USD 1.0030-0.9995 0.9950 0.9910-0.9850
GBP/USD 1.1805-1.1760 1.1695 1.1695
USD/JPY 136.00-135.20 134.10 133.00-132.50

Intra-Day Strategy (22nd 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$1759.40/oz and low of US$1745.45/oz. Gold is down by 0.668% at US$1746.85/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 1760-1835 keeping stop loss closing above 1835, targeting 1741-1732-1707 and 1700-1690. Buy in between 1740-1707 with risk below 1690, targeting 1760-1774-1785 and 1798-1809-1818.

 
Intraday Support Levels
S1     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 Friday made its intraday high of US$19.57/oz and low of US19.01/oz settled down by 2.59% at US$19.03/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    
S2     18.90
S3     18.60-17.80

Intraday  Resistance Levels
R1     19.50--19.80
R2     20.00-20.70
R3     21.00-21.45

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$91.61/bbl, an intraday low of US$87.87/bbl, and settled down by 0.521% to close at US$89.54/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 88.20-83.70 with risk daily closing below 83.70; targeting 90.50-91.30-92.35 and 93.00-94.30.

 
Intraday Support Levels
S1     88.20-86.80
S2     86.10
S3     84.90-84.00

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.419 Sell
20-DMA   91.23 Buy
50-DMA   96.36 Buy
100-DMA   98.43 Buy
200-DMA   94.22 Buy
STOCH(5,3)   57.112 Sell
MACD(12,26,9)   -2.731 Buy

EUR/USD

AAFX TRADING

EUR/USD on Friday made an intraday low of US$1.0031/EUR, a high of US$1.0095/EUR, and settled the day down by 0.493% to close at US$1.0038/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     1.0290-1.0335

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)   -0.0034 Buy

GBP/USD

AAFX TRADING

GBP/USD on Friday made an intra‐day low of US$1.1791/GBP, a high of US$1.1935/GBP, and settled the day down 0.815% to close at US$1.1826/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 1.1805-1.1480 with a target of 1.1890-1.1930-1.2060 and 1.2110-1.2150-1.2245 with stop loss closing below 1.1480. Sell in between 1.1890-1.2550 with targets at 1.1805-1.1760-1.1695 and 1.1600-1.1480 with stop loss should be 1.2630.

 
Intraday Support Levels
S1     1.1805-1.1760
S2     1.1695
S3     1.1695

Intraday Resistance Levels
R1     1.1890-1.1930
R2     1.2060-1.2010
R3     1.2110-1.2150

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

33.989

Buy
20-DMA   1.2035 Sell
50-DMA   1.2134 Sell
100-DMA   1.2362 Sell
200-DMA   1.2715 Sell
STOCH(5,3)   5.734 Sell
MACD(12,26,9)   -0.0049 Sell

USD/JPY

AAFX TRADING

USD/JPY on Friday made an intra‐day low of JPY135.70/USD and made an intraday high of JPY137.26/USD and settled the day up by 0.745% at JPY136.89/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)   -0.0765 Sell

AAFX TRADING
AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING AAFX TRADING